Robinhood posts strong Q2 earnings fueled by options and crypto

Robinhood reported a profitable second quarter of 2024, bringing in $682 million in revenue, up 40% from the previous year, amid renewed interest in cryptocurrency trading.

The company’s crypto trading-based revenues reached $81 million, a 161% increase from the same period last year. Robinhood attributed the growth to increased trading volumes, indicating growing interest in cryptocurrencies among retail investors.

Crypto trading volumes on the platform also increased by 137% compared to Q2 2023, but fell by 40% compared to Q1 2024. The decline coincided with a decline in monthly active users in Q2, the report noted.

Robinhood’s crypto assets under custody are now $20.6 billion, up 57% from a year earlier.

Transaction-based revenue across all of the platform’s offerings increased 69% year-over-year, with options accounting for the largest revenue stream at $182 million. Equity revenue increased 60% to $40 million.

The company stated that it strengthened its position in the market with the strategic acquisitions it made.

“We maintained momentum this quarter with rapid product launches and a relentless drive to deliver the highest level of value to our customers,” said Robinhood CEO and co-founder Vlad Tenev.

In June, the company finalized a deal to acquire cryptocurrency exchange Bitstamp Ltd. The acquisition, which is subject to regulatory approval, is expected to increase Robinhood’s operational scope and leverage Bitstamp’s 50 active licenses and registrations across the EU, UK, US and Asia, the earnings report said.

Robinhood has also enhanced its retail investing offerings using AI by acquiring AI-powered investment research platform Pluto Capital Inc.

The earnings report comes at a time when Robinhood is facing some regulatory issues.

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

However, this announcement received immediate backlash from the crypto community, with the Chamber of Digital Commerce, the trade association for the digital asset industry, expressing concerns that the SEC was overstepping its regulatory powers.

Despite the challenges, the company has continued to expand its offerings, with plans to offer its crypto futures product in the US and Europe.