HOOD (Trans): Revenue hit a record high; $13bn net deposits in Oct.

Below is Dolphin Research’s recap of $Robinhood(HOOD.US) Q3 2026 earnings call

I. Key takeaways

1. Expense guidance

a. Full-year Adj. OpEx + SBC cut to $2.675–2.75bn, with the high end lowered by $25mn and the midpoint down by ~$13mn vs. prior. Management reiterated discipline on cost while reallocating savings to growth.

b. Q4 will keep investing in Trump accounts (~$100mn for the year), expand Gold and Platinum credit cards, and pull forward some 2027 plan items. Spending cadence is front-loaded to support pipeline and feature rollouts.

2. Q3 headline metrics

a. Scale: revenue of $1.4bn (+12%, record). Adj. EBITDA of $808mn (+9%, record), with margin at 57%.

b. Cost and efficiency: Adj. OpEx + SBC at $664mn, within prior guidance. Revenue per employee neared $2mn, a new high.

c. Platform: client assets near $400bn; annualized revenue >$5.5bn. Fourteen lines now each running >$100mn annualized, with management calling the firm a 'Rule of 80' company.

3. New Adj. EPS metric

a. Q3 GAAP EPS was $0.51, including a -$0.07 mark-to-market impact from investments. New Adj. EPS came in at $0.60.

b. The adjustment excludes non-operating items like investment gains/losses but keeps routine SBC, as share dilution makes the EPS denominator critical. The North Star remains maximizing EPS and FCF per share.

4. Q4 start and rate sensitivity

a. Oct. net deposits exceeded $13bn (incl. a $6bn Dell family donation into Trump accounts), lifting YTD net deposits above $68bn, a new annual record. Deposit momentum stayed broad-based.

b. Oct. ADV for equities, options, and crypto was ~5% below Q3’s record, while event contracts were ~10% higher. Crypto spreads tightened slightly.

c. A 25bp move in rates changes revenue by ~1.5%: of ~$80bn interest-earning assets, ~$40bn is rate-sensitive, implying ~-$+100mn annualized per 25bp. Sweep balances are less sensitive.

II. Management commentary detail

2.1 Core remarks

1. No.1 active-trading platform

a. The Hood Summit rolled out 17 products and services; Agentic trading is now native in-app, and MCP connectivity expanded to Robinhood Legend. Agentic accounts hold over $250mn, with usage and trading on an accelerating curve.

b. The firm became the first U.S. broker to offer true perpetuals, settled every 15 minutes via Bitstamp. Prediction markets will add earnings and company KPI contracts, with 24/7 stock trading targeted for this year.

c. Market share in equities, options, crypto, and margin all rose double digits YoY. Equity, options, and margin volumes were each ~+50% YoY, and event contracts were up ~7x.

2. No.1 next-gen wallet

a. Trump accounts now auto-open; the U.S. Treasury has opened accounts for nearly 70mn children under 18, with 25mn receiving $250 each from the Dell Foundation. The company aims to make it the default channel for charitable giving nationwide, in partnership with BNY and the Gov.

b. Gold subscribers reached 5mn (+30% YoY+, 4x vs. the revamp four years ago), with overall penetration at ~18% and new-customer penetration at 40% in the quarter. Adoption remains robust.

c. Bank and credit cards remain the primary growth levers for Gold, not yet fully opened. The firm is strengthening account-opening linkages and scenario-based recommendations.

3. Global financial stack

a. Robinhood Chain mainnet went live on Jul 1 and ranked top five by volume and revenue in its first quarter. DEX volume surpassed $100bn, on-chain fees topped $50mn, and DeFi perpetuals daily volume exceeded $1bn in recent weeks.

b. The firm secured a DFSA license to enter the Middle East. Regulatory progress supports intl expansion.

4. Prediction markets

a. The vertically integrated exchange Rothera delivered >$100mn annualized revenue in its first full quarter. Scaling continues.

b. Partnerships with Crypto.com and og.com bring 1% initial equity each without cash outlay, potentially up to 10% depending on collaboration depth. Equity stakes align incentives.

2.2 Q&A

Q: How is banking progressing, and when will the Zelle alternative go live?

A: The in-house bank became the No.1 destination for brokerage outflows by amount, and P2P transfers will broaden access. This milestone came before a full banking open, keeping more funds within the ecosystem. A live demo showed Send Money via SMS; recipients do not need a Robinhood account and can receive via Apple Pay or Google Pay, creating a funnel for banking. Access is limited for now, with broader rollout in coming weeks.

Q: How is global expansion, and which countries are next?

