Q3 2025 Results: Robinhood vs Coinbase
Robinhood’s total net revenue doubled year-on-year to a record $1.27 billion in Q3 2025, driven by broad-based growth. Transaction-based revenue surged 129% YoY to $730 million, with cryptocurrency trading revenue up over 300% to $268 million and options trading revenue up 50% to $304 million. Equities trading revenue also jumped 132% to $86 million. Net interest revenue grew 66% to $456 million, reflecting higher interest-earning assets and securities lending, while “other” revenues (primarily Robinhood Gold subscriptions) reached $88 million. Strong monetization lifted Average Revenue Per User (ARPU) to $191, up 82% from a year ago, as customers engaged more across trading and subscription products.
User Base and Assets
Funded accounts expanded to 26.8 million (up 10% YoY) and total investment accounts to 27.9 million, underscoring robust user growth. Total platform assets swelled 119% YoY to $333 billion, propelled by record net deposits of $20.4 billion in Q3 (an annualized 29% growth in assets) and market valuation increases in equities and crypto. Crypto asset exposure rose with the market rebound, and Robinhood Retirement accounts now hold $24.2 billion (up 144% YoY). Crucially, Robinhood Gold (premium tier) subscribers nearly doubled to 3.9 million, contributing to asset growth through higher cash sweep balances (a record $35.4 billion, +44% YoY) and margin lending (record $13.9 billion, +153% YoY). These metrics highlight a deepening asset base per customer and greater engagement in the ecosystem.
Product & Market Share Updates
Q3 featured significant product expansion aimed at active traders and new asset classes. Robinhood launched event-driven “Prediction Markets” in March 2025 and by Q3 saw rapid uptake. Event contract volumes more than doubled sequentially to 2.3 billion in the quarter. It also introduced futures trading and perpetual crypto futures in select markets (e.g. Europe and the UK) as part of its push into derivatives. A dedicated HOOD Summit in September unveiled advanced trading tools (like Robinhood Social and AI-powered screeners via the new “Cortex” engine) to cement Robinhood’s position among active retail traders. These moves aim to capture greater share of trading activity; already in October (post-Q3) Robinhood saw record daily volumes across equities, options, prediction markets, and futures. Notably, Robinhood now boasts 11 distinct business lines generating ≥$100 M in annualized revenue, reflecting a diversified revenue base beyond just stock brokerage (e.g. crypto, cash management, lending, etc.).
Cost Structure and Income
Despite ramped-up growth initiatives, operating expenses were kept in check relative to revenue growth. Total operating costs in Q3 rose 31% YoY to $639 million, mainly due to higher marketing spend and acquisition-related expenses. On a non-GAAP basis, adjusted operating expenses (excluding certain one-time items) were $613 million (up 29% YoY). This helped preserve strong operating leverage. Net income was $556 million (GAAP), up 271% year-on-year, yielding a solid net profit margin (~44%). Adjusted EBITDA came in at $742 million (non-GAAP), reflecting a very high EBITDA margin of ~58%, while diluted EPS was $0.61 (up 259% YoY). Robinhood did raise its full-year expense outlook slightly to ~$2.28 billion including stock-based comp amid growth investments, but overall Q3 profitability underscored the platform’s ability to capitalize on the surge in trading activity efficiently.
Roadmap and Capital Allocation
Management signaled an ambitious roadmap going into late 2025. Robinhood Banking (a new banking product suite) began rolling out in Q3, aiming to deepen user financial engagement, and Robinhood Ventures (for alternative investments) is slated to launch, hinting at expansion into venture and private markets. Internationally, Robinhood closed its acquisition of Bitstamp in June 2025 for roughly $200 million, integrating one of Europe’s oldest crypto exchanges. This deal handed Robinhood 50+ global crypto licenses and an established institutional client base in the EU and UK, boosting Q3 crypto volumes. Bitstamp contributed ~$40 billion in notional trading volume, about half of Robinhood’s Q3 crypto turnover. To enter Canada, Robinhood agreed in May to acquire Toronto-based WonderFi Technologies (owner of Bitbuy and Coinsquare exchanges) for ~C$250 million cash, though extra regulatory approvals have delayed closing into 1H 2026. These acquisitions align with Robinhood’s strategy to extend its global footprint and serve more advanced traders, without straying from its core retail base. In terms of capital allocation, Robinhood continues to return capital to shareholders. It repurchased $107 million of stock in Q3 (1 million shares) and has bought back $810 million cumulatively since Q3 2024, even as it preserves a sizable liquidity cushion. Cash equivalents stood at $4.3 billion as of quarter-end.
