Robinhood, the online brokerage, experienced its first profitable quarter since its initial public offering in spite of the continuous decline in its cryptocurrency-related revenue.
Following the report of a decline in monthly active users, shares of Robinhood plunged 9.3%, reflecting investors' concerns.
The revenue from cryptocurrency transactions fell to $31 million in Q2, but Robinhood's total revenue increased by 10% to $486 million, resulting in a net income of $25 million.
Despite posting higher Q2 revenues and achieving its first profitable quarter as a public company, Robinhood's shares took a hit, falling 4% in extended trading due to a decline in monthly active users.
Tomiwabold OlajideThe online brokerage saw its active users drop to 10.8 million, a decrease of one million from the previous quarter and 3.2 million fewer than the previous year.
Amid these volatile market conditions, Robinhood is actively seeking new revenue streams and implementing cost-cutting measures, including job cuts, to counteract its current user downturn.
The online brokerage, which first ventured into crypto in 2018, has been witnessing a considerable decline in crypto trading revenue during the ongoing "crypto winter."
Robinhood first ventured into the cryptocurrency market in 2018. Initially, the platform offered users the ability to trade only Bitcoin and Ether. Over time, it expanded its offerings and began to include more digital assets, including Shiba Inu in 2022.
However, Robinhood recently rushed to remove a host of newly listed assets, including Cardano, after they were named securities by the U.S. Securities and Exchange Commission in a lawsuit against Binance. The removal of these popular digital tokens might have also contributed to the notable decline in crypto revenues.
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