Robinhood posts first-quarter profit after going public, but cryptocurrency trading revenue declines by 18%

The online brokerage Robinhood has released its second-quarter financial report, benefiting from increased interest income due to the Federal Reserve's significant rate hikes. Robinhood reported its first quarterly profit since going public in the first quarter, with a net profit of $25 million in the second quarter. However, cryptocurrency trading revenue declined by 18% to $31 million. Robinhood also plans to launch brokerage services in the UK before the end of the year.

Significant Increase in Interest Income, High Interest Rates Successfully Attract Customers

With the Federal Reserve continuously raising interest rates, Robinhood generated interest income of up to $2.34 billion in the last quarter, significantly surpassing its commission revenue. Robinhood has also decided to reward customers with high interest rates to attract more funds from clients. The Brokerage sweep program launched by Robinhood automatically transfers customers' uninvested cash to partner banks. For Gold members subscribing to the service for a monthly fee of $5, they can enjoy a high interest rate of 4.9%. Since the beginning of the year, the balance of the Robinhood Gold sweep program has increased to $11 billion.

Decline in Cryptocurrency Trading Revenue

In the second quarter, cryptocurrency trading revenue was $31 million, an 18% decrease from the $38 million in the first quarter, accounting for 16% of all trading revenue of $193 million. Additionally, Robinhood holds around $5.8 billion in cash and cash equivalents, and custodies $11.5 billion in cryptocurrency assets, similar to the amount held at the end of the first quarter.

Following the lawsuit against Binance and Coinbase, Robinhood reevaluated the trading of cryptocurrencies on its platform and announced the suspension of trading for Cardano ADA, Polygon MATIC, and Solana SOL starting from 7:00 PM EDT on June 27. These cryptocurrencies were mentioned in the lawsuits against Binance and Coinbase as securities.

Expected Launch of Services in the UK by Year-End

Since July, Robinhood has opened 24-hour market trading and acquired the X1 credit card platform, allowing customers to receive rewards for purchasing stocks with their credit cards. Furthermore, Robinhood also plans to launch brokerage services in the UK before the end of the year and has already begun recruiting talent.

Regarding the stocks previously purchased by Emergent Fidelity Technologies, a company declared bankrupt under SBF, Robinhood continues to seek to repurchase them.

Robinhood's stock price fell by 3.34% yesterday due to market downturn, closing at $12.44. It has risen by 50% year-to-date.