1. Home
  2. Coin Telegraph
  3. Robinhood turns profitable in Q2, but crypto revenue declines
Robinhood turns profitable in Q2, but crypto revenue declines

Robinhood turns profitable in Q2, but crypto revenue declines

0

Source: Coin Telegraph

Robinhood achieved profitability for the first time since becoming a public company in the second quarter of 2023. Its crypto revenue, however, continues to decline.

Robinhood released its second-quarter results, achieving profitability for the first time since becoming a public company, despite a drop in revenue in the second quarter of 2023. 

According to its quarterly report released on Aug. 2, Robinhood’s revenue from cryptocurrency transactions shrank by 18% to $31 million. Other transaction-based revenues dropped as well, including options, which decreased 5% to $127 million, and equities, which declined 7% to $25 million. Over the past year, its revenue has decreased by 4% from $202 million in June last year to $193 million.

In spite of the decline in revenue, the company recorded a net income of $25 million, or earnings per share (EPS) of $0.03, compared with a net loss of $511 million, or EPS of -$0.57, in the first quarter of the year. The result is attributable to improvements in total operating expenses over the past few months, with a midpoint decrease of $45 million.

Robinhood’s Q2 2023 results. Source: Robinhood

Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 31% sequentially to $151 million, with its margin gaining five points to 31%. EBITDA is often used by analysts, investors and financial professionals to compare the operational performance of companies in the same industry.

The total assets under custody increased 13% to $89 billion last quarter, driven by “higher equity valuations and continued net deposits.” Taking the first half of 2023 into account, Robinhood slightly increased its crypto assets under custody from $8.431 billion in December 2022 to $11.503 billion in June 2023.

“In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company,” said Vlad Tenev, CEO and co-founder of Robinhood Markets.“ Generally accepted accounting principles (GAAP) refers to the standard accounting principles and guidelines that companies use to prepare their financial statements.

Robinhood’s net deposit was $4.1 billion in the quarter, which translates to an annualized growth rate of 21% relative to assets under custody in the first quarter of 2023. Over the past 12 months, net deposits were $16.1 billion, indicating a growth rate of 25% over a year.

Magazine: How smart people invest in dumb memecoins — 3-point plan for success

Go to Source
Author: Ana Paula Pereira