Robinhood Markets (NASDAQ: HOOD) reported record-breaking second-quarter results on Wednesday, with total net revenues soaring to $682 million. The company's performance was boosted by significant growth in transaction-based revenues and a surge in its premium subscription service.
Robinhood Posts Record Q2 Numbers
The financial technology firm, known for its commission-free trading platform, saw its net income climb to $188 million, translating to diluted earnings per share of $0.21. This marks a substantial increase from the $25 million, or $0.03 per share, reported in the same quarter last year.
In Q2 2024, Robinhood $HOOD earned $285 million in net interest income. $134 million came from interest on cash and deposits* earning 5.25%. Interest rate cuts will be a meaningful headwind for the company.
— Jevgenijs Kazanins (@jevgenijs) August 7, 2024
* Includes cash and cash equivalents, cash, cash equivalent, and… pic.twitter.com/tMlmEoXUja
Net profit increased by 652% compared to the $25 million reported in the same period last year and by 20% compared to the $157 million from the first quarter of this year.
“I’m encouraged by the progress we’re making as a business,” said Jason Warnick, Chief Financial Officer of Robinhood. “In Q2, we set new quarterly records for revenues and earnings per share as we continue to focus on delivering another year of profitable growth.”
Robinhood's transaction-based revenues, which include income from options, cryptocurrencies, and equities trading, jumped 69% year-over-year (YoY) to $327 million. Options trading continued to be a key driver, with revenues in this segment increasing 43% to $182 million. Cryptocurrency trading revenues more than doubled, surging 161% to $81 million.
“This quarter, we kept up the pace with rapid product launches and a relentless drive to provide top value for our customers,” said Vlad Tenev, CEO and Co-Founder of Robinhood.
Earlier this week, Robinhood announced the appointment of David Schwed as the Chief Information Security Officer for its Brokerage division. Previously, Schwed served as the Chief Operating Officer and subsequently as an Advisor at Halborn, a cybersecurity company.
Gold Surpasses 2 Million
The company's premium subscription service, Robinhood Gold, reached a milestone of 2 million subscribers, representing an increase of 750,000 or 61% YoY. This growth in Gold subscribers has contributed to the company's other revenues, which rose 19% to $70 million.
“With Robinhood Gold reaching 2 million subscribers, we're witnessing the flywheel accelerate,” added Tenev.
Robinhood's assets under custody (AUC) also grew 57% YoY to $139.7 billion, driven by net deposits and higher equity and cryptocurrency valuations. The company reported net deposits of $13.2 billion for the quarter, representing an annualized growth rate of 41% relative to AUC at the end of Q1 2024.
The company also highlighted its recent strategic moves, including the planned acquisition of Bitstamp, Ltd, a globally-scaled crypto exchange, and the purchase of Pluto Capital Inc., an AI-powered investment research platform.
Looking ahead, Robinhood maintained its full-year 2024 expense outlook, projecting GAAP total operating expenses and Non-GAAP combined Adjusted Operating Expenses and Share-Based Compensation to range between $1.85 billion and $1.95 billion.
Concurrently, the firm launched joint investment accounts that allow multiple users to handle investments collaboratively. This new feature allows families and partners to combine their assets into one account, thereby improving their investment approaches.
