Robinhood Revenues In Q2 Increase By 10% To $486 Million
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The Robinhood retail trading platform has posted a strong performance for the second quarter of 2022. During the quarter, Robinhood recorded a net income of $25 million. Revenue reported during the period gained by 10% to reach $486 million.
Robinhood posts solid Q2 results
Robinhood’s performance in Q2 significantly differs from the first quarter. During the quarter ending on June 30, the brokerage firm had earnings per share (EPS) of $0.03, a jump from the negative EPS of $0.57 posted during the first quarter.
The revenue posted by the trading platform in Q2 marked Robinhood’s fifth consecutive quarter of revenue growth. The monthly active users (MAU) on the platform in Q2 were 10.8 million, representing a drop of 1 million.
On the other hand, the number of accounts with funding increased by 70,000 to 23.2 million between April and June 2023. By the end of the first quarter, these accounts had increased by 120,000 to 23.1 million.
The commission-free retail trading platform also saw an increase in the total net revenue during the recent quarter. The growth happened despite the platform reporting lower transaction revenues during the period. The revenue came from an increase in the broker’s earnings generated from processing proxy votes on behalf of companies.
The revenue posted by Robinhood from interest earned on cash and securities also increased during the quarter to $234 million, representing a 13% jump. The increase comes from growth in interest-earning assets, high short-term interest rates, and a rise in securities lending activity.
Revenue derived from transaction-based revenues dropped by 7% in Q2 compared to Q1 to hit $193 million. The revenues earned from cryptocurrency fell by 18%, while revenue from equities trading dropped by 7%. Revenue from options trading activities also plunged by 5% during the second quarter.
The trading platform also said it achieved its first GAAP profitability in Q2. The GAAP profitability happened despite the firm posting a 13% quarter-over-quarter increase in assets in custody to $89 billion. Robinhood shares reacted to the financial results posted for the second quarter, with the stock declining by 3.34% in the last 24 hours.
The Chief Financial Officer at Robinhood, Jason Warnick, said, “We’ve been talking about for the last several quarters how we want to be lean and scrappy from a cost perspective, and we’ve been keeping our eye on that very closely.”
Plunge in crypto trading activities
As aforementioned, cryptocurrency trading activities on Robinhood during the second quarter were down by 18%. The drop comes amid increased regulatory scrutiny over the cryptocurrency industry by regulators in the United States.
Robinhood delisted several cryptocurrencies during the second quarter, including Cardano (ADA) and Solana (SOL). At the time, the trading platform attributed the decision to the action taken by the Securities and Exchange Commission (SEC) to sue Binance and Coinbase for offering unregistered securities.
