Robinhood (HOOD, Financial), a prominent US internet brokerage firm, recently released its financial results for the third quarter. The company's revenue reached $637 million, marking a 36% increase compared to the same period last year. Notably, the net profit attributable to common shareholders was $150 million, a turnaround from the $85 million net loss reported a year ago. Despite these gains, Robinhood's net income per diluted share was $0.17, short of Wall Street analysts’ expectations, which led to a significant 11% decline in the stock's after-hours trading price.
In the quarter ending September 30, 2024, Robinhood's total net revenue saw a 36% year-over-year increase, driven by growth across its various business segments. Despite reaching $637 million in revenue, the figure lagged behind the $657.85 million predicted by analysts. Transaction-based revenue jumped to $319 million, a 72% rise from the previous year, while net interest income rose by 9% to $274 million. Other revenue streams increased by 42% to $44 million.
Breaking down the transaction-based revenue, options trading generated $202 million, up 63% from the previous quarter, cryptocurrency trading brought in $61 million, marking a 165% increase, and stock trading contributed $37 million, a 37% rise.
Robinhood's adjusted EBITDA also experienced a notable improvement, rising by 96% to $268 million, with a 42% margin compared to last year's 29%. Meanwhile, the company’s total operating expenses fell by 10% to $486 million, with marketing spending showing the most significant increase at 111% year-over-year.
The company managed to repurchase 5 million shares of Class A common stock at an average price of $19.42, totaling $97 million, as part of its $1 billion stock buyback program initiated in July 2024.
Operational highlights include a rise in funded accounts to 24.3 million, an addition of 1 million users compared to last year. Assets Under Custody (AUC) surged 76% to $152.2 billion, fueled by increased net deposits and higher valuations of stock and cryptocurrency assets. Average revenue per user (ARPU) grew by 31% to $105.
Looking forward, Robinhood anticipates its total operating expenses for the full fiscal year 2024 to range between $1.86 billion and $1.96 billion, in line with GAAP standards. The company maintains its forecast for adjusted operating expenses and stock-based compensation expenses between $1.85 billion and $1.95 billion for the year.
On the trading front, Robinhood's stock saw a modest increase of $0.18 to close at $28.21 during regular trading on NASDAQ. However, it experienced a significant after-hours drop of $3.06 to $25.15. Over the past 52 weeks, the stock's price has ranged from a high of $28.58 to a low of $7.91.
