A month has gone by since the last earnings report for Robinhood Markets, Inc. (HOOD). Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Robinhood Markets due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Robinhood Markets, Inc. before we dive into how investors and analysts have reacted as of late.
Robinhood Q3 Earnings Beat on Trading & NIR Surge
Robinhood’s third-quarter 2025 earnings per share of 61 cents handily surpassed the Zacks Consensus Estimate of 51 cents. Moreover, the figure compared favorably with earnings of 17 cents in the prior-year quarter.
Results benefited substantially from solid trading activity across all asset classes amid heightened volatility, which led to a jump in transaction-based revenues. Further, higher net interest revenues (NIR), a surge in Gold subscribers and an improvement in Monthly Active Users (MAU) were tailwinds. However, higher expenses were an undermining factor.
Net income (GAAP) was $556 million, jumping significantly from $150 million in the year-ago quarter.
Revenues Soar, Expenses Rise
Quarterly total net revenues soared 100% year over year to $1.3 billion. Moreover, the top line beat the Zacks Consensus Estimate of $1.2 billion.
During the quarter, average revenue per user (ARPU) increased 82% year over year to $191.
Transaction-based revenues of $730 million jumped 128.8% from the prior-year quarter. This was primarily driven by an improvement in options, equities and cryptocurrencies revenues, which jumped 50%, 132% and 300%, respectively.
NIR rose 66.4% to $456 million. This was mainly attributable to a higher interest-earning assets balance and securities lending activity, partially offset by lower short-term interest rates.
Other revenues increased 100% to $88 million, primarily due to a rise in Gold subscription revenues. During the reported quarter, its Gold subscribers jumped 77% year over year to 3.9 million.
Total operating expenses were $639 million, up 31.5%. The increase was primarily due to a rise in all the components. Adjusted operating expenses increased 34.8% to $535 million.
During the reported quarter, adjusted EBITDA jumped to $742 million from $268 million in the year-ago period.
Other Business Activities
As of Sept. 30, 2025, total platform assets soared 119% year over year to $333 billion. The rise was driven by continued net deposits, acquired assets and higher equity and cryptocurrency valuations.
Equity Notional Trading Volumes surged 126% in the quarter to a record $647 billion. Likewise, Options Contracts Traded rose 38% to 610 million, while Crypto Notional Trading Volumes (which includes Robinhood App and Bitstamp Exchange) were $80 billion.
Further, the company reported MAU of 13.8 million, up 25.5% year over year.
Share Repurchase Update
In the reported quarter, the company repurchased nearly 1 million shares for $107 million.
2025 Outlook
Robinhood anticipates combined adjusted operating expenses and SBC to be roughly $2.28 billion, including Bitstamp-related costs.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 12.11% due to these changes.
VGM Scores
At this time, Robinhood Markets has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Robinhood Markets has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Robinhood Markets belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, Moelis (MC), has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Moelis reported revenues of $375.98 million in the last reported quarter, representing a year-over-year change of +37.3%. EPS of $0.68 for the same period compares with $0.22 a year ago.
Moelis is expected to post earnings of $0.74 per share for the current quarter, representing a year-over-year change of -37.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
Moelis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report Moelis & Company (MC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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