Robinhood Shares Plummet in First Earnings Report Since IPO

Robinhood shares fell on Wednesday after the company reported its first post-IPO earnings results.

The stock slid in after-hours trading after the company provided an outlook that concerned Wall Street.

In its first post-initial public offering earnings report, Robinhood revealed revenue of $565 million for the quarter ended June 30. This is up from $244 million in the same quarter of 2020.

Net loss in the quarter was $502 million or $2.16 per share, compared with net income of $58 million or nine cents per share YOY. Analysts had expected a loss of just 26 cents per share on revenue of $559.5 million.

The company reported that transaction-based revenue grew 141% YOY in the quarter to $451 million.

Cyptocurrency trading had topped the figures. Crypto trading revenue in the quarter came in at $233 million. This is compared tojust $5 million in the second quarter of 2020.
Options revenue rose 48% YOY o $165 million. Equities transaction-based revenue fell 26%, to $52 million.

The company saw its monthly active users hit 21.3 million in the quarter, a staggering increase of 109% YOY, and net cumulative funded accounts jumped 130% to 22.5 million.

Assets under customer grew 205% of $102 million, while average revenue per use came in $112 in the quarter, down from $115 in the second quarter of 2020.

“We’re encouraged by the number of people who are accessing the financial system for the first time through Robinhood,” said Vlad Tenev, co-founder and chief executive of Robinhood. “We’re happy to expand access through products like commission-free crypto trading, which saw strong growth this quarter among women investors in particular, and IPO Access, which gives customers an opportunity to invest in companies at their IPO price.”

So why did shares fall over 9%?

Investors were absorbing the warnign from the company about its outlook. The company warned a slowdown in trading activity would hit revenues in the current quarter

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.