Robinhood Reports Third Quarter 2024 Results
Robinhood (HOOD) reported strong Q3 2024 results with total net revenues up 36% year-over-year to $637 million. The company achieved net income of $150 million, or $0.17 diluted EPS, compared to a net loss in Q3 2023. Transaction-based revenues increased 72% to $319 million, driven by growth in options, cryptocurrencies, and equities. Assets Under Custody grew 76% to $152.2 billion, while Funded Customers reached 24.3 million. Gold Subscribers increased 65% to 2.2 million. The company launched Robinhood Legend desktop platform and plans to introduce futures and index options trading.
Robinhood (HOOD) ha riportato risultati solidi per il terzo trimestre del 2024, con ricavi netti totali aumentati del 36% rispetto all'anno precedente, raggiungendo i 637 milioni di dollari. L'azienda ha registrato un reddito netto di 150 milioni di dollari, ovvero un utile per azione diluito di 0,17 dollari, rispetto a una perdita netta nel terzo trimestre del 2023. I ricavi basati sulle transazioni sono aumentati del 72%, raggiungendo i 319 milioni di dollari, grazie alla crescita delle opzioni, delle criptovalute e delle azioni. Gli Attivi in Custodia sono cresciuti del 76%, raggiungendo i 152,2 miliardi di dollari, mentre i Clienti Finanziati hanno raggiunto i 24,3 milioni. Gli Abbonati a Gold sono aumentati del 65%, arrivando a 2,2 milioni. L'azienda ha lanciato la piattaforma desktop Robinhood Legend e prevede di introdurre il trading di futures e opzioni su indici.
Robinhood (HOOD) informó sobre sólidos resultados del tercer trimestre de 2024, con ingresos netos totales que aumentaron un 36% interanual, alcanzando los 637 millones de dólares. La compañía logró un ingreso neto de 150 millones de dólares, o 0,17 dólares de utilidad por acción diluida, en comparación con una pérdida neta en el tercer trimestre de 2023. Los ingresos por transacciones aumentaron un 72% hasta 319 millones de dólares, impulsados por el crecimiento en opciones, criptomonedas y acciones. Los Activos Bajo Custodia crecieron un 76% hasta alcanzar los 152,2 mil millones de dólares, mientras que los Clientes Financiados llegaron a 24,3 millones. Los suscriptores de Gold aumentaron un 65%, alcanzando los 2,2 millones. La compañía lanzó la plataforma de escritorio Robinhood Legend y planea introducir operaciones de futuros y opciones sobre índices.
로빈후드 (HOOD)는 2024년 3분기 강력한 실적을 발표했으며, 총 순 수익이 전년 대비 36% 증가한 6억 3,700만 달러를 기록했습니다. 회사는 순이익 1억 5,000만 달러와 희석 주당 수익 0.17달러를 달성했으며, 이는 2023년 3분기 순손실에 비해 향상된 결과입니다. 거래 기반 수익은 72% 증가하여 3억 1,900만 달러에 이르렀으며, 이는 옵션, 암호화폐 및 주식에서의 성장 덕분입니다. 수탁 자산은 76% 증가하여 1,522억 달러에 도달했으며, 자금을 지원받은 고객은 2,430만 명에 달했습니다. 골드 가입자는 65% 증가하여 220만 명에 이르렀습니다. 회사는 로빈후드 레전드 데스크탑 플랫폼을 출시했으며, 선물 및 지수 옵션 거래를 도입할 예정입니다.
Robinhood (HOOD) a annoncé de solides résultats pour le troisième trimestre de 2024, avec des revenus nets totaux en hausse de 36 % par rapport à l'année précédente, atteignant 637 millions de dollars. L'entreprise a enregistré un bénéfice net de 150 millions de dollars, soit un bénéfice par action dilué de 0,17 dollar, comparé à une perte nette au troisième trimestre 2023. Les revenus basés sur les transactions ont augmenté de 72 % pour atteindre 319 millions de dollars, grâce à la croissance des options, des cryptomonnaies et des actions. Les Actifs Sous Custodie ont augmenté de 76 % pour atteindre 152,2 milliards de dollars, tandis que les Clients Financiés ont atteint 24,3 millions. Le nombre d'abonnés Gold a augmenté de 65 % pour atteindre 2,2 millions. L'entreprise a lancé la plateforme de bureau Robinhood Legend et prévoit d'introduire le trading de contrats à terme et d'options sur indices.
