How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
In short
Robinhood makes most of its money when customers trade: market makers and other liquidity providers pay it for routing equity, option and crypto orders, which produced $2.63 billion, or 59% of its $4.47 billion of net revenues in 2025. Net interest on margin loans, customer cash and securities lending added $1.51 billion, and Gold subscriptions $179 million.
How Robinhood Markets makes money, FY2025: the income statement as a flow, to scale. Trading rebates earn 59% of revenue; interest earns another 34%.. Source: Robinhood Markets, Inc. (NASDAQ: HOOD) Form 10-K for fiscal 2025 (filed 2026-02-18). Gross profit, margins and shares calculated.
Robinhood says it was the first U.S. retail broker to offer commission-free stock trading. Instead of commissions, it routes customers’ orders to market makers and other liquidity providers, which pay it for the flow: payment for order flow (PFOF) on equities and options, and Transaction Rebates on crypto. In fiscal 2025 these transaction-based revenues were $2,628 million: options $1,123 million, crypto $901 million, equities $302 million and other items, including Prediction Markets commissions and instant withdrawals, $302 million.
Robinhood revenue by fiscal year, FY2021 to FY2025, from the company's filings. Chart: The Business Engineer.
The second engine is interest. Net interest revenues were $1,514 million in 2025, led by margin interest of $573 million, interest on segregated cash and deposits of $319 million, Cash Sweep of $229 million and securities lending of $190 million. The margin book reached $16.8 billion at year-end, up from $7.9 billion.
Other revenues were $331 million, of which $179 million came from Robinhood Gold, a subscription that the company says carries a flat recurring rate. Gold had 4.18 million subscribers at the end of 2025.
How Robinhood compares
Against its own history, the mix has shifted back towards trading. Transaction-based revenues were 59% of net revenues in 2025, up from 56% in 2024, while net interest fell from 38% to 34% of the total, even as it grew 37% in dollars.
Within trading, options remain the largest line at 25% of net revenues, followed by crypto at 20% and equities at 7%. Equities grew fastest of the three, up 71%, on a 65% rise in notional volume traded per trader, the company says.
Revenue per customer rose faster than the customer base. ARPU increased 40% to $171, while Funded Customers grew 7% to 27.0 million.
Total net revenues rose 52% to $4,473 million, and net income rose 33% to $1,883 million. Pre-tax income roughly doubled to $2,108 million; net income grew less because 2024 included a $347 million tax benefit, while 2025 carried a $225 million tax charge.
Robinhood revenue by line, prior year against FY2025, as reported. Chart: The Business Engineer.
Robinhood bought TradePMR, a custody and portfolio platform for registered investment advisers, in February 2025 and the Bitstamp crypto exchange in June 2025. Acquisitions added $51.8 billion to Total Platform Assets, which ended the year at $322.1 billion.
Churn rose. 1.7 million funded customers left in 2025, against 0.9 million in 2024, while 2.5 million new funded customers joined.
What to watch
PFOF rules. Robinhood says new SEC rules taking effect from May 2026 will narrow spreads on many securities and may reduce the PFOF it earns, and that because some competitors rely less on PFOF, such changes could hit it harder.
Interest rates. The company expects any future Federal Reserve rate cuts to reduce net interest revenues, which were 34% of the 2025 total.
Credit. Robinhood guarantees its partner bank, Coastal Bank, against losses on the Robinhood Gold Card; the provision for credit losses rose to $114 million in 2025 from $76 million.
Frequently asked questions
How does Robinhood make money?
Mostly from trading. In fiscal 2025, liquidity providers paid Robinhood $2.63 billion for routing customer orders in options, crypto and equities (59% of $4.47 billion net revenues). Net interest added $1.51 billion and other revenues, mainly Gold subscriptions, $331 million.
What is Robinhood's biggest revenue source?
Options. Options transaction revenue was $1,123 million in 2025, 25% of net revenues, up 48% from $760 million in 2024.
How much does Robinhood earn from Robinhood Gold?
