Robinhood Markets, Inc. Reports January 2024 Operating Data
- Funded Customers increased to 23.5 million, up by 120 thousand from December 2023.
- Assets Under Custody (AUC) were $102.4 billion, remaining flat compared to December 2023.
- Net Deposits in January were $3.8 billion, indicating a 44% annualized growth rate relative to December 2023 AUC.
- Trading Volumes for options rose while those for equities and crypto decreased compared to December 2023.
- Margin Balances increased by 3% to $3.6 billion, and Total Cash Sweep Balances reached $16.8 billion, up by $0.4 billion (2%) from December 2023.
- Total Securities Lending Revenue in January stood at $12 million, unchanged from December 2023.
- None.
Insights
Robinhood's reported increase in Funded Customers suggests a growing user base, which is a positive signal for potential revenue growth. However, the modest increase of 120 thousand customers can be seen as a deceleration when compared to the platform's historical growth rates. The Assets Under Custody (AUC) remaining flat indicates a stabilization in the amount of assets Robinhood is managing, which could be interpreted as a plateau in user investment activity or a balance between inflows and outflows.
Net Deposits showing a 44% annualized growth rate in January is a strong indicator of customer trust and engagement, as it reflects the willingness of customers to deposit money into their Robinhood accounts. However, it's important to consider the broader economic context, including interest rates and market conditions, which could influence investor behavior and the sustainability of this growth rate.
The shift in Trading Volumes, with options trading up slightly and equities and crypto trading down, could suggest a shift in user trading preferences or market sentiment. The decrease in crypto trading volumes aligns with the broader cooling of the cryptocurrency market. The increase in margin balances, albeit small, might indicate a slightly increased appetite for leverage among Robinhood's customer base.
From a financial perspective, the flat Securities Lending Revenue and the slight increase in Cash Sweep Balances are noteworthy. Securities lending can be a significant source of revenue for brokers and stagnation in this area might suggest a need for Robinhood to explore additional revenue streams or improve their securities lending program. The increase in cash sweep balances, particularly in the Gold Cash Sweep, is a positive as it represents additional funds that Robinhood can earn interest on.
The Margin Book growth is modest and could reflect cautious investor behavior in the current economic climate, which could be influenced by factors such as market volatility and changes in interest rates. It's also critical to monitor the sustainability of these margin levels, as they can impact the company's risk profile, especially if there is a market downturn.
Overall, while the reported metrics offer some positive signs, they also point to areas where growth is not as robust. Investors should consider these factors in the context of Robinhood's strategic initiatives, competitive positioning and the broader market environment to assess the company's potential for future growth and profitability.
The data provided by Robinhood offers a snapshot of consumer behavior in the retail investment sector. The annual growth rate of Net Deposits at 26% compared to the previous year indicates a healthy appetite for retail investment, which can be reflective of broader economic trends such as disposable income levels and consumer confidence. However, the flat AUC suggests that while more funds are being deposited, they may not be translating into proportional increases in investment values, possibly due to market performance or conservative investment choices.
Moreover, the shift in trading volume away from equities and crypto towards options could suggest a search for higher yields or hedging strategies amidst market uncertainty. This transition might also reflect broader economic conditions, such as increased market volatility or changing investor risk appetites. The economic implications of these shifts can have ripple effects on the market, influencing liquidity and volatility across different asset classes.
It is also important to consider the potential impact of macroeconomic factors, such as inflation rates, interest rate hikes and economic policies, on Robinhood's business model. These factors can affect both the amount of new deposits and the trading behavior of Robinhood's user base, which in turn can influence the company's revenue and profitability.
MENLO PARK, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today reported selected monthly operating data for January 2024:
- Funded Customers at the end of January were 23.5 million, up approximately 120 thousand from December 2023(1).