Risk Flags
Robinhood’s stellar growth is tied to market momentum that can be volatile. The surge in retail trading activity across crypto, options, and equities powered results, but any market pullback could dampen volumes and high ARPU levels. The firm’s push into new products such as derivatives, prediction markets, and banking, and new geographies brings execution and integration risks, as evidenced by increased operating expense guidance and the delayed Canadian expansion. Additionally, Robinhood must navigate regulatory complexities on multiple fronts, from U.S. securities rules for equities and options to crypto regulation abroad, especially after acquiring entities like Bitstamp that operate under numerous international licenses. Finally, the impending CFO transition in 2026 bears watching to ensure financial strategy continuity. Overall, while Q3 showcased balanced, diversified growth, Robinhood will need to sustain user engagement and manage costs amid potential market and regulatory headwinds.
Coinbase Q3 2025 Performance
Coinbase delivered a strong Q3 with $1.87 billion in total revenue, up 55% year-on-year and 25% sequentially. Transaction revenue rebounded to $1.0 billion (+37% QoQ) on the back of higher crypto trading volumes, while subscription and services revenue reached $747 million (a quarterly record, +14% QoQ). Within transaction revenues, retail (consumer) trading was the engine: consumer transaction revenue was $844 million, up 30% from Q2, as retail trading volume surged to $59 billion (+37% QoQ) amid a crypto market rally. Institutional trading revenue jumped to $135 million (+122% QoQ) even with a more modest 22% increase in institutional volume to $236 billion.
This outsized institutional revenue gain was driven by derivatives: Coinbase closed its acquisition of Deribit on August 14, which contributed $52 million to Q3 revenue and helped push Coinbase’s combined crypto derivatives trading to all-time highs of over $840 billion notional in Q3. Other transaction fees (for example instant transfer fees) were $68 million (+26% QoQ), reflecting greater user activity and on-chain usage, including on Coinbase’s Layer-2 network, Base. On the subscriptions side, stablecoin-related revenue (mainly interest income from USDC reserves) was the largest component at $355 million (+7% QoQ), underscoring the importance of the USDC partnership. Blockchain “reward” revenue (staking fees) climbed to $185 million (+28% QoQ) amid higher crypto asset prices (ETH +81% in Q3, SOL +29%) boosting staking yields. Smaller streams like custodial fees, interest on institutional loans, and earn-out payments from crypto protocol partners brought “other” subscription revenue to $143 million (+19% QoQ). In total, recurring revenue made up roughly 40% of Coinbase’s net revenue this quarter, a testament to its strategy of diversifying beyond pure trading commissions.
Trading and Derivatives Activity
Crypto trading activity rebounded sharply in Q3, aided by a broad market upswing. Global spot crypto volumes were up roughly 38% QoQ and Coinbase’s total trading volume hit $295 billion (+24% QoQ). Notably, Coinbase’s retail trading growth outpaced the market, a sign that expanded asset listings and improved user experience attracted more engagement. The trading mix shifted toward altcoins: Bitcoin represented 24% of Q3 trading volume on Coinbase (down from 30%+ in Q2), while Ethereum rose to 22% and XRP to 9%. Other crypto assets made up 42% of volume, reflecting the popularity of newly listed long-tail tokens. Correspondingly, transaction revenue was less Bitcoin-centric (BTC trades 24% of transaction revenue vs 34% in Q2) and more driven by assets like ETH 17% of revenue and XRP 14%. Derivatives emerged as a major theme.
