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Robinhood Q4 Earnings Top on Trading Surge & Higher NIR, Stock Up
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Shares of Robinhood Market Inc. (HOOD - Free Report) surged 15.4% in after-market hours on better-than-expected quarterly results. Its fourth-quarter 2024 adjusted earnings per share of 54 cents handily surpassed the Zacks Consensus Estimate of 42 cents. Moreover, the figure compared favorably with earnings of 3 cents in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results benefited substantially from the crypto-trading boom, higher net interest revenues (NIR) and a jump in Gold subscribers. Also, the company witnessed improvement in Monthly Active Users (MAU). However, a rise in expenses acted as a headwind.
The results excluded certain notable items. After considering those, net income (GAAP) was $996 million, a massive jump from $30 million in the year-ago quarter.
For 2024, adjusted earnings per share were $1.10 per share, which outpaced the Zacks Consensus Estimate of 97 cents. Net income (on a GAAP basis) was $1.41 billion or $1.56 per share against a loss of $541 million or 61 cents in 2023.
HOOD’s Revenues Rise, Expenses Increase
Quarterly total net revenues surged 115.3% year over year to $1.01 billion. Moreover, the top line beat the Zacks Consensus Estimate of $940.65 million.
For 2024, total net revenues were $2.95 billion, up 58.2% from 2023. Further, the top line surpassed the Zacks Consensus Estimate of $2.88 billion.
During the quarter, average revenue per user (ARPU) increased 102.5% year over year to $164.
Transaction-based revenues were $672 million, significantly up from $200 million in the prior-year quarter. This was primarily driven by an improvement in options, equities and cryptocurrencies revenues.
NIR grew 25.4% to $296 million. The rise was mainly attributable to higher interest-earning assets balance, partially offset by a lower federal funds rate.
Other revenues increased 31.4% to $46 million, primarily due to a rise in Gold subscription revenues. During the reported quarter, its Gold subscribers increased 85.9% year over year to 2.64 million.
Total operating expenses were $458 million, up 2.9%. The rise was primarily due to a rise in all the components except general and administrative expenses. Adjusted operating expenses increased 18.4% to $431 million.
During the reported quarter, adjusted EBITDA jumped to $613 million from $133 million in the year-ago period.
Robinhood’s Other Business Activities
As of Dec. 31, 2024, total AUC jumped 88% year over year to $192.9 billion. The rise was driven by continued net deposits and higher equity and cryptocurrency valuations.
Equity Notional Trading Volumes increased 154% in the quarter to $423 billion. Likewise, Options Contracts Traded rose 61% to 477 million, while Crypto Notional Trading Volumes surged 400% to $71 billion.
Further, the company reported MAU of 14.9 million, up 36.7% year over year.
Robinhood’s Share Repurchase Update
In the reported quarter, the company repurchased nearly 5.3 million shares for $160 million.
HOOD’s Outlook for 2025
Robinhood anticipates combined adjusted operating expenses and share-based compensation (SBC) for 2025 to be in the range of $2-$2.1 billion.
Our View on Robinhood
Robinhood’s expansion efforts, product diversification and relatively lower interest rates alongside a solid balance sheet will aid its financials. However, higher SBC expenses and excessive regulatory risks are woes.
Robinhood Markets, Inc. Price, Consensus and EPS Surprise
Charles Schwab’s (SCHW - Free Report) fourth-quarter 2024 adjusted earnings of $1.01 per share beat the Zacks Consensus Estimate of 90 cents. The bottom line jumped 49% year over year.
SCHW’s results benefited from the solid performance of the asset management business, which drove revenues. Also, higher net interest revenues acted as a tailwind. The absence of fee waivers, lower GAAP expenses and solid brokerage account numbers were the other positives.
Interactive Brokers Group’s (IBKR - Free Report) fourth-quarter 2024 adjusted earnings per share of $2.03 beat the Zacks Consensus Estimate of $1.86. The bottom line reflected a jump of 33.6% from the prior-year quarter’s actuals.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades, was another tailwind. However, higher expenses hurt IBKR’s results to some extent.
