Robinhood Reports 58% Revenue Increase to $2.95 Billion for 2024

Robinhood Markets, Inc. reported a significant increase in net revenue for the year ended December 31, 2024, reaching $2.95 billion, a 58% rise compared to $1.87 billion in 2023. This increase led to a net income of $1.41 billion, or diluted earnings per share of $1.56, a stark contrast to the net loss of $0.54 billion, or diluted EPS of -$0.61, reported in the previous year. The 2024 net income included a $369 million deferred tax benefit and a $55 million benefit from a regulatory settlement reversal. Total operating expenses decreased by 21% to $1.90 billion, primarily due to a 65% decrease in stock-based compensation expense.

The company experienced growth in several key operational metrics. Funded customers increased by 8% to 25.2 million, while investment accounts rose by 10% to 26.2 million. Assets under custody showed substantial growth, increasing by 88% to $192.9 billion, driven by net deposits and higher valuations of equities and cryptocurrencies. Net deposits reached $50.5 billion, representing a 49% growth rate relative to AUC at the end of the fourth quarter of 2023. Average revenue per user increased by 53% to $122, and Robinhood Gold subscribers increased by 86% to 2.64 million.

Robinhood announced two significant pending acquisitions. An agreement was reached to acquire Bitstamp, a global cryptocurrency exchange, for approximately $200 million. Separately, the company agreed to acquire TradePMR, a custodial and portfolio management platform, for approximately $300 million in cash and equity compensation. Both acquisitions are subject to customary closing conditions and regulatory approvals, with expected closure in the first half of 2025. The company also highlighted its strategic focus on becoming the leading platform for active traders and securing the largest wallet share among the next generation of investors, along with building a leading global financial ecosystem.

The company's financial performance was influenced by several factors, including increased trading volumes in cryptocurrencies and options, higher interest rates impacting net interest revenues, and the impact of the Federal Reserve's interest rate cuts in late 2024. Robinhood also detailed various risks and uncertainties, including regulatory changes impacting payment for order flow, cybersecurity threats, cryptocurrency market volatility, and the potential for litigation. The company stated that it believes its primary sources of liquidity will be sufficient to meet its liquidity needs for the next 12 months. The 10-K filing also included extensive disclosures on regulatory compliance across various jurisdictions and the company's internal control over financial reporting.