Robinhood Markets

Thesis

Written 2026-08-23.

Robinhood is where a generation is learning to hold assets, and the money is now following the accounts. That second part is what turned this from a story into a position. Owning the default financial app of people who are early in their earning lives is a very long-dated asset, provided they actually bring their money — and they are.

The quarter. Net revenue of $1.31bn, up 32%. Net income of $573m, up 48%. Adjusted EBITDA of $741m at a 57% margin, and that margin is being carried while the company spends heavily on marketing and new products. This is a profitable business, not a growth story that hopes to become one.

Platform assets reached $369bn, up 32%, with $21.7bn of net deposits in Q2 2026 — about a 28% annualised rate. This is the number that matters most to me. User counts can be vanity; net deposits are people moving real money onto the platform, and at that rate the asset base compounds without needing a single new customer. As those balances grow with their owners' careers, the revenue per account grows with them.

And it keeps shipping. Agentic Trading, Robinhood Earn, Robinhood Chain, and Rothera — a CFTC-licensed exchange and clearinghouse through a joint venture. That last one matters more than it sounds: owning licensed market infrastructure is a different kind of business from routing orders to somebody else's. This is a company still expanding the surface it can charge on.

What I am watching

I am bullish, and these are the things I would need to see to change that.

How much of the profit is the market rather than the business. Transaction revenue grew 44% and is the largest driver, and transaction revenue is the most cyclical line a broker has. It rises with enthusiasm and falls with it. Net interest revenue grew 9% by comparison — the steadier half is growing far more slowly than the exciting half.

The reported EPS is flattered. Diluted EPS of $0.62 was up 48%, but $0.14 of it relates to a fund deconsolidation. That is a real event and it is not the operating business, so the underlying progress is smaller than the headline.

What a drawdown does to this. The thesis says the deposits keep arriving because the accounts are habitual rather than speculative. A sustained downturn is the test of that sentence: transaction revenue would fall first, and whether net deposits hold through it is the number that answers the question.

Regulatory exposure. A retail broker expanding into crypto, prediction markets and its own clearing infrastructure is widening the number of regulators with an opinion about it.

What would make me wrong

• Net deposits slowing sharply, which would say the habit is thinner than I think.
• Transaction revenue falling in a drawdown with no other line taking the weight.
• Margin compressing as the newer products scale, rather than holding at these levels.
• A regulatory outcome that changes the economics of order flow or of the new venues.

Latest movements

• 2026-08-20 — Opened at $96.12.