February 2024 proved to be another successful month for Robinhood Markets, Inc. (NASDAQ: HOOD), as the company reported growth in key areas such as funded customers, assets under custody (AUC), and trading volumes.
Cryptocurrency volumes increased by 86% compared to last year, and the amount of deposited funds grew by 60%.
According to the report, Robinhood’s funded customers reached 23.6 million at the end of February, representing an increase of approximately 130,000 from January 2024. The platform’s AUC also saw significant growth, reaching $118.7 billion, a 16% increase from the previous month and 59% from the previous year, when AUC stood at $74.7 billion.
“Net Deposits were $3.6 billion in February, translating to a 42% annualized growth rate relative to January 2024 AUC,” the company commented. “Over the last twelve months, Net Deposits were $21.6 billion, translating to an annual growth rate of 29% relative to February 2023 AUC.”
Trading volumes on the platform were higher across all asset classes in February compared to January 2024. Equity notional trading volumes increased by 36% to $80.9 billion, while options contracts traded rose by 12% to 119.1 million. Crypto notional trading volumes also saw a 10% increase, reaching $6.5 billion.
On an annual basis, the increases were even stronger. Cryptocurrency trading activity increased by 86%, stocks by 41%, and options contracts by 33%.
Robinhood’s margin balances and total cash sweep balances also experienced growth in February. Margin balances increased by 6% from the end of January 2024, reaching $3.8 billion, while total cash sweep balances grew by 8% to $18.1 billion. The company’s total securities lending revenue in February was $13 million, representing an 8% increase from the previous month.
BERNSTEIN HAS UPGRADED $HOOD ROBINHOOD TO A PRICE TARGET OF $30 FOLLOWING FEBRUARY DATA
“Robinhood’s profit has been supported by structural cost cuts and interest income, helping to establish a path toward online-broker peers’ margins.“ pic.twitter.com/yRmtgYTdAR
— amit (@amitisinvesting) March 13, 2024
Q4 Results and Record Night Volumes
The company reported impressive financial results for the fourth quarter of 2023 a month ago. The online brokerage firm generated total net revenue of $471 million during the October-December period, marking a 24% year-over-year increase and surpassing market estimates of $457 million.
The strong performance translated into a net income of $30 million, or $0.03 earnings per share, a significant turnaround from the losses experienced in the previous quarter and the corresponding period of the prior year.
A key contributor to Robinhood’s success was the launch of its “Robinhood 24 Hour Market” platform. This innovative service allows retail investors to trade stocks and exchange-traded funds around the clock, five days a week, catering to the growing demand for extended trading hours.
Since its introduction, the Robinhood 24 Hour Market has recorded an impressive total overnight trading volume exceeding $10 billion. The platform has witnessed a significant shift in trading patterns, with as much as 25% of the total daily trading volume occurring during the overnight session on the busiest days.
Initially launched in May 2023 for US clients, the 24-hour trading platform underwent a trial period before being made available to all Robinhood customers in July.