Robinhood Q2 Earnings: Will The Brokerage's Performance Signal A Market Top?

Robinhood Markets Inc HOOD is on deck to issue its second-quarter earnings on Wednesday after the closing bell. With the potential to act as an indicator of retail trading activity, investors are keenly watching the results.

Let’s take a closer look at what to expect.

Robinhood By The Numbers: The Menlo Park, California-based company is expected to issue a loss of 2 cents per share on revenues of $475.02 million.

Revenue expectations are 49.38% higher on a year-over-year basis, but a 9.6% decline from the previous quarter. The projected 2-cent-per-share loss would stand in stark contrast to last year’s performance, equating to an increase of 93.55% on a year-over-year basis.

One of the key elements underpinning Robinhood’s second-quarter performance is the effect of higher interest rates. The Federal Reserve’s hike to 5%-5.25% during the same period is predicted to have boosted the company’s net interest income (NII).

Consensus estimates for NII stand at $230 million, suggesting a 10.6% increase, a sign that Robinhood may have successfully navigated the interest rate environment.

Another aspect investors will be watching out for is transaction-based revenues, which are estimated to hit $187.1 million.

The figure will be affected by predicted decreases in options, equity and crypto transaction revenues.

HOOD Price action: Shares of Robinhood are trading 3.78% lower to $12.38 Wednesday afternoon, according to Benzinga Pro.

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