Robinhood posts strong Q2 earnings fueled by options and crypto

Robinhood recorded a profitable second quarter in 2024, with a 40% increase in revenue year-over-year, totaling $682 million, propelled by a renewed interest in crypto trading.

The firm’s crypto transaction-based revenues hit $81 million, accounting for a 161% hike compared to the same period last year. Robinhood attributed this growth to heightened trading volumes, indicating a growing enthusiasm for cryptocurrencies among retail investors.

Crypto trading volumes on the platform also marked a 137% rise compared to Q2 2023, but was down 40% from the first quarter of 2024. The downturn conincded with a drop in monthly active users in Q2, the report added.

Robinhood’s crypto assets under custody rose 57% year-on-year, currently standing at $20.6 billion.

Transaction-based revenue across all of the platform’s offerings jumped 69% year-over-year, with options accounting for the largest revenue stream of $182 million. Equities revenue was up 60%, amounting to $40 million.

According to the firm, its strategic purchases have bolstered its market standing.

“This quarter, we kept up the pace with rapid product launches and a relentless drive to provide top value for our customers,” said Vlad Tenev, CEO and co-founder of Robinhood.

In June, the firm finalized an agreement to acquire crypto exchange Bitstamp, Ltd. The earnings report added that the acquisition, subject to regulatory approval, is expected to boost Robinhood’s operational scope, leveraging Bitstamp’s 50 active licenses and registrations throughout the EU, UK, US, and Asia.

Further, Robinhood also acquired Pluto Capital Inc., an AI-driven investment research platform, in July to enhance its retail investment offerings using AI.

The earnings report comes as Robinhood is facing some regulatory hiccups. 

In May, the exchange’s cryptocurrency division received a Wells Notice from the U.S. Securities and Exchange Commission, indicating an impending enforcement action against the trading platform. Per the commission’s preliminary findings, Robinhood had violated U.S. securities laws.

However, the notice received immediate backlash from the crypto community, with the Digital Chamber, a digital asset sector trade association, expressing concerns over the SEC’s regulatory overreach.

Despite the challenges, the firm has continued to expand its offering, with plans to offer its cryptocurrency futures product in the U.S. and Europe.