• Net Deposits: $10 billion for the third straight quarter, totaling $34 billion year-to-date.

• Customer Assets Under Custody: Record high of $152 billion.

• Options Contracts: Up 47% year-over-year, totaling 1.2 billion contracts year-to-date.

• Revenue: Total net revenues grew 36% to $637 million.

• Adjusted EBITDA: Increased 96% year-over-year, nearly doubling to $268 million.

• Adjusted EBITDA Margin: Expanded by 13 points to 42%.

• Net Income: $150 million or $0.17 per share.

• Gold Subscriptions: Record 2.2 million subscribers, with annualized recurring revenue over $110 million.

• Transaction-Based Revenues: Grew 72% year-over-year.

• Net Interest Revenues: Increased 9% year-over-year.

• Operating Expenses and SBC: $476 million in Q3.

• Share Repurchase: $97 million allocated to repurchase 5 million shares in Q3.

• Warning! GuruFocus has detected 6 Warning Sign with HOOD.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Robinhood Markets Inc (NASDAQ:HOOD) achieved record net deposits of $10 billion for the third consecutive quarter, bringing year-to-date deposits to $34 billion, surpassing the 2020 record.

• The company reported a 47% year-over-year increase in options contracts, setting a new record and demonstrating success in attracting active traders.

• Adjusted EBITDA increased by 96% year-over-year, highlighting strong financial performance and operational efficiency.

• Robinhood Gold subscriptions reached an all-time high of 2.2 million, contributing to record annualized recurring revenue of over $110 million.

• The introduction of new products like index options, futures, and the Robinhood Legend desktop platform is expected to expand the addressable market and enhance customer engagement.

Negative Points

• The 1% gold deposit boost did not drive as much incremental customer activity as expected, leading to its wind-down in November.

• Equity fee capture declined by about 20% sequentially, influenced by customer preference for larger, more liquid names.

• The rollout of the Robinhood Gold Card is progressing slower than anticipated due to the need to manage credit risk and understand customer behavior.

• Despite strong demand, the rollout of new products like the Robinhood Legend platform and futures trading is still in early stages, limiting immediate impact.

• The company faces potential challenges from regulatory developments, which could impact future operations and financial results.

Q & A Highlights

Q: When will the Robinhood Gold Card be available to all users? A: Vlad Tenev, Co-Founder, CEO, and President, stated that the demand for the Gold Card has been overwhelming, with a waitlist close to 2 million. Currently, about 100,000 customers have access. The rollout is being managed carefully to understand customer behavior and economics, with plans to expand significantly over the next year.