In what came as little surprise to industry onlookers in Wednesday, NASDAQ-listed trading platform Robinhood posted underwhelming second-quarter results underscored by a sharp decline in retail investment customers.
Underlying earnings (EBITDA) were negative US$80mln, with net losses of US$295mln equating to -US$0.34 per diluted share.
While net revenues saw a 6% uptick over the quarter, at US$318mln were still down 44% year on year, and assets under custody plunged by 31%.
Reduced market asset valuations in the crypto and traditional markets undoubtedly played a large hand in the poor results, but what really stung was a sharp drop in monthly active users (MAU).
Robinhood lost 1.9 million MAU in the last period, a 12% quarter-on-quarter decline.
On the bright side
It wasn’t all bad news for Robinhood.
While net losses were significant, they were still a 25% improvement on first-quarter losses of US$392mln.
Net deposits of US$5.2bn represented a 22% annualised growth rate.
Robinhood also retains US$6bn in cash and cash equivalents on the balance sheet.
In response to the sour quarterly results, Robinhood announced a company restructuring that saw nearly a quarter of its workforce slashed.
That makes for the second such restructuring this year for the company, after a 9% workforce reduction in April failed to steer earnings in a favourable direction.
But the markets have yet to respond negatively to the results; HOOD shares were up 1.41% in Wednesday’s pre-market trade.