Although Robinhood (Nasdaq: HOOD) faces potential regulatory setbacks, its revenue from cryptocurrency trading in the first three months of 2024 jumped 232 percent to $126 million. The increase was driven by virtual cryptocurrency trading volume in the quarter, which reached $36 billion, 224 percent higher.
Encryption is king
The US brokerage's total quarterly revenue over the three months rose 40 percent year-on-year to reach $618 million. Of the total, transaction-based revenue increased 59 percent to $329 million, primarily driven by cryptocurrencies. Options trading revenue also rose 16 percent to $154 million, while stock revenue of $39 million jumped 44 percent.
Aside from transaction-based revenue, Robinhood also generated $254 million in net interest, up 22 percent, and $35 million, up 35 percent, from other sources, which includes subscriptions.
Robinhood's cryptocurrency revenue tripled in the first quarter pic.twitter.com/Z6UtTWvz4C
– Jeff Roberts (@jeffjohnroberts) May 8, 2024
While demand for cryptocurrencies has surged on the platform, the SEC issued a Welsh Notice to Robinhood regarding its cryptocurrency offerings, signaling potential enforcement action against the brokerage.
Profitable quarter
The quarter was also profitable for the broker, as it generated net income of $157 million, or diluted earnings per share (EPS) of $0.18, compared to a loss of $511 million in the corresponding quarter of the previous year. Interestingly, the broker managed to reduce operating expenses by 52 percent year-on-year to $460 million.
“We delivered significant revenue growth and margin expansion in the first quarter as we remain focused on driving another year of profitable growth in 2024,” said Jason Warnick, Robinhood's CFO. “In the first quarter, we set records for quarterly revenue, net income and earnings per share, even as we ramped up our investments in marketing and growth.”
In the three months, assets on the platform increased by 65 percent to $129.6 billion. Net deposits also jumped to $11.2 billion, with an annual growth rate of 44% compared to the end of the previous quarter.
Robinhood brought in a whopping $11.2 billion in deposits in the first quarter, the highest ever in corporate history $hood pic.twitter.com/jKrcWj6ZEn
– Georgavin (@georgavin) May 9, 2024
Looking at the current quarter's performance, Vlad Tenev, CEO of Robinhood, said: “The second quarter is off to a strong start with April being the highest month of the year in terms of net deposit and Gold subscriber growth, and we are excited to see strong interest from over a million customers on… Our Robinhood Gold Card.
This article was written by Arnab Shomi at www.financemagnates.com.