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.
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