Robinhood Markets, Inc. has reported that total net revenues increased 10% sequentially to $486 million, primarily due to seasonally higher proxy revenue and higher net interest revenues, partially offset by lower transaction-based revenues. Net income was $25 million, or earnings per share (EPS) of $0.03, compared with a net loss of $511 million, or EPS […]
Robinhood Markets, Inc. has reported that total net revenues increased 10% sequentially to $486 million, primarily due to seasonally higher proxy revenue and higher net interest revenues, partially offset by lower transaction-based revenues.
Net income was $25 million, or earnings per share (EPS) of $0.03, compared with a net loss of $511 million, or EPS of -$0.57, in Q1 2023. Q1 2023 EPS of -$0.57 included a -$0.54 EPS impact from a one-time $485 million share-based compensation expense related to Robinhood co-founders canceling their 2021 market-based restricted stock unit awards in February 2023.
Robinhood’s financial results for the second quarter of 2023 mark the neobroker’s first time achieving GAAP profitability as a public company. It was on July 28, 2021 that Robinhood sold shares in its IPO at $38 per share ahead of its public debut on the Nasdaq on July 29, raising close to $2 billion.
Robinhood’s outlook for 2023 has now improved, with GAAP total operating expenses for full-year 2023 to be in the range of $2.330 billion to $2.410 billion, an improvement of $45 million at the midpoint of the range from our prior outlook of $2.345 billion to $2.485 billion.
Robinhood’s metrics contained in its Q2 report include:
- Transaction-based revenues decreased 7% sequentially to $193 million.
- Options decreased 5% to $127 million.
- Cryptocurrencies decreased 18% to $31 million.
- Equities decreased 7% to $25 million.
- Net interest revenue increased 13% sequentially to $234 million, driven by growth in interest earning assets, higher short term interest rates, and increased securities lending activity.
- Operating expenses decreased by $484 million sequentially to $466 million, primarily due to the 2021 Founders Award Cancellation in Q1.
- Operating expenses prior to SBC increased $5 million sequentially to $357 million.
- SBC decreased by $489 million sequentially to $109 million, primarily due to the 2021 Founders Award Cancellation in Q1.
- Adjusted EBITDA (non-GAAP) increased 31% sequentially to $151 million. Adjusted EBITDA margin (non-GAAP) increased 5 points sequentially to 31%.
- Net Cumulative Funded Accounts increased 70 thousand sequentially to 23.2 million.
- Monthly Active Users (MAU) decreased 1.0 million sequentially to 10.8 million.
- Assets Under Custody (AUC) increased 13% sequentially to $89 billion, primarily driven by higher equity valuations and continued net deposits.
- Net Deposits were $4.1 billion, which translates to an annualized growth rate of 21% relative to AUC at the end of Q1 2023. Over the past twelve months, Net Deposits were $16.1 billion, which translates to a growth rate of 25% relative to AUC at the end of Q2 2022.
- Average Revenue Per User (ARPU) increased to $84 from $77 in Q1 2023.
- Cash and cash equivalents totaled $5.8 billion compared with $5.5 billion at the end of Q1 2023.
“Significant milestone by achieving GAAP profitability for the first time as a public company”
Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said: “In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company. Guided by our bold product roadmap we’re continuing to innovate for our customers, grow assets, gain market share, and change the industry for the better.”
Jason Warnick, Chief Financial Officer of Robinhood Markets, commented: “Reaching GAAP profitability is a testament to the work our team has done to transform the business and better position Robinhood to drive shareholder value. With five consecutive quarters of revenue and Adjusted EBITDA growth, we’re continuing to drive efficiency across our operations while investing in customer experience. Looking ahead, we remain focused on delivering for customers and growing our business.”
Robinhood bets on Retirement, Gold, 24 Hour Market, UK launch
Robinhood is further growing its Retirement product (IRA assets to date nearing $1 billion and upcoming launch of a 3% IRA match for Robinhood Gold customers) and its Gold cash sweep program which now offers a 4.9% yield (balances have more than doubled since the start of the year, increasing to $11 billion).
The neobroker has recently launched Robinhood 24 Hour Market in partnership with Blue Ocean Technologies to enable customers to invest in select stocks and ETFs on their own schedules, five days a week.
Also in July, Robinhood acquired X1, a platform that offers a no-fee stainless steel credit card with rewards on each purchase.
FinanceFeeds has also reported on the upcoming launch of Robinhood’s brokerage services in the UK by the end of the year, with the firm already hiring for key roles.