Robinhood Capitalizes on Strong Crypto Interest in First Earnings Report, But Stock Stumbles

[ad_1]

Robinhood Markets Inc. benefited from strong interest in cryptocurrencies in its first report on earnings as a state-owned enterprise, although the company continued to warn that the September quarter was unlikely. Corresponds to record levels of activity in the June quarter.

The company posted a net loss of $ 502 million in the second quarter, or $ 2.16 per share, while it posted a profit of $ 58 million, or 9 cents per share, in the quarter of the year. former. Robinhood HOOD, + 6.71%, said in its earnings release that it recorded $ 528 million in costs associated with the fair value of convertible notes and warrants liabilities during the period. The shares fell more than 9% in after-hours trading, after closing the regular session at $ 49.80.

Robinhood had detailed in a document filed with the Securities and Exchange Commission in July that he expected a loss of $ 487 million to $ 537 million for the quarter.

Revenue for the June quarter increased from $ 244 million to $ 565 million. Cryptocurrency transaction revenue amounted to $ 233 million, down from just $ 5 million in the previous June quarter.

Don’t Miss: 5 Things You Should Know About Robinhood’s IPO

The company said it expected total revenue of $ 546 million to $ 574 million for the period in its July filing with the SEC. FactSet did not list enough analyst estimates to form a solid consensus on earnings or revenue expectations.

Read: Which ETFs will the trendy Robinhoods stocks be in and when?

The company had 22.5 million cumulative net funded accounts in the June quarter and it had 21.3 million monthly active users. Robinhood had $ 102 billion in assets in custody, up from $ 33.4 billion a year earlier.

Were encouraged by the number of people entering the financial system for the first time through Robinhood, CEO Vlad Tenev said in the earnings release.

The company reiterated a warning from the filing, noting that it expects revenue for the September quarter to be lower than the June quarter. The company expects seasonal headwinds and declining business activity across the industry to result in lower revenues and significantly fewer new funded accounts than in the previous quarter, he said. in its press release.

Robinhood highlighted a keen interest in its IPO Access feature, which allows retail traders to invest in businesses at their IPO prices.

The clients who participated in those IPOs were relatively diamond cut, so to speak, Tenev said during the earnings call. They’ve been holding these shares for over 30 days and haven’t returned them, so I think that addresses a misconception that a lot of people have about retailing in IPOs.

Tenev added that he was optimistic that more and more new issuers would see Robinhood as a way to better align with their retail shareholders.

[ad_2]