Robinhood just posted numbers that have left even the most cynical Wall Street veterans mumbling into their bourbon. Their Q3 revenue doubled year-over-year to $1.27 billion while profits nearly tripled. The market—in its infinite and occasionally questionable wisdom—has slapped a $109 billion valuation on the company.
Let that sink in. $109 billion. For context, that's roughly what Goldman Sachs is worth. Goldman. Sachs. A banking colossus founded during the Chester A. Arthur administration that once viewed Robinhood as a cute little fintech experiment, like watching a toddler play dress-up in daddy's business suit.
We've seen this movie before, haven't we? The promising fintech darling captures lightning in a bottle, posts growth numbers that make traditional banks look arthritic, and then... well, then reality usually shows up uninvited. Remember when PayPal briefly eclipsed Bank of America in market cap? When Square (now Block) was valued higher than institutions with actual vaults and centuries of history?
But Robinhood might—and I write this with the trepidation of someone who's watched too many fintech bubbles inflate and pop—actually deserve its moment.
The Money Machine Goes Brrr (From Multiple Directions)
The breakdown here is impressive. Transaction revenue exploded by 129% to $730 million. Their crypto business—once dismissed as an afterthought—surged an almost laughable 300% to $268 million. Options trading (always their bread and butter) grew 50% to $304 million. Even plain vanilla equities revenue more than doubled to $86 million.
What Robinhood has built isn't just a one-trick pony; it's a whole damn circus. During the GameStop mania, critics hammered them for over-reliance on payment for order flow. During crypto's dark days, skeptics chortled at their digital asset stumbles. Now both revenue streams are gushing simultaneously, alongside interest revenue that jumped 66% to $456 million.
Here's what the Brooks Brothers crowd missed about Robinhood from day one: They weren't building a discount brokerage with a slick app. They were constructing a financial ecosystem that could monetize engagement across multiple dimensions. Their premium Gold subscription now boasts 3.9 million subscribers (up 77%), generating average revenue per user of $191 (up 82%).
That's not brokerage economics. That's... something else entirely.
When the Flywheel Starts Spinning
I've covered fintech since the days when "digital banking" meant getting your statement on CD-ROM. One pattern I've observed repeatedly is what I call the "operating leverage revelation"—that magical inflection point when user growth suddenly translates into profit explosion.
We're witnessing that alchemy in Robinhood's numbers. Net income surged 271% to $556 million. Adjusted EBITDA grew 177% to $742 million, representing a 58% margin. Those are SaaS economics somehow grafted onto a financial services business—a Frankenstein's monster that shouldn't exist but is now stomping through Wall Street.
The platform now hosts $333 billion in assets, more than double last year's figure. Remember when traditional brokerages dismissed Robinhood users as dabblers with pocket change? Those accounts grew up. And multiplied.
The $109 Billion Question
So is this valuation—$122.50 per share and a $109 billion market cap—sustainable, or just another example of market frothiness?
Look, that's roughly 25x this quarter's annualized earnings. Not completely insane for a company growing triple digits. If they maintain anything resembling their current trajectory, today's valuation might eventually seem downright conservative.
The bearish perspective, naturally, is that we're sitting at peak retail investor enthusiasm. Crypto's looking bubbly again, stocks keep grinding higher despite recession whispers, and options volume suggests speculative fever. Robinhood thrives precisely in this environment—and environments, like cheap sushi, don't stay fresh forever.
Coinbase offers a useful parallel—similar cyclicality but with even wilder swings. Robinhood's diversified revenue should theoretically provide more stability during downturns, but "more stable" isn't the same as "stable."
What gives me pause is this: Robinhood is now being valued as if it's a permanent fixture in the financial firmament, not just riding a particularly exuberant market cycle. That requires believing they've fundamentally rewired how an entire generation approaches investing.
They might have! I've spoken with countless twentysomethings who can't imagine managing money any other way. But $109 billion assumes not just continuation but acceleration of everything going right—sustained retail enthusiasm, favorable interest rates, successful product expansion, and regulators who don't wake up feeling interventionist.
That's a lot of dominoes that need to stay upright.
But then again, I've been wrong about Robinhood before. Many of us dismissed it as a passing fancy, only to watch it transform retail investing. Sometimes the market recognizes a paradigm shift before the "experts" do. And sometimes valuations like these mark the precise moment before gravity remembers it exists.
The frustrating thing about covering fintech is you usually only know which scenario you're in after it's too late to matter.
Anyway, $109 billion. For a company younger than some of my dress shirts. That started by offering free stock trades when everyone "knew" that business model couldn't work.
Finance is weird. I wouldn't have it any other way.
