Robinhood reported record revenue, a 57% adjusted EBITDA margin and nearly a million new funded customers, and the stock fell about 4% after hours. Pretax income rose $267 million, and $135 million of that came from a single non-operating line. The debate sits in the distance between what the quarter proved and what the valuation requires.
What the beat was made of
Consensus figures differ by source. Investing.com put the estimate at $0.42 a share on $1.25 billion of revenue. Pre-earnings surveys carried $0.43 on about $1.29 billion. A third compilation circulating at $0.44 could not be confirmed. Robinhood reported $0.62 on $1.31 billion, so the beat holds under every version.
The composition deserves a closer look. Other income, net came in at $135 million against $3 million a year ago. The release attributes $129 million of net income to gains primarily from deconsolidating Robinhood Ventures Fund I, worth $0.14 a diluted share.
Robinhood publishes no adjusted EPS. Subtracting the gain gives roughly $0.48, which is arithmetic rather than a reported figure. On that basis the beat narrows to about six cents.
Tax worked against the quarter. The provision rose 143% to $136 million on pretax income up 60%. The effective rate reached 19.2% from 12.7%.
Operating expenses grew 33% against revenue growth of 32%. Expenses held at 56% of revenue in both periods. The sequential comparison looks better, with that ratio falling from 61% in the March quarter and adjusted EBITDA margin rising from 50% to 57%.
The customer engine did the work
Marketing spend rose 5% to $104 million and fell to 8% of revenue from 10%. Against that, funded customers grew by nearly a million, the largest quarterly addition since the IPO.
That combination is the most persuasive figure in the release. Shiv Verma named the drivers: a strong market, new banking and card products, the SpaceX listing, an acquisition worth a couple hundred thousand accounts, and international growth. Part of the gain is inorganic, and Robinhood did not bridge the rest.
Gold subscribers reached 4.8 million, up 39% and 500,000 sequentially. Adoption stands at 17%, and roughly 40% of newly funded customers signed up. Average revenue per user rose 24% to $187.
Net deposits were a record $21.7 billion, a 28% annualized rate. Trailing twelve-month deposits reached $75.7 billion. Platform assets rose 32% to $369 billion, helped by higher equity prices and held back by lower crypto prices.
The stable leg grew slowest
Net interest revenue rose 9% to $389 million. Over the same period the margin book rose 127% to $21.6 billion, and receivables from users reached $22.8 billion from $18.0 billion at year end.
The gap comes from rates and from mix. Short-term rates fell, securities lending softened, and a February change moved more than $6 billion of Cash Sweep balances into customer free credit balances. Cash Sweep fell 9% to $29.7 billion. Net interest slipped to 30% of revenue from 36%.
The recurring leg of the model is growing more slowly than the cyclical one.
Balance sheet growth carries its own cost. Total assets nearly doubled to $56.6 billion from $38.1 billion at year end, against $9.5 billion of equity. Securities loaned reached $20.5 billion. Operating cash flow fell to $720 million from $3.51 billion, driven by a $4.4 billion rise in user receivables. Margin lending consumes cash as it grows, and the June convertible issue of $2.2 billion covered it.
That issue carries a zero coupon. It also cost $123 million in capped calls and came with $290 million of stock repurchased alongside it. Robinhood bought 4.4 million shares in the quarter at roughly $94. The stock closed the day at $89.84.
Thin economics under the new businesses
Event contracts revenue reached $156 million on 13.6 billion contracts. That works out near 1.1 cents of revenue per contract, on instruments that settle at $1. The revenue tracks contract count, and the per-contract take is small.
Rothera, the CFTC-licensed venue built with Susquehanna, has cleared over 3.5 billion contracts since launching in June. Robinhood does not control it.
Robinhood Chain drew the only disclosed economics for the crypto stack. Asked by Alex Markgraff of KeyBanc, Verma said the chain earns a few basis points per transaction rather than per dollar of volume, and shares roughly half with Arbitrum.
Agentic trading opened to nearly 100,000 accounts holding just over $100 million, or about $1,000 each.
The company's count of 13 businesses above $100 million in annualized revenue rests on a definition printed in its own release: one quarter's revenue multiplied by four. Robinhood Legend and the credit card joined this quarter.
What July already shows
Verma said July equity, options and event contract volumes are running near the second-quarter average, with crypto slower and take rates similar. Net deposits are tracking toward $4 billion for the month.
Craig Moore of FD Partners noted on the call that the figure is the lowest of the year and well below June. Verma pointed to seasonality and to the year-to-date rate holding above 20%. Four billion a month annualizes to roughly 13% against $369 billion of platform assets, against 28% in the quarter just reported.
One further change arrives next quarter. Robinhood said it intends to exclude interest expense classified as operating expenses from its adjusted expense measures starting in the third quarter. The lowered guide of $2.675 billion to $2.775 billion will be measured on a slightly different basis than the one it replaced. Credit losses, pending acquisition costs, regulatory matters and restructuring sit outside it entirely.
Options had priced about an 11.4% move into the print. The realized after-hours decline of roughly 4% sits well inside that. The move reads as a repricing of earnings quality within a franchise the market still credits.
Robinhood has shown it can acquire customers cheaply and turn them into subscribers and deposits. The next stage rests on narrower ground: whether net interest reaccelerates, whether deposits recover above 20% after July, and whether event contracts hold volume once the World Cup calendar empties.