Robinhood Q2 revenues tick up slightly as company starts fresh round of layoffs

Quick Take

  • Robinhood announced a new round of layoffs in advance of its Q2 earnings today.
  • Crypto transaction revenue saw a slight increase from Q1, from $54 million to $58 million.

The bad news from Robinhood kept coming today. First, the New York Department of Financial Services hit the company with a $30 million fine, followed by the company's CEO announcing layoffs for about one-quarter of its staff.

After the layoff announcement, Robinhood released its second-quarter earnings, reporting net revenues were up 6% to $318 million. Still, it's a far cry from Q2 2021, when the firm raked in over $233 million in crypto transaction revenue and $565 million in net revenues. 

Crypto transaction revenue saw a slight increase from Q1, from $54 million to $58 million. Despite the uptick, overall transaction revenues were down 7%. Today's figure marks the most the firm has made on crypto since the mania of 2021. 

The firm touted its introduction of a number of new coins and wallet offering, saying in a statement that it plans to continue building momentum in crypto. 

Like last quarter, the earnings figures came hot off the announcement of layoffs. In Q1, Robinhood laid off approximately 9% of its global staff before announcing its earnings figures. At the time, it cited a period of significant growth that led to duplicate roles and needless layers of complexity. Today, the firm made similar moves, announcing a fresh round of layoffs

"As part of a broader company reorganization into a General Manager (GM) structure, I just announced that we are reducing our headcount by approximately 23%. While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions," Vlad Tenev, CEO of Robinhood, said in a blog post. 

Separately, and before the layoff news, the crypto business hit a speed bump today when the New York Department of Financial Services fined Robinhood for allegedly failing to comply with anti-money laundering and cybersecurity regulations. It will now be required to retain an independent consultant to evaluate its crypto business's compliance. 

Robinhood will host its second-quarter 2022 earnings call tomorrow at 5 p.m. EDT. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.