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- Cash, Clicks, And Confidence: Here’s A Simple Plan to Ride The Brokerage Boom
Cash, Clicks, And Confidence: Here’s A Simple Plan to Ride The Brokerage Boom
Noah Zelvis
November 09, 2025
In partnership with
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What Just Happened
Robinhood (NASDAQ: HOOD) just dropped a crowd-pleaser. Earnings came in great as revenue beat ($1.27B vs. $1.19B), EPS beat ($0.61 vs. $0.53), and 100% Year over year (YoY top-line growth. Users and Average Revenue Per User (ARPU) improved, and crypto came back with $268M in Q3 revenue.
Management also highlighted two new lanes, Prediction Markets and Bitstamp, each on track to be ~$100M annualized businesses, plus a continued wealth-management push (banking, card, retirement). That is music to our ears.
The not-so-rosy bits are that crypto was a tad light vs. some expectations, and the CFO announced a planned transition. Net-net still a powerful execution and expansion message.
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The Business
This is no longer just a free-trades app. It’s a multi-asset storefront where retail investors trade stocks, options, crypto, hold cash, and increasingly park their money (sweep yields, Gold, retirement). Here’s how they turn it into profits:
More funded customers → more assets on platform → more trades, higher ARPU.
More products (options, futures, crypto, prediction markets, banking) → more reasons to stay.
More cash flow → more product velocity and, potentially, buybacks down the road.
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Your Three-Step Checklist
1) Customers & Assets
Are funded accounts rising, and are assets under custody compounding? That’s your demand signal. If both trend up, engagement and monetization usually follow.
2) ARPU & Mix
Is ARPU holding or climbing as users adopt more products? Options, cash yields, and premium features should keep the mix rich even when one line (e.g., crypto) takes a breather.
3) Cash & Margins
Are GAAP profits and operating margins staying healthy while they expand product lines? If operating discipline holds (even with growth spending), you’ve got a huge business.
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Why Bulls Still Cheer
Category momentum: Retail participation is sticky when platforms bundle banking, credit, and advice-lite features; you don’t need euphoric volumes every quarter to grow ARPU.
New profit centers: Prediction markets and Bitstamp add non-zero revenue streams with different cycles than equities.
Crypto as a call option: When the crypto tide rises, HOOD’s volume and take rate can amplify quickly.
Brand with gravity: A 20- and 30-something user base that keeps aging into higher incomes is a quiet compounding engine.
Why Bears Keep Their Helmets On
Valuation heat: After a monster run, expectations are sky-high. Small misses can trigger fast air-pockets.
Reg/Rule risk: Brokerage, banking, and crypto each carry their own regulatory tripwires; product timelines can slip.
Mix volatility: Options/crypto revenue is powerful—but never smooth.
Key-seat change: CFO transition adds a little uncertainty to a precision operation.
What to Watch Next (so you’re not guessing)
Funded customers & net deposits: Are more people bringing bigger balances?
ARPU trend: Holding ~flat or up = mix quality; sharp dips = caution.
Operating margin & cash: Can they keep margins healthy while scaling new lines?
Product cadence: Banking rollout, credit card traction, and international expansion milestones.
Crypto sensitivity: Does revenue track crypto volumes without over-reliance?
How I’d Actually Trade It
Starter Buy (1–2% position): Buy on a red or quiet day. You’re paying for execution momentum, not perfection.
Add on Proof (toward 3–4%): Add only after the next print confirms: funded customers up, ARPU stable/up, and margins intact. Let the numbers do the talking.
Risk Line: Reassess if funded customers flatten and ARPU dips while expenses push guidance to the low end. Trim if two metrics break at once.
Tactics: Scale in thirds, avoid chasing gap-ups, and be willing to trim into 10–20% bursts to keep emotions out of it.
What Could Go Right
Wealth flywheel spins: Banking + card + retirement deepen stickiness and raise ARPU even in sleepy trading quarters.
Crypto tailwind returns: A broad crypto upcycle puts upside torque on volumes and sentiment.
International unlocks: EU stock tokens, broader crypto, and futures capabilities widen the funnel.
What Could Go Wrong
Risk-off macro: Light volumes can compress high-multiple stories quickly.
Regulatory speed bumps: Any surprise around crypto custody, tokens, or prediction markets.
Execution drag: Product sprawl outpaces support, dinging NPS and engagement.
Valuation
You’re not buying it cheap by any means. You’re buying proven acceleration (users + ARPU), operating leverage, and new lanes that can smooth a historically choppy mix. That works—as long as customers, ARPU, and margins keep trending the right way.
Bottom Line
Treat HOOD like a disciplined momentum compounder: start small, make it earn you adds, and manage the heat. If customers and cash keep climbing while new products stick, the story can keep working beyond the quarter-to-quarter noise.
Action Recap
✅ Starter: 1–2% on calm/red days
✅ Add on proof: Next print shows funded customers ↑, ARPU stable/↑, margins healthy
⚠️ Trim on trouble: Funded customers flatten + ARPU slips while costs creep
👀 Watch next: Net deposits, ARPU, operating margin, banking/card progress, crypto sensitivity
That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.
Best Regards,
—Noah Zelvis
Tech Stock Insider