Robinhood (HOOD) berichtete über starke Ergebnisse im 3. Quartal 2024, mit einem Anstieg der Nettoumsätze um 36% im Jahresvergleich auf 637 Millionen Dollar. Das Unternehmen erzielte einen Nettogewinn von 150 Millionen Dollar, beziehungsweise einen verwässerten Gewinn pro Aktie von 0,17 Dollar, im Vergleich zu einem Nettverlust im 3. Quartal 2023. Die transaktionsbasierten Einnahmen stiegen um 72% auf 319 Millionen Dollar, getrieben durch das Wachstum bei Optionen, Kryptowährungen und Aktien. Das verwaltete Vermögen wuchs um 76% auf 152,2 Milliarden Dollar, während die finanzierten Kunden 24,3 Millionen erreichten. Die Gold-Abonnenten stiegen um 65% auf 2,2 Millionen. Das Unternehmen hat die Desktop-Plattform Robinhood Legend eingeführt und plant, den Handel mit Futures und Indexoptionen einzuführen.
- Revenue growth of 36% YoY to $637 million
- Net income of $150 million vs net loss in Q3 2023
- Transaction-based revenues up 72% YoY to $319 million
- Assets Under Custody increased 76% YoY to $152.2 billion
- Gold Subscribers grew 65% YoY to 2.2 million
- Operating expenses decreased 10% YoY to $486 million
- Net interest revenues showed slower growth at 9% YoY
- Cash and cash equivalents decreased to $4.6 billion from $4.9 billion YoY
Insights
An exceptional quarter showcasing strong financial performance with
Particularly noteworthy is the
The expansion into new product verticals and international markets represents a strategic pivot toward capturing higher-value customers. The launch of Robinhood Legend platform and planned introduction of futures and index options directly targets the lucrative active trader segment. The UK expansion with stock lending and margin trading, plus upcoming options trading approval, opens significant growth opportunities in a major financial market.
Customer engagement metrics are strong with MAUs up
Second highest Revenues on record, up
GAAP Diluted EPS of
Year-to-date Net Deposits of
MENLO PARK, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced financial results for the third quarter of 2024, which ended September 30, 2024.
“I'm really proud of our Q3 results and how smoothly our product engine is humming,” said Vlad Tenev, CEO and Co-Founder of Robinhood. “In the past month, we introduced Robinhood Legend, our new desktop offering, and announced index options, futures, and a realized profit and loss tool are coming soon. And just this week, we launched our Presidential Election Market. We have a ton of momentum, and we’re just getting started.”
“Q3 was another strong quarter, as we drove
Third Quarter Results:
- Total net revenues increased
36% year-over-year to$637 million .- Transaction-based revenues increased
72% year-over-year to$319 million , primarily driven by options revenue of$202 million , up63% , cryptocurrencies revenue of$61 million , up165% , and equities revenue of$37 million , up37% . - Net interest revenues increased
9% year-over-year to$274 million , primarily driven by growth in interest-earning assets. - Other revenues increased
42% year-over-year to$44 million , primarily due to increased Gold subscription revenues. - Total net revenues were reduced by
$27 million in Q3 2024 (and$13 million in Q2 2024) due to matches paid to customers on transfers and deposits.
- Transaction-based revenues increased
- Net income increased year-over-year to
$150 million , or diluted earnings per share (EPS) of$0.17 , compared to a net loss of$85 million , or diluted EPS of -$0.09 , in Q3 2023. - Total operating expenses decreased
10% year-over-year to$486 million . This includes a$10 million regulatory accrual, which compares to a$104 million regulatory accrual in Q3 2023.- Adjusted Operating Expenses (non-GAAP) increased
12% year-over-year to$397 million primarily due to increased marketing and growth investments. - Share-Based Compensation (SBC) decreased
5% year-over-year to$79 million .
- Adjusted Operating Expenses (non-GAAP) increased
- Adjusted EBITDA (non-GAAP) increased
96% year-over-year to$268 million . - Funded Customers increased by 1.0 million year-over-year to 24.3 million.
- Investment Accounts increased by 1.5 million year-over-year to 25.1 million.
- Assets Under Custody (AUC) increased
76% year-over-year to$152.2 billion , driven by continued Net Deposits and higher equity and cryptocurrency valuations. - Net Deposits were
$10.0 billion , an annualized growth rate of29% relative to AUC at the end of Q2 2024. Over the past twelve months, Net Deposits were$39.0 billion , a growth rate of45% relative to AUC at the end of Q3 2023. - Average Revenue Per User (ARPU) increased by
31% year-over-year to$105. - Gold Subscribers increased by 860 thousand, or
65% , year-over-year to 2.2 million. - Cash and cash equivalents totaled
$4.6 billion compared with$4.9 billion at the end of Q3 2023. - Share repurchases were
$97 million , representing 5.0 million shares of our Class A common stock at an average price per share of$19.42 .- In July 2024, we began executing on our authorized
$1 billion share repurchase program, which we continue to expect to complete over a total of two to three years.
