Robinhood Revenues Breakdown

Business / By Gennaro Cuofano / March 5, 2024

Robinhood generated $1.86 billion in 2023, compared to $1.36 billion in 2022 and $1.81 billion in 2021.

Of $1.86 billion in revenue in 2023, over $900 million came from net interest revenue followed by $785 million which came from transaction-based revenues.

By 2023, net interest revenue took over transaction revenue on the platform, most probably due to a shrunk trading volume compared to previous years.

Robinhood’s transaction revenue highly depends on the macroeconomic scenarios of stock markets.

Options trading transactions revenue contributed to most of Robinhood’s transaction revenue in 2023, which passed $500 million in the same period.

Key Facts
Founders	Vladimir Tenev & Baiju Bhatt
Year Founded	April 18, 2013
Year of IPO	7/28/2021
IPO Price	$38.00
Total Revenues at IPO	$958 Million
Total Revenues in 2021	$1.4 Billion
Employees	2,200 full-time employees as of December 2023
Revenues per Employee	$847,727

how-does-robinhood-make-money — 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 include payment for order flow from routing customer orders for options, cryptocurrencies, and equities to market makers.

payment-for-order-flow — 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.

meme-investing — 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.

Read Next: How Does Robinhood Make Money, Robinhood Business Model

Robinhood In Numbers

Robinhood Revenue

Robinhood Revenue — Robinhood generated $1.86 billion in 2023, compared to $1.36 billion in 2022 and $1.81 billion in 2021.

Robinhood Revenue Breakdown

Robinhood-Revenue-Breakdown

Robinhood-Revenue-Breakdown-2021-2023

Robinhood Transactions Revenue

Robinhood Transactions Revenue — 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.

Is Robinhood Profitable?

Robinhood Net Losses — 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 Funded Customers

Robinhood Funded Customers — 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 Net Deposits

Robinhood Net Deposits — Robinhood reported $17.1 billion in net deposits in 2023, compared to $18.4 billion in 2022 and $27.1 billion in 2021.

Robinhood ARPU

Robinhood ARPU — Robinhood reported an average revenue per user of $80 in 2023, compared to $60 in 2022 and $103 in 2021.

Robinhood Monthly Active Users

Robinhood Monthly Active Users — Robinhood reported 10.9 million Monthly Active Users in 2023, compared to 11.4 million in 2022 and 17.3 million in 2021.

Robinhood Employees

Robinhood Employees — Robinhood had 2,200 employees in 2023, compared to 2,300 employees in 2022 and 3,800 employees in 2021.

Robinhood Revenue per Employee

Robinhood Revenue per Employee — Robinhood generated $847,727 per employee in 2023, compared to $590,435 in 2022 and $477,632 in 2021.

Read More: How Does TD Ameritrade Make Money, How Does Dave Make Money, How Does Webull Make Money, How Does Betterment Make Money, How Does Wealthfront Make Money, How Does M1 Finance Make Money, How Does Mint Make Money, How Does NerdWallet Make Money, How Does Acorns Make Money, How Does SoFi Make Money, How Does Stash Make Money, How Does Robinhood Make Money, How Does E-Trade Make Money, How Does Coinbase Make Money, How Does Affirm Make Money, Fintech Companies And Their Business Models.

List of FinTech Business Models

how-does-acorns-make-money — Acorns is a fintech platform providing services related to Robo-investing and micro-investing. The company makes money primarily through three subscription tiers: Lite – ($1/month), which gives users access to Acorns Invest, Personal ($3/month) that includes Invest plus the Later (retirement) and Spend (personal checking account) suite of products, Family ($5/month) with features from both the Lite and Personal plans with the addition of Early.

affirm-business-model — Started as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.

how-does-alipay-make-money — Alipay is a Chinese mobile and online payment platform created in 2004 by entrepreneur Jack Ma as the payment arm of Taobao, a major Chinese eCommerce site. Alipay, therefore, is the B2C component of Alibaba Group. Alipay makes money via escrows transaction fees, a range of value-added ancillary services, and through its Credit Pay Instalment fees.

how-does-betterment-make-money — Betterment is an American financial advisory company founded in 2008 by MBA graduate Jon Stein and lawyer Eli Broverman. Betterment makes money via investment plans, financial advice packages, betterment for advisors, betterment for business, cash reserve, and checking accounts.

