Robinhood’s Q2 earnings – What to expect

Robinhood Markets, Inc. (NASDAQ: HOOD) is scheduled to announce its second-quarter results on Wednesday after market close.  

Here’s what analysts expect, in line with estimates compiled by Seeking Alpha  

Earnings: -0.26, estimated  
Revenue: 559.55 million, estimated  

Robinhood’s Projected Q2 results
  • Revenue: $546 – $574 million 
  • Operating expenses: $536- $486 million 
  • Net income (loss): $537 – $487million  
  • Other Data Adjusted EBITDA (non-GAAP): $59 – $103 million  
  • Monthly Active Users (MAU): 21.3 million
Earnings History 

The millennial-favoured stock trading app, Robinhood, reported a net loss per share of $6.26 in the first quarter compared to $0.23 posted in Q1 FY 2020. The company, however, profited significantly from customer trades. According to a recent Securities and Exchange Commission (SEC) regulatory filing, the business collected $331 million in payment for order flow – the money brokerage firms receive for directing clients’ trades to market makers – in Q1.  

Robinhood’s net cumulative funded accounts grew 150.0% YOY to 18.0 million Monthly Active Users (MAUs) rose to 17.7 million, an increase of 51.3% compared to 2020. Assets Under Custody (AUC) fetched 80.9 billion, respectively. For three months ending March 31, 2021, the firm’s total revenue increased 309% to $522 million, up from $128 million in the same period last year.  

Robinhood’s cryptocurrency trading platform offers commission-free buying and selling of cryptocurrency through the company subsidiary, RHC. As per the SEC S-1 Form uploaded by Robinhood, the total cryptocurrency market capitalization has grown from approximately $450 billion to roughly $1.9 trillion from February 21, 2018, to March 31, 2021. 

The company has attributed the massive growth to increased adoption of cryptocurrency trading by retail and institutional investors and continued growth of various non-investing use cases for crypto assets. Further, the worldwide daily average market volume of Bitcoin was over $54 billion in March 2021, as compared to $8 billion in February 2018. 

For the year ending December 31, 2020, Robinhood’s total revenue grew 245% to $959 million, up from $278 million for the corresponding period in 2019. The company made a net income of $7 million versus a net loss of $107 million. Adjusted EBITDA was $155 million, compared to negative $74 million in 2019. 

Robinhood Nasdaq debut  

Two weeks back, the financial services company that became infamous for offering commission-free trades went public on the Nasdaq stock exchange. RobinHood (HOOD) debuted at $38 per share, and 55,000,000 shares were sold. The share closed at around $34.82, down by about 8.37 % of its opening price on the first day of listing. The stocks were trading at $46.67 at the time of writing.   

Robinhood on July 1 had filed an S1 with the SEC. The filing came in just after a day where FINRA had fined the firm a record $70 million for misinforming customers with charges including customer service, outages, and displaying incorrect data. 

Company profile 

Robinhood Markets, Inc. was incorporated in the State of Delaware on November 22, 2013. The company offers commission-free trades of stocks and exchange-traded funds via a mobile app – Robinhood Financial. It also enables users to buy and sell cryptocurrencies with Robinhood Crypto. 

According to the company website, Robinhood’s mission is to democratize finance for all. It is a FINRA-regulated broker-dealer registered with the U.S. Securities and Exchange Commission and a Securities Investor Protection Corporation member. 

Plans ahead  

Robinhood has announced its plans to buy fintech startup’ Say Technologies’ for $140 million in an all-cash deal. As part of the Robinhood family, Say will keep offering its proxy voting services and Q&A platform to existing customers, the company blogpost speaks.  

“We founded Say to give investors a better way to engage with the companies they own, and to give companies tools to better understand and access their investors. As part of the Robinhood family, we’ll be able to further our goal of creating a new ecosystem of ownership and engagement to benefit all investors and companies,” says Alex Lebow, Co-Founder & CEO of Say Technologies, in the blog post.

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