Robinhood's Q4 2024 EPS, Sales Beat Estimates: A Record-Setting Quarter

Robinhood Markets, Inc. (HOOD) reported record-breaking Q4 2024 results, with total net revenues up 115% year-over-year to a record $1.01 billion. The company's strong performance was driven by a 200% increase in transaction-based revenues, including a 700% surge in cryptocurrency revenue and an 83% increase in options revenue. Net income increased over 10X year-over-year to a record $916 million, or diluted EPS of a record $1.01.



Key factors contributing to Robinhood's strong Q4 2024 results include:

1. Diversified Revenue Streams: Robinhood's revenue composition reveals a successful diversification strategy, with cryptocurrency revenue of $358 million (up over 700%) and options revenue of $222 million (up 83%). This diversification allows Robinhood to capitalize on market volatility and attract a broader range of investors.
2. Growth in Assets Under Custody (AUC): Robinhood's AUC increased 88% year-over-year to $193 billion, driven by continued net deposits and higher equity and cryptocurrency valuations. This growth indicates that investors are increasingly trusting Robinhood with their assets, which can lead to recurring revenue and improved margins.
3. Record Net Deposits: Robinhood reported record Net Deposits of $16.1 billion, an annualized growth rate of 42% relative to AUC at the end of Q3 2024. Over the past twelve months, Net Deposits were $50.5 billion, a growth rate of 49% relative to AUC at the end of Q4 2023. This trend suggests that Robinhood is successfully attracting new customers and retaining existing ones.
4. Gold Subscriber Growth: Robinhood's Gold Subscribers increased by 1.2 million, or 86%, year-over-year to 2.6 million. This growth represents high-margin, recurring revenue, as Gold subscribers pay a monthly fee for premium features and services.
5. Strategic Acquisitions: Robinhood's planned acquisitions of Bitstamp and TradePMR position the company for institutional crypto trading and entry into the advisory space. These moves suggest a deliberate strategy to reduce reliance on retail trading revenue and tap into new revenue streams.

Robinhood's Q4 2024 results demonstrate impressive growth, diversification, and strategic initiatives that enhance its long-term growth prospects and market position. The company's ability to capitalize on market trends, expand into new revenue streams, and make strategic acquisitions sets it up for continued success in the competitive online brokerage landscape.