Robinhood Is Moving Beyond Crypto. Earnings Will Show If It's Working. — Barrons.com

What happened

Robinhood Markets will report third-quarter financial results on Tuesday after the close. Analysts expect earnings per share of 56 cents, down from 61 cents a year earlier, on revenue of $1.44 billion and operating expenses of $776 million.

Confirmed

Global impact / market context

Robinhood is adding credit cards, wealth management and artificial-intelligence trading tools to broaden revenue beyond trading. Investors want proof these launches bring lasting revenue diversification, because analysts expect profit per share to fall even as expected revenue rises, while operating expenses climb.

Analyst inference

Customers have shifted over the past year away from cryptocurrency trading toward options and prediction markets, which are contracts on event outcomes. Second-quarter transaction-based revenue rose 44% year over year, driven largely by event contracts and options, while transaction-based cryptocurrency revenue fell 38%.

Analyst inference

What to watch

1. Analysts expect revenue of $1.44 billion and operating expenses of $776 million, versus $1.27 billion and $639 million a year ago, so compare reported figures with these estimates and the year-earlier numbers. Confirmed
2. Watch how much of transaction-based revenue comes from prediction markets, which are event contracts, and whether options growth continues, since cryptocurrency trading revenue already fell 38%. Analyst inference
3. Assess whether new products such as the credit card, wealth management and artificial-intelligence trading tools are adding sustainable revenue, as analysts seek proof of durable diversification beyond trading. Proposed

Evidence

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