- In July 2024, we began executing on our authorized
Highlights
Robinhood takes major steps toward delivering on product roadmap and winning the active trader market.
- Building for Active Traders - In October 2024, Robinhood began rolling out Robinhood Legend, a powerful, sleek browser-based desktop trading platform built from the ground up for active traders, and announced that it will launch futures and index options in the coming months with some of the lowest contract fees in the industry.
- Robinhood Hosts its First Ever Customer-Focused Conference - In October 2024, Robinhood held its inaugural HOOD Summit, bringing together over 400 customers with Robinhood executives and other industry leaders for a three-day event to discuss the latest in trading technology, investing, and culture.
- More than 9 percent of Robinhood Funded Customers benefit from Robinhood Gold - Gold Subscribers reached new highs of 2.2 million in Q3 2024. Additionally, Robinhood Gold Cards continue to roll out, now in the hands of nearly 100 thousand customers.
- Robinhood Retirement Reaches
$11 billion in AUC - In October 2024, Robinhood Retirement reached$11 billion in AUC across nearly one million funded retirement accounts. Offering the first ever IRA with a match, customers have received over$200 million in matches on retirement account transfers and contributions since launching in January 2023. - Expanding Our UK Product Offering - Robinhood introduced stock lending in the UK in September 2024 and launched margin investing for UK customers in October 2024. Robinhood has also received Financial Conduct Authority approval to offer options trading in the UK and plans to launch in 2025.
Additional Q3 2024 Operating Data
- Retirement AUC increased 9X year-over-year to
$9.9 billion . - Cash Sweep increased
80% year-over-year to$24.5 billion . - Margin Book increased
53% year-over-year to$5.5 billion . - Equity Notional Trading Volumes increased
65% year-over-year to$286.2 billion . - Options Contracts Traded increased
47% year-over-year to 443.4 million. - Crypto Notional Trading Volumes increased
112% year-over-year to$14.4 billion . - Monthly Active Users (MAU) increased
7% year-over-year to 11.0 million.
Webcast and Conference Call Information
Robinhood will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET today, October 30, 2024. The live webcast of Robinhood's earnings conference call can be accessed at investors.robinhood.com, along with the earnings press release and accompanying slide presentation.
Following the call, a replay and transcript will also be available at the same website.
Financial Outlook
Our 2024 expense plan includes growth investments in new products, features, and international expansion while also getting more efficient in our existing businesses. Our outlook for GAAP total operating expenses is
Our outlook for Non-GAAP combined Adjusted Operating Expenses and SBC for full-year 2024 is unchanged at
Actual results might differ materially from our outlook due to several factors, including the rate of growth in Funded Customers and our effectiveness to cross-sell products which affects variable marketing costs, the degree to which we are successful in managing credit losses and preventing fraud, and our ability to manage web-hosting expenses efficiently, among other factors. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.
About Robinhood
Robinhood Markets, Inc. (NASDAQ: HOOD) transformed financial services by introducing commission-free stock trading and democratizing access to the markets for millions of investors. Today, Robinhood lets you trade stocks, options, commodity interests, and crypto, invest for retirement, and earn with Robinhood Gold. Headquartered in Menlo Park, California, Robinhood puts customers in the driver's seat, delivering unprecedented value and products intentionally designed for a new generation of investors. Additional information about Robinhood can be found at www.robinhood.com.
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 in a broad, non-exclusionary manner for purposes of the U.S. Securities and Exchange Commission's (“SEC”) 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. All other names are trademarks and/or registered trademarks of their respective owners.