Gold subscription revenues were $179 million in 2025, up 64% from $109 million, with 4.18 million Gold Subscribers at year-end.
Is Robinhood profitable?
Yes. Net income was $1,883 million in 2025, up from $1,411 million in 2024, on total net revenues of $4,473 million.
2023 Robinhood generated $785 million in transaction revenue, compared to $814 million in 2022 and $1.4 billion in 2021. In 2023, most of the total transaction revenue came from options trading, which generated over $500 million in transaction revenue for the company.
Robinhood is not profitable, as it reported a net loss of $541 million in 2023, compared to over a billion dollars in net losses in 2022 and nearly $3.7 billion in net losses in 2021.
Robinhood is defined as a Funded Customer, a unique person who has at least one account with a Robinhood within the past 45 calendar days with some net balance on it. For instance, in 2023, the company reported 23.4 million funded customers compared to 23 million in 2022 and 22.7 million in 2021.
Robinhood generated $847,727 per employee in 2023, compared to $590,435 in 2022 and $477,632 in 2021.
Robinhood is an app that gamifies investing in stocks, ETFs, options, and cryptocurrencies, all commission-free. While the app is commission-free Robinhood made $1.81 billion in total revenues in 2021, primarily based on transaction-based revenue which represented over 77% ($1.4 billion) of the company’s overall revenues. Transaction-based revenues primarily includes payment for order flow from routing customer orders for options, cryptocurrencies, and equities to market makers.
Robinhood’s mission is to “democratize access to the American financial system.” They do that via a gamified investment platform which is easy to set up and use with no commissions (customers are routed to market makers who earn Robinhood payment for order flow commissions).
Robinhood leverages two-sided network effects, where the more free users join the platform, the more it becomes attractive to market makers, thus prompting the platform to add a growing number of assets quickly. While Robinhood is primarily free for users, it generates revenues by routing customers to market makers and getting commissions for that. That is the mechanism of the so-called “payment for order flow.” That means that market makers are the primary customers for Robinhood.
Distribution Model: Branding/Product Development/Growth Hacking, Deal Making, Lobbying.
For Robinhood to keep growing, the company needs to invest massive resources back into its platform to enable a larger and larger number of users to invest on top of it. The company also invests substantial resources in branding campaigns, securing distribution deals on various platforms, and keeping its app’s rankings high across the Apple and Android stores. In addition, since Robinhood operates in a highly regulated sector, it needs to be able to keep close ties with regulators in the financial sectors (this is why Robinhood has internalized various lobbyists profiles in the last 2-3 years).
While Robinhood is free for users, users transacting on Robinhood are routed to market makers, thus earning the company commissions for this trading activity, facilitating liquidity through various markets. In 2021, for instance, Robinhood made most of its money from the payment for order flow related to options and cryptocurrencies (and within cryptocurrencies primarily with Doge).
Robinhood business model today
While Robinhood’s app is free, and it makes it easy for users to invest, it does make money in an asymmetric way. In fact, the company makes money on the transactions placed by its users, not by charging a commission, but instead by the so-called payment for order flow (โPFOFโ).
Payment for order flow consists of a “kickback” or commission that the broker routing customers to a market maker (in charge of enabling the bid and ask price) will pay a commission to the broker as a sort of market-making fee.
Indeed, transaction-based revenues (which represented over 77% of the company’s revenues in 2021) consist of amounts earned from routing customer orders for options, cryptocurrencies, and equities to market makers.
As the company highlights, when customers place orders for options, cryptocurrencies, or equities on Robinhood, the platform routes these orders to market makers, receiving a commissions from them for creating market liquidity.
When it comes to equities and options trading, these fees are known as payment for order flow (โPFOFโ).
When it comes to cryptocurrency trading, those are called โTransaction Rebates.โ
When it comes to equities, the fees are based on the publicly quoted bid-ask spread for the security being traded.
For options, the fee is on a per contract basis based on the underlying security.
In the case of cryptocurrencies, Robinhood’s rebates are a fixed percentage of the notional order value.
