Robinhood Markets (HOOD) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $682 million, up 40% year-over-year, and record net income of $188 million with diluted EPS of $0.21, driven by strong growth in equity, options, and crypto trading volumes.

• Funded customers increased by 1 million year-over-year to 24.2 million, with assets under custody up 57% to $140 billion.

• Gold subscribers grew over 60% year-over-year to nearly 2 million, with annualized Gold subscription revenue exceeding $100 million.

• Margin balances hit a two-year high of $5 billion, with 75% of growth from customers with balances over $100K after introducing competitive rates.

• Announced strategic acquisitions of Bitstamp and Pluto to expand global crypto and AI capabilities.

Financial highlights

• Adjusted EBITDA doubled year-over-year to $301 million, with margin expanding to 44% from 31% a year ago.

• Net income was $188 million, or $0.21 per share, up sevenfold from a year ago.

• Transaction-based revenues increased 69% year-over-year to $327 million, led by options (+43%), crypto (+161%), and equities (+60%).

• Net interest revenues rose 22% year-over-year to $285 million, driven by higher margin balances and cash sweep growth.

• Cash sweep balances hit a record $21 billion, up 76% year-over-year.

Outlook and guidance

• Expense outlook for 2024 remains unchanged at $1.85–$1.95 billion.

• $1 billion share repurchase authorization to be executed over 2–3 years, depending on market conditions.

• Management expects primary sources of liquidity to be adequate for the next 12 months.

• If U.S. operating improvements continue, a significant portion of the U.S. valuation allowance may be reversed within 24 months.

• Focus remains on growth investments in new products, features, and international expansion while improving efficiency.