Robinhood beats quarterly profit estimates as trading activity remains robust

The Menlo Park, California-based company's profit was $573 million, or 62 cents per share, for the three months ended June 30, compared with $386 million, or 42 cents per share, a year earlier.

On an adjusted basis, Robinhood earned 48 cents per share, topping analysts' average estimate of 44 cents per share, according to data compiled by LSEG.

Shares of Robinhood fell 2.9% in extended trading. The stock has dropped 20.6% this year, as of last close.

"If there's one concern, it's valuation. After the stock's huge run, expectations are elevated, and some of this quarter's EPS benefited from one-time investment gains," said David Bartosiak, stock strategist at Zacks Investment.

Robinhood Markets beat Wall Street estimates for second-quarter profit on Wednesday, as robust trading in equities, options and prediction markets helped offset weakness in cryptocurrency trading.

Retail trading remained robust during the quarter as heightened market volatility, driven in part by the U.S.-Iran conflict and its impact on inflation expectations and the Federal Reserve's interest-rate outlook, kept investors active.