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Robinhood Q4 Earnings Top on Trading Surge & Higher NIR, Stock Up
Shares of Robinhood Market Inc. (HOOD - Free Report) surged 15.4% in after-market hours on better-than-expected quarterly results. Its fourth-quarter 2024 adjusted earnings per share of 54 cents handily surpassed the Zacks Consensus Estimate of 42 cents. Moreover, the figure compared favorably with earnings of 3 cents in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results benefited substantially from the crypto-trading boom, higher net interest revenues (NIR) and a jump in Gold subscribers. Also, the company witnessed improvement in Monthly Active Users (MAU). However, a rise in expenses acted as a headwind.
The results excluded certain notable items. After considering those, net income (GAAP) was $996 million, a massive jump from $30 million in the year-ago quarter.
For 2024, adjusted earnings per share were $1.10 per share, which outpaced the Zacks Consensus Estimate of 97 cents. Net income (on a GAAP basis) was $1.41 billion or $1.56 per share against a loss of $541 million or 61 cents in 2023.
HOOD’s Revenues Rise, Expenses Increase
Quarterly total net revenues surged 115.3% year over year to $1.01 billion. Moreover, the top line beat the Zacks Consensus Estimate of $940.65 million.
For 2024, total net revenues were $2.95 billion, up 58.2% from 2023. Further, the top line surpassed the Zacks Consensus Estimate of $2.88 billion.
During the quarter, average revenue per user (ARPU) increased 102.5% year over year to $164.
Transaction-based revenues were $672 million, significantly up from $200 million in the prior-year quarter. This was primarily driven by an improvement in options, equities and cryptocurrencies revenues.
NIR grew 25.4% to $296 million. The rise was mainly attributable to higher interest-earning assets balance, partially offset by a lower federal funds rate.
Other revenues increased 31.4% to $46 million, primarily due to a rise in Gold subscription revenues. During the reported quarter, its Gold subscribers increased 85.9% year over year to 2.64 million.
Total operating expenses were $458 million, up 2.9%. The rise was primarily due to a rise in all the components except general and administrative expenses. Adjusted operating expenses increased 18.4% to $431 million.
During the reported quarter, adjusted EBITDA jumped to $613 million from $133 million in the year-ago period.
Robinhood’s Other Business Activities
As of Dec. 31, 2024, total AUC jumped 88% year over year to $192.9 billion. The rise was driven by continued net deposits and higher equity and cryptocurrency valuations.
Equity Notional Trading Volumes increased 154% in the quarter to $423 billion. Likewise, Options Contracts Traded rose 61% to 477 million, while Crypto Notional Trading Volumes surged 400% to $71 billion.
Further, the company reported MAU of 14.9 million, up 36.7% year over year.
Robinhood’s Share Repurchase Update
In the reported quarter, the company repurchased nearly 5.3 million shares for $160 million.
HOOD’s Outlook for 2025
Robinhood anticipates combined adjusted operating expenses and share-based compensation (SBC) for 2025 to be in the range of $2-$2.1 billion.
Our View on Robinhood
Robinhood’s expansion efforts, product diversification and relatively lower interest rates alongside a solid balance sheet will aid its financials. However, higher SBC expenses and excessive regulatory risks are woes.
Robinhood Markets, Inc. Price, Consensus and EPS Surprise
Robinhood Markets, Inc. price-consensus-eps-surprise-chart | Robinhood Markets, Inc. Quote
Currently, Robinhood sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of HOOD’s Peers
Charles Schwab’s (SCHW - Free Report) fourth-quarter 2024 adjusted earnings of $1.01 per share beat the Zacks Consensus Estimate of 90 cents. The bottom line jumped 49% year over year.
SCHW’s results benefited from the solid performance of the asset management business, which drove revenues. Also, higher net interest revenues acted as a tailwind. The absence of fee waivers, lower GAAP expenses and solid brokerage account numbers were the other positives.
Interactive Brokers Group’s (IBKR - Free Report) fourth-quarter 2024 adjusted earnings per share of $2.03 beat the Zacks Consensus Estimate of $1.86. The bottom line reflected a jump of 33.6% from the prior-year quarter’s actuals.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades, was another tailwind. However, higher expenses hurt IBKR’s results to some extent.