Robinhood Markets (HOOD) Up 0.6% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Robinhood Markets, Inc. reported strong Q2 2025 earnings, driven by increased trading activity and higher net interest revenues, despite rising expenses [3][4][5]. Financial Performance - Q2 2025 earnings per share reached 42 cents, exceeding the Zacks Consensus Estimate of 31 cents and up from 21 cents in the prior-year quarter [3]. - Net income (GAAP) was $386 million, significantly higher than $188 million in the same quarter last year [4]. - Total net revenues surged 45% year over year to $989 million, surpassing the Zacks Consensus Estimate of $922.1 million [5]. - Average revenue per user (ARPU) increased 34% year over year to $151 [5]. - Transaction-based revenues grew 65% to $539 million, with options, equities, and cryptocurrencies revenues increasing by 46%, 65%, and 98% respectively [5]. Revenue Sources - Net interest revenues rose 25% to $357 million, driven by a higher interest-earning assets balance and securities lending activity [6]. - Other revenues increased 33% to $93 million, primarily due to a rise in Gold subscription revenues, with Gold subscribers jumping 76% year over year to 3.5 million [6]. Expenses - Total operating expenses were $550 million, up 12%, with adjusted operating expenses increasing 9% to $444 million [7]. - Adjusted EBITDA rose to $549 million from $301 million in the year-ago period [7]. Business Activities - Total platform assets soared 99% year over year to $279 billion, driven by net deposits and higher equity and cryptocurrency valuations [8]. - Equity notional trading volumes reached a record $517 billion, while options contracts traded rose 32% to 515 million [8]. - Monthly Active Users (MAU) increased by 8% year over year to 12.8 million [9]. Share Repurchase - The company repurchased nearly 3 million shares for $124 million during the reported quarter [11]. Future Outlook - For 2025, Robinhood anticipates combined adjusted operating expenses and share-based compensation to be in the range of $2.15-$2.25 billion [12]. - The consensus estimate has shifted upward by 26.69% in the past month, indicating positive investor sentiment [13]. - Robinhood holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [15]. Industry Comparison - Robinhood operates within the Zacks Financial - Investment Bank industry, where Goldman Sachs reported revenues of $14.58 billion, reflecting a year-over-year change of +14.5% [16].