10-QPeriod: Q3 FY2024

Robinhood Markets, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 31, 2024For Securities:HOOD

Summary

Robinhood Markets, Inc. (HOOD) reported a significant turnaround in its financial performance for the quarter ending September 29, 2024. The company posted a net income of $150 million, a substantial improvement from a net loss of $85 million in the same period last year. This positive swing was driven by a 36% increase in total net revenues to $637 million, fueled by a robust performance in transaction-based revenues, which grew by 72% year-over-year, primarily in options and cryptocurrencies. Net interest revenues also saw a healthy increase of 9%. Key operational metrics reflect strong user engagement and growth, with Funded Customers increasing by 4% to 24.3 million and Assets Under Custody (AUC) soaring by 76% to $152.2 billion. This growth was supported by significant Net Deposits of $10.0 billion, more than double the previous year's figure. The company also saw a substantial 65% increase in Gold Subscribers to 2.19 million, indicating growing adoption of its premium service. Operationally, total operating expenses decreased by 10%, largely due to a significant reduction in general and administrative expenses, which fell by 42%. This improved profitability and efficiency position Robinhood favorably, although the company continues to navigate a complex regulatory environment and manages various legal proceedings that could impact future operations.

Financial Highlights

41 data points
Beta

Revenue

$637.00M

Net Income

$150.00M

23.5% Net Margin

EPS (Diluted)

$0.17

Total Assets

$43.24B

Cash & Equivalents

$4.61B

Free Cash Flow

$1.81B

Financial Statements
Beta
Revenue$637.00M
Operating Expenses$486.00M
Net Income$150.00M
EPS (Basic)$0.17
EPS (Diluted)$0.17
Shares Outstanding (Basic)884.11M
Shares Outstanding (Diluted)905.54M

Key Highlights

  • 1Achieved a net income of $150 million, compared to a net loss of $85 million in the prior year's quarter.
  • 2Total net revenues increased by 36% to $637 million, driven by a 72% surge in transaction-based revenues.
  • 3Assets Under Custody (AUC) grew by 76% to $152.2 billion, reflecting strong market performance and customer activity.
  • 4Funded Customers increased by 4% to 24.3 million, alongside a significant 65% rise in Gold Subscribers to 2.19 million.
  • 5Total operating expenses decreased by 10%, mainly due to a 42% reduction in general and administrative expenses.
  • 6Net Deposits were strong at $10.0 billion for the quarter.
  • 7Announced a $1 billion share repurchase program, with $97 million executed in the quarter.

Frequently Asked Questions

Robinhood reported a substantial improvement in its financial performance. Net income was $150 million, a significant turnaround from a net loss of $85 million in Q3 2023. Total net revenues increased by 36% to $637 million, driven by strong transaction-based revenues and net interest revenues. Operating expenses decreased by 10%.

Key operational metrics showed positive growth. Funded Customers increased by 4% to 24.3 million, and Assets Under Custody (AUC) grew significantly by 76% to $152.2 billion. Gold Subscribers also saw a substantial increase of 65% to 2.19 million.

Robinhood announced a $1 billion share repurchase program in May 2024. During the three months ended September 30, 2024, the company repurchased 5.01 million shares of its Class A common stock for $97 million.

Yes, Robinhood is involved in various ongoing legal and regulatory matters, including investigations related to brokerage execution quality, options trading, data security, and cryptocurrency operations. While the company believes it has made adequate accruals for probable losses, these matters introduce uncertainty and could potentially have a material adverse effect on its business, financial condition, and results of operations if resolved unfavorably.

Robinhood entered into an agreement in June 2024 to acquire Bitstamp, a cryptocurrency exchange, for approximately $200 million. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.