10-QPeriod: Q1 FY2024

Robinhood Markets, Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 8, 2024For Securities:HOOD

Summary

Robinhood Markets, Inc. (HOOD) demonstrated a significant turnaround in the first quarter of 2024, reporting a net income of $157 million and diluted EPS of $0.18, a substantial improvement from a net loss of $511 million in the same period last year. This profitability was driven by a 40% increase in total net revenues to $618 million, fueled by a 59% surge in transaction-based revenues, largely from a substantial increase in cryptocurrency and options trading volumes. Operationally, the company saw strong growth across key performance metrics, including a 65% increase in Assets Under Custody (AUC) to $129.6 billion and a 42% rise in Gold Subscribers to 1.68 million. Despite this positive financial performance, investors should note the company's ongoing legal and regulatory challenges, including an SEC investigation into its cryptocurrency operations and various other legal proceedings, which continue to represent a significant risk factor.

Financial Highlights

41 data points
Beta

Revenue

$618.00M

Net Income

$157.00M

25.4% Net Margin

EPS (Diluted)

$0.18

Total Assets

$46.09B

Cash & Equivalents

$4.72B

Free Cash Flow

-$623.00M

Financial Statements
Beta
Revenue$618.00M
Operating Expenses$460.00M
Net Income$157.00M
EPS (Basic)$0.18
EPS (Diluted)$0.18
Shares Outstanding (Basic)875.32M
Shares Outstanding (Diluted)895.78M

Key Highlights

  • 1Robinhood reported a net income of $157 million in Q1 2024, a significant improvement from a net loss of $511 million in Q1 2023.
  • 2Total net revenues increased by 40% year-over-year to $618 million, driven by a 59% increase in transaction-based revenues.
  • 3Assets Under Custody (AUC) grew by 65% to $129.6 billion, indicating increased customer assets on the platform.
  • 4Gold Subscribers increased by 42% to 1.68 million, showing strong growth in the premium subscription offering.
  • 5Operating expenses decreased by 52% to $460 million, largely due to a significant reduction in share-based compensation expenses compared to the prior year's exceptional charge.
  • 6Net Deposits were strong at $11.2 billion for the quarter, with an annualized growth rate of 44% relative to AUC.
  • 7The company received a Wells Notice from the SEC regarding its cryptocurrency operations, indicating potential enforcement action.

Frequently Asked Questions

Robinhood experienced a dramatic financial turnaround in Q1 2024, reporting a net income of $157 million ($0.18 EPS) compared to a net loss of $511 million (-$0.57 EPS) in Q1 2023. This was driven by a 40% increase in total net revenues to $618 million, primarily from higher transaction-based revenues, and a 52% decrease in operating expenses due to lower share-based compensation compared to the prior year's one-time charge.

Key metrics showed strong growth. Assets Under Custody (AUC) rose 65% to $129.6 billion. Gold Subscribers increased 42% to 1.68 million. Funded Customers grew 3% to 23.9 million, and Net Deposits were robust at $11.2 billion, with an annualized growth rate of 44%.

Yes, Robinhood Crypto (RHC) received a Wells Notice from the SEC Staff, indicating a preliminary determination to recommend an enforcement action alleging violations of the Exchange Act related to its cryptocurrency operations. The filing also details ongoing investigations and legal proceedings related to best execution, payment for order flow, account takeovers, cybersecurity, and historical trading restrictions.

Transaction-based revenues increased by 59% to $329 million. This surge was primarily attributed to an $88 million increase in cryptocurrency revenues, driven by higher trading volumes and user participation, and a $21 million increase in options revenues, fueled by a rise in contracts traded and user engagement, despite lower rebate rates.