Key Takeaways
- Robinhood Markets shares moved higher in after-hours trading on Wednesday after diluted earnings per share and revenue materially exceeded expectations.
- The online trading platform said its stellar results were driven by higher trading in options, crypto, and stocks.
- CEO Vlad Tenev called tokenization the industry’s “biggest innovation” of the last decade.
Robinhood Markets (HOOD) reported a blowout earnings beat
The trading platform, which caters to retail investors, in its latest quarter benefitted from a return of speculative investing and meme-stock mania, with a jump in transaction-based revenue across categories. Year-over-year gains were driven by higher trading in options, crypto, as well as stocks.
Robinhood’s second-quarter earnings materially exceeded expectations. Its reported diluted earnings per share of $0.42, doubling year-over-year. Revenue came in at $989 million. Analysts surveyed by Visible Alpha expected $0.30 in diluted EPS and $920 million in revenue.
Robinhood CFO Jason Warnick said on a conference call that the trading platform had a strong start to the third quarter, with July equity and options trading volumes setting monthly records. Crypto volumes at both Robinhood and its European crypto exchange Bitstamp are at six-month highs, he said.
The stock was relatively quiet in after-hours trading, recently rising about 1% after climbing a bit less than 3% in the regular session. The stock has been on an upward tear this year as it leaned into its crypto business and rolled out new products including blockchain-based stock tokens in Europe and staking for ethereum (ETHUSD) and solana (SOLUSD); the shares are up almost 170% year-to-date.
CEO Vlad Tenev in a statement said Robinhood’s “relentless product velocity” drove its strong second-quarter results and said tokenization was “the biggest innovation” the industry has seen in years.
The company stands to benefit from relaxed day-trading rules if the Financial Industry Regulatory Authority heeds the brokerage’s comments that guidelines were more harmful than helpful to investors, and a troublesome source of customer complaints.
Robinhood raised its full-year outlook for adjusted operating expenses slightly to account for its acquisition of Bitstamp, which closed in the second quarter.
This article has been updated since it was first published to add new information and update share-price movement.