After the Deribit acquisition, Coinbase’s derivatives business attained number-one share in crypto options globally and significant share in U.S. crypto futures. The company launched U.S.-based perpetual futures trading for institutional clients and introduced 24/7 trading, leveraging a more crypto-friendly regulatory stance to gain an edge in derivatives. Management noted that given this momentum, they have started tapering trading incentives and rebates, which are booked as contra-revenue, in the institutional segment. This is a sign of confidence in sustained volume that should bolster net revenue capture going forward. Overall, the “everything exchange” vision that integrates spot, derivatives, and DEX access is manifesting in higher trading breadth and market share gains in certain high-growth categories.
Stablecoin and Subscription Economics
Coinbase’s stablecoin franchise, USDC, continued to be a cornerstone of earnings. USDC’s average market cap climbed to $74 billion by Q3’s end (up about $12 billion QoQ), and average USDC balances held on Coinbase reached an all-time high of $15 billion. The result was $355 million in stablecoin revenue for Q3, largely interest income from reserves that Coinbase shares via its partnership with Circle. This recurring revenue stream, almost 19% of total revenue, has been bolstered by user incentives and by expanding those rewards to institutional clients in Q3. Coinbase positions USDC not just as a yield asset but as a payments medium. During the quarter it rolled out new payment APIs and corporate treasury integrations that allow businesses to use USDC for instant, 24/7 settlements, often on Base.
Aside from stablecoins, blockchain rewards and custody fees are significant subscription contributors. Staking revenue rose to $185 million as higher crypto prices increased the fiat value of rewards, though protocol reward rates are gradually declining as networks mature. Assets under custody hit a record $300 billion, partly due to Coinbase’s role as custodian for the majority of new crypto ETFs launched in the market. This drove custodial fee growth, now reported under “other subscription” revenue. Interest and lending income also ticked up to $65 million, with institutional crypto loan balances reaching $1.2 billion (a new high, +25% QoQ) as more clients borrowed against crypto for liquidity. The overall picture is a company steadily growing non-trading revenue, from stablecoin yield to staking to custody, providing a measure of earnings stability against the volatility of trading volumes.
Cost Base and Efficiency
Coinbase demonstrated improved cost discipline in Q3. Operating expenses were $1.4 billion, down 9% QoQ, as earlier restructuring efforts and the absence of large one-off charges helped reduce the cost run rate. Notably, technology, development, and G&A expenses rose 14% sequentially to $1.1 billion, driven by higher headcount (+12% QoQ to 4,795 full-time employees) and increased USDC reward payouts tied to the surge in USDC balances. This figure also includes about $30 million in costs from the newly acquired Deribit business and reflects renewed hiring in growth areas after a period of layoffs in 2023.
Offsetting this, other operating expenses plunged QoQ as no similar customer support liability reoccurred. Net income came in at $433 million on a GAAP basis, a strong profit, though down from an unusually high $1.4 billion in Q2 that was boosted by one-time investment gains. On an adjusted basis excluding investment revaluations, adjusted net income was $421 million. Adjusted EBITDA was robust at $801 million in Q3, indicating healthy operating cash generation. The balance sheet remains strong. Coinbase entered Q4 with ample capital, including $5.6 billion custodial fiat and $2.6 billion in its own crypto investments, and it added roughly $299 million of Bitcoin to its own investments in Q3. The company is positioned to continue investing in strategic growth areas without sacrificing profitability.
Strategic Moves and Capital Allocation
Coinbase continued to invest in strategic expansion during Q3 and early Q4. In October 2025, it announced the acquisition of Echo, an on-chain capital raising platform, for about $375 million. Echo’s technology will enable Coinbase to facilitate token sales and potentially tokenized securities offerings, expanding its suite of services for crypto startups and enterprises. Earlier, in August, Coinbase completed the $2.9 billion Deribit acquisition, first announced in May, to fill a major gap in its derivatives portfolio. Deribit is the world’s largest crypto options exchange, and bringing it under Coinbase’s umbrella instantly gave Coinbase a dominant position in crypto options and a broader international user base in derivatives. These acquisitions, combined with organic product launches such as integrated DEX trading on Base, perpetual futures for U.S. traders, and Embedded Wallets for developers, illustrate an aggressive but deliberate approach to becoming a one-stop platform for crypto.
