Robinhood Markets saw its shares climb sharply on Monday after the US-based trading app delivered quarterly results that comfortably exceeded Wall Street forecasts. The company reported second-quarter revenue of $682m (approximately £530m), driven primarily by a resurgence in cryptocurrency trading as Bitcoin and Ethereum both posted double-digit percentage gains during the period.
The Menlo Park-headquartered firm said its crypto trading revenue hit $327m in the three months to June, more than double the $158m recorded in the same quarter last year. Total transaction-based revenue rose 41% year-on-year, with equities and options also contributing to the outperformance. Net income swung to $128m, compared with a loss of $45m a year earlier.
Analysts at Jefferies described the results as 'a clear sign that the retail trading boom is far from over', noting that Robinhood's monthly active users increased 12% quarter-on-quarter to 12.3 million. The company also reported record assets under custody of $142bn, up 38% from the prior quarter, reflecting both market appreciation and net deposits from customers.
The rally in Robinhood shares comes against a backdrop of renewed appetite for risk assets among younger investors, many of whom were drawn to the platform during the meme-stock frenzy of 2021. However, the stock remains well below its 2021 peak of $85, and some analysts caution that the valuation — currently trading at around 35 times forward earnings — leaves little room for error.
For UK investors holding US equities through investment platforms or pension funds, the performance of Robinhood serves as a bellwether for retail sentiment in global markets. A sustained recovery in retail trading volumes could boost London-listed fintech stocks such as Plus500 and CMC Markets, which have also seen increased activity in recent months.