- Robinhood has achieved profitability for the first time since becoming a public company in the second quarter of 2023.
- The new-age brokerage posted a $25 million net income for the quarter ended June 30.
- Despite recording a profit, Robinhood recorded a fall of 18% in its crypto trading revenue in Q2.
Robinhood, an American financial services firm, has released its second-quarter results, achieving profitability for the first time since becoming a public company. This development comes, despite a drop in revenue in the second quarter of 2023.
The company’s net income was $25 million for the quarter ended June 30, the company said in its second quarter of 2023. According to Robinhood’s quarterly report released on August 2, 2023, the company’s revenue from cryptocurrency transactions declined by 18% to $31 million. Other transaction-based revenues also dropped, including options, which decreased 5% to $127 million, and equities, which declined 7% to $25 million. Over the past year, its revenue has reduced by 4% from $202 million in June last year to $193 million.
However, Vladimir Tenev, Robinhood CEO, has said:
‘’In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company. Guided by our bold product roadmap, we continue to innovate for our customers, grow assets, gain market share, and improve the industry.
Generally accepted accounting principles (GAAP) refer to the standard accounting principles and guidelines companies use to prepare their financial statements.
Robinhood also recorded $11.5 million in crypto assets into custody in Q2, the same amount as recorded at the end of the previous quarter. This brings the total assets under custody jumping by 13% to $89 billion in Q3, owing to “higher equity valuations and continued net deposits.” Robinhood’s crypto assets under custody climbed marginally in the first half of 2023, from $8.431 billion in December 2022 to $11.503 billion in June 2023. The result is attributable to improvements in total operating expenses over the past few months, with a midpoint decrease of $45 million.
The net deposit was $4.1 billion in the quarter, representing a 21% annualized growth rate in assets under custody in the first quarter of 2023. Net deposits totaled $16.1 billion in the last 12 months, representing a 25% year-on-year increase.
Drop In Robinhood Users
On the other hand, the firm has also shed an astounding million monthly active users, dropping to 10.8 million for the quarter, down from 14 million in the same quarter last year.
The company has lost 3.2 million monthly active users compared to this quarter a year ago. It has been at its lowest monthly operational user level in the past nine quarters.
Total accounts grew by 70,000 compared to the previous quarter this year, and numbers are up by 310,000 year over year.
Reportedly, in July, Robinhood acquired X1. This platform offers a no-fee stainless steel credit card with rewards on each purchase. The $95 million cash deal will enable Robinhood to provide its customers access to credit, bringing the company “closer towards our goal of serving the entirety of our customers’ critical financial needs,” Tenev said.
