The stock trading app stated that in its first financial report as a public company on Wednesday, Robinhood’s turnover more than doubled to 565 million dollars in the second quarter, due to a massive rise in crypto trading.
The revenue increased by more than 131 percent from 244 million dollars a year earlier and was close to the high level of the company’s projection, from 546 million dollars to 574 million dollars.
Crypto-trading revenue was $233 million, more than half of all transaction-based revenue in the second quarter was $451 million. Cryptocurrency’s revenue share in the first quarter increased to more than 51%, from 17%.
Over 60% of cumulative net financed accounts had traded crypto in the quarter. Crypto-based revenue was just $5 million in the second quarter of 2020.
The Slowdown in Trading Activity
But when the firm warned of a slowdown in trading activity, the shares plummeted in revenues this quarter. Investors may also worry whether such a tailwind can continue to offer crypto fluctuation. Robinhood was last down more than 8 percent.
Client trading options contributed $165 million last quarter, while shares generated transaction-based income at $52 million. In addition, Robinhood generates money from its gold subscription programme.
The company said in the earnings release:
“For the three months ended September 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter,”
In the second quarter of 2021, custodial assets soared 205% to $102 billion compared to $33 billion in last year’s second quarter. Robinhood alerted investors to the possibility of a downturn in trade following a record second quarter on its third-quarter results. Robinhood shares soared to results on Wednesday at 6.7 percent to $49.80.
