Robinhood Q2 Revenue Doubles, Led by Crypto Trading

The second quarter of 2021 is the first time where a larger share of new Robinhood customers placed their first trade in crypto rather than equities.

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key takeaways

  • Transaction-based revenue from cryptocurrency trading increased to $233 million in the second quarter of 2021, compared to $5 million in the second quarter of 2020
  • Revenue from crypto trading made up more than half of Robinhood’s total transaction-based revenue, which was $451 million during the second quarter

Robinhood’s revenue more than doubled during the second quarter of 2021 to $565 million, largely due to a surge in crypto trading, the retail exchange announced Wednesday. 

In its first quarterly earnings report since becoming a publicly traded company in July, Robinhood (ticker HOOD) revealed a net loss of $502 million, a loss of $2.16 per share. Analysts expected a net loss of $487 million to $537 million. 

Transaction-based revenue from cryptocurrency trading increased to $233 million in the second quarter of 2021, compared to $5 million in the second quarter of 2020. Revenue from crypto trading made up more than half of total transaction-based revenue, which was $451 million during the second quarter. 

“I’m especially pleased by the progress we’ve made with our crypto services in Q2, making them more resilient to surges in trading volume,” said Vlad Tenev, CEO and co-founder of Robinhood during Wednesday’s earnings call. “We’re working on rolling out new crypto features such as more points, recurring investments. The ability to deposit and withdraw your crypto. We’re excited about the future of our crypto product.” 

More than 60% of Robinhood’s net cumulative funded accounts traded digital assets during the second quarter, up from 11% in the second quarter of 2020, the company noted. The second quarter of 2021 is the first time where a larger share of new Robinhood customers placed their first trade in crypto rather than equities. 

Assets under custody surged 205% to $102 billion in the second quarter of 2021, compared with $33 billion in the second quarter of 2020. 

In a move in line with the exchange’s democratic nature, Robinhood executives solicited shareholder questions during its second quarter earnings call. Investors were most interested in learning more about the exchange’s plans to expand crypto offerings and retirement investment products such as 401(k) plans and IRAs. 

“There’s been a ton of enthusiasm from the crypto community, and the Dogecoin community in particular, on getting access to wallets, and it’s something that our teams are working on,” said Tenev during the call. “Of course, operating crypto wallets and the ability to deposit and withdraw cryptocurrencies is tricky to do with scale we want to make sure it’s done correctly and properly, and we want to make sure that everything from a security and operations standpoint, is as bulletproof as possible.” 

Tenev stressed that Robinhood’s founding principle of eliminating barriers to investing remains true, and this will be reflected in future products. 

“The goal is really to take our first-time investors and turn them into long-term investors,” he said on the call. “We’re also looking at multiple account types. Giving people access to tax advantaged accounts like IRAs and Roth IRAs, as well as things like joint accounts and beneficiaries — and we see all of that in the future.” 

Shares of HOOD slipped in after hours trading following the release of the report. HOOD was trading at $46.08 after hours at time of publication after closing the trading session Wednesday at $49.80.

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