Robinhood Markets reported that its retirement assets under custody have surged to $31 billion, just three years after launching the product. CEO Vlad Tenev highlighted a 50% increase in retirement accounts, reaching 1.98 billion. However, the stock slid to $73.6 following a disappointing Q2 earnings report that revealed a sharp decline in cryptocurrency revenue from $268 million to $134 million.
Crypto Revenue Halves, Other Segments Surge
The company's total revenue grew only 2% year-over-year to $895 million. The crypto trading revenue drop of 50% was offset by strong performance in its prediction marketplace and futures offerings. The number of futures contracts traded soared to 20.1 million, while index options contracts increased to 29.4 million.
Analyst Outlook: Near-Term Pain, Long-Term Promise
Despite the crypto headwind, analysts project a 20% revenue increase in the current quarter to $1.19 billion, with full-year revenue growth of 13%. The optimism is driven by the company's diversification into retirement, derivatives, and banking services. BTIG analyst Mark Palmer said, “Robinhood is evolving from a trading app into a full-fledged financial platform. Retirement and derivatives will more than compensate for the crypto downturn.”
User Engagement and New Products
Monthly active users recovered to 12 million, still below the 2021 peak. Robinhood is rolling out a debit card and has a waitlist of over 2 million for its credit card. Retirement products are boosting user stickiness, with average retirement assets per account rising 35% year-over-year.
Robinhood's shares traded at $72.80 in after-hours. The company will report full Q2 results on July 24, with investors eyeing signs of a crypto revenue recovery and guidance on new growth drivers.