Robinhood Set Records on Revenue, Net Deposits, and Gold Subscribers. The Stock Is Still 44% Below Its High.
Robinhood (HOOD -3.61%) reported second-quarter results on Wednesday that set records nearly everywhere you look. Record revenue. Record net deposits. A record number of Gold subscribers, and record trading volumes in both equities and options.
The stock slipped about 3% during Wednesday’s regular session, closing at $89.84 before the results arrived, then fell another 3.6% on Thursday, to $86.60. That leaves shares roughly 44% beneath the 52-week high of $153.86 they set back in October of last year.
So why won’t the market pay what it used to for a business performing like this? The latest report holds most of the explanation. Here’s a closer look at three things it tells us.
Image source: Getty Images.
The records are broad, not narrow
Robinhood’s revenue reached $1.31 billion in the second quarter, a record, and 32% more than a year earlier. The growth rate more than doubled from the first quarter’s 15%, so the pace is accelerating, too.
Net deposits came in at about $22 billion for the quarter, and total platform assets climbed 32% year over year to $369 billion. Gold subscribers (members of the company’s premium tier, which bundles higher yields, lower margin rates, and other perks) reached a record 4.8 million, up 39%. Funded customers grew 7% to 28.4 million, and retirement assets under custody reached $34.5 billion, 82% higher than a year earlier.
Profitability scaled right along with it. Non-GAAP (adjusted) EBITDA rose 35% year over year to $741 million, a 57% margin.
Net income came in at $573 million, up 48% year over year, and earnings per share climbed at the same rate to $0.62. Both figures got help from about $0.14 per share of one-time gains, though, so the underlying earnings number is closer to $0.48.
The engagement stats were arguably the most impressive part. Equity trading volumes jumped 85% year over year to a record $956 billion, and options contracts traded rose 50% to a record 774 million. On the earnings call, chief financial officer Shiv Verma said the company now counts 13 separate businesses that have each reached $100 million in annualized revenue, two of them added during the quarter.
The mix behind the records changed
Look one layer down, though, and the composition of all that record revenue has shifted meaningfully.
Crypto trading revenue was $252 million as recently as the first quarter of 2025. In this year’s first quarter, it was $134 million. Last quarter, it was $100 million, down 38% year over year — the second quarter in a row of declines at a roughly 40% pace or worse.
What replaced it is younger. Equities revenue nearly doubled year over year to $129 million. Event contracts, the company’s prediction-markets business where customers trade on outcomes like elections and economic data, generated $156 million, up more than tenfold from a year earlier. A business line that barely existed at this scale a year ago now brings in more revenue than crypto does.
This, I’d argue, is what the market is discounting. Robinhood’s transaction revenue has always moved with whatever retail traders are excited about, and the excitement rotates. The records themselves aren’t in dispute. What the market keeps marking down is how repeatable they are, when the fastest-growing line has only recently begun proving itself at scale.
The drawdown hasn’t made the stock cheap
Today’s Change
(-3.61%) $-3.24
Current Price
$86.60
Key Data Points
Market Cap
Day’s Range
$86.21 – $92.57
52wk Range
$63.52 – $153.86
Volume
656K
Avg Vol
27.2M
Gross Margin
89.43%
A 44% decline sounds like a bargain. But as of this writing, shares sit at $86.60, or about 38 times earnings — a valuation that assumes plenty of growth ahead. And that’s with earnings flattered by the one-time gains mentioned above.
To be fair, the company is executing well beyond trading. Net interest revenue rose 9% year over year to $389 million, and the margin lending book more than doubled to $21.6 billion. The newer banking and retirement products continue to attract assets, too. Growth like that in platform assets could eventually make trading swings matter less to the overall business.
Is the stock a buy?
Ultimately, I think the market has this one about right. The company is executing about as well as anyone could ask, and the record quarter was broad-based. However, about 38 times earnings already pays for that execution, and the newest revenue lines haven’t yet shown they can hold up across a full market cycle.
If you own the stock, I don’t see anything in this report that argues for selling a business performing like this. I just wouldn’t buy shares on its strength, either. Another quarter or two showing the new revenue mix holding up (crypto stabilizing while event contracts keep growing) could change my mind at a similar price.
