Briefly
In Robinhood’s newest earnings name, the agency’s CEO Vlad Tenev mentioned prediction markets have doubled each quarter since launch, reaching 2.3 billion contracts in Q3.
CFO Jason Warnick estimates their crypto take charges remained regular after their Bitstamp acquisition.
Tenev mentioned early leads to the U.Okay. and EU present promise as Robinhood ramps its European rollout.
Robinhood’s newest earnings name confirmed how the corporate is doubling down on crypto, with rising prediction-market exercise, file buying and selling revenues, and plans to broaden its platform throughout Europe.
The reported third-quarter income of $1.27 billion represents a 100% year-on-year enhance, beating Wall Road forecasts. Transaction-based income rose 129 % to $730 million, buoyed by sturdy crypto and choices buying and selling, whereas crypto revenues hit roughly $268 million.
Prediction markets ‘on hearth’
CEO Vlad Tenev mentioned prediction markets “are actually on hearth,” with volumes doubling each quarter since launch to 2.3 billion contracts in Q3 and October alone surpassing that whole.
Prospects “actually love the product, and we’re bringing them much more,” he mentioned, including that Robinhood now lists greater than 1,000 stay contracts spanning sports activities, economics, politics, and tradition.
“We love being early to this new asset class, and a few individuals are saying this could possibly be one of many largest,” Tenev added. “You’ll be able to worth danger in just about something.”
Requested by a Piper Sandler analyst about Robinhood’s technique and new rivals, Tenev mentioned the corporate’s power comes from its scale and attain throughout belongings.
“One of many benefits now we have getting into any market—prediction markets aren’t an exception—is that now we have distribution, and now we have numerous clients: 26 million plus funded accounts within the U.S. which might be buying and selling and utilizing us for all kinds of issues,” Tenev claimed.
Robinhood ended the quarter with 26.8 million funded clients and $333 billion in platform belongings, up greater than 100% in comparison with a 12 months earlier. The corporate additionally added 2.5 million new accounts and noticed $20 billion in web deposits on this 12 months’s Q3 alone, in accordance with knowledge from its earnings presentation.
Crypto revenues and take charges
A KeyBanc Capital Markets analyst requested about Robinhood’s crypto revenues, take charges, and the impression of its Bitstamp acquisition in 2024.
“The blended take charge’s type of within the high-60-cent zone, and we’re liking what we’re seeing for smart-exchange routing. Actually strong curiosity by clients,” CFO Jason Warnick responded, including that the take charge for This fall thus far has remained “in the identical zone.”
A blended take charge is the common price Robinhood earns on every commerce made on its platform, combining all of the methods it makes cash (resembling with spreads, routing, or trade charges) right into a single determine.
Worldwide growth
Warnick’s optimism carried by means of to Tenev, who mentioned Robinhood’s worldwide plan remains to be in its early phases but stays central to its long-term technique.
“It’s nonetheless early in our worldwide plan,” Tenev mentioned. “That’s why once we discuss this chance, it’s actually a 10-year imaginative and prescient as a result of, not like the U.S., once we broaden into these markets, we don’t have an current established buyer base to cross-sell into.”
Tenev claimed that exercise within the U.Okay. and EU has been enhancing, resulting in new advertising initiatives and a broader rollout of stock-token buying and selling throughout 30 European nations.
“5 to 10 years from now, we’ll look again and we’ll say, ‘Man, we underestimated the expansion of that’,” he mentioned.
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