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Financial services company Robinhood (NASDAQ:HOOD) announced better-than-expected revenue in Q1 CY2025, with sales up 50% year on year to $927 million. Its non-GAAP profit of $0.45 per share was 21.8% above analysts’ consensus estimates.

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Robinhood (HOOD) Q1 CY2025 Highlights:

• Revenue: $927 million vs analyst estimates of $915.7 million (50% year-on-year growth, 1.2% beat)

• Adjusted EPS: $0.45 vs analyst estimates of $0.37 (21.8% beat)

• Adjusted EBITDA: $470 million vs analyst estimates of $490.5 million (50.7% margin, 4.2% miss)

• Operating Margin: 39.9%, up from 25.6% in the same quarter last year

• Free Cash Flow was $631 million, up from -$1.42 billion in the previous quarter

• Funded Customers: 25.8 million, up 1.9 million year on year

• Market Capitalization: $42.36 billion

StockStory’s Take

Robinhood’s first quarter results were shaped by rapid product launches and increased engagement from active traders. CEO Vlad Tenev emphasized the impact of new offerings such as futures trading, prediction markets, and the expanded Legend platform, which management credits for driving double-digit volume growth across equities, options, and crypto. The rollout of additional features for active traders, as well as the near doubling of Gold subscriptions, contributed to higher transaction-based revenues and growing wallet share.

Looking forward, management highlighted the company’s focus on broadening its financial ecosystem with upcoming launches in banking, advisory services, and international expansion. Tenev described the upcoming Bitstamp acquisition and the planned rollout of Robinhood Banking as central to the firm's long-term strategy. He acknowledged regulatory uncertainty in crypto and product integration as key factors that could influence growth, noting, “We’re heads down getting things ready for the crypto event, which will be in France in two months.”

Key Insights from Management’s Remarks

Management attributed first quarter results to a combination of increased product adoption and expansion into new trading segments, differentiating Robinhood from competitors. The quarter’s outperformance versus expectations was driven by the success of new products, enhanced user engagement, and early momentum in international markets.

• Active Trader Platform Scaling: Robinhood Legend saw a surge in incremental trading volume following the introduction of new asset classes and features, with management noting that most of this activity was incremental rather than cannibalizing other segments.

• Futures and Prediction Markets Launch: Futures trading and prediction markets, both launched in Q1, generated significant early interest. Futures contracts traded in April alone exceeded all of Q1, and prediction markets passed 1 billion contracts in the last six months, with management citing strong adoption from both existing and new users.

• Gold Subscription and Credit Card Expansion: Gold subscribers grew to 3.2 million by quarter end, supported by the successful rollout of the Gold credit card. Management described Gold as a central cross-sell lever, driving higher deposit rates and broadening product adoption.

• Retirement and Advisory Asset Growth: Retirement assets rose to $16 billion, and the completed TradePMR acquisition brought $40 billion in platform assets, establishing a foundation for Robinhood’s entry into the registered investment adviser (RIA) market.

• International and Crypto Diversification: The U.K. brokerage offering gained traction, and the upcoming Bitstamp acquisition is expected to expand Robinhood’s global crypto reach. Management also referenced continued product improvements and regulatory engagement as necessary for further crypto asset listings and tokenization initiatives.