Robinhood’s (HOOD) earnings call included a series of previously submitted shareholder questions ranging from “Will HOOD pay out a dividend in the future?” to “Is Robinhood getting a crypto wallet?”
The investment app has no plans to issue dividends, and as for crypto wallets, “it’s something our team is working on” but it’s currently challenging because of scale, answered CEO Vlad Tenev.
In line with the company’s “democratize finance for all” theme, the trading platform allowed shareholders to submit questions ahead of the call. Those with the most ‘upvotes’ were answered by management.
“What’s next for Robinhood? If PFOF is regulated, what can you do?” read another shareholder question.
PFOF is when a brokerage firm funnels trades to market makers for a fee. Much of Robinhood’s past revenue has stemmed from payment for order flow.
CFO Jason Warnick noted Robinhood is continuing to diversify its revenue stream and will focus on its single money app going forward, which will mean more products and more features.
Later on the call, Warnick said, “We don’t expect payment for order flow to be banned.”
Crytpo activity surges
The company reported total revenue of $565 million, up 131% year over year.
Robinhood reported more than half of its total transaction-based revenue came from crypto trading, filling the gap for a drop in equity trades year-over-year. Crypto transaction-based revenue for the second quarter was $233 million, compared to just $5 million for the same quarter in 2020.
However, the company warned of lower revenue expectations for the third quarter. Shares fell about 5% in after hours.
[Read more: Robinhood earnings: Crypto trading skyrockets in Q2]
“For the three months ended Sept 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer funded accounts than in the prior quarter” read the company quarterly report.
Robinhood highlighted its IPO access product which it launched in May. It allows retail traders to access shares at the initial public offering price.
“Customers that have been participating in these IPOs have been relatively diamond-handed, so to speak … They’ve been holding onto these stocks for over 30 days, “ said Tenev.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre