Robinhood stock is tumbling as earnings show monthly active users plunged by 1 million in the 2nd quarter

• Robinhood stock dropped as much as 7% Thursday following its second-quarter earnings report.
• The trading firm said monthly active users declined by about 1 million per month in the quarter.

Robinhood stock dropped as much as 7% Thursday following its latest earnings release, which showed its monthly active users declined by about 1 million in the second quarter.

After midday in New York, shares changed hands at around $11.70, down about 5.9% on the day.

The company reported that its monthly active users dipped to 10.8 million on average last quarter. That's down from 11.8 million in the first quarter and from more than 21 million at the height of the pandemic meme-stock craze in 2021.

Transaction-based revenues declined 7% on a quarterly basis to $193 million, with options, cryptocurrencies, and equities seeing declines of 5%, 18%, and 7%, respectively.

Still, Robinhood did its first-ever profitable quarter as a public company largely thanks to the high interest-rate environment created by the Federal Reserve.

The company had net income of $25 million, or 3 cents a share, beating forecasts for a loss of 1 cent a share.

Total revenue increased 10% sequentially to $486 million as net interest revenue grew 13% to $234 million, which the company attributed to higher short-term interest rates and increased "securities lending activity."

Meanwhile, Robinhood's retirement offerings have seen a boost even as trading transaction revenues dip. Customers have piled into the Gold program, which is currently offering a 4.9% yield, with Gold cash sweep balances more than doubling since the start of the year to $11 billion.

"With five consecutive quarters of revenue and Adjusted EBITDA growth, we're continuing to drive efficiency across our operations while investing in customer experience," chief financial officer Jason Warnick said.