Robinhood Stock Slides Despite Record Revenue and Beaten Earnings

Robinhood Markets' stock continues to slide despite reporting record second-quarter revenue and earnings that beat Wall Street expectations. While the headline figures look impressive, investors looked beyond the top-line results.

The company reported a 32% year-over-year increase in quarterly revenue to $1.31 billion, exceeding analyst estimates. Diluted earnings per share rose 48% to $0.62, with net income reaching $573 million. Additionally, Robinhood attracted $21.7 billion in net deposits and grew its Gold subscriber base to 4.8 million.

However, part of the earnings beat came from a one-time accounting gain of $129 million, largely related to the deconsolidation of Robinhood Ventures Fund I. Excluding this item, adjusted EPS would have been closer to $0.48, still ahead of the $0.44 consensus estimate.

Investors also focused on rising costs, with total operating expenses increasing 33% year over year to $734 million. Furthermore, crypto trading revenue continued to weaken, falling 38% year over year to $100 million, and crypto trading volume declined 35% to $18 billion.