Shares in Robinhood Markets Inc. were flat in late trading on a busy day that saw the company deliver mixed financial results, announce the layoff of 23% of its staff and was fined $30 million for regulatory violations in New York.

For the quarter ending June 30, Robinhood reported a non-generally accepted accounting principles loss per share of 34 cents, an improvement from a loss of $2.16 per share in the same quarter last year. Revenue in the quarter came in at $318 million, up from $299 million in the previous quarter but down 44% year-over-year.

Analysts had expected earnings per share loss of 37 cents on revenue of $321 million.

Transaction-based revenues in the quarter dropped 7% compared to the previous quarter, including an 11% drop in options transactions and 19% in equities. The decline in traditional investments was offset by a 7% increase in cryptocurrency transactions.  Monthly active users dropped 1.9 million to 14 million in June and assets under custody dropped 31% to $64.2 billion, primarily driven by lower market asset valuations.

“In the second quarter, we continued to make strong progress on our roadmap and delivered products that will help our customers navigate an environment marked by higher interest rates and rising inflation,” Vlad Tenev, chief executive officer and co-founder of Robinhood, said in a statement.

Alongside the earnings result, Robinhood announced that it would reduce its headcount by approximately 23% as part of a broader company reorganization. The headcount reduction is on top of a previously announced cut of 9% of employees in April that was said to be due to duplicated roles and job functions.

In a message to employees, Tenev said the cuts were necessary due to the deterioration of the macro environment, 40-year high inflation and a broad cryptocurrency market crash “further reducing customer trading activity and assets under custody.”

“Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022,” Tenev explained. “In this new environment, we are operating with more staffing than appropriate.”

The news came as the New York Department of Financial Services announced that Robinhood’s cryptocurrency division had been fined $30 million over alleged anti-money laundering and cybersecurity violations.

The NYDFS alleged that Robinhood’s cryptocurrency arm had “significant deficiencies” in its anti-money laundering compliance program and that its cryptocurrency cybersecurity program had “critical failures” that “did not fully address operational risks.” It also alleged that Robinhood violated consumer protection laws by not having a phone number on its website for customers to make complaints.

Investors were blase about the various announcements, with shares in Robinhood barely moving in late trading, down 0.65% as of 7:19 p.m. EDT.

Photo: Robinhood

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