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Revenue: Up 50% year-over-year, reaching $927 million in Q1.
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Net Deposits: Record $18 billion in the quarter.
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Gold Subscribers: Nearly doubled year-over-year to 3.2 million by the end of the quarter, 3.3 million in April.
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Retirement Assets: Increased to $16 billion, up 20% from the start of the year.
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Adjusted EBITDA Margin: Expanded by 11 points year-over-year, with a 51% margin in Q1.
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Adjusted Operating Expenses and SBC: $533 million in Q1.
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Share Repurchase Program: Over $650 million deployed at an average price of $33 per share, with authorization increased to $1.5 billion.
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Trading Volumes: Double-digit increases across all categories, with equities up 84% year-over-year.
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Interest-Earning Assets and Securities Lending: Continued growth, offsetting short-term rates.
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Margin Balances: Approximately $8.4 billion, up 2x from last year.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Robinhood Markets Inc (NASDAQ:HOOD) reported a 50% year-over-year increase in revenue, showcasing strong business growth.
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The company launched new products such as futures and prediction markets, with futures trading accelerating significantly.
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Robinhood Gold subscribers nearly doubled year-over-year to 3.2 million, indicating strong customer engagement.
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The acquisition of TradePMR brought over $40 billion of platform assets, enhancing Robinhood's asset base.
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International expansion is progressing, with over 150,000 international customers and plans to launch in Asia.
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The company faces potential regulatory risks, which could impact future operations and product offerings.
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Despite strong growth, the company remains heavily reliant on trading volumes, which can be volatile.
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There are concerns about the sustainability of the 2% match promotion for attracting wealthier clients.
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The integration of TradePMR involves $85 million in incremental costs, which could impact profitability.
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Crypto trading volumes have seen a pullback from record highs, indicating potential volatility in this segment.
Q: What is Robinhood doing to accelerate credit cards and checking accounts to their Gold members? A: Jason Warnick, CFO, mentioned that the number of Gold cardholders increased from 100,000 to over 200,000 in Q1. They plan to continue increasing cardholders throughout the year while being measured in the near term. Vlad Tenev, CEO, added that Robinhood Banking aims to provide a compelling digital banking experience for high-net-worth individuals, with a public rollout expected in Q3.
Q: When will users be able to invest in private companies such as SpaceX? A: Vlad Tenev, CEO, stated that allowing customers to invest in private companies is a top policy priority. He emphasized the need for comprehensive security legislation in the U.S. and a rethinking of accredited investor rules. Robinhood is actively discussing these issues with lawmakers and believes progress will be made.
Q: When will Robinhood offer 401(k) plans to businesses? A: Vlad Tenev, CEO, explained that Robinhood's long-term goal is to build a global financial ecosystem, expanding from retail to serving businesses and institutions. While 401(k) administration is a sizable opportunity, the current focus is on integrating TradePMR to serve registered investment advisors.
Q: How is Robinhood Gold performing, and what is the growth trajectory? A: Vlad Tenev, CEO, expressed that Robinhood Gold is the best deal in financial services and aims to be on par with top membership loyalty programs like Costco and Amazon Prime. The improvements in Q1 attach rate are just the beginning, with continued rollout of the credit card and banking products expected to enhance Gold's value.
Q: What is the status of Robinhood's crypto initiatives, and how is customer engagement? A: Vlad Tenev, CEO, reported that crypto had a strong quarter with $260 million in revenue. While trading volumes fluctuate, market share is increasing. Robinhood is diversifying its crypto business and plans to unveil more products and features at the upcoming June event.
Q: Can you provide insights on the adoption of Robinhood Strategies? A: Vlad Tenev, CEO, shared that Robinhood Strategies has over 40,000 customers and $100 million in assets. Customer engagement has been positive, with users sharing their portfolios and experiences on social media. The product continues to grow with more features being added based on demand.
Q: How is the futures offering performing, and where is the volume coming from? A: Vlad Tenev, CEO, noted that futures trading saw 4.5 million contracts in April, indicating strong adoption. The volumes are incremental, with many futures traders also engaging in equities and other assets. Futures provide easy short positions and 24-hour trading, appealing to active traders.
Q: What are the plans for Robinhood Cortex, and will it be a paid product? A: Vlad Tenev, CEO, stated that Cortex will be available to Gold subscribers without additional fees. The product aims to enhance the trading experience with features like Stock Digest and Trade Builder. The team is working to integrate Cortex more deeply into the Robinhood platform.
Q: What is the impact of the Bitstamp acquisition on Robinhood's crypto strategy? A: Vlad Tenev, CEO, expressed excitement about the Bitstamp acquisition, which positions Robinhood as the oldest continuously running crypto exchange. The acquisition will enhance customer execution quality and provide opportunities in institutional and international markets.
Q: How is Robinhood managing credit risk with the Gold Card, and what are the expectations for credit loss provisioning? A: Jason Warnick, CFO, reported low delinquency rates and write-offs, with tight underwriting standards in place. The provision for credit losses increased due to brokerage-related losses, not credit card issues. The company expects gradual increases in provisions as more cards are rolled out.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