A: Long-term, more than half of revenue should come from overseas and more than half from institutions, and intl growth is accelerating. Robinhood Chain outperformed expectations, and the company will invest more in the developer ecosystem. It has a Dubai license and MAS in-principle approval, with Singapore as the SEA/APAC hub; the UK now runs crypto and brokerage on one platform with rising download share; Canada has crypto via the WonderFi acquisition. The CFO said seeds from the 10-year plan are bearing fruit.

Q: What major products could lift revenue in 2027?

A: Bets include Agentic, prediction markets, perpetuals, Trump accounts, Ventures, and tokenization. Core brokerage and crypto continue to gain share, while client assets should compound with age and markets; platform assets are ~$400bn, and management expects >$500bn soon. Robinhood Ventures launched RVI and RV2, with more to come, aiming to let retail participate in private markets.

Q: Plans for customers who prefer 'set-and-forget'?

A: Passive advisory Strategies assets exceed $2bn, viewed as a 'dark horse'. Growth is rapid YoY; Smart Income lets users set term and risk with a slider to see expected yield, then deposit and leave it. More improvements are in the pipeline.

Q: How many products do power users adopt, and what does converting most users to power users mean?

A: Three to four products is the sweet spot, with ARPU and activity rising as product count increases. Customers trading equities, crypto, options, futures, and prediction markets contribute materially more revenue. The firm is improving cohesion and discovery via shared entry points across social, search, and the home feed.

Gold is the best lens: users arrive for any asset, then discover Gold and adopt more products and deposit more. Overall penetration is 18%, new-customer penetration >40%, and runway remains large.

Q: How do you educate customers on perpetuals and Agentic trading?

A: Through in-product guides and learning modules, with AI agents and community content as key education channels. Many customers use AI agents to explain options strategies and break down trade ideas, not just to place orders. Third-party creator content is being added; Robinhood Social already hosts deep analysis and supports sharing charts and data sources.

Q: Will you launch exchange-fund-type products to diversify concentrated positions without selling?

A: Management is seriously studying tax-efficient diversification solutions for concentrated holdings, with no timeline yet. Current products elsewhere have high thresholds, creating an opportunity for broader access. Research continues.

Q: What is the long-term monetization potential for Robinhood Chain, and can monetization rise without hurting competitiveness?

A: Steady-state take rate is a few bps of notional, with revenue not being the near-term KPI. On-chain gross revenue was ~$50mn this quarter, about half shared with Arbitrum, leaving ~$25mn net (~$100mn annualized), not yet counted in the '>$100mn businesses'. Developer activity ranks No.1; KPIs include TVL, especially tokenized-equity TVL, not high fees. The roadmap brings U.S.-tradeable assets on-chain for overseas clients as developer primitives.

Q: Net deposits grew below the 20% target; how much came from new vs. existing customers, and can intl make up the gap?

A: By Oct., the full-year 20% target was surpassed, with recent growth skewing to existing customers. Quarterly patterns are non-linear: Q2 was boosted by markets and IPOs, while Q3 resembled Q1; new products are the biggest driver of net deposits. The firm is re-accelerating net new accounts, with next year’s launches aiding acquisition. Trump accounts are adding employer funding and donor flows and already contribute meaningfully to net deposits.

Q: Vision for P2P, and expectations for acquisition and monetization?

A: First, see if existing users adopt it and whether it solves pain points; the product is inherently viral. No monetization outlook yet. Non-Robinhood recipients become new acquisition touchpoints.

Q: What drives expense changes, and what is the 2027 run-rate?

A: Trump accounts remain ~+$100mn for the year; no 2027 guidance yet. The full plan will be unveiled in Jan–Feb. Q4 spend upticks reflect Trump accounts, card expansion, and pulled-forward plan items; the philosophy is to boost core efficiency and reinvest savings into new bets.

Q: Why take stakes in two prediction-market platforms, and how will orders be split across venues?

A: Rothera is the primary exchange; the two investees serve as secondary venues and will handle most flow. The two are Crypto.com and og.com, with timing from year-end to early next year; customers get choice and execution resilience as the firm gradually exits other venues. Listings depend on product experience, with no equity/options-style routing and no conflicts; prior referrals had no economics, whereas ownership now gives shareholders upside.

Q: When will company KPI contracts go live, and how were Oct. ADVs and crypto pricing?

A: KPI contracts are imminent, and Oct. ADVs for each asset were within ±5% of Q3’s high. Event contracts were ~7x YoY; crypto spreads tightened at the start, with the full quarter to be assessed. Pricing remains dynamic.

Q: What is the goal and monetization path for Robinhood Social?

