Robinhood Markets (HOOD) Q3 2024 earnings summary

Executive summary

• Net revenues rose 36% year-over-year to $637 million in Q3 2024, with net income of $150 million (diluted EPS $0.17), marking a return to profitability and the second-highest quarterly revenue on record.

• Funded Customers reached 24.3 million, up 1 million year-over-year, and assets under custody hit a record $152.2 billion, up 76% year-over-year.

• Adjusted EBITDA nearly doubled year-over-year to $268 million (42% margin), with GAAP diluted EPS of $0.17 and net margin of 24%.

• Product innovation included the launch of Robinhood Legend desktop, index options, futures, event contracts, Gold Card, and international expansion, with the pending Bitstamp acquisition.

• Share repurchases totaled $97 million for 5 million shares in Q3 as part of a $1 billion buyback program.

Financial highlights

• Transaction-based revenues grew 72% year-over-year to $319 million, led by options (+63%), equities (+65%), and crypto (+165%).

• Net interest revenues increased 9% to $274 million; other revenues rose 42% to $44 million, mainly from Gold subscriptions.

• Adjusted operating expenses (non-GAAP) were $397 million, up 12% year-over-year; total operating expenses fell 10% to $486 million.

• ARPU was $105, up 31% year-over-year.

• Cash and cash equivalents stood at $4.6 billion at quarter end, with $3 billion in available credit lines.

Outlook and guidance

• 2024 expense outlook maintained at $1.85–$1.95 billion for combined adjusted operating expenses and SBC, with expectations to finish near the top end.

• Contra revenues expected to grow sequentially in Q4, then slow in 2025 as the Gold deposit boost winds down in November 2024.

• Bitstamp acquisition expected to close in H1 2025, supporting international expansion.

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