Contacts
Investors:
ir@robinhood.com
Press:
press@robinhood.com
ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
December 31, | September 30, | ||||||
(in millions, except share and per share data) | 2023 | 2024 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,835 | $ | 4,611 | |||
Cash and cash equivalents segregated under federal and other regulations | 4,448 | 5,547 | |||||
Receivables from brokers, dealers, and clearing organizations | 89 | 139 | |||||
Receivables from users, net | 3,495 | 5,546 | |||||
Securities borrowed | 1,602 | 3,704 | |||||
Deposits with clearing organizations | 338 | 464 | |||||
Asset related to user cryptocurrencies safeguarding obligation | 14,708 | 19,456 | |||||
User-held fractional shares | 1,592 | 2,201 | |||||
Held-to-maturity investments | 413 | 527 | |||||
Prepaid expenses | 63 | 86 | |||||
Deferred customer match incentives | 11 | 73 | |||||
Other current assets | 196 | 251 | |||||
Total current assets | 31,790 | 42,605 | |||||
Property, software, and equipment, net | 120 | 133 | |||||
Goodwill | 175 | 179 | |||||
Intangible assets, net | 48 | 39 | |||||
Non-current held-to-maturity investments | 73 | — | |||||
Non-current deferred customer match incentives | 19 | 159 | |||||
Other non-current assets, including non-current prepaid expenses of | 107 | 130 | |||||
Total assets | $ | 32,332 | $ | 43,245 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 384 | $ | 443 | |||
Payables to users | 5,097 | 6,264 | |||||
Securities loaned | 3,547 | 7,306 | |||||
User cryptocurrencies safeguarding obligation | 14,708 | 19,456 | |||||
Fractional shares repurchase obligation | 1,592 | 2,201 | |||||
Other current liabilities | 217 | 288 | |||||
Total current liabilities | 25,545 | 35,958 | |||||
Other non-current liabilities | 91 | 79 | |||||
Total liabilities | 25,636 | 36,037 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, | — | — | |||||
Class A common stock, | — | — | |||||
Class B common stock, | — | — | |||||
Class C common stock, | — | — | |||||
Additional paid-in capital | 12,145 | 12,158 | |||||
Accumulated other comprehensive income (loss) | (3 | ) | 1 | ||||
Accumulated deficit | (5,446 | ) | (4,951 | ) | |||
Total stockholders’ equity | 6,696 | 7,208 | |||||
Total liabilities and stockholders’ equity | $ | 32,332 | $ | 43,245 | |||
ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||||||
Three Months Ended September 30, | YOY% | Three Months Ended June 30, | QOQ% | ||||||||||||||||
(in millions, except share, per share, and percentage data) | 2023 | 2024 | Change | 2024 | Change | ||||||||||||||
Revenues: | |||||||||||||||||||
Transaction-based revenues | $ | 185 | $ | 319 | 72 | % | $ | 327 | (2 | )% | |||||||||
Net interest revenues | 251 | 274 | 9 | % | 285 | (4 | )% | ||||||||||||
Other revenues | 31 | 44 | 42 | % | 70 | (37 | )% | ||||||||||||
Total net revenues | 467 | 637 | 36 | % | 682 | (7 | )% | ||||||||||||
Operating expenses(1)(2): | |||||||||||||||||||
Brokerage and transaction | 39 | 39 | — | % | 40 | (3 | )% | ||||||||||||
Technology and development | 202 | 205 | 1 | % | 209 | (2 | )% | ||||||||||||
Operations | 41 | 50 | 22 | % | 46 | 9 | % | ||||||||||||
Marketing | 28 | 59 | 111 | % | 64 | (8 | )% | ||||||||||||
General and administrative | 230 | 133 | (42 | )% | 134 | (1 | )% | ||||||||||||
Total operating expenses | 540 | 486 | (10 | )% | 493 | (1 | )% | ||||||||||||
Other income (expense), net | (2 | ) | 2 | NM | 2 | — | % | ||||||||||||
Income (loss) before income taxes | (75 | ) | 153 | NM | 191 | (20 | )% | ||||||||||||
Provision for income taxes | 10 | 3 | (70 | )% | 3 | — | % | ||||||||||||
Net income (loss) | $ | (85 | ) | $ | 150 | NM | $ | 188 | (20 | )% | |||||||||
Net income (loss) attributable to common stockholders: | |||||||||||||||||||
Basic | $ | (85 | ) | $ | 150 | $ | 188 | ||||||||||||
Diluted | $ | (85 | ) | $ | 150 | $ | 188 | ||||||||||||
Net income (loss) per share attributable to common stockholders: | |||||||||||||||||||
Basic | $ | (0.09 | ) | $ | 0.17 | $ | 0.21 | ||||||||||||
Diluted | $ | (0.09 | ) | $ | 0.17 | $ | 0.21 | ||||||||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||||||||||||||||||
Basic | 895,108,790 | 884,108,545 | 881,076,624 | ||||||||||||||||
Diluted | 895,108,790 | 905,544,750 | 904,490,572 | ||||||||||||||||
Nine Months Ended September 30, | YOY% Change | |||||||||||
