Robinhood reports record Revenues of $618M in Q1-2024 led by 232% leap in Crypto activity

US neobroker Robinhood Markets, Inc. (NASDAQ:HOOD) is seeing its shares rise by 7% in aftermarket trading on Wednesday, after the company reported fairly upbeat results for the first quarter of 2024.

Robinhood reported record quarterly revenues of $618 million in Q1-2024, up 40% year-over-year. The company also saw record GAAP Diluted EPS of $0.18 per share. The company’s Q1 results included record Net Deposits of $11.2 billion, including net positive transfers from every major incumbent brokerage firm. The company’s Gold Subscribers reached a new high of 1.7 million, up 42% year-over-year.

After posting only its second profitable quarter ever in Q4-2023 with $30 million of Net Profit, Robinhood’s Q1 2024 generated a Net Profit of $157 million, also a record for the company.

However the results follow news that Robinhood faces some regulatory headwinds in its crypto business, with Robinhood Crypto LLC receiving a Wells Notice earlier this week.

Vlad Tenev, CEO and Co-Founder of Robinhood, said,

“We continued to aggressively execute on our product roadmap in Q1, leading to all-time highs for Net Deposits and Gold Subscribers. Q2 is off to a strong start with April being our highest month of the year for Net Deposits and Gold Subscriber growth, and we’re excited to see strong interest from over 1 million customers in our Robinhood Gold Card.”

“We delivered significant revenue growth and margin expansion in Q1 as we remain focused on driving another year of profitable growth in 2024,” said Jason Warnick, Chief Financial Officer of Robinhood. “In Q1, we set records for quarterly revenues, net income, and EPS, even as we stepped up our marketing and growth investments.”

Robinhood Q1 2024 Results Summary

• Total net revenues increased 40% year-over-year to $618 million.
  • Transaction-based revenues increased 59% year-over-year to $329 million, primarily driven by cryptocurrencies revenue of $126 million, up 232%, options revenue of $154 million, up 16%, and equities revenue of $39 million, up 44%.
  • Net interest revenues increased 22% year-over-year to $254 million, driven by growth in interest-earning assets and higher short term interest rates.
  • Other revenues increased 35% year-over-year to $35 million, primarily driven by higher Gold subscription revenue.
• Net income increased year-over-year to $157 million, or diluted earnings per share (EPS) of $0.18, compared with a net loss of $511 million, or diluted EPS of -$0.57, in Q1 2023.
  • Q1 2023 diluted EPS of -$0.57 included a -$0.54 impact from a one-time $485 million share-based compensation (“SBC”) expense related to our co-founders cancelling their 2021 market-based restricted stock unit awards in February 2023 (the “2021 Founders Award Cancellation”).
• Total operating expenses decreased 52% year-over-year to $460 million primarily due to the 2021 Founders Award Cancellation in Q1 2023.
  • Adjusted Operating Expenses (non-GAAP) increased 13% year-over-year to $398 million, primarily due to increased marketing and growth investments.
  • SBC decreased 90% year-over-year to $62 million, primarily due to the 2021 Founders Award Cancellation in Q1 2023.
• Adjusted EBITDA (non-GAAP) increased 115% year-over-year to $247 million.
• Funded Customers increased by 810 thousand year-over-year to 23.9 million.
  • Investment Accounts increased by 1.1 million year-over-year to 24.4 million.
• Assets Under Custody (AUC) increased 65% year-over-year to $129.6 billion, primarily driven by higher equity and cryptocurrency valuations and continued Net Deposits.
• Net Deposits were $11.2 billion, an annualized growth rate of 44% relative to AUC at the end of Q4 2023. Over the past twelve months, Net Deposits were $23.9 billion, a growth rate of 30% relative to AUC at the end of Q1 2023.
• Average Revenue Per User (ARPU) increased by 35% year-over-year to $104.
• Gold Subscribers increased by 500 thousand, or 42%, year-over-year to 1.7 million.
• Cash and cash equivalents totaled $4.7 billion compared with $5.5 billion at the end of Q1 2023.

Q1 Highlights

• Gold Subscribers continue to accelerate – Gold Subscribers grew to a record high of 1.7 million in Q1 2024, up 260 thousand quarter-over-quarter, marking the fastest quarterly growth in three years.
• New 1% unlimited deposit boost with Gold – Announced in March and launching soon, deposit boost will provide even more value to customers with Robinhood Gold.
• Robinhood announces new Gold Credit Card – Announced in March and exclusively for Robinhood Gold Subscribers, the Gold credit card provides industry leading benefits such as 3% cash back on all categories and no annual or foreign transaction fees. More than 1 million customers have joined the waitlist.
• 3% Retirement Transfer Match Drives Adoption – Customers transferred over $4 billion in retirement assets from brokerage competitors during Robinhood’s 3% transfer promotion between January 2024 and April 2024, averaging over $90 thousand per customer.
• Robinhood Retirement grows more than 4X year-to-date – In early May, Retirement AUC reached a new high with over $7 billion.
• Robinhood UK Reaches Full Availability – Marking another step in global expansion, Robinhood rolled all eligible customers off the waitlist in March.
• 24 Hour Market Sees Record Overnight Volumes – With over 900 stocks and ETFs available, Robinhood 24 Hour Market reached new highs in its overnight trading volumes. Through March, customers have traded over $10 billion in Notional Trading Volume during the overnight session since launch.

Additional Q1 2024 Operating Data

• Retirement AUC totaled $4.2 billion compared with $0.3 billion at the end of Q1 2023.
• Cash Sweep increased 113% year-over-year to $19.0 billion.
• Margin Book increased 32% year-over-year to $4.1 billion.
• Equity Notional Trading Volumes increased 40% year-over-year to $225.0 billion.
• Options Contracts Traded increased 26% year-over-year to 343.6 million.
• Crypto Notional Trading Volumes increased 224% year-over-year to $36.0 billion.
• Monthly Active Users (MAU) increased 16% year-over-year to 13.7 million.

Robinhood Financial Outlook

Robinhood’s 2024 expense plan includes growth investments in new products, features, and international expansion while also getting more efficient in our existing businesses. Taken together, it continues to expect both GAAP total operating expenses and Non-GAAP combined Adjusted Operating Expenses and SBC for full-year 2024 to be in the range of $1.85 billion to $1.95 billion.