Robinhood exceeded Wall Street’s expectations for its second-quarter earnings on Wednesday, driven by a surge in trading volumes linked to meme stocks and cryptocurrencies. The app, known for attracting retail investors, reported a 69% increase in transaction-based revenue to $327 million, fueled by renewed interest in highly shorted shares of GameStop, spurred by meme-stock influencer Keith Gill’s return to social media.
The company’s stock rose by 2.6% in after-hours trading following its announcement of a forthcoming desktop version of its popular mobile trading app. Additionally, Robinhood’s quarterly net interest revenue, primarily from margin investing, increased by 22% to $285 million, contributing to a record revenue of $682 million for the quarter ending June 30. This figure surpassed the forecasted $643.34 million, with earnings per share of 21 cents exceeding expectations of 15 cents.
The cryptocurrency market also performed strongly in the first half of the year, bolstered by gains in bitcoin following the U.S. Securities and Exchange Commission’s approval of exchange-traded funds tracking spot prices of bitcoin and ether. Despite this, the SEC maintains that crypto tokens are securities and falls within its regulatory scope, leading to ongoing disputes with industry leaders who accuse the regulator of overreach.
Robinhood CEO Vlad Tenev addressed regulatory concerns during a call with analysts, asserting confidence in the company’s ability to succeed regardless of the political landscape post-election. Similarly, CFO Jason Warnick expressed optimism about the company’s resilience in the face of potential economic downturns.
As Robinhood navigates the aftermath of the 2021 meme-stock trading frenzy, it continues to diversify its offerings to stabilize trading activity.
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