Robinhood Markets Inc. benefited from strong interest in cryptocurrencies in its first earnings report as a public company, although the company continued to warn that the September quarter was unlikely to coincide with the record levels of activity in the June quarter.
The company posted a second-quarter net loss of $ 502 million, or $ 2.16 per share, while it posted a profit of $ 58 million, or 9 cents a share, in the prior-year quarter. HOOD Robinhood,
noted in its earnings release that it saw $ 528 million in costs associated with the fair value of the convertible notes and the guarantee liability in the period. The shares fell more than 9% in after-hours trading, after closing the regular session at $ 49.80.
Robinhood had detailed in a July filing with the Securities and Exchange Commission that it expected a loss of $ 487 million to $ 537 million for the quarter.
Revenue for the June quarter increased to $ 565 million from $ 244 million. Cryptocurrency transaction revenue accounted for $ 233 million, up from just $ 5 million in the previous June quarter.
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The company had said it expected between $ 546 million and $ 574 million in total revenue for the period in its July SEC filing. FactSet did not list enough analyst estimates to form a strong consensus opinion on earnings or revenue expectations.
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The company had 22.5 million accumulated financed net accounts in the June quarter and had 21.3 million monthly active users. Robinhood had $ 102 billion in assets in custody, up from $ 33.4 billion the year before.
“We are encouraged by the number of people entering the financial system for the first time through Robinhood,” Chief Executive Vlad Tenev said in the earnings release.
The company reiterated a warning from the filing, noting that it expects revenue for the September quarter to be lower than that seen in the June quarter. The company expects that “seasonal headwinds and lower business activity in the industry will result in lower revenues and significantly fewer new accounts financed than in the previous quarter,” it said in its statement.
Robinhood noted strong interest in its IPO access feature, which allows retailers to invest in companies at their IPO prices.
“The clients who have been participating in these IPOs have been relatively good, so to speak,” Tenev said on the earnings call. “They have been holding these stocks for more than 30 days and they haven’t changed them, so I think that addresses a misconception that a lot of people have had about retailing in IPOs.”
Tenev went on to say that he was “optimistic that more and more new issuers will see Robinhood as a way to better align with their retail shareholders.”