Robinhood's trades are free. Its interest line was $1.1 billion.
Robinhood made trades free in 2015 and earned on order flow and parked cash. By 2024 net interest was roughly $1.1 billion, and total net revenues were $2.95 billion. The SEC and FINRA penalties showed the cost of unclear disclosure.
Transcript
In 2024, Robinhood earned roughly $1.1 billion in net interest, more than its transaction-based line. Yet its trades are free.
When its app launched in 2015, Robinhood gave away commissions. It would earn on payment for order flow, and on net interest from the cash and stock customers parked with it.
The model had a cost. In December 2020, Robinhood agreed to a $65 million SEC penalty for misleading customers about order flow and failing best execution. In 2021 came a $57 million FINRA fine, plus about $12.6 million in restitution.
By 2024, Robinhood's total net revenues reached $2.95 billion, up 58%.
If you give the visible thing away, know where the money comes from, and tell customers plainly. Robinhood's free trades paid. Its disclosure failures cost it.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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