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.

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