Robinhood second-quarter earnings 2021

Robinhood’s income greater than doubled within the second quarter to $565 million, bolstered by a large surge in crypto buying and selling, the inventory buying and selling app mentioned Wednesday.

In its first earnings report as a public firm, Robinhood reported a web lack of $502 million, or a lack of $2.16 per share, inside the anticipated web lack of $487 million to $537 million forecast by the corporate. The brokerage turned a revenue in the identical quarter final 12 months.

Income surged greater than 131% within the interval from $244 million a 12 months in the past and was close to the excessive vary of the corporate’s forecast of $546 million to $574 million.

Income from crypto buying and selling totaled $233 million, greater than half of all of the transaction-based income of $451 million for the second quarter. Cryptocurrency’s share of income jumped to greater than 51% from 17% within the first quarter.

Greater than 60% of cumulative web funded accounts traded crypto within the quarter. Within the second quarter of 2020, crypto based mostly income was simply $5 million.

Purchasers buying and selling choices contributed $165 million to and equities had been $52 million of transaction based mostly income final quarter. Robinhood additionally earns income off of its gold subscription service.

Belongings underneath custody ballooned 205% to $102 billion within the second quarter of 2021, in contrast with $33 billion within the second quarter final 12 months.

Robinhood warned buyers that its third quarter outcomes may very well be effected by a slowdown in buying and selling after a report second quarter.

“For the three months ended September 30, 2021, we count on seasonal headwinds and decrease buying and selling exercise throughout the business to end in decrease revenues and significantly fewer new funded accounts than within the prior quarter,” the corporate mentioned within the earnings launch.

Shares of Robinhood ticked 3% decrease in after hours buying and selling. Robinhood shares jumped 6.7% to $49.80 on Wednesday into the outcomes.

Whole funded accounts (these tied to a checking account) totaled 22.5 million as of the second quarter, according to Robinhood’s forecast. That is up from 18 million within the first quarter of 2021, which was a rise of 151% from a 12 months earlier. 

Crypto buying and selling, which Robinhood first launched in 2018, has ballooned in the previous few years. Robinhood affords seven completely different digital cash, together with bitcoin, ethereum and litecoin. Dogecoin, meme-inspired token, accounted for 34% of its cryptocurrency transaction-based income within the first quarter. 

Robinhood makes cash in crypto by routing orders to market makers that the corporate says supply “aggressive pricing” and taking a share of the order worth. The value of bitcoin hovered round $45,000 on Wednesday, up greater than 50% on the 12 months.

Robinhood went public on the Nasdaq final month, hitting the general public markets it seeks to democratize for beginner buyers. For the reason that debut, shares of Robinhood have had a wild experience. After sinking on the primary few days of buying and selling, the corporate had a meme inventory second when it rallied 50% amid retail investor curiosity.

Earlier this month, information that sure Robinhood shareholders will promote as much as 97.9 million shares over time dented the inventory. Robinhood mentioned the SEC knowledgeable the brokerage on August 13 that they’re reviewing the resale S-1 and that no gross sales may be made till the SEC workers completes their overview and declares it efficient.