Robinhood’s revenues, in 2021, were primarily driven by options and cryptocurrency trading.
While Robinhood supports various cryptocurrencies for trading, during the second quarter of 2021 and for the first, second, and third quarters of 2021, transaction-based revenue attributable to transactions in a single cryptocurrency (Dogecoin) generated approximately 7%, 32%, and 8% of our total net revenues, for each quarter!
Quick intro to Robinhood
As pointed out on the Robinhood website you can “Invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from your phone or desktop.“
Robinhood earns money by offering:
Robinhood Gold, a margin trading service, which starts at $6 a month
Earn interests from customer cash and stocks, just like a bank collects interest on cash deposits
And from rebates from market makers and trading venues
Robinhood’s claimed mission is to “democratize access to the American financial system.”
Indeed, Robinhood’s primary value proposition is fueled by an investing platform that lets you buy and sell stocks, exchange-traded funds, options, and cryptocurrencies, all commission-free. As its mission is to democratize the financial system, this goes through three main elements of the platform:
User-friendly
Made for all investorsโnewcomers
And convenient also to experts (even though that is not the primary target)
As Vlad Tenev, co-founder of Robinhood told Business Insider “there were a lot of people who didn’t believe in it, and we had to bang down a ton of doors. We were really relentless.”
After seventy-five pitches they finally got a round of investing that allowed them to launch the platform.
As explained on the Robinhood website, the realization of a market potential from the app came from the two founders’ experience in selling software to Wall Street’s hedge funds.
They figured those funds paid nothing for those transactions, while the average American would be charged for fees that would be up to $10 for every trade. From that, they realized they could democratize the whole process.
That is why in December 2013 they launched the service on Hacker News even before it was available:
This strategy paid off and Robinhood grew quickly, from a waiting list of hundreds of thousands of users in 2014 to over 3 million accounts in 2018. The convenience of the app is at the same time strength and for some a weakness. As pointed out on Bloomberg “itโs a little bit like putting a casino in an investorโs pocket.”
However, that same frictionless, friendly user-experience, together with a seamless app have made it extremely popular among millennials.ย
ย
Robinhood also makes money from rebates, as pointed out on its blog “the revenue from these rebates cover the costs of operating the business and to offer commission-free trading.ย
Robinhood earns ~$0.00026 in rebates per dollar traded. That means if you buy a stock for $100.00, Robinhood earns 2.6 cents from the market maker.”
At the same time, Bloomberg found out that than 40 percent of its revenue in early 2018, came from selling its customersโ orders to high-frequency trading firms, or market makers.ย
Why does this matter? For a company that called itself Robinhood, which is supposed to democratize the financial markets. It might be paradoxical that the same company makes most of its revenues from users that have small capitals that generate income for high-frequency trading firms, which are the quintessence of Wall Street.ย
Breaking down how Robinhood really makes money
If we look at the Robinhood business model more in detail, we find out it makes money with three primary ways:
When the cash on Robinhood accounts are uninvested cash, those can be lent out and invested in other safe financial instruments that make Robinhood earn a small return on each dollar invested.
The freemium model
Freemium is an effective model that can help companies leverage the free offering to create a sales funnel that generates a continuous stream of leads and paying customers.
Indeed, Robinhood offers basic services for free, and it offers more advanced functionalities (like buying on margins, or after-hours trading) part of a paid package called Robinhood Gold.
Another more controversial way for Robinhood to make money is through market makers, which pay small fees to Robinhood for sending trades to process through their platforms.
When a company becomes a synonym of buying stocks
During the pandemic Robinhood became even more popular, as more people looked into investing:
Stories of Robinhood amateurs, retail investors, performing better than Wall Street firms, became a mantra that helped the company further spread and grow.
However, Robinhood also became an app used by teenagers. In June 2020, a 20-year old started to trade options at the margin, and he had accumulated a paper loss of over $700K which led him to suicide.
