Fintech upstart and online trading platform Robinhood Markets (HOOD -0.37%) reported its first-quarter earnings on Wednesday, May 8, showing it significantly exceeded analysts' estimates with diluted EPS of $0.18 against the expected $0.03. Record revenue for the quarter came in at $618 million, well above analyst forecasts.
This quarter reflects robust growth and efficiency in the company's operations.
| Metric | Q1 2024 | Analyst Estimates | Q1 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $618 million | $471 million | $441 million | 40% |
| EPS | $0.18 | $0.03 | ($0.57) | N/A |
| Net income | $157 million | N/A | ($511 million) | N/A |
| Gold subscribers | 1.7 million | N/A | 1.2 million | 42% |
| Net deposits | $11.2 billion | N/A | $7.8 billion | 44% |
Data sources: Company results from Robinhood. Analyst estimates from FactSet. EPS = Earnings per share. YOY = Year over year.
Robinhood's business overview
Robinhood Markets has been a disruptor in the fintech industry, offering innovative financial services through its mobile and web apps. The company revolutionized the field by introducing commission-free stock trading, among other products, fulfilling its mission to make finance accessible to all.
Robinhood is continuously innovating and offers various services including retirement investing, cryptocurrency trading, Robinhood Gold premium service, credit cards, and its Cash Management feature. Success hinges on its ability to push product boundaries while maintaining a user-centric approach and scaling its operations efficiently.
Quarter highlights
Notable in the Q1 report was the 42% year-over-year increase in subscribers of its Gold premium service, signaling growing consumer trust and product appeal. Subscription revenue tends to provide stability to a company's balance sheet and should improve multiple metrics going forward.
Financially, the company marked a record net income of $157 million, a reversal from the previous year's $511 million loss, underpinned by a solid 44% growth in net deposits.
Product-wise, Robinhood maintained its innovative edge, enhancing offerings such as expanding its cryptocurrency trading capabilities and offering 24-hour trading on select stocks, evidencing its commitment to meeting diverse consumer financial needs. It also introduced a Gold credit card available to the 1.7 million-plus subscribers of that service and offered a promotional 3% match on funds transferred into users' retirement portfolios.
No major changes in dividend policies were reported this quarter, maintaining a consistent approach toward capital allocation and shareholder returns.
Looking ahead
Riding the momentum of a strong quarter, management's outlook remains optimistic, with continued focus on product innovation and market expansion. Management foresees further growth in key metrics including net deposits and Gold subscribers, backed by investments in technology and user experience enhancements.
Investors are encouraged to monitor Robinhood's progress in international markets and the fintech regulatory environment, which could influence future performance. Specific figures or guidance of notable metrics for upcoming quarters were not disclosed.
