Trading platform Robinhood Markets reported a significant surge in its third-quarter crypto revenue, marking a 300% increase from the same period last year. This substantial growth in its cryptocurrency business contributed to the company's quarterly earnings exceeding Wall Street expectations.
Robinhood announced on Wednesday that its Q3 transaction-based revenues climbed 129% year-over-year, reaching $730 million. A key driver of this increase was its crypto revenues, which alone amounted to $268 million, representing a more than 300% rise compared to the previous year.
The company's overall revenues for the quarter ending September 30 doubled year-over-year to $1.27 billion, surpassing analyst projections of $1.2 billion. Earnings per share saw a notable increase of 259%, reaching 61 cents, which was higher than the anticipated 51 cents per share.
While traditionally recognized for its stock trading services, Robinhood has been actively expanding its offerings to attract both retail and institutional crypto users. This strategic push includes the acquisition of Bitstamp in June and the introduction of tokenized stocks and prediction markets.
Robinhood's finance chief, Jason Warnick, stated that its Bitstamp and prediction markets businesses are collectively generating approximately $100 million or more in annualized revenues.
Shares of Robinhood (HOOD) closed Wednesday's trading session up 4.15% at $142.48. However, the stock experienced a decline of over 2% in after-hours trading, falling below the $140 mark.
Year-to-date, the company's stock has seen a gain of over 280%. It reached an all-time high of $152.46 on October 9, prior to a significant crypto market downturn that tempered further growth.
CEO Discusses Expansion of Prediction Markets and Tokenized Stocks
Robinhood CEO Vladimir Tenev informed investors during an earnings conference that the company is exploring various options to enhance the global availability of its prediction market offering.
"As a scaled traditional player, but also on the crypto side, I think we’ll have our pick of what’s best in each jurisdiction," Tenev stated. "That’s something we’re definitely closely looking at."
Tenev also addressed the current state of his company's tokenized stock offerings, noting that while they are not as interoperable as desired, this is primarily because they are not yet integrated with Decentralized Finance (DeFi).
He expressed an expectation for increased interoperability over time. Tenev believes that, similar to other assets in the crypto space, the community will play a role in developing bridges and wrappers, which should mitigate concerns regarding interoperability.