Robinhood Markets, Inc. (NASDAQ: HOOD)

Robinhood’s Q2 2025 financial performance was exceptionally strong across all key metrics. Total net revenues grew 45% year-over-year to $989 million, representing the company’s strongest quarterly revenue performance to date. This growth was driven by robust increases across all revenue segments, with transaction-based revenues leading the way at $539 million (+65% YoY), followed by net interest revenues of $357 million (+25% YoY) and other revenues of $93 million (+33% YoY).

Profitability metrics showed remarkable improvement, with net income surging 105% to $386 million, translating to a net margin of 39%, up from 28% in the prior year. This significant margin expansion demonstrates the company’s operating leverage and effective expense management. Diluted earnings per share doubled to $0.42, reflecting both strong earnings growth and the impact of share repurchases.

The company’s Adjusted EBITDA increased 82% to $549 million, representing a margin of 56%, up from 44% in Q2 2024. This improvement was driven by strong revenue growth combined with disciplined expense management. Total operating expenses increased only 12% to $550 million, demonstrating significant operating leverage as the business scales.

Transaction-based revenues were particularly strong, benefiting from increased trading activity across all asset classes. Options revenue reached $265 million (+46% YoY), cryptocurrency revenue surged to $160 million (+98% YoY), and equities revenue grew to $66 million (+65% YoY). This diversified revenue growth showcases the platform’s appeal across different investor preferences and market conditions.

Customer Growth remained healthy with Funded Customers increasing 10% year-over-year to 26.5 million. The company added 2.3 million new funded customers during the quarter, demonstrating continued platform appeal despite a more mature user base. Investment Accounts grew at a similar pace to 27.4 million, indicating that existing customers are opening additional account types, particularly retirement accounts.

Total Platform Assets experienced exceptional growth, nearly doubling to $279 billion, representing a 99% increase year-over-year. This growth was driven by both substantial net deposits of $13.8 billion during the quarter and appreciation in equity and cryptocurrency valuations. Over the trailing twelve months, net deposits totaled $57.9 billion, representing a 41% growth rate relative to platform assets.

Average Revenue Per User (ARPU) increased significantly by 34% to $151 on an annualized basis, reflecting higher customer engagement, increased trading activity, and successful monetization of the growing user base. This metric demonstrates the company’s ability to drive revenue growth both through customer acquisition and deepening relationships with existing customers.

Robinhood Gold continued its impressive growth trajectory with subscribers reaching a record 3.5 million, up 76% year-over-year. This represents an adoption rate of over 13% among funded customers, with over 1.5 million new subscribers added during the past year. The Gold Card credit card product now serves more than 300,000 customers, further expanding the company’s financial services ecosystem.

Transaction-based Revenues led growth with $539 million in Q2 2025, representing a 65% increase year-over-year. This segment accounted for 54% of total revenues and was driven by robust trading activity across all asset classes:

• Options Revenue: $265 million (+46% YoY) – Record 515 million contracts traded
• Cryptocurrency Revenue: $160 million (+98% YoY) – Benefited from higher crypto prices and Bitstamp acquisition
• Equities Revenue: $66 million (+65% YoY) – Record $517 billion in notional trading volume

Net Interest Revenues grew 25% to $357 million, representing 36% of total revenues. Growth was driven by expansion in interest-earning assets, including a record Cash Sweep balance of $32.7 billion (+56% YoY) and Margin Book of $9.5 billion (+90% YoY). Securities lending activity also contributed to growth, partially offset by lower short-term interest rates.

Other Revenues increased 33% to $93 million, primarily driven by the continued growth in Robinhood Gold subscribers. This segment includes subscription fees, referral revenues, and other ancillary income streams. The growth reflects the company’s success in diversifying revenue sources beyond traditional trading commissions.

Robinhood demonstrated exceptional operating leverage in Q2 2025, with total operating expenses increasing only 12% to $550 million while revenues grew 45%. This resulted in significant margin expansion across all profitability metrics:

Expense Management

• Technology and Development: $214 million (+2% YoY) – Disciplined investment in platform capabilities
• Marketing: $99 million (+55% YoY) – Strategic investments in customer acquisition
• General and Administrative: $132 million (-1% YoY) – Improved operational efficiency
• Brokerage and Transaction: $48 million (+20% YoY) – Scales with transaction volume
• Operations: $29 million (+4% YoY) – Stable operational base

The company’s Adjusted Operating Expenses and Share-Based Compensation increased only 6% year-over-year to $522 million, including costs related to the Bitstamp acquisition. This metric excludes provision for credit losses, which totaled $28 million in Q2 2025 compared to $18 million in the prior year, reflecting growth in credit products.

Operating leverage was most evident in the significant improvement in operating margins, with the company achieving an Adjusted EBITDA margin of 56%, up from 44% in Q2 2024. This demonstrates the scalability of Robinhood’s technology platform and the benefits of its asset-light business model.

Q2 2025 was marked by significant strategic progress across multiple initiatives that position Robinhood for continued growth and market expansion:

Product Innovation and Trading Tools

• Robinhood Legend Expansion: Extended availability to all customers in the UK, with strong adoption among active traders
• Mobile Enhancements: Launched Robinhood Legend charts on mobile and options simulated returns pre-trade
• Active Trader Focus: Announced HOOD Summit 2025 for September – the company’s second annual active trader event
• Product Livestream: Hosted the first-ever product spotlight livestream in June 2025

Global Crypto Expansion

The company made significant strides in cryptocurrency expansion through multiple strategic initiatives:

• Bitstamp Acquisition: Closed the acquisition of Bitstamp Ltd. in June 2025, adding over 50 active licenses and significantly expanding institutional capabilities
• European Expansion: Launched Stock Tokens in 30 European countries covering over 200 US stocks and ETFs
• US Crypto Staking: Introduced crypto staking services to eligible US customers
• WonderFi Agreement: Entered agreement to acquire WonderFi, a Canadian leader in digital asset products and services, expected to close in H2 2025

Financial Services Expansion

Robinhood continued expanding beyond traditional brokerage services:

• Robinhood Strategies: Digital advisory offering now manages over $0.5 billion in assets serving over 100,000 customers since March 2025 launch
• Retirement Growth: Robinhood Retirement AUC exceeded $20 billion, up 50% year-to-date
• Gold Card Success: Credit card now serves more than 300,000 customers
• Tokenization Innovation: CEO Vlad Tenev highlighted tokenization as “the biggest innovation our industry has seen in the past decade”

Management provided updated 2025 expense guidance, reflecting the successful integration of strategic acquisitions and continued investment in growth initiatives:

Updated Expense Guidance

• Combined Adjusted Operating Expenses and SBC: $2.15 billion to $2.25 billion (increased from prior guidance of $2.085-$2.185 billion)
• Increase primarily reflects $65 million of anticipated costs related to Bitstamp acquisition
• Guidance excludes provision for credit losses, WonderFi-related costs, and potential regulatory matters
• Reflects continued investment in new products, features, and international expansion

Growth Investment Areas

The company continues to invest strategically in areas expected to drive long-term growth:

• International expansion and regulatory compliance capabilities
• Product development for new financial services offerings
• Technology infrastructure to support platform scalability
• Integration and optimization of acquired businesses (Bitstamp, pending WonderFi)

Management expressed confidence in the company’s ability to maintain strong growth while continuing to invest in strategic initiatives that expand the addressable market and deepen customer relationships.