Robinhood beats Q2 profit estimates as business goes beyond YOLO trading

Robinhood Markets reported second-quarter earnings that exceeded Wall Street forecasts, propelled by a sharp increase in trading activity across stocks, options, and cryptocurrencies.

The Menlo Park-based brokerage posted earnings per share of 42 cents on revenue of $989 million, outpacing analyst expectations of 31 cents per share and $914 million in revenue, according to FactSet and LSEG data.

The quarter, which ended June 30, saw Robinhood’s net income more than double to $386 million from the prior year. Transaction-based revenues climbed 65% to $539 million, with crypto revenue nearly doubling to $160 million.

Options trading revenue rose 46%, while equities trading was up 65%, reflecting heightened engagement from retail investors during a period marked by market volatility and shifting US tariff policy.

Robinhood’s CEO Vlad Tenev attributed the strong deposit growth to both market conditions and the firm’s expanding suite of products, certainly not least of which is crypto.

“If the market is moving in crypto or another asset class, traders deposit money to take advantage of those opportunities,” Tenev said during the company’s earnings call. “So there is a component that moves up and down, but if you look over the long term the trajectory for net deposits in this business has been quite strong. And when I look at tailwinds – new products, growth in customers, expansion into new services like banking – the long-term trends should help net deposits grow.”

The brokerage reported net deposits of $13.8 billion for the quarter, its third highest on record. Total platform assets reached $279 billion, nearly double the figure from a year ago, buoyed by both market appreciation and new client inflows. Average assets per customer topped $10,000, up from roughly $5,000 a year earlier, signaling that Robinhood is attracting investors with larger balances.

Margin trading also hit new highs, with the company’s margin book reaching $9.5 billion, a 90% increase year over year. Barron's noted that this mirrors a broader industry trend, as margin use across brokerages set a new record in June.

Robinhood’s subscription service, Robinhood Gold, saw its membership rise to 3.5 million, up from 3.2 million at the end of the first quarter. The company’s digital advice platform, Robinhood Strategies, its digital advice service launched in March, now manages more than $500 million for over 100,000 clients.

"It’s clear the retail crowd is back, and they’re not just YOLOing,” David Bartosiak, a Zacks Investment Research stock strategist, wrote in a note following Robinhood's earnings call. "Now they’re subscribing to Gold, swiping the new credit card, and dropping deposits like it’s 2021 again.”

Despite the strong results, Wall Street analysts remain cautious. As reported by CoinDesk, Citi, JPMorgan, and Keefe, Bruyette & Woods all raised their price targets for Robinhood but maintained neutral ratings, citing concerns that much of the company’s future growth may already be reflected in its share price.

“Nearly perfect operating environment with meaningful volatility, robust retail engagement, and historically elevated rates as both its trading and rate-sensitive segments performed well,” wrote JPMorgan analyst Kenneth Worthington.

Cantor Fitzgerald’s Brett Knoblauch, who holds a buy rating, raised his price target to $118, pointing to ongoing momentum in new products and revenue streams. He highlighted growth in areas such as crypto staking and the soon-to-launch Robinhood Banking service.

Shares of Robinhood edged higher following the results and have nearly tripled since April, outpacing the broader Nasdaq composite index’s 9% gain over the same period. While analysts acknowledge the company’s rapid expansion and the resilience of retail investors, many suggest that the current valuation already factors in much of the anticipated upside.