Robinhood(US:HOOD)2025-11-05 22:36Customer Growth - Funded Customers increased by 2.5 million, or 10%, to 26.8 million compared to 24.3 million[163] - Robinhood Gold Subscribers increased by 1.69 million, or 77%, to 3.88 million compared to 2.19 million[164] - The number of users placing cryptocurrency trades increased by 92% and 45% for Q3 2024 and Q3 2025, respectively[172] Financial Performance - Total net revenues increased 100% to $1,274 million compared to $637 million[164] - Net income increased 271% to $556 million compared to $150 million[164] - Adjusted EBITDA increased 177% to $742 million compared to $268 million[164] - Total net revenues for Q3 2025 reached $1,274 million, a 99% increase from $637 million in Q3 2024[170] - Total net revenues for the nine months ended September 30, 2025, reached $1,746 million, up from $1,439 million in the same period of 2024, marking a 21% increase[180] Revenue Breakdown - Net Deposits were $20.4 billion, translating to an annualized growth rate of 29% relative to Total Platform Assets[164] - Transaction-based revenues for Q3 2025 were $730 million, a 129% increase compared to $319 million in Q3 2024[171] - Cryptocurrency transaction-based revenues surged by 339% in Q3 2025, totaling $268 million, up from $61 million in Q3 2024[171] - Margin interest revenues rose by 84% in Q3 2025, reaching $153 million, up from $83 million in Q3 2024[175] - Options revenues increased by 50% in Q3 2025, totaling $304 million, compared to $202 million in Q3 2024[171] Asset Growth - Total Platform Assets increased 119% to $332.7 billion compared to $152.2 billion, driven by continued Net Deposits and higher asset valuations[164] - Total Platform Assets composition: Equities at $203.0 billion (91% increase), Cryptocurrencies at $51.1 billion (162% increase), and Options and futures at $3.9 billion (225% increase)[165] - Total interest-earning assets for the three months ended September 30, 2025, amounted to $64,402 million, an increase from $56,783 million in the previous quarter, representing a growth of 13.5%[177] Operating Expenses - Total operating expenses increased 31% to $639 million compared to $486 million[164] - Total operating expenses for Q3 2025 were $639 million, up from $486 million in Q3 2024, reflecting a 31% increase[170] - Marketing expenses surged to $102 million for the three months ended September 30, 2025, reflecting a 73% increase from $59 million in the same period of 2024[180] - Technology and development costs increased by $32 million (16%) and $55 million (9%) for the three and nine months ended September 30, 2025, primarily due to higher employee compensation and benefits expenses[182] - General and administrative costs rose by $52 million (39%) and $65 million (17%) for the three and nine months ended September 30, 2025, driven by higher employee compensation and legal expenses[186] Credit and Interest Management - The company anticipates that potential future rate cuts by the Federal Reserve may negatively impact net interest revenues[175] - Provision for credit losses increased to $26 million for the three months ended September 30, 2025, a 13% rise from $23 million in the same period of 2024[180] - A hypothetical 100 basis point increase in interest rates would result in an increase of $171 million in total net revenues for 2024 and $298 million for 2025[204] - A hypothetical 150 basis point increase in interest rates would result in an increase of $257 million in total net revenues for 2024 and $447 million for 2025[204] - The company has established a comprehensive interest rate risk management policy to identify and implement appropriate hedging strategies[207] Cash Flow and Liquidity - Cash provided by operating activities increased by $1.33 billion, primarily due to a $783 million increase in net income and a $4.44 billion increase in securities loaned[196] - As of September 30, 2025, the company had cash and cash equivalents of $4.33 billion and held-to-maturity investments of $53 million[191] - The company had committed revolving credit facilities with a total borrowing capacity of up to $3.775 billion as of September 30, 2025[192] - Net cash provided by investing activities increased by $881 million compared to the prior period[198] Risk Management - The company monitors required margin levels daily and requires customers to deposit additional collateral or reduce positions when necessary to manage market-related credit risk[209] - Actual results may differ from simulated results due to various factors, including balance growth or decline and changes in market conditions[208] - The investment policy focuses on the preservation of capital and supporting liquidity requirements, investing in highly-rated debt securities with an average duration of less than one year[205]