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

For the quarter ended June 30, Robinhood reported a loss before costs such as stock compensation of 34 cents a share, an improvement from a loss of $2.16 per share in the same quarter last year. Revenue in the quarter fell 44% from a year ago, to $318 million. Analysts had expected a loss of 37 cents a share on revenue of $321 million.

Transaction-based revenues in the quarter dropped 7% from the previous quarter, including an 11% drop in options transactions and an 19% drop 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,” Robinhood Chief Executive Vlad Tenev said in a statement.

Alongside the earnings results, Robinhood announced that it would reduce its headcount by 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 involving what it said were duplicated roles and job functions.

In a message to employees, Tenev said the cuts were necessary because of 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 about two-thirds of a point.

Photo: Robinhood