Robinhood Surpasses Expectations in Q1 Earnings, Fueled by Surge in Crypto Trading Activity (NASDAQ: HOOD)

Robinhood Markets (NASDAQ:HOOD) reported Q1 earnings and revenues that eclipsed the expectations set by Wall Street. This surge was largely fueled by a notable increase in cryptocurrency trading throughout the first quarter of 2024. Subsequent to the announcement, HOOD’s shares experienced a 5.5% uptick in after-hours trading on Wednesday.

The trading platform, which encompasses both stock and cryptocurrency, affirms its forecast for fiscal year 2024’s total operating expenses to be in the range of $1.85B-$1.95B. This is in alignment with the Visible Alpha consensus which projects $1.94B.

A noteworthy Q1 GAAP EPS of $0.18 was publicized, which not only overshadows the anticipated $0.06 consensus but also represents a rise from $0.03 in Q4 2023, and a significant recovery from the -$0.57 in Q1 2023.

Quarterly net revenue reached $618M, surpassing the average analyst predictions of $555M. This marks an ascent from the $471M in the prior quarter and a substantial increase from $441M the previous year.

Jason Warnick, the Chief Financial Officer, remarked on the company’s successful quarter, “We delivered robust growth in revenues and an improvement in margins in Q1, which is indicative of our commitment to fostering another profitable year of growth in 2024. The quarter set new records for us in terms of revenues, net income, and EPS, concurrently with our heightened investments in marketing and expansion.”

There was a rise in the monthly active users tally to 13.7M, surpassing the Visible Alpha consensus of 11.3M, and up from 10.9M in Q4 and 11.8M in Q1 2023. The average revenue per user rose to $104, comparing favorably to the Visible Alpha estimate of $85.06, up from $81 in the prior quarter and $77 in the corresponding quarter of the previous year.

Driven predominantly by cryptocurrency, transaction-based revenue increased to $329M from $200M in the previous quarter and experienced a 59% year-on-year growth. Cryptocurrency revenue specifically soared to $126M from $43M in Q4, marking a year-on-year increase of 232%; equity revenue increased to $39M from the previous quarter’s $25M – a 44% year-on-year growth; options revenue grew to $154M from $121M in the prior quarter, marking a 16% year-on-year rise.

Furthermore, Robinhood Markets (HOOD) reported $254M in net interest revenue for Q1, an increase from both Q4 2023’s $236M and the $208M of Q1 2023.

Record net deposits of $11.2B were noted, a substantial leap from $4.6B at 2023’s year-end.

Adjusted operating EBITDA demonstrated remarkable growth, rising to $247M from $133M in the last quarter and from $115M in the corresponding quarter of the previous year.

The concluded statement indicates a forthcoming conference call scheduled at 5:00 PM ET.

In earlier reports, Robinhood Markets revealed a GAAP EPS of $0.18, beating the estimate by $0.12, with revenue of $618M that exceeded expectations by $63.04M.