(in millions, except share, per share, and percentage data) | 2023 | 2024 | ||||||||||
Revenues: | ||||||||||||
Transaction-based revenues | $ | 585 | $ | 975 | 67 | % | ||||||
Net interest revenues | 693 | 813 | 17 | % | ||||||||
Other revenues | 116 | 149 | 28 | % | ||||||||
Total net revenues | 1,394 | 1,937 | 39 | % | ||||||||
Operating expenses(1)(2): | ||||||||||||
Brokerage and transaction | 114 | 114 | — | % | ||||||||
Technology and development | 608 | 610 | — | % | ||||||||
Operations | 119 | 140 | 18 | % | ||||||||
Marketing | 79 | 190 | 141 | % | ||||||||
General and administrative | 1,036 | 385 | (63 | )% | ||||||||
Total operating expenses | 1,956 | 1,439 | (26 | )% | ||||||||
Other income, net | — | 8 | NM | |||||||||
Income (loss) before income taxes | (562 | ) | 506 | NM | ||||||||
Provision for income taxes | 9 | 11 | 22 | % | ||||||||
Net income (loss) | $ | (571 | ) | $ | 495 | NM | ||||||
Net income (loss) attributable to common stockholders: | ||||||||||||
Basic | $ | (571 | ) | $ | 495 | |||||||
Diluted | $ | (571 | ) | $ | 495 | |||||||
Net income (loss) per share attributable to common stockholders: | ||||||||||||
Basic | $ | (0.64 | ) | $ | 0.56 | |||||||
Diluted | $ | (0.64 | ) | $ | 0.55 | |||||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||||||||||
Basic | 898,999,464 | 880,182,573 | ||||||||||
Diluted | 898,999,464 | 903,555,592 | ||||||||||
________________
(1) The following table presents operating expenses as a percent of total net revenues:
Three Months Ended September 30, | Three Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||
2023 | 2024 | 2024 | 2023 | 2024 | |||||||||||||||
Brokerage and transaction | 8 | % | 6 | % | 5 | % | 8 | % | 6 | % | |||||||||
Technology and development | 43 | % | 32 | % | 31 | % | 44 | % | 31 | % | |||||||||
Operations | 9 | % | 8 | % | 7 | % | 9 | % | 7 | % | |||||||||
Marketing | 6 | % | 9 | % | 9 | % | 6 | % | 10 | % | |||||||||
General and administrative | 49 | % | 21 | % | 20 | % | 74 | % | 20 | % | |||||||||
Total operating expenses | 115 | % | 76 | % | 72 | % | 141 | % | 74 | % | |||||||||
(2) The following table presents the SBC on our unaudited condensed consolidated statements of operations for the periods indicated:
Three Months Ended September 30, | Three Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||
(in millions) | 2023 | 2024 | 2024 | 2023 | 2024 | ||||||||||||||
Brokerage and transaction | $ | 2 | $ | 2 | $ | 3 | $ | 6 | $ | 7 | |||||||||
Technology and development | 51 | 48 | 52 | 161 | 144 | ||||||||||||||
Operations | 3 | 1 | 2 | 6 | 5 | ||||||||||||||
Marketing | 1 | 3 | 1 | 3 | 6 | ||||||||||||||
General and administrative | 26 | 25 | 28 | 614 | 65 | ||||||||||||||
Total SBC | $ | 83 | $ | 79 | $ | 86 | $ | 790 | $ | 227 | |||||||||
ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2023 | 2024 | 2023 | 2024 | |||||||||||
Operating activities: | |||||||||||||||
Net income (loss) | $ | (85 | ) | $ | 150 | $ | (571 | ) | $ | 495 | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||
Depreciation and amortization | 19 | 20 | 54 | 55 | |||||||||||
Provision for credit losses | 14 | 23 | 29 | 57 | |||||||||||
Share-based compensation | 83 | 79 | 790 | 227 | |||||||||||
Other | (27 | ) | 1 | (27 | ) | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Securities segregated under federal and other regulations | — | 547 | — | — | |||||||||||
Receivables from brokers, dealers, and clearing organizations | 54 | 10 | 13 | (50 | ) | ||||||||||
Receivables from users, net | (391 | ) | (433 | ) | (502 | ) | (1,971 | ) | |||||||
Securities borrowed | (244 | ) | (1,487 | ) | (687 | ) | (2,102 | ) | |||||||
Deposits with clearing organizations | (52 | ) | 87 | (89 | ) | (126 | ) | ||||||||
Current and non-current prepaid expenses | 17 | (21 | ) | 26 | (41 | ) | |||||||||
Current and non-current deferred customer match incentives | (4 | ) | (6 | ) | (10 | ) | (202 | ) | |||||||
Other current and non-current assets | 62 | 117 | 10 | (11 | ) | ||||||||||
Accounts payable and accrued expenses | 94 | 54 | 145 | 28 | |||||||||||
Payables to users | (786 | ) | 475 | (376 | ) | 1,167 | |||||||||
Securities loaned | 263 | 2,215 | 1,411 | 3,759 | |||||||||||
Other current and non-current liabilities | 6 | (19 | ) | 5 | (42 | ) | |||||||||
Net cash provided by (used in) operating activities | (977 | ) | 1,812 | 221 | 1,243 | ||||||||||