On the capital front, Coinbase has not indicated share buybacks. It tends to retain capital for growth. The company is steadily investing in regulatory compliance and global expansion and noted policy tailwinds in markets like the U.S. for stablecoins as well as continued expansion in regions like Brazil and India. Coinbase’s regulatory posture, including active engagement with lawmakers and support for stablecoin regulation, suggests continued allocation of resources to shape a favorable operating environment. Overall, Q3 saw Coinbase balancing shareholder interests with growth investments. The company remained free cash flow positive, grew its crypto asset treasury, and indicated it will continue to be prudent in expense management while pursuing its roadmap.
Risk Flags
While Q3 was strong, several risks warrant attention. Regulatory uncertainty remains a constant overhang. Coinbase still faces an SEC lawsuit alleging that certain crypto tokens on its platform are unregistered securities, and the regulatory climate, though improving with clearer stablecoin guidelines, remains unsettled in the U.S. Trading volume sustainability is another concern. Q3 benefited from a significant crypto market rally, with Bitcoin trading above $100k in Q3, which may not persist. A decline in crypto prices or interest could shrink transaction revenue and reduce the value of assets on platform, affecting custody fee and staking income. Interest rate risk looms over stablecoin revenues. USDC yields are tied to U.S. interest rates, and as rate cuts are anticipated in late 2025 into 2026, the $355 million stablecoin revenue recorded this quarter could face compression.
On the expense side, Coinbase has reaccelerated hiring (+12% QoQ headcount growth) and taken on integration costs for multiple acquisitions, which could pressure margins if revenue growth stalls. The active M&A strategy adds integration and execution risk and increases complexity across trading, brokerage, custody, cloud services, and more. Competition in crypto is intense and global. Rivals are vying for the same trading and institutional clients, which means Coinbase must continuously innovate and comply in each jurisdiction to maintain market share. In short, Coinbase’s expanding footprint is well positioned but will require careful navigation of regulatory landscapes, market cycles, and operational challenges in the coming quarters.
Robinhood vs. Coinbase
Robinhood and Coinbase both reported robust top-line growth, but the composition of their revenues differs markedly. Robinhood’s revenue is increasingly diversified across equities, options, crypto trading, and interest-based income, with 11 revenue streams topping $100 M annualized. Its Q3 transaction revenue (58% of total) was buoyed by retail trading fervor, notably in cryptocurrencies (crypto was 36% of Robinhood’s transaction revenue), alongside a sizable net interest margin from cash sweep and margin loans (net interest made up ~36% of total revenue). Coinbase, by contrast, still derives the majority of its net revenue from trading fees (about 58% from transactions in Q3) but has built a significant recurring base. 40%+ of Coinbase’s net revenue now comes from subscriptions and services like USDC interest, staking, and custody. This gives Coinbase a more hybrid revenue model, part volatile trading fees and part steadier yield and fee income, whereas Robinhood’s fortunes are more squarely tied to customer trading activity, albeit across multiple asset classes.
Robinhood went public via a traditional IPO. On July 28, 2021 it priced shares at US $38 per share.
Coinbase did not do a traditional IPO; it went public via a direct listing on the Nasdaq Stock Market - trading under ticker “COIN” began April 14, 2021. (A reference price was set at US $250/share.)
Both companies have benefited from crypto’s resurgence in 2025, but Coinbase’s results suggest it is monetizing the broader crypto ecosystem (derivatives, stablecoin float, blockchain participation) in ways that complement pure trading commissions. Robinhood, meanwhile, is leveraging traditional brokerage revenue drivers (order flow, interest on balances) combined with newer products like crypto and premium subscriptions. The quality of revenue at Coinbase may be perceived as higher in terms of predictability, due to interest and custodial fees, whereas Robinhood’s doubling of revenue exemplifies high beta to market volumes, helped by its expanding product set.
User Base Depth vs. Breadth
In terms of user scale, Robinhood leads in active retail accounts. Its 26.8 million funded accounts likely exceed Coinbase’s monthly transacting user count, which was under 10 million in recent quarters. Robinhood’s users are primarily younger retail investors with relatively smaller account sizes but high engagement (ARPU of $191). Coinbase’s user base, on the other hand, includes 120+ million registered users globally and a mix of retail and institutional participants. This translated to $516 B in assets on platform for Coinbase, far surpassing Robinhood’s $333 B. Much of Coinbase’s asset base is driven by large institutional custody clients and high-value crypto holders, whereas Robinhood’s asset base includes significant equity holdings and cash from a broad retail cohort.
