Impressive Transaction-Based Revenues to Drive Robinhood's Q3 Earnings

Robinhood Markets’ HOOD transaction-based revenues (comprising more than 60% of total net revenues) are expected to have been solid in the third quarter of 2025. The company is scheduled to announce its quarterly numbers tomorrow after market close.

During the third quarter, trading volumes and client activity remained robust, supported by an overall risk-on sentiment in global markets. Investor confidence was buoyed by the Federal Reserve’s dovish stance. The broader equity markets reflected this optimism, with major indices repeatedly hitting record highs, and the S&P 500 Index advancing nearly 8% during the quarter.

In addition, clarity on several macroeconomic fronts, including inflation moderation, resilient labor market data and easing geopolitical tensions, encouraged investors to re-enter the markets and increase exposure to risk assets. Trading momentum was not limited to equities; activity remained elevated across multiple asset classes, particularly in fixed income and digital assets. Cryptocurrencies, in particular, witnessed renewed investor interest amid favorable regulatory developments and growing institutional participation.

These are likely to have supported Robinhood’s transaction-based revenues in the to-be-reported quarter. The Zacks Consensus Estimate for the metric is pegged at $756.4 million, indicating a 137.1% jump from the prior-year quarter. The solid performance is likely to have been driven by higher options, equity and cryptocurrencies transaction revenues during the third quarter. 

The consensus estimate for options transaction revenues is $300.2 million, suggesting 48.6% growth. Further, the Zacks Consensus Estimate for equity and cryptocurrencies transaction revenues is pegged at $82.5 million and $313.9 million, respectively. Equity transaction revenues are projected to surge 122.9%, while cryptocurrencies transaction revenues are estimated to jump 414.6% year over year.

HOOD’s Q3 Earnings & Revenue Growth Expectations

The Zacks Consensus Estimate for earnings is pegged at 51 cents, which has remained unchanged over the past seven days. The figure suggests a jump of 200% from the year-ago reported number. 

The consensus estimate for sales of $1.21 billion indicates a 90.6% year-over-year rise.
 

Robinhood Markets, Inc. Price and EPS Surprise

Robinhood Markets, Inc. price-eps-surprise | Robinhood Markets, Inc. Quote

Click here to know about the other factors that are likely to have influenced HOOD’s overall performance.

How Robinhood’s Peers Fared in Q3

Two of Robinhood’s close peers – Interactive Brokers IBKR and Charles Schwab SCHW – announced quarterly numbers on Oct. 16.

Interactive Brokers’ third-quarter 2025 adjusted earnings per share of 57 cents surpassed the Zacks Consensus Estimate of 50 cents. The bottom line grew 42.5% from the prior-year quarter. Results primarily benefited from an increase in revenues as trading volume, customer accounts and daily average revenue trades increased in the quarter. As such, Interactive Brokers recorded a 23.4% jump in commissions. 

Similarly, Schwab’s third-quarter 2025 adjusted earnings of $1.31 per share outpaced the Zacks Consensus Estimate of $1.23 and surged 70% year over year. The solid performance of the asset management business and higher net interest revenues supported the results. Also, trading revenues, which soared 24.8% year over year, drove Schwab’s quarterly performance.

Our Take on Robinhood’s Q3 Performance

Apart from impressive transaction-based revenues, Robinhood is expected to have witnessed higher interest income as interest rates were relatively high in the third quarter despite the rate cut in mid-September. Hence, this will also support this Zacks Rank #3 (Hold) company’s third-quarter results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On the other hand, HOOD’s operating expenses are likely to have stayed elevated due to ongoing investments in platform upgrades, product innovation, customer support and regulatory compliance.

Robinhood’s shares have had a remarkable run on the bourses since the beginning of the year. This year, the stock soared a whopping 294.8%, outperforming the industry’s growth of 31.2%. Also, it fared better than Schwab and Interactive Brokers.

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This article originally published on Zacks Investment Research (zacks.com).

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