Robinhood (HOOD) Sees Record Revenues and Subscriber Growth in Q2 2024

Robinhood
Markets,
Inc.
(NASDAQ:
HOOD)
has
released
its
financial
results
for
the
second
quarter
of
2024,
marking
a
period
of
significant
growth
and
record-breaking
performance.
The
company
reported
record
revenues
of
$682
million,
a
40%
year-over-year
increase,
and
net
income
of
$188
million,
translating
to
a
GAAP
diluted
EPS
of
$0.21,
up
from
$0.03
in
Q2
2023,
according
to

GlobeNewswire.

Financial
Highlights

Robinhood’s
Q2
2024
financial
results
reflect
robust
growth
across
several
key
metrics:

• 
  Total
  net
  revenues
  increased
  by
  40%
  year-over-year
  to
  $682
  million.
• 
  Transaction-based
  revenues
  surged
  by
  69%
  year-over-year
  to
  $327
  million,
  with
  options
  revenue
  at
  $182
  million
  (up
  43%),
  cryptocurrencies
  revenue
  at
  $81
  million
  (up
  161%),
  and
  equities
  revenue
  at
  $40
  million
  (up
  60%).
• 
  Net
  interest
  revenues
  rose
  by
  22%
  year-over-year
  to
  $285
  million,
  driven
  by
  growth
  in
  interest-earning
  assets
  and
  increased
  securities
  lending
  activity.
• 
  Other
  revenues
  grew
  by
  19%
  year-over-year
  to
  $70
  million,
  primarily
  due
  to
  increased
  Gold
  subscription
  revenues.
• 
  Net
  income
  reached
  $188
  million,
  a
  significant
  increase
  from
  $25
  million
  in
  Q2
  2023.
• 
  Total
  operating
  expenses
  increased
  by
  6%
  year-over-year
  to
  $493
  million,
  mainly
  due
  to
  higher
  marketing
  and
  growth
  investments.
• 
  Adjusted
  EBITDA
  (non-GAAP)
  nearly
  doubled,
  increasing
  by
  99%
  year-over-year
  to
  $301
  million.

Customer
Growth
and
Engagement

The
company’s
user
base
also
saw
substantial
growth:

• 
  Funded
  Customers
  increased
  by
  1
  million
  year-over-year
  to
  24.2
  million.
• 
  Investment
  Accounts
  rose
  by
  1.4
  million
  year-over-year
  to
  24.8
  million.
• 
  Assets
  Under
  Custody
  (AUC)
  grew
  by
  57%
  year-over-year
  to
  $139.7
  billion,
  driven
  by
  continued
  Net
  Deposits
  and
  higher
  equity
  and
  cryptocurrency
  valuations.
• 
  Net
  Deposits
  were
  $13.2
  billion,
  representing
  an
  annualized
  growth
  rate
  of
  41%
  relative
  to
  AUC
  at
  the
  end
  of
  Q1
  2024.
• 
  Average
  Revenue
  Per
  User
  (ARPU)
  increased
  by
  35%
  year-over-year
  to
  $113.
• 
  Gold
  Subscribers
  surged
  by
  61%
  year-over-year
  to
  2
  million.

Strategic
Initiatives
and
Product
Development

Robinhood
has
been
active
in
expanding
its
product
offerings
and
strategic
acquisitions:

• 
  Robinhood
  Gold
  achieved
  a
  milestone
  of
  2
  million
  subscribers,
  accounting
  for
  over
  8%
  of
  Funded
  Customers.
• 
  1%
  Transfer
  Bonus
  drove
  over
  $3
  billion
  in
  asset
  transfers
  from
  April
  30
  to
  June
  28,
  2024.
• 
  Acquisitions:
  Robinhood
  agreed
  to
  acquire
  
  
  
  
  
  Bitstamp,
  Ltd.,
  a
  globally-scaled
  crypto
  exchange,
  and
  Pluto
  Capital
  Inc.,
  an
  AI-powered
  investment
  research
  platform.
• 
  Margin
  Rates:
  In
  May,
  Robinhood
  introduced
  industry-leading
  margin
  rates,
  resulting
  in
  a
  20%
  growth
  in
  margin
  balances,
  which
  reached
  $5
  billion.
• 
  Share
  Repurchase
  Program:
  The
  Board
  of
  Directors
  authorized
  a
  $1
  billion
  share
  repurchase
  program,
  expected
  to
  be
  executed
  over
  two
  to
  three
  years.

Future
Outlook

Looking
ahead,
Robinhood’s
2024
expense
plan
includes
growth
investments
in
new
products,
features,
and
international
expansion.
The
company
maintains
its
outlook
for
GAAP
total
operating
expenses
and
Non-GAAP
combined
Adjusted
Operating
Expenses
and
SBC
for
full-year
2024
at
$1.85
billion
to
$1.95
billion.

Robinhood’s
rapid
growth
and
strategic
initiatives
underscore
its
commitment
to
enhancing
customer
value
and
expanding
its
market
presence.

Image
source:
Shutterstock