Investing activities: | |||||||||||||||
Purchases of property, software, and equipment | (1 | ) | (7 | ) | (1 | ) | (9 | ) | |||||||
Capitalization of internally developed software | (5 | ) | (12 | ) | (14 | ) | (26 | ) | |||||||
Purchases of held-to-maturity investments | (76 | ) | (167 | ) | (651 | ) | (469 | ) | |||||||
Proceeds from maturities of held-to-maturity investments | 75 | 150 | 167 | 439 | |||||||||||
Purchases of credit card receivables by Credit Card Funding Trust | — | (169 | ) | — | (239 | ) | |||||||||
Collections of purchased credit card receivables | — | 82 | — | 130 | |||||||||||
Business acquisition, net of cash and cash equivalents acquired | (90 | ) | — | (90 | ) | (6 | ) | ||||||||
Asset acquisition, net of cash acquired | — | — | — | (3 | ) | ||||||||||
Other | — | — | 10 | 1 | |||||||||||
Net cash used in investing activities | (97 | ) | (123 | ) | (579 | ) | (182 | ) | |||||||
Financing activities: | |||||||||||||||
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | — | — | 9 | 10 | |||||||||||
Taxes paid related to net share settlement of equity awards | (4 | ) | (56 | ) | (9 | ) | (155 | ) | |||||||
Payments of debt issuance costs | — | — | (10 | ) | (14 | ) | |||||||||
Draws on credit facilities | 10 | 1 | 20 | 12 | |||||||||||
Repayments on credit facilities | (10 | ) | (1 | ) | (20 | ) | (12 | ) | |||||||
Borrowings on Credit Card Funding Trust | — | 78 | — | 95 | |||||||||||
Repayments on Credit Card Funding Trust | — | — | — | (1 | ) | ||||||||||
Change in principal collected from customers due to Coastal Bank | (3 | ) | (22 | ) | (3 | ) | (15 | ) | |||||||
Repurchase of Class A common stock | (608 | ) | (97 | ) | (608 | ) | (97 | ) | |||||||
Proceeds from exercise of stock options, net of repurchases | — | 2 | 2 | 10 | |||||||||||
Net cash used in financing activities | (615 | ) | (95 | ) | (619 | ) | (167 | ) | |||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 1 | — | 1 | |||||||||||
Net increase (decrease) in cash, cash equivalents, segregated cash, and restricted cash | (1,689 | ) | 1,595 | (977 | ) | 895 | |||||||||
Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period | 10,069 | 8,646 | 9,357 | 9,346 | |||||||||||
Cash, cash equivalents, segregated cash, and restricted cash, end of the period | $ | 8,380 | $ | 10,241 | $ | 8,380 | $ | 10,241 | |||||||
Reconciliation of cash, cash equivalents, segregated cash and restricted cash, end of the period: | |||||||||||||||
Cash and cash equivalents, end of the period | $ | 4,889 | $ | 4,611 | $ | 4,889 | $ | 4,611 | |||||||
Segregated cash and cash equivalents, end of the period | 3,448 | 5,547 | 3,448 | 5,547 | |||||||||||
Restricted cash in other current assets, end of the period | 26 | 67 | 26 | 67 | |||||||||||
Restricted cash in other non-current assets, end of the period | 17 | 16 | 17 | 16 | |||||||||||
Cash, cash equivalents, segregated cash and restricted cash, end of the period | $ | 8,380 | $ | 10,241 | $ | 8,380 | $ | 10,241 | |||||||
Supplemental disclosures: | |||||||||||||||
Cash paid for interest | $ | 2 | $ | 4 | $ | 8 | $ | 12 | |||||||
Cash paid for income taxes, net of refund received | $ | 7 | $ | 8 | $ | 9 | $ | 14 | |||||||
Reconciliation of GAAP to Non-GAAP Results (Unaudited) | |||||||||||||||||||
Three Months Ended September 30, | Three Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||
(in millions) | 2023 | 2024 | 2024 | 2023 | 2024 | ||||||||||||||
Net income (loss) | $ | (85 | ) | $ | 150 | $ | 188 | $ | (571 | ) | $ | 495 | |||||||
Net margin | (18 | )% | 24 | % | 28 | % | (41 | )% | 26 | % | |||||||||
Add: | |||||||||||||||||||
Interest expenses related to credit facilities | 6 | 6 | 6 | 17 | 18 | ||||||||||||||
Provision for income taxes | 10 | 3 | 3 | 9 | 11 | ||||||||||||||
Depreciation and amortization | 19 | 20 | 18 | 54 | 55 | ||||||||||||||
EBITDA (non-GAAP) | (50 | ) | 179 | 215 | (491 | ) | 579 | ||||||||||||
Add: SBC | |||||||||||||||||||
2021 Founders Award Cancellation | — | — | — | 485 | — | ||||||||||||||
SBC Excluding 2021 Founders Award Cancellation | 83 | 79 | 86 | 305 | 227 | ||||||||||||||
Significant legal and tax settlements and reserves | 104 | 10 | — | 104 | 10 | ||||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 137 | $ | 268 | $ | 301 | $ | 403 | $ | 816 | |||||||||