Braintree

how-does-venmo-make-money — Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.

how-does-chime-make-money — Chime is an American neobank (internet-only bank) company, providing fee-free financial services through its mobile banking app, thus providing personal finance services free of charge while making the majority of its money via interchange fees (paid by merchants when consumers use their debit cards) and ATM fees.

coinbase-business-model — Coinbase is among the most popular platforms for trading and storing crypto-assets, whose mission is “to create an open financial system for the world” by enabling customers to trade cryptocurrencies. Its platform serves both as a search and discovery engine for crypto assets. The company makes money primarily through fees earned for the transactions processed through the platform, custodial services offered, interest, and subscriptions.

how-does-compass-make-money — Compass is a licensed American real-estate broker incorporating online real estate technology as a marketing medium. The company makes money via sales commissions (collected whenever a sale is facilitated or tenants are found for a rental property) and bridge loans (a service allowing the seller to purchase a home before the revenue from the sale of their previous home is available).

how-does-dosh-make-money — Dosh is a Fintech platform that enables automatic cash backs for consumers. Its business model connects major card providers with online and offline local businesses to develop automatic cash back programs. The company makes money by earning an affiliate commission on each eligible sale from consumers.

how-does-e-trade-make-money — E-Trade is a trading platform, allowing investors to trade common and preferred stocks, exchange-traded funds (ETFs), options, bonds, mutual funds, and futures contracts, acquired by Morgan Stanley in 2020 for $13 billion. E-Trade makes money through interest income, order flow, margin interests, options, future and bonds trading, and through other fees and service charges.

how-does-klarna-make-money — Klarna is a financial technology company allowing consumers to shop with a temporary Visa card. Thus it then performs a soft credit check and pays the merchant. Klarna makes money by charging merchants. Klarna also earns a percentage of interchange fees as a commission and for interests earned on customers’ accounts.

how-does-lemonade-make-money — Lemonade is an insurance tech company using behavioral economics and artificial intelligence to process claims efficiently. The company leverages technology to streamline onboarding customers while also applying a financial model to reduce conflicts of interest with customers (perhaps by donating the variable premiums to charity). The company makes money by selling its core insurance products, and via its tech platform, it tries to enhance its sales.

how-does-monzo-make-money — Monzo is an English neobank offering a mobile app and a prepaid debit card for consumers and businesses. It was one of the first app-based banks to enter the UK market, founded by Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, and Tom Blomfield in 2015. All were employees of Starling Bank, a similar neobank challenging the dominance of established financial institutions in England. The company enjoys many revenue streams: business and consumer subscriptions, interchange and overdraft fees, personal loans, and more.

how-does-nerdwallet-make-money — NerdWallet is an online platform providing tools and tips on all matters related to personal finance. The company gained traction as a simple web application comparing credit cards. NerdWallet makes money via affiliate commissions determined according to the affiliate agreements.

how-does-quadpay-make-money — Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.

how-does-revolut-make-money — Revolut an English fintech company offering banking and investment services to consumers. Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, the company initially produced a low-rate travel card. Storonsky in particular was an avid traveler who became tired of spending hundreds of pounds on currency exchange and foreign transaction fees. The Revolut app and core banking account are free to use. Instead, money is made through a combination of subscription fees, transaction fees, perks, and ancillary services.

how-does-robinhood-make-money — Robinhood is an app that helps to invest in stocks, ETFs, options, and cryptocurrencies, all commission-free. Robinhood earns money by offering: Robinhood Gold, a margin trading service, which starts at $6 a month, earn interests from customer cash and stocks, and rebates from market makers and trading venues.

how-does-sofi-make-money — SoFi is an online lending platform that provides affordable education loans to students, and it expanded into financial services, including loans, credit cards, investment services, and insurance. It makes money primarily via payment processing fees and loan securitization.

Squarespace

how-does-squarespace-make-money — Squarespace is a North American hosting and website building company. Founded in 2004 by college student Anthony Casalena as a blog hosting service, it grew to become among the most successful website building companies. The company mostly makes money via its subscription plans. It also makes money via customizations on top of its subscription plans. And in part also as transaction fees for the website where it processes the sales.

how-does-stash-make-money — Stash is a FinTech platform offering a suite of financial tools for young investors, coupled with personalized investment advice and life insurance. The company primarily makes money via subscriptions, cashback, payment for order flows, and interest for cash sitting on members’ accounts.

how-does-venmo-make-money — Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.

Wealthfront

how-does-wealthfront-make-money — Wealthfront is an automated Fintech investment platform providing investment, retirement, and cash management products to retail investors, mostly making money on the annual 0.25% advisory fee the company charges for assets under management. It also makes money via a line of credits and interests on the cash accounts.

how-does-zelle-make-money — Zelle is a peer-to-peer payment network that indirectly benefits the banks’ consortium that backs it. Zelle also enables users to pay businesses for goods and services, free for users. Merchants pay a 1% fee to Visa or Mastercard, who share it with the bank that issued the card.

Read Next: Fintech Business Models, IaaS, PaaS, SaaS, Enterprise AI Business Model, Cloud Business Models.

Read Next: Affirm Business Model, Chime Business Model, Coinbase Business Model, Klarna Business Model, Paypal Business Model, Stripe Business Model, Robinhood Business Model.

Main Free Guides:

Related

More Resources

About The Author

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.