Robinhood tops profit expectations as trading frenzy sweeps across asset classes

[BENGALURU] Robinhood Markets exceeded second-quarter profit estimates on Wednesday (Jul 30), driven by a massive surge in volumes as investors traded options, crypto and stocks.

The strong results add to a run of recent successes for the Menlo Park, California-based online brokerage, which has been aggressively rolling out new products to expand beyond its core user base and become a more integral part of customers’ financial routines.

They also underscore the resilience of retail investors, who have stayed active despite tariff-related turbulence, and highlight their key role in the current financial landscape.

“When the market drops, our customers tend to lean in and buy. It feels like there’s more room for retail engagement from here,” chief financial officer Jason Warnick said, adding that the momentum had carried into July.

The company more than doubled its profit to US$386 million, or 42 US cents per share, for the three months ended Jun 30. Analysts were expecting 31 US cents per share, according to data compiled by LSEG.

Transaction-based revenues increased 65 per cent to US$539 million from last year. Crypto revenue jumped 98 per cent, options soared 46 per cent and equities climbed 65 per cent.

Shares rose 1.6 per cent after market close. They have nearly tripled so far this year, compared with a 9 per cent gain in the Nasdaq composite index.

Expansion drive

Robinhood is rapidly establishing itself as a major force across asset classes, evolving beyond its origins as a stock-trading app. But the expansion has faced hurdles.

Last month, it launched tokens allowing users in the European Union to trade US-listed stocks, alongside a limited offering providing exposure to private companies such as OpenAI and SpaceX.

OpenAI pushed back, arguing that it did not endorse the tokens. Still, Robinhood CEO Vlad Tenev called tokenisation “the biggest innovation our industry has seen in the past decade”.

Earlier this month, Robinhood was also floated as a potential candidate to be included in the S&P 500 index. Such a move typically lifts the stock by triggering buying from funds that track the index.

But the spot eventually went to Datadog, a cloud security firm worth US$52 billion.

“It’s flattering to be in the conversation,” Warnick said. “It’s a really strong signal that we have been on the right track. But it’s not something I’m distracted by at all.”

Robinhood has cemented its hold in areas of consumer finance beyond trading. It launched a credit card for its Gold subscribers last year, and has since added a wealth management service with fee caps for those users.

The expanded lineup has made the premium subscription more attractive, driving a 76 per cent increase to 3.5 million users. REUTERS