This opened up the worry of predatory issues from the Robinhood part and the risk of running an app that makes it easy for everyone to trade. How Robinhood will address these issues will also affect how the platform will evolve and how regulation will react to that.
Handling hypergrowthย
As we saw at the beginning of this story, Robinhood’s preferred mode of expansion has always been through a waitlist that the company opened to quickly gain traction.ย
Robinhood started to roll out its waitlist in 2019, for the UK. This was an important move, as it would have enabled an expansion outside the US.
In 2013, Robinhood set out on a mission to democratize the financial system. We pioneered commission-free investing in the US to enable everyone to participate in the markets. Since then, over six million Americans have discovered Robinhood.ย
And it continued:ย
Today, weโre excited to continue our journey and introduce the Robinhood investing platform to the UK. With Robinhood, you can invest in thousands of US and global stocks, commission-free. There are no foreign exchange fees and no account minimums. Sign up today to get early access when we launch in early 2020.ย
Yet, as the pandemic hit and growth picked up even further, also troubles came with it. Indeed, one thing is growth, another is hypergrowth โ as explored in the emerging fifth paradigm of scaling โ .
When companies scale too quickly, especially in a sector, like Robinhood’s growth within the financial industry, things can get messy.ย
In an industry highly regulated, and with the potential to negatively influence the lives of many young people approaching trading for the first time, Robinhood had to pause its international growth plan and focus on the US market.
In a statement released to TechCrunch the company announced:ย
A lot has changed in the world over the past few months, and weโve made the difficult decision to postpone our UK launch indefinitely.
And it stressed out how it needed to focus back on its core, the US, before being able to grow internationally, and not for lack of resources.
The company, back in May 2020, closed a round of $280 million, led by Sequoia, which valued the company at $8.3 billion.
Therefore, the focus back to the US, more than a problem of lack of allocated resources for growth, is a problem of handling scalability in an industry that has high regulatory boundaries.ย
Robinhood and the meme economy
Meme stocks are securities that go viral online and attract the attention of the younger generation of retail investors. Meme investing, therefore, is a bottom-up, community-driven approach to investing that positions itself as the antonym to Wall Street investing. Also, meme investing often looks at attractive opportunities with lower liquidity that might be easier to overtake, thus enabling wide speculation, as “meme investors” often look for disproportionate short-term returns.
Platforms like Robinhood make money on fees from large Wall Street institutions through a mechanism known as โpayment for order flow.โ In short, this is controversial not only from the fact it kind of goes against Robinhood’s mission to democratize investing but also in terms of potential conflict of interests between the platform and its retail investors.ย
In factย payments for order flow or โPFOFโ work apps like Robinhood, or other stock brokerage firms make money by selling trades of their customers.
For helping the market to be liquid Robinhood gets a fee on each trade, which is taken from the spread (the difference) between the bid and ask price. The more liquid the market the tighter the bid and ask price, and vice-versa. And this, of course, might be a very lucrative side of the business for Robinhood.ย
But it poses the question of how consistent it is with its mission.ย
Indeed, during the take over of meme stocks in 2021, as explained in meme investing, Robinhood stopped the trades of some of these stocks (like GameStop) claiming a liquidity/risk insurance policy. Yet some doubted that this was also due to the fact that retail traders were squeezing out of the market a few hedge funds with short positions, also owned by some institutions Robinhood was doing business with (for more details look the whole meme investing piece).ย
As an answer to these concerns Robinhood’s CEO highlighted the possibility to give away, or reduce this revenue stream, in a piece entitled “The Sub-Penny Opportunity,” Vlad Tenev explained:
The Sub-Penny Rule (SEC Rule 612) prevents exchanges from quoting in increments less than a penny. This limitation can result in an artificially wide NBBO, which is the pricing benchmark used by off-exchange market-makers.ย
And he further explained:ย
In a nutshell, exchanges cannot fairly compete with off-exchange market makers in executing our customersโ orders. As a first step toward better enabling our exchanges to compete fairly, we propose amending Rule 612 to allow exchanges to quote prices up to four decimal places for all stocks.ย
Back in 2005, when Rule 612 was adopted, the consensus was that price increments of $0.0001 were economically insignificant. Supporters of the rule argued that sophisticated investors may use these smaller increments to step ahead of retail investors by trivial amounts. Some also argued that technology hadnโt advanced enough to properly handle an enormous increase in on-exchange quoting.
