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Cryptocurrency Dogecoin accounted for an astonishing 26% of Robinhoods revenue in the quarter.

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Robinhood Markets customers went crypto-crazy in the second quarter, buying aggressively on the platform and helping lift the company’s revenue to new highs. In fact, the “joke” cryptocurrency Dogecoin accounted for an astonishing 26% of the company’s revenue in the quarter.

The surge in cryptocurrency trading came as equity trading dropped sharply from its torrid pace in the first quarter, when meme stock mania dominated the market.

Without that GameStop -fueled bump, Robinhood’s (ticker: HOOD) revenue from equities trading fell to $52 million in the second quarter from $133 million in the first. It was even down on a year-over-year basis, when Robinhood had about half as many customers as it does today. And the company is likely to have a rough third quarter. Robinhood warned that “we expect seasonal headwinds and lower trading activity across the industry to result in lower revenues and considerably fewer new funded accounts than in the prior quarter.”

After rising 6.7% to $49.80 on Wednesday, shares were trading 3.3% lower in after-hours trading shortly after the earnings release came out.

Robinhood posted a $502 million loss on $565 million in revenue for the quarter. Those numbers fell within the ranges that Robinhood had previously projected in its prospectus before going public on July 29.

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Only three analysts cover the stock—most are restricted from issuing reports because their banks underwrote the initial public offering. Of the three that have issued estimates, the average expectation was for Robinhood to lose 15 cents per share, although it was not immediately clear if that number is comparable to Robinhood’s reported loss of $2.16 a share.

The company’s loss was based partly on how it accounts for convertible warrants that it issued when it was still reeling from the GameStop frenzy and had to raise money to satisfy demands from its clearinghouse.

Crypto transaction revenue surged to $233 million in the quarter, from $88 million in the first quarter and just $5 million a year ago. Of that, 62% was from Dogecoin, the cryptocurrency that started as a joke and that often trades based on tweets from Elon Musk. Dogecoin peaked above 70 cents in May and has since fallen to about 30 cents. Dogecoin trading brought in $144 million in revenue for Robinhood, more than twice as much as all the stock-trading on the platform.

More than 60% of Robinhood’s customers traded crypto in the quarter. In fact, a higher percentage of new customers made crypto purchases than equity purchases, the first time that has happened on the platform. The company had 22.5 million funded accounts at the end of the quarter, up from 18 million at the end of the first quarter.

Robinhood makes most of its money when users make transactions on the platform. It sends user trades to market-makers, who take a cut of the spread between the bid and ask prices and send a portion of that back to Robinhood. Transaction-based revenue made up 80% of the company’s total revenue in the quarter, with a premium subscription service and interest income making up the rest. That is about in line with the first quarter.

The company will hold a conference call at 5 p.m. Eastern time when it will answer questions posed by users of an app from Say Technologies, an investor-focused tech firm that Robinhood just agreed to buy for $140 million.

Write to Avi Salzman at avi.salzman@barrons.com

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