Shares in Robinhood Markets Inc. plunged in after-hours trading today after the company warned that a slowdown in trading would affect revenue in the coming quarter.

In its first post-initial public offering earnings report, Robinhood reported revenue of $565 million for the quarter ended June 30, up from $244 million in the same quarter of 2020. Net loss in the quarter came to $502 million or $2.16 per share, compared with net income of $58 million or nine cents per share year-over-year.

Analysts had been expecting a much smaller loss of 26 cents per share on revenue of $559.5 million.

Transaction-based revenue grew 141% year-over-year in the quarter to $451 million, with cryptocurrency trading topping the figures. Crypto trading revenue in the quarter came in at $233 million compared with $5 million in the second quarter of 2020, while options revenue rose 48% year-over-year, to $165 million. Equities transaction-based revenue fell 26%, to $52 million.

Monthly active users came in at 21.3 million in the quarter, up 109% year-over-year, and net cumulative funded accounts jumped 130% to 22.5 million. Assets under customer shot up 205% of $102 million, while average revenue per use came in $112 in the quarter, down from $115 in the second quarter of 2020.

Highlights in the quarter included the launch of the company’s IPO Access product in May that provides customers access to shares of certain IPOs at the same time as institutional and high net worth investors. Robinhood also expanded its rollout of live phone support and trained hundreds of additional customer service representatives.

“We’re encouraged by the number of people who are accessing the financial system for the first time through Robinhood,” Vlad Tenev, co-founder and chief executive of Robinhood, said in a statement. “We’re happy to expand access through products like commission-free crypto trading, which saw strong growth this quarter among women investors in particular, and IPO Access, which gives customers an opportunity to invest in companies at their IPO price.”

Another highlight in the quarter was cryptocurrency engagement hitting record levels with over 60% of funded accounts trading crypto but that is the catch coming into the next quarter. Trading volumes in crypto are declining and that will hit Robinhood’s revenue.

Noting that it had benefited from market conditional and trading behavior for strong growth, Robinhood warned that this wouldn’t be the case in the next quarter. It cited seasonal headwinds and lower trading activity across the industry for what it said would be lower revenues and considerably fewer new funded accounts than in the previous quarter.

Investors took note of the warning, hitting the company’s stock hard in extended trading. Robinhood shares fell more than 9%.

Photo: Nasdaq