Robinhood Markets, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Product Velocity: Strong product velocity across focus areas: #1 in active traders, #1 in wallet share for next generation, #1 global financial ecosystem. Launched new tooling capabilities for mobile Legend, Cortex for Gold members. Hosted second annual HOOD Summit for active traders in Las Vegas.
• Financials: Revenues $989 million, up 45% Y/Y. Trading volumes up across categories. Interest-earning assets up over 50%. Gold cash sweep balances over $30 billion. Adjusted OpEx and SBC up 6% Y/Y, leading to 56% adjusted EBITDA margins.
• New Products: Futures contract volumes 11 million, index options 17 million, prediction markets nearly 1 billion. Robinhood Strategies grown to over 100,000 funded customers and $0.5 billion in assets. Robinhood Banking on track for rollout later in the quarter.

Segment Performance

• Active Traders: Record trading volumes in Q2 across equities, options, prediction markets, index options, and futures. Index options volumes grew 60% QoQ, event contracts more than doubled to nearly 1 billion in Q2. Active trader offering has industry-leading product velocity.
• Assets: Customer assets doubled year-over-year to over $0.25 trillion. Average assets per funded customer over $10,000 for the first time. Robinhood Strategies has over 100,000 funded customers and over $0.5 billion in assets. Robinhood Gold cardholders tripled YTD to over 300,000. Retirement assets over $20 billion, doubled in a year.
• Global Financial Ecosystem: Expanded European offering to 30 countries, serving over 400 million people. Launched stock tokens, which are seen as a big innovation. Perpetual futures coming soon in Europe. Staking in the U.S. launched with over 750 million stakes in the first month. Acquired Bitstamp, expanding institutional business. Robinhood Chain, a Layer 2 blockchain optimized for real-world assets.
• Revenue: Revenue up 45% Y/Y to nearly $1 billion. Net deposits third highest quarter ever, $10 billion over 6 quarters, continuing into July. Gold subscribers up to a record 3.5 million, 13% adoption of overall customer base, 35% among new customers.

Guidance

• Revenue expected to continue growth, with Q3 off to a fast start in July with net deposits around $6 billion, equity and options trading volumes setting new monthly records.
• Bitstamp acquisition expected to add about $65 million in costs in 2025, factored into full-year adjusted OpEx and SBC outlook of $2.15 billion to $2.25 billion.
• Robinhood Banking on track for rollout to customers later in the quarter.

Risks

• Regulatory developments could impact business.
• Competition from other financial institutions entering crypto and other segments.
• Market volatility affecting trading volumes and net deposits.

Question and Answer

Q: When will Robinhood Banking be broadly available for customers?

A: Vlad Tenev said it's on track for rollout later in the quarter.

Q: Does Robinhood have plans to step more heavily into lending, such as personal loans, auto loans, mortgages and other products?

A: Jason Warnick mentioned partnerships like with Sage Home Loans for mortgages and existing credit products like Gold Card and margin.

Q: What will you see in the quarter regarding crypto monetization and any effects from smart exchange routing?

A: Jason Warnick discussed rebate rates and smart exchange routing benefits for high-volume traders Q: When will Robinhood Banking be broadly available?

A: Vlad Tenev stated it's on track for rollout later in the quarter Q: Plans for stepping into lending?

A: Jason Warnick talked about partnerships and existing credit products like Gold Card and margin Q: Crypto monetization and smart exchange routing?

A: Jason Warnick explained rebate rates and smart exchange routing benefits for high-volume traders