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Robinhood Markets Inc. on Wednesday reported second-quarter earnings that beat expectations despite a drop in transaction sales and monthly active users, but management at the stock-trading app said the company expect to spend a bit less this year.
Shares fell 3.4% after hours on Wednesday.
The online trading company reported second-quarter net income of $25 million, or 3 cents a share, contrasting with a loss of $295 million, or 34 cents a share, in the same quarter last year. Revenue rose to $486 million, compared with $318 million in the prior-year quarter.
Analysts polled by FactSet expected Robinhood
HOOD,
to report an adjusted loss of 1 cent a share, on revenue of $473 million.
Robinhood also reported a drop from the prior quarter in transaction revenues and monthly active users: Transaction-based revenues fell from the prior quarter for options, crypto and stocks, while monthly active users fell by 1 million from the prior quarter, to 10.8 million.
Still, the company said it expects total operating expenses for the full year to be between $2.33 billion and $2.41 billion, with the midpoint of that range a bit better than earlier expectations for $2.345 billion to $2.485 billion.
Robinhood has been hoping for a bigger rebound in trading volumes and trader engagement as the stock and crypto markets recover, following deeper apprehension over inflation and the collapse of crypto exchange FTX in months past.
The company in May debuted 24-hour trading, five days a week. It has also introduced retirement IRA savings services, a cash sweep program, and in July bought a platform that offers a no-fee credit card. Executives on Wednesday said the company was still “on track” to launch brokerage services in the U.K. by the end of the year.
Management said it “continues to pursue purchasing most or all” of the leftover 55 million shares bought by Emergent Fidelity Technologies, a company co-founded by FTX founder Sam Bankman-Fried, last year.
“Discussions are ongoing with the related parties and we will continue to provide updates as appropriate,” Robinhood said Wednesday.
Shares of Robinhood have climbed 53.8% so far this year. By comparison, the S&P 500 Index
SPX
is up 18.1% over that period.
