Robinhood (NASDAQ:HOOD) stock is in focus today and climbing slightly. Yesterday after the market closed, HOOD stock reported mixed second-quarter results and disclosed it would dismiss about 23% of its employees.
Robinhood’s Q2 revenue came in at $318 million, versus analysts’ average outlook of $314.5 million. Its sales tumbled 44% year-over-year. It reported a loss per share, however, of 34 cents, better than analysts’ mean outlook of a loss per share of 36 cents.
The company’s transaction-based revenues dropped 7% compared with Q1, but its cryptocurrency trading sales rose 7% versus Q1, while its revenue from stocks fell 19% sequentially.
“We continue to challenge ourselves to reach a positive run-rate for Adjusted EBITDA by the end of 2022,” the company stated.
On the positive side, Robinhood’s net interest revenue jumped 35% versus Q1, and its EBITDA loss, excluding certain items, improved by $63 million to a loss of $80 million.
Turning to user data, Robinhood monthly active users sank 1.9 million in Q2 versus Q1.
Large-Scale Layoffs at HOOD Stock
In a letter to the company’s employees that was released to the public, Robinhood CEO Vlad Tenev announced that the firm cut its headcount by about 23%. He stated, “While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions.”
Tenev blamed the layoffs on “additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”
A number of analysts praised the layoffs, stating they will boost the company’s bottom line and could increase the price of HOOD stock in the near-term.
“We believe these cost reductions will likely drive the company to profitability in the near term and could drive shares higher,” Goldman Sachs analyst Will Nance predicted.
A $30 Million Fine
The New York State Department of Financial Services, the state’s leading financial regulator, has hit Robinhood with a $30 million fine, The Wall Street Journal reported today. The fine was leveled due to “alleged violations of anti-money-laundering and cybersecurity regulations,” the newspaper stated, adding the judgment marks the first time the agency has punished a company for a violation related to cryptos.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.