MW Robinhood had a huge quarter thanks to crypto - here's why that may continue

By Gordon Gottsegen

Shares of Robinhood jump over 12% shortly after announcing its Q4 earnings results

Stocks had a strong fourth quarter in 2024. Crypto had a strong fourth quarter in 2024. So it may come as no surprise that Robinhood Markets Inc., a brokerage where individual investors can buy both stocks and cryptocurrencies, had a strong quarter too.

Robinhood announced its quarterly earnings and year-end results on Wednesday after market close. The company reported quarterly revenue of $1.01 billion, beating the FactSet consensus of $946 million, and earnings per share of $1.01, more than double the analysts' consensus of 42 cents.

In response, shares of Robinhood (HOOD) jumped over 12.5% in after-hours trading.

Robinhood saw impressive growth across the board. Assets under custody grew 88% year over year to $193 billion; the number of investment accounts grew 10% year over year to 26.2 million; the number of paying Robinhood Gold subscribers grew 86% year over year to 2.6 million; and Robinhood's net income increased more than 10 times year over year to $916 million.

A major factor in this growth was Robinhood's crypto business. Robinhood pulled in $672 million from transaction-based revenue, but over half of that - $358 million - was from crypto-based revenue. That was a more than 700% jump in crypto-based revenue from the same quarter last year.

That growth in crypto may be just beginning.

2024 was a dramatic year for Robinhood's crypto business. It received a Wells notice for its crypto listings from the SEC in May, which put the brokerage in the sights of government regulators. But things seemed to turn around near the end of the year, when Donald Trump won the presidential election, regulatory scrutiny loosened and crypto markets rallied.

These latest earnings show that Robinhood benefited from the recent crypto bull run, and it could encourage Robinhood to push farther into crypto. This may involve offering new coins - like the Trump memecoin that was announced days before the inauguration, and is currently tradable on Robinhood - or something entirely different.

In Wednesday's earnings call, Chief Financial Officer Jason Warnick mentioned that Robinhood was looking into the tokenization of real-world assets - including equities traded on exchanges, shares of private companies or other real-world assets

"If you can use blockchain technology to tokenize it, then customers can have access, which is a great starting point, but then they can trade it 24/7 and settle near instantly. It's got such a great benefit from the user experience," he said. "I think we're really well-positioned to deliver on this idea of tokenizing real-world assets and making them available to customers."

Warnick mentioned that Robinhood was exploring the idea, and referenced a recent op-ed about the topic written by Robinhood co-founder and Chief Executive Vlad Tenev. Warnick said that Robinhood's position at the intersection of traditional finance and crypto made it a good candidate to push forward in that space.

And if Wednesday's earnings call is any indicator, customer appetite might be there to support that move.

-Gordon Gottsegen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 12, 2025 17:57 ET (22:57 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.