Adjusted EBITDA margin (non-GAAP) | 29 | % | 42 | % | 44 | % | 29 | % | 42 | % | |||||||||
Three Months Ended September 30, | Three Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||
(in millions) | 2023 | 2024 | 2024 | 2023 | 2024 | ||||||||||||||
Total operating expenses (GAAP) | $ | 540 | $ | 486 | $ | 493 | $ | 1,956 | $ | 1,439 | |||||||||
Add: SBC | |||||||||||||||||||
2021 Founders Award Cancellation | — | — | — | 485 | — | ||||||||||||||
SBC Excluding 2021 Founders Award Cancellation | 83 | 79 | 86 | 305 | 227 | ||||||||||||||
Significant legal and tax settlements and reserves | 104 | 10 | — | 104 | 10 | ||||||||||||||
Adjusted Operating Expenses (Non-GAAP) | $ | 353 | $ | 397 | $ | 407 | $ | 1,062 | $ | 1,202 | |||||||||
(in millions) | Prior Financial Outlook1 for the Year Ending December 31, 2024 | Current Financial Outlook for the Year Ending December 31, 2024 | Change |
Total operating expenses (GAAP) | increased by | ||
Significant legal and tax settlements and reserves | — | increased by | |
Adjusted Operating Expenses and SBC (Non-GAAP)2 | no change |
(1) Prior Outlook provided at Q2 2024 Earnings on August 7th, 2024.
(2) Actual results might differ materially from our outlook, see “Financial Outlook” for more information. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements regarding the expected financial performance of Robinhood Markets, Inc. and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”) and our strategic and operational plans, including (among others) statements regarding that index options, futures, and a realized profit and loss tool are coming soon; that we have a ton of momentum, and we’re just getting started; that in July 2024, we began executing on our authorized
Non-GAAP Financial Measures
We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total net revenues, net income (loss) and other results under GAAP, we utilize non-GAAP calculations of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin, Adjusted Operating Expenses, and Adjusted Operating Expenses and SBC. This non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss), excluding (i) interest expenses related to credit facilities, (ii) provision for (benefit from) income taxes, (iii) depreciation and amortization, (iv) SBC, (v) significant legal and tax settlements and reserves, and (vi) other significant gains, losses, and expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing results.
The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total net revenues. The most directly comparable GAAP measure is net margin (calculated as net income (loss) divided by total net revenues). We believe Adjusted EBITDA Margin provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Adjusted EBITDA Margin is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.
Adjusted Operating Expenses
Adjusted Operating Expenses is defined as GAAP total operating expenses minus (i) SBC, (ii) significant legal and tax settlements and reserves, and (iii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. We believe Adjusted Operating Expenses provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.
Adjusted Operating Expenses and SBC
Adjusted Operating Expenses and SBC is defined as GAAP total operating expenses minus (i) significant legal and tax settlements and reserves and (ii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses), that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. Unlike Adjusted Operating Expenses, Adjusted Operating Expenses and SBC does not adjust for SBC. We believe Adjusted Operating Expense and SBC provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses and SBC is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.
Key Performance Metrics
In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key performance metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
Funded Customers
We define a Funded Customer as a unique person who has at least one account with a Robinhood entity and, within the past 45 calendar days (a) had an account balance that was greater than zero (excluding amounts that are deposited into a Funded Customer account by the Company with no action taken by the unique person) or (b) completed a transaction using any such account. Individuals who share a funded joint investing account (which launched in July 2024) are each considered to be a Funded Customer.
