Robinhood releases its first earnings report as a public company on Wednesday. Here's what investors need to know

Published Wed, Aug 18 202110:43 AM EDTUpdated Wed, Aug 18 202111:07 AM EDT

Stock trading app Robinhood reports its first batch of earnings as a publicly traded company Wednesday after the bell. Here's a breakdown of what investors can expect. Robinhood went public on the Nasdaq last month and hit the public markets it seeks to democratize for amateur investors. Since the debut, shares of Robinhood have had a wild ride. After sinking 8% on the first day of trading, the stock had a meme-stock moment when it rallied 50% amid retail investor interest. The stock is down about 3% this week, trading at roughly $48 per share. Ahead of its report, the trading platform already issued guidance on user growth and financials for the period, so those numbers are unlikely to move the stock. Funded accounts and revenue expectations Robinhood said it had 22.5 million funded accounts (those tied to a bank account) as of the second quarter. That's up from 18 million in the first quarter, which was an increase of 151% from a year earlier. The brokerage estimates second-quarter revenue between $546 million to $574 million, up from $244 million in the year-earlier period. Revenue jumped 309% in the first quarter to $522 million from $128 million a year prior. Wall Street analysts expect revenue of $521.8 million in the second quarter, according to an average of three firms polled by Refinitiv. However, Robinhood expects to swing to a net loss of $487 million to $537 million in the second quarter after turning a profit in the same quarter last year. Analysts, although there are only two polled for EPS, expect earnings of 8 cents per share in the second quarter, according to Refinitiv. On Tuesday, consensus was for a loss of 15 cents per share, which included three estimates. CNBC doesn't compare results to EPS estimates because of uncertainty around share count and number of analysts. "Relative to the brokerage peer group, which trades at a significant discount to the disruptive fintech peer group, Robinhood screens at the top end, but on revenue growth adjusted basis it screens towards the bottom end," Redburn analyst Charles Bendit. "This reflects our expectations Robinhood will increasingly monetize its user base." Redburn gave HOOD a buy rating ahead of its earnings. Trading activity going forward What could move the stock is any guidance that signals a slowdown in trading and therefore revenue for the free-trading pioneer. Last month, Robinhood warned of a potential slowdown in trading revenue and new clients as the boom in retail investing starts to decelerate. The company said in a regulatory filing it expected third-quarter revenue to be below the second quarter "as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies." Robinhood also anticipates the growth rate of new clients will be lower in the third quarter. Investors will also be watching for news surrounding share sales from existing shareholders that bailed Robinhood out during the GameStop trading mania . Following news that shareholders will sell up to 97.9 million shares over time , Robinhood said these sales can't start without approval from the Securities and Exchange Commission, which shouldn't occur until after Robinhood's second-quarter earnings. Robinhood is a five-time CNBC Disruptor 50 company that topped this year's list. Sign up for our weekly, original newsletter that offers a closer look at CNBC Disruptor 50 companies like Robinhood, and the founders who continue to innovate across every sector of the economy.

Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021.

Brendan McDermid | Reuters

Stock trading app Robinhood reports its first batch of earnings as a publicly traded company Wednesday after the bell. Here's a breakdown of what investors can expect.