However, since that time, technology has advanced by leaps and bounds, and commission-free trading has become the industry norm. Itโs now clear that customers value sub-penny price improvements and no longer consider them economically insignificant, especially in low-priced, high-volume stocks that may only trade with a penny spread.ย
Robinhood’s IPO
Finally, the Robinhood prospectus is out we can finally look under the hood of the company to understand how its revenues are broken up.
As highlighted in Robinhood’s financial prospectus most of its revenues in 2021 were transaction-based. As we’ll see this means that Robinhood is making most of its revenues from payment per order flow.
ย
During the pandemic, Robinhood managed to increase all its KPIs, primarily thanks to meme stocks, and crypto investing, which draw to the platform millions of new users.
ย
Among the assets that recorded an exponential growth for Robinhood, equities, and options – driven by meme stocks like GameStop and AMC, cryptocurrency investing – primarily driven by Dogecoin; made up the incredible growth in assets traded on the platform and therefore the fees taken by Robinhood.
ย
Within the transaction-based revenues, most of them came from market makers. And among those Citadel Security represented 34% of the total market maker revenues for Robinhood. This is relevant because Citadel Securities LLC is the largest market maker in the US, which during the short squeeze from Redditors bailed out hedge fund Melvin Capital.
Wall Street As Main Customer
As the company highlighted in its financial prospectus:
We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker.
And it continued:
Because a majority of our revenue is transaction-based (including payment for order flow, or โPFOFโ), reduced spreads in securities pricing, reduced levels of trading activity generally, changes in our business relationships with market makers and any new regulation of, or any bans on, PFOF and similar practices may result in reduced profitability, increased compliance costs and expanded potential for negative publicity.
How do these transactions are computed?
Robinhood explains:
A majority of our revenue is transaction-based, in that we receive consideration in exchange for routing our usersโ equity, option and cryptocurrency trade orders to market makers for execution. With respect to equities and options trading, such fees are known as PFOF. With respect to cryptocurrency trading, we receive โTransaction Rebates.โ In the case of equities, the fees we receive are typically based on the size of the publicly quoted bid-ask spread for the security being traded; that is, we receive a fixed percentage of the difference between the publicly quoted bid and ask at the time the trade is executed. For options, our fee is on a per contract basis based on the underlying security. In the case of cryptocurrencies, our rebate is a fixed percentage of the notional order value. Within each asset class, whether equities, options or cryptocurrencies, the transaction-based revenue we earn is calculated in an identical manner among all participating market makers. We route equity and option orders in priority to participating market makers that we believe are most likely to give our customers the best execution, based on historical performance, and we do not consider transaction fees when routing orders. For cryptocurrency orders, we route to various market makers that we believe offer competitive pricing, and we do not consider Transaction Rebates when routing cryptocurrency orders.
Doge Represented Most Of Robinhood Growth For Crypto Assets
As highlighted in its financial prospects:
A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected.
Dogecoin was so important in terms of revenue streams related to crypto investing, that in Robinhood prospectus it was highlighted how the company would be negatively affected โif the markets for Dogecoin deteriorate or if the price of Dogecoin declines, including as a result of factors such as negative perceptions of Dogecoin or the increased availability of Dogecoin on other cryptocurrency trading platforms.โ
Who Are Robinhood Customers?
As highlighted in the financial prospects โfrom January 1, 2015, to March 31, 2021, over half of the customers funding accounts on our platform told us that Robinhood was their first brokerage account.โ
And it continued โas of March 31, 2021, approximately 70% of our AUC came from customers on our platform aged 18 to 40, and the median age of customers on our platform was 31.โ
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
