Robinhood’s Q2 Earnings Show 18% Decline in Crypto Trading Revenue

In its Q2 2023 earnings report, Robinhood (HOOD), the web buying and selling platform identified for its crypto-friendly method, revealed crypto buying and selling income of $31 million, representing an 18% lower from the earlier quarter’s $38 million. 

Regardless of this decline, Robinhood achieved profitability for the primary time since going public.

In Q2, Robinhood’s cryptocurrency buying and selling income amounted to $31 million, comprising 16% of the full buying and selling income of $193 million throughout all classes, which skilled a 7% sequential decline. 

In accordance with the corporate’s quarterly report launched on August 2, income from cryptocurrency transactions will not be the one part affected; different transaction-based revenues additionally skilled decreases, with choices income declining by 5% to $127 million and equities income declining by 7% to $25 million. 

Over the previous 12 months, Robinhood’s revenue has dropped by 4%, from $202 million in June of the earlier 12 months to $193 million.

The drop in crypto buying and selling comes amid a turbulent state of the general crypto market, impacted by varied occasions, together with the collapse of Terra and FTX and ongoing regulatory challenges. 

In June, Robinhood ceased help for tokens listed within the SEC lawsuits in opposition to crypto exchanges Binance and Coinbase, comparable to Cardano (ADA), Polygon (MATIC), and Solana (SOL). 

Presently, the buying and selling platform provides 15 completely different cryptocurrencies, together with standard ones like bitcoin (BTC), ether (ETH), dogecoin (DOGE), and avalanche (AVAX).

Regardless of the challenges available in the market, Robinhood reported earnings per share of $0.03 on income of $486 million for the second quarter, surpassing analysts expectations, which projected a lack of $0.01 per share on income of $473 million. 

The corporate achieved a noteworthy 10% rise in complete web revenues, which may be attributed primarily to elevated proxy income and better web curiosity revenues, which have surged seasonally.

Robinhood Expands Strategically with UK CEO Appointment and Crypto Asset Surge, Achieves 13% Development in Whole Property Below Custody

Robinhood stays undaunted by the lower in transaction-based income and is actively advancing its enlargement initiatives. 

The corporate is making strides towards its UK launch, scheduled for the top of this 12 months. 

A big step on this course is the appointment of Jordan Sinclair, a former Barclays govt who now assumes the position of CEO for Robinhood’s operations within the UK.

Furthermore, Robinhood’s crypto property beneath custody elevated reasonably, from $8.431 billion in December 2022 to $11.503 billion by June 2023. 

Notably, the aggregated property beneath management skilled a 13% rise to succeed in $89 billion through the earlier quarter. This surge was propelled by augmented fairness valuations and sustained web deposits.

“In Q2, we reached a big milestone by attaining GAAP profitability for the primary time as a public firm,” stated Vlad Tenev, CEO and co-founder of Robinhood Markets. 

“Usually accepted accounting ideas (GAAP) refers to the usual accounting ideas and tips firms use to organize their monetary statements.

By way of web deposits, Robinhood recorded a considerable $4.1 billion within the quarter, indicating an annualized development fee of 21% relative to the property beneath custody through the first quarter of 2023. 

Over the previous 12 months, the online deposits aggregated to $16.1 billion, illustrating a development fee of 25% over twelve months.