Robinhood Markets, Inc. reported an increase in Net Profit of approximately 130% YoY, to $157 Million, primarily driven by the rise in revenue from crypto assets.
On May 8, Robinhood Markets, Inc. (NASDAQ: HOOD) reported its quarterly reports for the quarter ended April 30. The report presented significant financial growth and an increase in user engagement.
This article highlights the key financial outcomes and strategic expansions.
Financial Performance
Revenues
Total net revenues increased by 40% YoY, reaching $618 Million in Q1 2024. The key drivers of this substantial growth include an increase in cryptocurrency revenue of 232% to $126 Million and an increase in transaction-based revenues of 59% to $329 Million.
Robinhood's crypto revenue tripled in Q1 pic.twitter.com/Z6UtTWvz4C
— Jeff Roberts (@jeffjohnroberts) May 8, 2024
Options revenue grew by 16% to $154 Million, and equities revenue increased by 44% to $39 Million.
Net Interest Revenue
Revenues from interest grew by 22%, YoY, to $254 Million, fueled by growth in interest-earning assets and higher short-term interest rates.
Other Revenue
The revenue from the increase in gold subscriptions has supported a 35% increase in other revenues to $35 million.
Net Income
Robinhood has done a tremendous job, converting a net loss of $511 Million in Q1 2023 to a net profit of $157 Million in Q1 2024, with diluted earnings per share (EPS) of $0.18.
Operational Highlights
Reduction in Expenses
Total operating expenses decreased by 52% to $460 Million, mainly driven by the absence of a substantial one-time share-based compensation (SBC) expense from the previous year.
Adjusted Operating Expenses
The company has invested substantially in marketing and growth, increasing adjusted operating expenses by 13% to $398 Million.
Adjusted EBITDA
It demonstrated a significant improvement, increasing by 115% to $247 Million.
Growth in Customer Base and Product Base: A major driver of Growth
User Base
There is an increase in funded customer accounts by 810,000, reaching 23.9 Million customers. The investment account rose by 1.1 Million to 24.4 Million.
Assets Under Custody (AUC)
This has increased by 65% YoY to $129.6 Billion, driven by higher equity, cryptocurrency valuations, and continued net deposits.
Gold Subscribers
There is a substantial increase of 42% YoY, 500,000 new subscribers added to the list, reaching 1.7 Million.
Net Deposits
At the quarter’s end, it recorded net deposits of $11.2 Billion, showing an annualized growth rate of 44%.
Robinhood’s Growth Fueled By Innovation & Expansion
Robinhood launched multiple initiatives to enhance user value, including introducing a 1% unlimited deposit boost and a new Gold Credit Card. It attracted more than 1 million previously interested customers. The card offers 3% cash back across all categories without annual or foreign transaction fees.
The company also observed robust adoption of its retirement transfer match program, transferring over $4 Billion in assets from competitors.
Global and Operational Expansion
Robinhood UK reached full availability as part of the company’s broader global expansion strategy. It also reported significant overnight volumes.
Outlook & Strategy For 2024
The company plans to continue investing in new products, features and international expansion while improving efficiency in existing operations. The projected total operating expenses for 2024 range between $1.85 Billion and $1.95 Billion.
These positive results and strategic moves represent Robinhood’s commitment to democratizing finance and expanding its global footprint, targeting growth and profitability in the evolving financial landscape.
Impact Of Report On Stock Market
The positive performance presented in the company quarterly report is expected to attract buyers, leading to an increase in share prices, as visible from the price trend in the pre-market session.
Source: Investing.com
It has experienced a rise of 4.26% in the pre-market, reaching prices above $18. It is expected to experience a further increase when the market opens.