In effect, Coinbase has deeper assets per user, especially among institutions, and a more global reach. Robinhood has more retail investor penetration in the U.S. and is working to expand internationally through targeted acquisitions (Bitstamp, WonderFi). The two firms are converging somewhat, with Robinhood adding higher-balance customers, for example via Retirement accounts and Gold members, and Coinbase striving to grow retail engagement. Coinbase’s asset and user depth, including being custodian for ~80% of U.S. crypto ETF assets, remains higher due to its role with large entities. Conversely, Robinhood’s advantage is in user activity. Its users trade frequently across assets, including equities and options that Coinbase does not offer, yielding high ARPU, whereas Coinbase’s average retail user might be less active outside of crypto market rallies.
Derivatives Monetization
When it comes to derivatives, Coinbase has taken a clear lead. With the acquisition of Deribit, Coinbase instantly became a top player in crypto options and futures globally. In Q3, derivatives contributed materially to Coinbase’s revenue, for example $52 M from Deribit in just 1.5 months, and gave it first-mover advantage as U.S. regulators warm to crypto futures. Coinbase launched the first legally compliant perpetual futures for U.S. users this quarter. Robinhood is only beginning its foray into derivatives. It introduced event futures and crypto perpetuals in Europe and the UK and launched limited futures trading in Q3, but these are nascent offerings compared to Coinbase’s multi-billion-dollar derivatives volumes.
Outside of crypto, Robinhood does generate significant revenue from options trading ($304 M in Q3), effectively derivatives on equities. Here Robinhood likely has a larger retail market share in U.S. equity options than Coinbase, which does not offer stock options. In the crypto realm, derivatives comprise roughly 80% of total crypto market volume globally, and Coinbase’s strategic investments position it to capture this flow, including institutional hedging and speculative trading. Robinhood’s smaller step into crypto futures suggests a recognition of this opportunity, but Coinbase’s monetization of derivatives, via trading fees on futures and options and soon potential structured products via Echo, is significantly ahead. The gap may widen as Coinbase integrates Deribit fully and offers a 24/7 regulated crypto derivatives suite, whereas Robinhood will need time and perhaps further licenses or partnerships to scale its derivatives presence outside the small event contracts niche.
Stablecoin vs. Net Interest Drivers
Both companies are profiting from the high interest rate environment, but through different vehicles. Robinhood’s net interest revenue ($456 M in Q3) comes from interest on customer cash deposits, margin loans, and securities lending, essentially traditional brokerage interest income supported by 5%+ short-term rates. Coinbase’s closest analog is its stablecoin revenue ($355 M), which is driven by interest on the reserves backing USDC, also benefiting from high Fed rates. In practice, these are similar yield-driven earnings streams, but Coinbase’s is tied to the success of USDC adoption and involves sharing economics with Circle, whereas Robinhood’s is tied to customer cash balances and margin utilization on its platform. Robinhood’s interest revenue grew 66% YoY, thanks to growing assets and still-elevated rates, and it could taper if Fed rates decline or if customers reallocate cash into investments.
Coinbase’s stablecoin revenue, while also sensitive to rate cuts, has an element of volume growth as well. USDC volumes and circulation expanded significantly in Q3, partially mitigating rate effects. Another difference is predictability. Robinhood must actively compete for customer cash, with its Cash Sweep balances hitting $35.4 B with attractive yields to users, whereas Coinbase’s USDC revenue benefits from a quasi-monopolistic position as USDC co-manager. Both firms are leveraging interest income to smooth out earnings, but Coinbase’s stablecoin strategy doubles as a long-term payments play, potentially more defensible if USDC becomes embedded in payment flows. Robinhood’s interest income, by contrast, is more a byproduct of its brokerage model, and it has also begun rolling out Robinhood Banking to lock in those deposits. In summary, interest-sensitive income now underpins roughly a third of revenue for each company, making Fed policy a shared watch item, though achieved via different instruments, fiat versus stablecoin.
