In a recently released Q2 2023 earnings report, online trading platform Robinhood (HOOD) disclosed a crypto trading revenue of $31 million, denoting an 18% diminution from $38 million, the prior quarter’s earnings. Whatever your thoughts are on Robinhood’s crypto-friendly approach, it’s undeniable that despite the downturn, the trading platform accomplished profitability for the first time since their initial public offering (IPO).
Of course, Robinhood’s losses haven’t been restricted to the world of cryptocurrency. Other transaction-based revenues presented similar trends, with equities revenue descending by 7% to $25 million, and options revenue reducing by 5% to $127 million. This all contributed to Robinhood’s overall income sliding by 4% year-on-year. Some may argue that this comes during a time of disorder in the broader crypto market, punctuated by episodes like the collapse of Terra and FTX.
Support for Cardano (ADA) and other tokens implicated in SEC lawsuits against Binance and Coinbase was also halted by Robinhood in June. However, not all indicators are pointing downwards. Despite market adversities, Robinhood reported net revenues increasing by 10% for the second quarter, exceeding analysts’ expectations and being driven predominantly by higher net interest revenues and increased proxy revenue.
Robinhood also revealed strategic expansion plans, including a launch in the UK market later this year, a crucial step led by Jordan Sinclair, the newly appointed UK CEO. On top of this, crypto assets under Robinhood’s custody underwent a moderate increase from $8.431 billion in December 2022 to $11.503 billion by June 2023. The total aggregated assets under control observed a 13% climb amassing to $89 billion during the last quarter, powered by sustained net deposits and increased equity valuations.
Furthermore, Robinhood experienced a substantial $4.1 billion in net deposits during the quarter, signifying an annualized growth rate of 21% in relation to assets under custody during Q1 2023. Over the past year, net deposits amounted to $16.1 billion, corresponding to a 25% growth rate over twelve months.
While there is anisgma surrounding Robinhood’s practices, it’s indisputable that their resilience in the face of adversity is nothing short of compelling. As the company’s CEO, Vlad Tenev, boldly asserted, “In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company.” It will be intriguing to see how the platform’s fortunes unfold in the forthcoming quarters, considering the ever-changing terrain of the cryptocurrency market.
Source: Cryptonews
