Robinhood Posts Surprising Revenue Increase Fueled by Interest Payments

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Robin­hood post­ed a 14% increase in total rev­enue for the third quar­ter of 2022, thanks to the trad­ing app’s sav­ing grace: inter­est pay­ments — which saw a 73% increase. 

The plat­form report­ed a net loss of $175 mil­lion, com­pared to a $295 mil­lion net loss in the sec­ond quar­ter of 2022. 

Robin­hood allows select users to bor­row mon­ey for trades and charges inter­est on the debt. Mar­gin trad­ing is not a new fea­ture for the app, but it has been steadi­ly bring­ing in more income for the past two quar­ters as inter­est rates have increased.

Net inter­est income increased 35% to $74 mil­lion in the sec­ond quar­ter of 2022, up from $55 mil­lion in the quar­ter prior.

The plat­form is eager to dive deep­er into the cryp­to space after launch­ing the beta ver­sion of its self-cus­tody wal­let in September. 

“We want every­one to have safe, easy and low cost access to the pow­er of the decen­tral­ized web,” Robin­hood CEO Vlad Tenev said Wednes­day dur­ing the company’s earn­ings call

The com­pa­ny hopes to roll out the wal­let to inter­na­tion­al users in 2023.

Total month­ly active users fell to 12.2 mil­lion, com­ing in low­er than the expect­ed 13.7 mil­lion. It’s the low­est month­ly active user fig­ure since the last quar­ter of 2020. Trans­ac­tion rev­enues still saw a 3% increase in the third quar­ter of the year, large­ly dri­ven by options, which rose 10%. Cryp­tocur­ren­cy trans­ac­tion rev­enue post­ed a 12% loss.

Robin­hood, which went pub­lic in 2021 after pio­neer­ing a zero-fee trad­ing struc­ture for equi­ties, end­ed the trad­ing ses­sion Wednes­day 4.4% low­er but was trad­ing 3.8% high­er in after-hours trad­ing at time of pub­li­ca­tion. Shares are down near­ly 40% year to date. 

Mid­way through the third quar­ter of 2022, the trad­ing app announced it was lay­ing off 23% of its staff, account­ing for an esti­mat­ed 10% decrease in expens­es for 2022. Depart­ing staff had the option to remain employed through Oct. 1, 2022 with full pay and benefits. 

It was the sec­ond round of lay­offs for the com­pa­ny this year: The trad­ing plat­form let 9% of its staff go in April.


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  • Casey Wag­n­er

    Block­works

    Senior Reporter

    Casey Wag­n­er is a New York-based busi­ness jour­nal­ist cov­er­ing reg­u­la­tion, leg­is­la­tion, dig­i­tal asset invest­ment firms, mar­ket struc­ture, cen­tral banks and gov­ern­ments, and CBD­Cs. Pri­or to join­ing Block­works, she report­ed on mar­kets at Bloomberg News. She grad­u­at­ed from the Uni­ver­si­ty of Vir­ginia with a degree in Media Studies.

    Con­tact Casey via email at [email pro­tect­ed]

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