A: For now, Social enhances the overall experience and becomes a business line only after creator monetization launches. Management believes 28mn customers can surface the best global ideas better than in-house content. Shareable content has expanded from trades to P/L, charts, and holdings, with off-platform sharing supported.

Q: Rothera’s share strategy, pricing, and plans to onboard more FCMs?

A: Rothera can be a neutral FCM gateway, with focus on non-sports financial contracts. It is independently operated by SIG, with the company a significant shareholder; other platforms have conflicts between prop trading and FCMs, while Rothera serves FCMs only. Non-sports mix rose from 15% last quarter to ~30%; sports will homogenize quickly. After acquisition, pricing moved to dynamic, benefiting customers without hurting company rates, with better pricing for Gold members; new features include a midterms hub and 15-minute crypto up/down contracts.

Q: How big is the market for perpetuals?

A: Management sees no reason it cannot match or surpass leading platforms. Top global platforms see tens of billions in daily volume, and Robinhood Chain surpassed $1bn daily within months of launch. Upside remains significant.

Q: What drove lower-than-expected take rates in Q3, and why the softer start in Q4?

A: Drivers vary by asset; crypto was weighed by Robinhood Earn stablecoin assets. Equity depends on single-stock vs. ETF mix and spreads, options on index vs. single-name mix; Earn exceeds $500mn with a lower monetization rate, and excluding it, crypto take rate was similar QoQ. Event contracts reflected new pricing, venue mix, and Gold; Oct. ticked lower on spread compression.

Q: In a hiking cycle, how sensitive is revenue to rates?

A: Each 25bp move shifts revenue by ~1.5%, with hikes as a tailwind. Trading products fare better in low-rate regimes, while NIM products do better in high-rate regimes, allowing resilience in both. Of ~$80bn interest-earning assets, ~$40bn is rate-sensitive (sweep less so), implying ~$100mn annualized per 25bp, or ~1.5% of a $5.5–6.0bn run-rate.

Q: Why were net deposits and MAU/funding-account ratios weaker this quarter?

A: One-quarter noise without trend implications, with Oct. already record-high. Launch timing, promos, seasonality, macro, and IPOs all cause variability; Oct. net deposits exceeded $13bn, and ADV stayed near Q3 records. Momentum remains intact.

Q: Rationale for partnering with Ripple and near-term opportunities?

A: Businesses are complementary: Ripple is institution-leaning, Robinhood is retail-leaning. Management did not detail near-term opportunities, emphasizing more integrations, products, and choice benefit both app and on-chain ecosystems. Ondo also integrated with Robinhood Chain the same day; the goal is to be the best home for tokenized products, with third parties listing on equal footing and in-house products succeeding on merit.

Q: After the SEC innovation exemption, when will tokenized equities return to the U.S., and what is the regulatory path for private equity tokens?

A: Private-equity tokens will launch overseas, with U.S. plans to be announced 'soon'; formal rules or legislation are still needed. There are two tracks: a U.S. Robinhood Ventures fund structure and single-company tokenization overseas, with cross-referrals. The U.S. still requires accredited investor standards; the innovation exemption is positive, but uncertainty five years out still deters large assets from moving on-chain.

Q: After the AI pullback, how is retail trading activity?

A: Activity remains strong; customers saw the dip as a buying opportunity, with down days often seeing the strongest net buys. Management points to Oct.’s strong net deposits and ADV as better indicators. Engagement is resilient.

Q: How will you step up acquisition, and can MAU, long stuck at 13–14mn, rise?

A: Acquisition is product-led, with only small-scale marketing tests; MAU is an outcome metric and not a KPI. P2P and banking investments were made ahead of full launch for 2027. The long-term bet is Trump accounts: as a broker and initial fiduciary alongside BNY, the firm can reach ~70mn children, while exploring earlier acquisition paths; several 2025 bets should lift both new accounts and MAU.

Q: When will banking ramp marketing?

A: It’s tied to full open; only once standalone bank accounts are live can performance marketing scale. Currently, one must be a brokerage customer to open a bank account. Banking should also feed brokerage and behaves more like software, with a faster cadence than credit cards, which require unit-economics and credit-risk tuning; payroll deposits and everyday spend make it a more predictable compounding source to balance trading cyclicality.

Q: ARPU doubled in two years; can it reach $300, and what must go right?

A: No ARPU target; younger and intl customer growth could drag ARPU. Intl users already exceed 1mn, and most customers will be overseas in the long run. ARPU is an outcome; teams are measured on share and ROI, with net deposits most correlated to revenue. Management sees 10x scale headroom for Robinhood.

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