Robinhood Shares Fall as Crypto Trading Revenue Declines Sharply

Robinhood Shares Fall as Crypto Trading Revenue Declines Sharply

Robinhood (NASDAQ: HOOD) shares fell about 8% in after-hours buying and selling Tuesday after the zero-commission buying and selling platform missed badly on income expectations as its cryptocurrency income fell sharply from the second quarter’s report excessive.

  • Robinhood stated its crypto revenues fell to simply $51 million within the third quarter, down from a report $233 million within the second quarter. The firm stated the diminished crypto buying and selling exercise led to considerably fewer new funded accounts and decrease income within the quarter as in comparison with the second quarter.
  • Total income for the quarter was $365 million, in need of analyst estimates of $437.1 million, in line with FactSet. The firm reported an adjusted web lack of $2.06 per share, versus analyst expectations of a lack of $0.67.
  • Robinhood stated that over a million prospects have signed up on the ready record for its crypto pockets, which is one in all its “most closely requested merchandise.”
  • The firm additionally launched recurring crypto investments, permitting prospects to robotically purchase crypto, with out paying commissions and on their very own schedule.
  • On the corporate’s earnings name on Tuesday, CEO Vlad Tenev stated the corporate was awaiting regulatory readability earlier than including extra cryptocurrencies to the seven that prospects can presently commerce – bitcoin, bitcoin money, bitcoin SV, dogecoin, ethereum, ethereum traditional and litecoin. “We’re going to be very cautious,” Tenev stated.
  • Previous speculation existed round Shiba Inu being added to Robinhood’s crypto choices, although Tenev made no point out of this on the decision.
  • The firm additionally famous that the recognition of dogecoin contributed to hundreds of thousands of latest accounts being added within the second quarter.
  • Robinhood went public on July 28 at an IPO worth of $38 per share and closed down 8% on its first day of buying and selling.

UPDATE (Oct. 26, 20:57 UTC): Updates share worth and convention name commentary.

UPDATE (Oct. 26, 22:33 UTC): Adds feedback from the earnings name.

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