Robinhood reports second-quarter earnings beat with revenue up 45% yoy

Robinhood has delivered a stunning performance in its second-quarter earnings report, surpassing Wall Street's forecasts on multiple fronts. The financial platform revealed that its revenue soared by 45% year-on-year, reaching an impressive $989 million. Additionally, net income more than doubled, climbing 105% to $386 million compared to the same period last year. The number of funded customer accounts also saw significant growth, increasing by 2.3 million to a total of 26.5 million, which exceeded analysts' expectations of 26.1 million. Investment accounts rose by 10% from the previous year, totaling 27.4 million. On the asset side, total platform assets nearly doubled, boasting a 99% increase from last year to $279 billion. This surge was fueled by strong net deposits, acquired assets, and rising valuations in both equity and cryptocurrency markets. Despite the positive figures, total operating expenses climbed 12% to $550 million. When adjusting for non-GAAP metrics, operating expenses and share-based compensation saw a 6% rise to $522 million, attributed to costs associated with the Bitstamp acquisition. In terms of transaction revenue, Robinhood reported $539 million, surpassing the anticipated $517 million. Options trading accounted for $265 million, exceeding the $250 million estimate. However, cryptocurrency trading fell short of expectations, bringing in $160 million against the projected $168 million. Equities also missed their target, generating $66 million instead of the expected $69 million. On a positive note, net interest revenue reached $357 million, beating the forecast of $306 million, while adjusted EBITDA surged by 82% to $549 million, far exceeding the estimate of $448 million. The average revenue per user grew by 34% year-over-year to $151, surpassing the consensus of $142. Furthermore, the number of Robinhood Gold subscribers—offering enhanced features like higher cash sweep rates and larger instant deposits—rose significantly by 76%, reaching 3.5 million users. CFO Jason Warnick expressed optimism about the upcoming quarter, stating, "Q3 is off to a great start in July, as customers accelerated their net deposits to around $6 billion and leaned in with strong trading across categories." The company’s stock has skyrocketed over 180% this year alone, following a 192% increase in 2024, marking an astonishing 400% rally over the past year. This growth has brought Robinhood’s market capitalization close to $100 billion. However, the company faced some setbacks, notably its exclusion from the S&P 500 last month, surprising many investors as rival fintech Block made the cut. As Robinhood continues to navigate its expansion into crypto infrastructure and tokenized finance, attention is drawn to its recent launch of synthetic stock tokens for firms like OpenAI and SpaceX. These assets, traded in Europe via Robinhood's crypto platform, offer users indirect exposure through special purpose vehicles, but have faced backlash, notably from OpenAI, which clarified that the tokens are not authorized equity. Robinhood has defended this initiative as a means to broaden access to pre-IPO markets while maintaining compliance with regulatory standards. An earnings call with analysts is scheduled for 5 P.M. ET, where further details are expected to be shared.