Robinhood earnings set to test stock’s 280% rally with revenue forecast to nearly double from year ago

Robinhood (HOOD) is set to report earnings after the bell on Wednesday, with Wall Street expecting blockbuster results from the trading platform that has seen its stock serve as the S&P 500’s (^GSPC) top performer this year.

Analysts expect Robinhood to post adjusted earnings of $0.53 per share on $1.2 billion in revenue for the third quarter, nearly double the $637 million reported in the same period last year.

Shares of the Menlo Park, Calif.-based company have surged nearly 40% since joining the S&P 500 in September and are up 280% year to date, the best among constituents in the index. Robinhood stock was up 4% on Wednesday ahead of the announcement.

The stock’s rally has been fueled by new product launches this year, ranging from tokenized stocks in Europe to prediction markets and crypto staking, as Robinhood aims to grow customer wallet share.

Read more: Live coverage of corporate earnings

“I see lots of companies copying from Robinhood,” Paul Brody, EY global blockchain leader, told Yahoo Finance on Wednesday, “offering these additional services, integrating them together in a very nice user experience, and delivering them to their end customers.”

Compass Point analyst Ed Engel and his team wrote in a recent note that they expect the company “to disclose October trends pacing well above 4Q expectations.”

Apart from increased revenue on higher options and equities volumes, the analysts pointed to the explosive growth of the platform’s prediction markets launched earlier this year.

Read more: How prediction markets work

The service lets traders wager on the outcome of major events, ranging from football games to Nvidia’s (NVDA) earnings results, the length of the government shutdown, and bitcoin’s year-end price target.

“We forecast HOOD generating ~$20m in revenue from prediction markets in 3Q, which is up over 100% QoQ,” Engel wrote last week.

Robinhood CEO Vlad Tenev disclosed in October on X that event contracts for predictions topped 4 billion, with over 2 billion of those contracts placed in the third quarter alone.

Analysts note that the trading platform earns $0.01 per contract, implying approximately $40 million in revenue. Engel points out that the number could go even higher, given that the NFL’s season is underway.

Crypto revenue is also expected to grow, driven by higher fees and “staking” services. Staking allows token holders to lock up their digital assets while receiving rewards for them, similar to a dividend or yield.