Robinhood Markets reported record second-quarter revenue on July 29, supported by rapid growth in event contracts, options trading and equities. However, Robinhood stock moved lower as invest
Robinhood Markets reported record second-quarter revenue on July 29, supported by rapid growth in event contracts, options trading and equities. However, Robinhood stock moved lower as investors weighed the company’s declining cryptocurrency revenue and the impact of one-off gains on quarterly earnings.
Robinhood stock closed the July 29 trading session at $89.84 after falling 3.15% from its previous close of $92.76. The selling continued after the closing bell, with the share price declining another 1.01% to approximately $88.93.
Robinhood stock price over the past day (Source: Google Finance)
The negative stock movement came despite Robinhood reporting total net revenue of $1.31 billion for the quarter ended June 30. Revenue increased 32% from the same period last year.
Net income rose 48% year over year to $573 million, while diluted earnings per share reached $0.62. However, Robinhood said the result included $129 million in gains, mainly related to the deconsolidation of Robinhood Ventures Fund I. These gains contributed approximately $0.14 to diluted earnings per share, which potentially made the company’s underlying profitability appear less impressive than the headline figure.
Transaction-based revenue increased 44% to $776 million, driven by strong activity across event contracts, options and equities.
Event contract revenue reached $156 million, more than 10 times the amount generated during the year-earlier period. Robinhood users traded more than 13.6 billion event contracts during the quarter. This makes prediction markets one of the company’s most important growth opportunities.
Options revenue increased 29% to $342 million, while equities revenue surged 95% to $129 million. Robinhood also said Rothera, its CFTC-licensed exchange and clearinghouse joint venture with Susquehanna, processed more than 3.5 billion contracts since launching in June.
Net interest revenue climbed 9% to $389 million. Other revenue increased 54% to $143 million, primarily because of Trump Account service revenue and higher Robinhood Gold subscription revenue.
On the other hand, cryptocurrency transaction revenue fell 38% to $100 million. Robinhood recorded $40 billion in total crypto notional volume, including $18 billion through its main application and $22 billion through Bitstamp.
Crypto volume on Robinhood’s main app declined 35% year over year, and Bitstamp accounted for more than half of the company’s reported cryptocurrency activity during the quarter.
Despite the revenue decline, Robinhood continued expanding its digital-asset operations. The company launched the public mainnet for Robinhood Chain, introduced Stock Tokens for eligible customers in more than 120 countries and debuted Robinhood Earn, a decentralized lending product available through its app.
Robinhood also completed its acquisition of WonderFi, giving the company a formal presence in Canada through regulated platforms including Bitbuy and Coinsquare. International funded customers surpassed one million, and Robinhood said it plans to introduce cryptocurrency services in the United Kingdom, although it did not provide a launch date.
Overall, Robinhood delivered strong top-line growth. Nevertheless, the latest decline in Robinhood stock suggests investors are cautious about weakening crypto activity, the quality of reported earnings and whether event contract revenue can maintain its current pace.
