Robinhood Markets (HOOD) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues reached $637 million, up 36% year-over-year, with net income of $150 million and GAAP diluted EPS of $0.17, marking a return to profitability and record customer and asset growth.

• 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.

• Net deposits exceeded $10 billion for the third consecutive quarter, with annualized net deposit growth rates of 29% in Q3 and 45% over the past year.

• Robinhood Gold subscriptions reached an all-time high of 2.2 million, and the Gold Card rollout continues with strong customer retention and engagement.

• Product launches included Robinhood Legend desktop, index options, futures, spot Bitcoin ETFs, and the Presidential Election Market, with international expansion and the pending Bitstamp acquisition.

Financial highlights

• Total net revenues were $637 million, up 36% year-over-year; transaction-based revenues rose 72% to $319 million, led by options (+63%), crypto (+165%), and equities (+37%).

• Net income was $150 million (diluted EPS $0.17), up $235 million year-over-year.

• Adjusted EBITDA nearly doubled to $268 million, with a 42% margin.

• Operating expenses decreased 10% year-over-year to $486 million, while adjusted operating expenses rose 12% to $397 million due to higher marketing and growth investments.

• ARPU increased 31% year-over-year to $105; Gold Subscribers grew 65% to 2.2 million.

Outlook and guidance

• 2024 expense outlook for combined adjusted operating expenses and SBC is $1.85–$1.95 billion, expected near the top end due to growth investments.

• Q4 net deposits in October already north of $4 billion, with equity and crypto volumes at multi-year highs.

• Contra revenues from deposit matches expected to grow sequentially in Q4, then slow in 2025; Gold deposit boost program to end in November 2024.

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

• Share repurchase program expected to complete over two to three years, with anticipated dilution of 2% or less for 2024.