Robinhood’s Revenue From Cryptocurrency Trading Jumps to 41% of Total

The popular zero-commission trading exchange warned in its second-quarter earnings report its reliance on cryptocurrency trading, and on dogecoin in particular, was a potential risk.

Aug 18, 2021 at 8:30 p.m. UTC
Updated Sep 14, 2021 at 1:42 p.m. UTC

Robinhood reported Wednesday that the percentage of its total revenue derived from commissions on cryptocurrency trading jumped to 41% in the second quarter, up from 17% in the first quarter. Overall, it said that more than 60% of its customers traded cryptos in the quarter.

  • Cryptocurrency-based revenue for the second quarter was $233 million, versus just $5 million in the year-ago quarter. 
  • Robinhood further specified that 62% of its cryptocurrency revenues in the second quarter came from the trading of dogecoin, up from 34% in the first quarter.
  • Robinhood noted this heavy reliance as a risk in its earnings report. “If demand for transactions in dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected,” the company wrote.
  • Wednesday’s report was Robinhood’s first earnings report as a public company. Overall, the company lost an adjusted $2.16 per share, compared to consensus estimates for a loss of 26 cents per share. It recorded revenue of $565 million, ahead of estimates for $559.5 million.
  • The company also warned of lower revenue expectations for the third quarter. "For the three months ended Sept 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer funded accounts than in the prior quarter," the company wrote.
  • Shares were down almost 6% in after-hours trading to $46.94  on Wednesday following the release of the report. The company went public on July 28 at an IPO price of $38 per share and closed down 8% on its first day of trading.

UPDATE (August 18, 20:56 UTC): Adds information in the first and fifth bullet points.

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