Robinhood Markets shares slid after the company reported second-quarter results that set records across multiple parts of its platform, including revenue, deposits, and subscriber growth. Despite the broadly strong quarter, investors focused on a notable decline in crypto trading revenue and a question of how repeatable the newest revenue streams will be through a full market cycle.
Robinhood’s second-quarter revenue rose to a record $1.31 billion, up 32% from a year earlier. The stock fell about 3% in Wednesday’s regular session and then dropped an additional 3.6% on Thursday, leaving it still well below its 52-week high.
Key takeaways
- Price move: Robinhood shares fell about 3% after the report and dropped a further 3.6% the next day.
- Catalyst: The results showed record revenue, deposits, and Gold subscriber growth, but crypto trading revenue declined 38% year over year.
- Key implication: Investors appeared willing to pay for strong execution, but are discounting the durability of the newer revenue mix beyond trading cycles.
- What else mattered: Equities and event contracts helped offset crypto weakness, while net interest revenue continued to grow.
What drove the move
Robinhood reported second-quarter revenue of $1.31 billion, a company record and 32% higher than the prior year period. The company also said growth accelerated versus the first quarter, with revenue growth more than doubling from 15% year over year in that quarter.
Deposits remained a strong point. Net deposits were about $22 billion for the quarter, and total platform assets rose 32% year over year to $369 billion. The company also reported a record 4.8 million Gold subscribers, up 39% over 12 months, alongside funded customers increasing 7% to 28.4 million. Retirement assets under custody reached $34.5 billion, up 82% year over year.
On profitability, Robinhood said non-GAAP (adjusted) EBITDA increased 35% year over year to $741 million, representing a 57% margin. Net income was $573 million, up 48% year over year, and earnings per share rose 48% to $0.62. The company also noted that the EPS figure benefited from about $0.14 per share of one-time gains, implying underlying earnings closer to $0.48.
Market reaction: the revenue mix shifted
While overall performance looked strong, the composition of revenue changed in ways that mattered to investors. Crypto trading revenue declined to $252 million in the second quarter, down 38% year over year. The company also said declines continued at roughly the 40% pace or worse for a second consecutive quarter.
Equities revenue nearly doubled year over year to $129 million. At the same time, Robinhood’s event contracts business—its prediction-markets offering where customers trade on outcomes such as elections and economic data—generated $156 million. The company characterized this as up more than tenfold versus the prior year, and said the line has grown from a smaller scale a year ago to now exceed crypto revenue.
On the trading engagement front, equity trading volumes rose 85% year over year to a record $956 billion, while options contracts traded increased 50% to a record 774 million. In its earnings call, the company’s chief financial officer, Shiv Verma, said Robinhood now counts 13 separate businesses reaching $100 million in annualized revenue, with two added during the quarter.
Investors appeared to separate “records” from “repeatability.” The quarter demonstrated robust activity and platform momentum, but the selloff suggested concern that the business still relies on trading conditions and that crypto weakness may not be fully offset yet if market dynamics shift.
Why the stock didn’t rebound despite the quarter
Even after the pullback, Robinhood shares were still trading at about 38 times earnings, according to the article’s cited valuation context. That implies the market is pricing in continued growth rather than offering a valuation reset, especially given that earnings were supported by one-time gains.
At the same time, the company pointed to progress beyond trading. Net interest revenue rose 9% year over year to $389 million, and the margin lending book more than doubled to $21.6 billion. Robinhood also highlighted continued traction in newer banking and retirement offerings, which contributed to the platform asset growth rate.
The implication for investors is that if platform assets and net interest income keep expanding, trading swings could weigh less on overall results. However, with crypto revenue still declining and event contracts only recently scaling, markets are likely to keep scrutinizing whether the updated mix can sustain during less favorable trading environments.
What to watch next
For the next reporting cycle, investors will likely focus on whether crypto trading revenue stabilizes and whether growth in equities and event contracts holds up as trading activity normalizes. The market will also watch continued progress in net interest revenue and the margin lending book, given their potential to smooth earnings through market cycles. Upcoming catalysts include the next earnings release and broader macro signals that can influence retail trading activity and interest-rate expectations.
