MENLO PARK – Robinhood Markets, Inc. (NASDAQ: HOOD) today announced financial results for the second quarter of 2022, which ended June 30, 2022.

  • Total net revenues increased 6% sequentially to $318 million.
  • Transaction-based revenues decreased 7% sequentially to $202 million.
    • Options decreased 11% sequentially to $113 million.
    • Cryptocurrencies increased 7% sequentially to $58 million.
    • Equities decreased 19% sequentially to $29 million.
  • Net interest revenue increased 35% sequentially to $74 million.
  • Net loss was $295 million, or $0.34 per diluted share, compared with net loss of $392 million, or $0.45 per diluted share in the first quarter of 2022.
  • Operating expenses decreased 12% sequentially to $610 million.
    • Operating expenses excluding share-based compensation decreased 5% sequentially to $446 million, which included $17 million of restructuring charges related to the reduction-in-force announced in April 2022.
    • Share-based compensation expense decreased 25% sequentially to $164 million. The decrease was primarily driven by a $24 million reversal related to our April workforce reduction and our reduced pace of hiring this year.
  • Adjusted EBITDA (non-GAAP) was negative $80 million, a sequential improvement of $63 million. We continue to challenge ourselves to reach a positive run-rate for Adjusted EBITDA by the end of 2022.
  • Net Cumulative Funded Accounts were 22.9 million, an increase of 100 thousand sequentially.
  • Monthly Active Users (MAU) decreased 1.9 million sequentially to 14.0 million for June 2022, as customers navigated the volatile market environment.
  • Assets Under Custody (AUC) decreased 31% sequentially to $64.2 billion, primarily driven by lower market asset valuations.
  • Net Deposits were $5.2 billion, which translates to an annualized growth rate of 22% relative to prior period AUC. Over the past twelve months, Net Deposits were $17.5 billion, which translates to a growth rate of 17%.
  • Average Revenues Per User (ARPU) increased to $56 from $53 in the first quarter of 2022.
  • Cash and cash equivalents totaled $6.0 billion at June 30, 2022, compared with $6.2 billion at March 31, 2022.

“In the second quarter we continued to make strong progress on our roadmap and delivered products that will help our customers navigate an environment marked by higher interest rates and rising inflation,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets. “With the introduction of Stock Lending, extended hours for trading, improved options offerings, new coins, and the announcement of our non-custodial wallet, we’ve built an even better and more robust customer experience in the first half of the year and look forward to bringing our customers additional products and services throughout the remainder of 2022.”

“This quarter saw Robinhood make important strides on both our business and financial goals,” said Jason Warnick, Chief Financial Officer of Robinhood Markets. “In the second quarter, we were encouraged to see our customers continue to engage with us through the volatile environment. We saw Net Deposits of $5.2 billion, representing a 22% annualized growth rate. Revenues in the quarter were up 6% and we managed our costs down 5%, leading to a $97 million sequential improvement in net loss and a $63 million improvement in Adjusted EBITDA. While the decision to make an additional reduction in force was a difficult one, we believe that it was the right decision and positions us to deliver on our mission of democratizing finance for all.”

Highlights

Robinhood delivers enhanced user experience for all brokerage customers

  • In the first half of 2022, Robinhood has launched several new products focused on delivering the top feature requests and addressing pain points for more advanced customers.
  • This quarter, Robinhood rolled out Stock Lending to give customers an additional source of income on their stocks, with over $3 billion of equity value already enrolled and available to lend.
  • Robinhood has also made improvements to its options offering, including introducing options in cash accounts, the top requested feature among advanced customers.
  • In the back half of the year, Robinhood plans to further enhance the customer experience by introducing advanced charting and screening tools, delivering improvements to the core trading flow, and rolling out retirement accounts.

Robinhood continues to build momentum in crypto

  • Despite the challenging environment for the whole crypto ecosystem, Robinhood has continued to build in this space. In the second quarter, Robinhood introduced a number of new coins in a deliberate and considered manner, and customers have been pleased with the offerings to date.
  • Robinhood is working to give customers even more control over their crypto. In April, the company rolled out crypto Wallets, allowing customers to move their crypto in and out of Robinhood in a simple, safe, and seamless way. Robinhood also announced its plan to introduce a non-custodial wallet later this year. The standalone app will allow customers to trade and swap crypto with no network fees and maintain full custody of their crypto throughout, all with the simplicity and great user experience they have come to expect from Robinhood.

Robinhood makes progress on its money offering

  • In March, Robinhood rolled out the Robinhood Cash Card, a debit card that features spending roundups as well as roundup bonuses and merchant rewards.
  • Since launch, the company has been making steady improvements to the user experience. Through the Cash Card, Robinhood sees an opportunity to become the primary place where customers deposit their paychecks and drive additional customer loyalty as well as diversify revenue over time.

Financial Outlook

As a result of the progress we have made on our cost reduction initiatives, including the reductions in force announced April 26, 2022 (the “April 2022 Restructuring”) and August 2, 2022 (the “August 2022 Restructuring”) we expect:

  • GAAP total operating expenses for full-year 2022 to be in the range of $2.46 billion to $2.60 billion, representing a decrease of approximately 25% to 29% from the prior year;
  • total operating expenses, excluding share-based compensation, for full-year 2022 to be in the range of $1.70 billion to $1.76 billion, representing a decrease of approximately 7% to 10% from the prior year. (These amounts include severance and other restructuring charges of $17 million in connection with the April 2022 Restructuring and an estimated $45 million to $60 million in connection with the August 2022 Restructuring); and
  • share-based compensation for full-year 2022 to be in the range of $760 million to $840 million, representing a decrease of approximately 47% to 52% percent from the prior year.  (These amounts include the benefit of share-based compensation reversal of $24 million in connection with the April 2022 Restructuring and an estimated share-based compensation reversal of $40 million to $50 million in connection with the August 2022 Restructuring.)

Actual results might differ materially from our outlook due to several factors, including the rate of growth in net new funded accounts which affects several costs including variable marketing costs, the degree to which we are successful in preventing fraud, our ability to manage web-hosting expenses efficiently, and our ability to achieve productivity improvements in customer service, among other factors. In connection with the August 2022 Restructuring, our actual share-based compensation reversal might differ from our estimate due to future changes in our stock price.

Source: Robinhood Markets, Inc.