Robinhood Q4 Earnings Top on Trading Surge & Higher NIR, Stock Up

Shares of Robinhood Market Inc. HOOD 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 IncreaseQuarterly 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 ActivitiesAs 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 UpdateIn the reported quarter, the company repurchased nearly 5.3 million shares for $160 million.HOOD’s Outlook for 2025Robinhood 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 RobinhoodRobinhood’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. QuoteCurrently, 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 PeersCharles Schwab’s SCHW 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 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.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks