Robinhood's Stock Down Despite Q3 Earnings Beat on Trading & NIR Surge

Core Insights - Robinhood Markets Inc. reported a 2.4% decline in shares despite strong quarterly results, with Q3 2025 earnings per share at 61 cents, exceeding the Zacks Consensus Estimate of 51 cents and significantly up from 17 cents in the prior-year quarter [1][9] Financial Performance - The company's net income (GAAP) reached $556 million, a substantial increase from $150 million in the same quarter last year [2] - Total net revenues surged 100% year over year to $1.3 billion, surpassing the Zacks Consensus Estimate of $1.2 billion [3] - Average revenue per user (ARPU) increased by 82% year over year to $191 [3] - Transaction-based revenues rose 128.8% to $730 million, driven by significant increases in options (50%), equities (132%), and cryptocurrencies (300%) [3] Revenue and Expenses Breakdown - Net interest revenues (NIR) increased by 66.4% to $456 million, attributed to a higher balance of interest-earning assets and securities lending activity [4] - Other revenues doubled to $88 million, mainly due to a rise in Gold subscription revenues, with Gold subscribers increasing by 77% year over year to 3.9 million [4] - Total operating expenses rose 31.5% to $639 million, with adjusted operating expenses increasing by 34.8% to $535 million [5] Business Activities and Metrics - Total platform assets grew 119% year over year to $333 billion, driven by net deposits and higher valuations [6] - Equity notional trading volumes reached a record $647 billion, up 126%, while options contracts traded rose 38% to 610 million [6] - Monthly Active Users (MAU) increased by 25.5% year over year to 13.8 million [7] Share Repurchase and Future Outlook - The company repurchased nearly 1 million shares for $107 million during the reported quarter [8] - For 2025, Robinhood anticipates combined adjusted operating expenses and share-based compensation to be approximately $2.28 billion, including costs related to Bitstamp [10] Competitive Landscape - Interactive Brokers reported adjusted earnings per share of 57 cents, up 42.5% year over year, aided by increased revenues and a decline in expenses [12] - Charles Schwab's adjusted earnings of $1.31 per share rose 70% year over year, benefiting from strong asset management performance and higher trading revenues [13]