Operating Expense and Opex Control
On efficiency, Robinhood currently enjoys higher margins, aided by its leaner cost base relative to revenue. In Q3, Robinhood’s adjusted EBITDA margin was ~58%, and it delivered GAAP net income margin above 40%. This reflects the company’s stringent cost discipline after past layoffs and its predominantly retail-focused, automated platform, and also some one-time gains. Coinbase, after aggressive cost cuts in 2023, is also now solidly profitable, but its adjusted EBITDA margin (~45% in Q3) is a bit lower, and it is reinvesting in growth with headcount +12% QoQ. Coinbase’s total operating expenses, at $1.4 B in Q3, are more than double Robinhood’s, reflecting a larger organization with nearly 4,800 employees and the breadth of its operations, including compliance, international expansion, and R&D on multiple product lines. Both companies have indicated focus on opex control.
Robinhood’s increase in 2025 expense guidance was modest and tied to growth initiatives, and Coinbase actually lowered expenses QoQ and has guided to roughly flat or single-digit growth in core expenses next quarter. A key point of divergence is stock-based compensation. Coinbase expects ~$234 M SBC in Q4, while Robinhood’s SBC impact is smaller in absolute terms. From an investor perspective, Robinhood currently demonstrates better operating leverage, as seen by doubling revenue with only 31% opex increase YoY, whereas Coinbase is balancing profitability with aggressive investment, leading to more moderate leverage in the short term. However, Coinbase’s cost base includes strategic spends, for example regulatory or legal costs and technology development for new products, that could pay off in future periods. If trading conditions soften, Robinhood’s lower fixed-cost base and ongoing share buybacks reducing share count might sustain its EPS better, whereas Coinbase’s broader footprint could face heavier expense drag. Thus far in 2025, both are showing improving cost ratios, but Robinhood holds the edge on near-term profitability metrics.
Capital and Regulatory Positioning
Both enter Q4 2025 well-capitalized, but with different scopes. Robinhood is a U.S. broker-dealer expanding licenses via acquisitions, holds $4.3 B in cash, and is buying back shares. Its footprint spans banking (Robinhood Bank) and crypto via state licenses and Bitstamp’s EU registrations. Key risk is renewed scrutiny of payment for order flow.
Coinbase operates under a more complex global regime, holds sizable fiat and crypto reserves, and has convertible notes. It secured a MiCA license in Europe and became a leading custodian for U.S. crypto ETFs, while actively challenging the SEC on crypto securities.
Netting it out: Coinbase carries broader regulatory exposure and aims to shape rules; Robinhood grows within established frameworks. Both show strong compliance cultures and capital cushions, with no capital shortfalls. Coinbase’s equity is lifted by crypto gains; Robinhood remains debt-free and profitable.
What to Watch in Q4
Robinhood: Whether record trading momentum persists into Q4 amid new launches. Monitor if recent rollouts, for example futures, prediction markets, and banking, drive incremental revenue, and how acquisition integrations such as Bitstamp contribute to international growth. Guidance on expense trajectory and any regulatory developments, like approval of new products, will also be key.
Coinbase: The progress of derivatives integration and Echo’s token offering platform in Q4, alongside crypto market conditions. Watch for any updates on the SEC legal case or U.S. regulatory shifts, as well as the impact of potential interest rate changes on USDC revenue. Coinbase’s ability to sustain trading volumes, with October’s ~$385 M transaction revenue guidance as a baseline, and keep expenses in check amid new acquisitions will be a focal point.
Sources:
Coinbase - Shareholder Letter
Robinhood - Shareholder Letter
Risk Disclaimer:
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The content reflects only the writer’s views and not financial advice. Please conduct your own due diligence before engaging with cryptocurrencies, DeFi, NFTs, Web 3 or related technologies, as they carry high risks and values can fluctuate significantly.
Note: This research paper is not sponsored by any of the mentioned companies.
the “what to watch” section is a great guide
Strong callouts on interest-sensitive revenue. Framing Robinhood’s net interest next to USDC yields makes the comparison intuitive