Robinhood Markets, Inc. (NASDAQ: HOOD)

Robinhood’s first quarter 2025 results exceeded expectations, with total net revenues reaching $927 million, a 50% increase year-over-year. Transaction-based revenues surged 77% to $583 million, driven by cryptocurrencies revenue up 100%, options revenue up 56%, and equities revenue up 44%.

Net interest revenues increased 14% to $290 million, supported by growth in interest-earning assets and securities lending activity, partially offset by lower short-term interest rates. Other revenues, primarily from Robinhood Gold subscriptions, grew 54% to $54 million, reflecting the platform’s successful premium offering expansion.

The company demonstrated strong operating leverage with net income up 114% to $336 million and diluted EPS increasing 106% to $0.37. Operating expenses grew at a slower pace than revenues, increasing only 21% to $557 million, while adjusted operating expenses and SBC (non-GAAP) increased 16% to $533 million, including TradePMR acquisition costs.

Adjusted EBITDA reached $470 million with an impressive 51% margin, representing a 90% year-over-year improvement. This strong profitability performance reflects Robinhood’s ability to scale its operations efficiently while investing in growth initiatives.

Robinhood’s customer metrics showed impressive growth, with funded customers increasing by 8% year-over-year to 25.8 million. Investment accounts grew even faster at 11% to 27.0 million, indicating increasing engagement among existing customers.

The platform’s assets surged 70% to $221 billion in total platform assets, driven by both net deposits and the TradePMR acquisition. The company achieved record quarterly net deposits of $18.0 billion, representing an impressive 37% annualized growth rate relative to total platform assets at Q4 2024.

Average revenue per user (ARPU) increased 39% year-over-year to $145, demonstrating the company’s ability to monetize its customer base effectively. This improvement reflects higher trading activity and deeper engagement with Robinhood’s expanded product suite.

Robinhood Gold continued its strong performance with subscribers reaching 3.2 million, up 90% year-over-year. This premium offering has become a significant driver of recurring revenue and customer engagement, contributing to the company’s overall profitability improvement.

Robinhood executed on its strategy with robust product velocity in Q1, releasing cutting-edge products for customers with more in the pipeline:

Enhanced Trading Capabilities

• Robinhood Legend: Enhanced desktop trading platform now features increased speed, support for index options and crypto, and new indicators and charts
• Prediction Markets: Expanded offering launched with hub and trading on world’s biggest events – customers have traded more than 1 billion event contracts in the last six months
• TradePMR Acquisition: Closed in February 2025, bringing approximately $41 billion in assets managed by RIAs

Financial Services Expansion

• Robinhood Strategies: Advisory service already serving 40,000+ customers and managing $100+ million in assets as of April 2025
• Robinhood Banking: Banking offering unveiled at second annual Gold keynote event
• Robinhood Cortex: AI-powered financial assistant introduced to enhance customer experience

International Expansion

• Over 150,000 customers across UK and EU
• Bitstamp cryptocurrency exchange acquisition on track to close mid-2025
• Global financial ecosystem strategy gaining momentum

Capital Return Program

• Board authorized additional $500 million in share repurchases, bringing total program to $1.5 billion
• Through April 25, 2025, repurchased 20 million shares at average price of $33.40 for total $667 million
• Management expects to execute remaining authorization over next two years

Trading metrics across all asset classes showed significant growth, highlighting the success of Robinhood’s product enhancements and market share gains. Robinhood Retirement AUC more than tripled year-over-year to $14.4 billion, demonstrating strong traction for its retirement offerings.

Cash Sweep balances increased 48% to $28.2 billion, while Margin Book more than doubled to $8.8 billion, reflecting growing customer engagement and confidence in the platform. Options contracts traded reached a record 500 million, benefiting from platform improvements and increased retail options trading.

Crypto trading volumes showed resilience with 28% year-over-year growth despite market volatility, while equity notional trading volumes surged 84% to $413 billion. These strong trading metrics underscore Robinhood’s market leadership position in retail investing.

Robinhood demonstrated exceptional operational efficiency in Q1 2025, with revenues growing significantly faster than expenses. Total operating expenses increased only 21% to $557 million while revenues grew 50%, resulting in significant margin expansion.

The company maintained disciplined expense management across key categories:

• Technology and development: +9% year-over-year – Despite continued investment in platform capabilities and international expansion
• Marketing: +57% year-over-year – Targeted spending drove record customer acquisition and engagement
• General and administrative: +13% year-over-year – Controlled G&A growth despite business scale-up

The company’s 2025 expense outlook includes growth investments while maintaining efficiency:

• Full year 2025 Adjusted Operating Expenses and SBC: $2.085-2.185 billion (including $85 million for TradePMR)
• Focus on new products, features, and international expansion
• Leveraging scale to improve operational efficiency in existing businesses