Robinhood's 2024 Turnaround: Driven by Record Revenues and Gold Subscribers

In 2024, Robinhood Markets, Inc. (HOOD) experienced a remarkable turnaround, with record revenues and net income, driven by a surge in Gold Subscribers and an increase in Assets Under Custody (AUC). This article explores the key factors contributing to Robinhood's impressive performance in 2024.



Record Revenues and Net Income

Robinhood's total net revenues surged 40% year-over-year to $618 million in Q1 2024, with transaction-based revenues increasing 59% to $329 million. This growth was primarily driven by cryptocurrencies revenue, which jumped 232% to $126 million, and options revenue, up 16% to $154 million. Net interest revenues and other revenues also grew significantly. As a result, net income increased to $157 million, or diluted EPS of $0.18, compared to a net loss of $511 million in Q1 2023.



Growth in Gold Subscribers

Robinhood's turnaround in 2024 was significantly driven by the growth in its Gold Subscribers, which reached a record high of 1.7 million, up 42% year-over-year. This increase contributed to a 35% rise in Average Revenue Per User (ARPU) and a 44% annualized growth rate in Net Deposits relative to Assets Under Custody (AUC). The surge in Gold Subscribers, coupled with the introduction of the Robinhood Gold Card and a 3% retirement transfer match, attracted over $4 billion in retirement assets and boosted Retirement AUC to over $7 billion.

Increase in Net Deposits and Assets Under Custody (AUC)

In 2024, Robinhood experienced a significant increase in Net Deposits and Assets Under Custody (AUC). Net Deposits reached $11.2 billion, an annualized growth rate of 44% relative to AUC at the end of Q4 2023, while AUC increased 65% year-over-year to $129.6 billion. This growth was primarily driven by higher equity and cryptocurrency valuations and continued Net Deposits. The increase in Net Deposits and AUC not only contributed to Robinhood's revenue growth but also expanded its customer base, with Funded Customers increasing by 810 thousand year-over-year to 23.9 million, and Investment Accounts increasing by 1.1 million year-over-year to 24.4 million.



Expansion into the UK Market and 24-hour Market

Robinhood's expansion into the UK market and the introduction of the 24-hour market have significantly contributed to its global user base and revenue growth. In Q1 2024, Robinhood reported a record number of funded customers, increasing by 810 thousand year-over-year to 23.9 million. This growth can be attributed to the rollout of the 24-hour market and the full availability of Robinhood UK, which marked another step in the company's global expansion. As a result, Robinhood's total net revenues increased by 40% year-over-year to $618 million in Q1 2024.

In conclusion, Robinhood's 2024 turnaround is a testament to the company's strategic initiatives, including the growth in Gold Subscribers, the introduction of the Robinhood Gold Card, and the expansion into the UK market and the 24-hour market. As Robinhood continues to innovate and adapt to the changing investment landscape, investors can expect the company to maintain its momentum and drive further growth in the coming years.