Robinhood turns profitable in Q2, but crypto revenue declines

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Robinhood released its second-quarter outcomes, reaching profitability for the primary time since changing into a public firm, regardless of a drop in income within the second quarter of 2023. 

In line with its quarterly report launched on Aug. 2, Robinhood’s income from cryptocurrency transactions shrank by 18% to $31 million. Different transaction-based revenues dropped as effectively, together with choices, which decreased 5% to $127 million, and equities, which declined 7% to $25 million. Over the previous 12 months, its income has decreased by 4% from $202 million in June final 12 months to $193 million.

Regardless of the decline in income, the corporate recorded a internet revenue of $25 million, or earnings per share (EPS) of $0.03, in contrast with a internet lack of $511 million, or EPS of -$0.57, within the first quarter of the 12 months. The result’s attributable to enhancements in whole working bills over the previous few months, with a midpoint lower of $45 million.

Robinhood’s Q2 2023 outcomes. Supply: Robinhood

Earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) elevated 31% sequentially to $151 million, with its margin gaining 5 factors to 31%. EBITDA is usually utilized by analysts, buyers and monetary professionals to match the operational efficiency of corporations in the identical trade.

The entire property beneath custody elevated 13% to $89 billion final quarter, pushed by “larger fairness valuations and continued internet deposits.” Taking the primary half of 2023 under consideration, Robinhood barely elevated its crypto property beneath custody from $8.431 billion in December 2022 to $11.503 billion in June 2023.

“In Q2, we reached a major milestone by reaching GAAP profitability for the primary time as a public firm,” mentioned Vlad Tenev, CEO and co-founder of Robinhood Markets.“ Typically accepted accounting rules (GAAP) refers to the usual accounting rules and pointers that corporations use to arrange their monetary statements.

Robinhood’s internet deposit was $4.1 billion within the quarter, which interprets to an annualized progress fee of 21% relative to property beneath custody within the first quarter of 2023. Over the previous 12 months, internet deposits have been $16.1 billion, indicating a progress fee of 25% over a 12 months.

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