- Assets Under Custody (AUC) at the end of January were
$102.4 billion , roughly flat to December 2023. Net Deposits were$3.8 billion in January, translating to a44% annualized growth rate relative to December 2023 AUC. Over the last twelve months, Net Deposits were$19.5 billion , translating to an annual growth rate of26% relative to January 2023 AUC. - Trading Volumes in January were higher for options, and lower for equities and crypto relative to December 2023. Equity Notional Trading Volumes were
$59.3 billion (down6% ). Options Contracts Traded were 106.2 million (up2% ). Crypto Notional Trading Volumes were$5.9 billion (down9% ). - Margin Balances at the end of January were
$3.6 billion , up3% from December 2023. - Total Cash Sweep Balances at the end of January were
$16.8 billion , up$0.4 billion (2% ) from the end of December 2023. - Total Securities Lending Revenue in January was
$12 million , unchanged from December 2023.
| January 2024 | December 2023 | M/M Change | January 2023 | Y/Y Change | |
| (M - in millions, B - in billions) | |||||
| Funded Customer Growth (M) | |||||
| Funded Customers1 | 23.5 | 23.4 | - | 23.0 | 2% |
| Assets Under Custody (AUC) ($B) | |||||
| Total AUC | - | 37% | |||
| Net Deposits | NM | NM | |||
| Trading | |||||
| Trading Days (Equities and Options) | 21 | 20 | 5% | 20 | 5% |
| Total Trading Volumes | |||||
| Equity ($B) | (6%) | 29% | |||
| Options Contracts (M) | 106.2 | 104.5 | 2% | 82.9 | 28% |
| Crypto ($B) | (9%) | 59% | |||
| Daily Average Revenue Trades (DARTs) (M) | |||||
| Equity | 1.7 | 1.8 | (6%) | 1.5 | 13% |
| Options | 0.7 | 0.6 | 17% | 0.6 | 17% |
| Crypto | 0.3 | 0.3 | - | 0.3 | - |
| Customer Margin and Cash Sweep Balances ($B) | |||||
| Margin Book | 3% | 20% | |||
| Total Cash Sweep | 2% | 137% | |||
| Gold Cash Sweep | 3% | 168% | |||
| Non-Gold Cash Sweep | - | (36%) | |||
| Total Securities Lending Revenue ($M) | - | (8%) | |||
(1) Funded Customers previously referred to as Net Cumulative Funded Accounts (NCFA). Funded Customers includes unique persons who have at least one account with a Robinhood entity.
For definitions and additional information regarding these metrics, please refer to Robinhood’s full monthly metrics release, which is available on investors.robinhood.com.
The information in this release is unaudited and the information for the months in the most recent fiscal quarter is preliminary, based on Robinhood’s estimates, and subject to completion of financial closing procedures. Final results for the most recent fiscal quarter, as reported in Robinhood’s quarterly and annual filings with the U.S. Securities and Exchange Commission (“SEC”), might vary from the information in this release.
About Robinhood
Robinhood Markets, Inc. is on a mission to democratize finance for all. In the U.S., people can invest with no account minimums through Robinhood Financial LLC, a registered broker dealer (member SIPC), buy and sell crypto through Robinhood Crypto, LLC, spend and earn rewards through debit cards with Robinhood Money, LLC and credit cards with Robinhood Credit, Inc., trade U.S. stocks without commission or FX fees in the UK through Robinhood U.K. Ltd., trade crypto in select jurisdictions in the European Union through Robinhood Europe, UAB, and access easy-to-understand educational content through Robinhood Learn.
Robinhood uses the “Overview” tab of its Investor Relations website (accessible at investors.robinhood.com/overview) and its Newsroom (accessible at newsroom.aboutrobinhood.com) as means of disclosing information to the public for purposes of the SEC’s Regulation Fair Disclosure (Reg. FD). Investors should routinely monitor those web pages, in addition to Robinhood’s press releases, SEC filings, and public conference calls and webcasts, as information posted on them could be deemed to be material information.
"Robinhood" and the Robinhood feather logo are registered trademarks of Robinhood Markets, Inc.
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FAQ
How many Funded Customers did Robinhood have at the end of January 2024?
What were the Assets Under Custody (AUC) for Robinhood at the end of January 2024?
What was the Net Deposits amount for Robinhood in January 2024?
How did Trading Volumes for equities, options, and crypto change in January 2024 compared to December 2023?
What was the percentage change in Margin Balances for Robinhood from December 2023 to January 2024?
How much was the Total Cash Sweep Balances for Robinhood at the end of January 2024?
What was the Total Securities Lending Revenue for Robinhood in January 2024?