Assets Under Custody (“AUC”)
We define AUC as the sum of the fair value of all equities, options, cryptocurrency and cash held by users in their accounts, net of receivables from users, as of a stated date or period end on a trade date basis. Net Deposits and net market gains (losses) drive the change in AUC in any given period.
Net Deposits
We define Net Deposits as all cash deposits and asset transfers from customers, as well as dividends, interest, and cash and assets earned in connection with Company promotions (such as account transfer and retirement match incentives and free stock bonuses) received by customers, net of reversals, customer cash withdrawals, margin interest, Gold subscription fees, and other assets transferred out of our platforms (assets transferred in or out include debit card transactions, Automated Customer Account Transfer Service transfers, and custodial crypto wallet transfers) for a stated period. Prior to the second quarter of 2024, Net Deposits did not include inflows from cash and assets earned in connection with Company promotions and prior to January 2024, Net Deposits did not include inflows from dividends and interest or outflows from Robinhood Gold subscription fees and margin interest, although we have not restated amounts in prior periods as the impact to those figures was immaterial.
Average Revenue Per User (“ARPU”)
We define ARPU as total revenue for a given period divided by the average number of Funded Customers on the last day of that period and the last day of the immediately preceding period. Figures in this release represent ARPU annualized for each three-month period presented.
Gold Subscribers
We define a Gold Subscriber as a unique person who has at least one account with a Robinhood entity and who, as of the end of the relevant period (a) is subscribed to Robinhood Gold and (b) has made at least one Robinhood Gold subscription fee payment.
Additional Operating Metrics
Retirement AUC
We define Retirement AUC as the total AUC in traditional IRAs and Roth IRAs.
Cash Sweep
We define Cash Sweep as the period-end aggregate balances in our brokerage sweep program (i.e., the period-end total amount of participating users’ uninvested brokerage cash that has been automatically “swept” or moved from their brokerage accounts into deposits for their benefit at a network of program banks). This is an off-balance-sheet amount. Robinhood earns a net interest spread on Cash Sweep balances based on the interest rate offered by the banks less the interest rate given to users as stated in our program terms.
Margin Book
We define Margin Book as our period-end aggregate outstanding margin loan balances receivable (i.e., the period-end total amount we are owed by customers on loans made for the purchase of securities, supported by a pledge of assets in their margin-enabled brokerage accounts).
Notional Trading Volume
We define Notional Trading Volume for any specified asset class as the aggregate dollar value (purchase price or sale price as applicable) of trades executed in that asset class over a specified period of time.
Options Contracts Traded
We define Options Contracts Traded as the total number of options contracts bought or sold over a specified period of time. Each contract generally entitles the holder to trade 100 shares of the underlying stock.
Monthly Active Users ("MAU")
We define MAUs as the number of unique persons who, using one or more accounts with a Robinhood entity, meet one of the following criteria at any point during a specified calendar month: a) executes a debit card or credit card transaction, b) transitions between two different screens on a mobile device while logged into their account or c) loads a page in a web browser while logged into their account. A person need not satisfy these conditions on a recurring monthly basis or be a Funded Customer to be included in MAU. MAU figures in this release reflect MAU for the last month of the relevant period presented. We utilize MAU to measure how many customers interact with our products and services during a given month. MAU does not measure the frequency or duration of the interaction, but we consider it a useful indicator for engagement. Additionally, MAUs are positively correlated with, but are not indicative of, the performance of revenue and other key performance indicators.
Glossary Terms
Investment Accounts
We define an Investment Account as a funded individual brokerage account, a funded joint investing account, or a funded individual retirement account ("IRA"). As of September 30, 2024, a Funded Customer can have up to four Investment Accounts - individual brokerage account, joint investing account (which launched in July 2024), traditional IRA, and Roth IRA.
Growth Rate and Annualized Growth Rate with respect to Net Deposits
When used with respect to Net Deposits, “growth rate” and “annualized growth rate” provide information about Net Deposits relative to total AUC. “Growth rate” is calculated as aggregate Net Deposits over a specified 12 month period, divided by AUC for the fiscal quarter that immediately precedes such 12 month period. “Annualized growth rate” is calculated as Net Deposits for a specified quarter multiplied by 4 and divided by AUC for the immediately preceding quarter.
FAQ
What was Robinhood's (HOOD) revenue in Q3 2024?
What was Robinhood's (HOOD) EPS in Q3 2024?
How many funded customers does Robinhood (HOOD) have in Q3 2024?