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Robinhood shares tank as revenue falls way short of expectations on lighter crypto trading

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Robinhood shares tank as revenue falls way short of expectations on lighter crypto trading

Inventory trading app Robinhood reported Tuesday an astronomical revenue miss for the third quarter, as cryptocurrency trading dropped off.

Robinhood acknowledged that, barring any exchange in the market environment, the headwinds that dragged down last quarter — love decrease retail trading task — will persist into 12 months-kill.

Early Newspaper

Shares of the newly public company tanked by 8% in after-hours trading.

For the third quarter, total earn revenue came in at $365 million, lacking a Refinitiv estimate of $431.5 million. Revenues increased 35% 12 months over 12 months but were effectively below the second quarter’s revenue of $565 million, which was bolstered by a massive surge in crypto trading.

Third-quarter transaction based revenue totaled $267 million, with only $51 million coming from cryptocurrency trading. Revenue from crypto trading totaled $233 million in the second quarter, helped by interest in meme-impressed dogecoin.

Vlad Tenev, co-founder and CEO of Robinhood rings the hole bell on the Nasdaq on July 29th, 2021.

Source: The Nasdaq

“Q2 was kind of one of those idiosyncratic market events the set there’s this massive interest namely in doge,” Robinhood CFO Jason Warnick educated CNBC. “We love it when those moments happen. It is a vast way to bring plenty of current potentialities onto the platform. Nonetheless we’re if reality be told considering investing in crypto over the long interval of time. And so it is , frankly, it is gonna be impossible for us to precisely predict … revenue on a quarter-to-quarter basis.”

Options trading contributed $164 million, and equities trading added $50 million to transaction-based revenue.

Procure cumulative accounts dropped to 22.4 million in the third quarter from 22.5 million in the second quarter. Monthly keen users totaled 18.9 million, down from 21.3 million in the second quarter.

Reasonable revenue per user decreased by 36% to $65 12 months over 12 months from $102.

Robinhood reported a earn loss of $1.32 billion, or $2.06 per share. Wall Boulevard was expecting a loss of $1.37 per share, in response to Refinitiv. Part-based compensation expense totaled $1.24 billion in the third quarter of 2021.

“This quarter was about constructing more merchandise and companies for our potentialities, including crypto wallets,” acknowledged Vlad Tenev, CEO and co-founder of Robinhood Markets. “Extra than one million folk have joined our crypto wallets waitlist thus a long way.”

Having a gaze forward, Robinhood acknowledged it expects fourth-quarter revenue no increased than $325 million. The company sees fable increase in accordance with the 660,000 opened in the third quarter of 2021.

“For the three months ending December 31, 2021, we are expecting that many of the components that impacted our third-quarter results, such as seasonal headwinds and decrease retail trading task, would perhaps persist,” the company acknowledged in a press release.

Robinhood hit the general public markets in July, opening at $38 per share. The stock closed at $39.57 per share Tuesday.

— with reporting from CNBC’s Kate Rooney.

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Robinhood shares tank as revenue falls way short of expectations on lighter crypto trading