Robinhood places up a shock revenue, however month-to-month lively customers — and shares — fall

The on-line buying and selling firm reported second-quarter internet revenue of $25 million, or 3 cents a share, contrasting with a lack of $295 million, or 34 cents a share, in the identical quarter final 12 months. Revenue rose to $486 million, in contrast with $318 million within the prior-year quarter.

Analysts polled by FactSet anticipated Robinhood
HOOD,
-3.34%
to report an adjusted lack of 1 cent a share, on income of $473 million.

Robinhood additionally reported a drop from the prior quarter in transaction revenues and month-to-month lively customers: Transaction-based revenues fell from the prior quarter for choices, crypto and shares, whereas month-to-month lively customers fell by 1 million from the prior quarter, to 10.8 million.

Robinhood has been hoping for an even bigger rebound in buying and selling volumes and dealer engagement, after the fervor of 2021 bumped into deeper apprehension over inflation, a recession and the collapse of crypto alternate FTX in months previous.

Both the S&P 500 Index
SPX
and the value of bitcoin
BTCUSD,
+0.01%
have rebounded to this point this 12 months. But Third Bridge analyst Andrew McGee, citing commentary from different business consultants, mentioned Robinhood might run up towards extra difficulties re-engaging customers, after putting restrictions on some inventory trades on the top of the meme-stocks craze greater than two years in the past.

“MAU’s [monthly active users] were highlighted as the highest-risk area for Robinhood by our specialists due to historical trends demonstrating that when retail traders lose significant amounts of money, they never come back,” he mentioned. “Additionally, the specialists believe the customers that left during the GameStop incident won’t return due to a lack of trust in the company.”

Still, the corporate mentioned it expects complete working bills for the total 12 months to be between $2.33 billion and $2.41 billion, with the midpoint of that vary a bit higher than earlier expectations for $2.345 billion to $2.485 billion.

The firm in May debuted 24-hour buying and selling, 5 days per week. It has additionally launched retirement IRA financial savings companies, a money sweep program, and in July purchased a platform that provides a no-fee bank card. Executives on Wednesday mentioned the corporate was nonetheless “on track” to launch brokerage companies within the U.Ok. by the tip of the 12 months.

Management mentioned it “continues to pursue purchasing most or all” of the leftover 55 million shares purchased by Emergent Fidelity Technologies, an organization co-founded by FTX founder Sam Bankman-Fried, final 12 months.

“Discussions are ongoing with the related parties and we will continue to provide updates as appropriate,” Robinhood mentioned Wednesday.

Shares of Robinhood have climbed 53.8% to this point this 12 months. By comparability, the S&P 500 Index
SPX
is up 18.1% over that interval.