Millennium-focused trading company Robinhood released its third quarter revenue report on October 26, and things aren’t looking good on the crypto front.
The firm stated that digital asset activity declined from record highs in the previous quarter, leading to considerably fewer new funded accounts. This resulted in lower revenue in the third quarter of 2021 compared to the second quarter.
Robinhood reported $51 million in crypto transaction-based revenue for the quarter. This is a huge 860% increase from the $ 5 million in the third quarter of 2020, but down 78.1% from the $ 233 million in crypto revenue in the second quarter of 2021.
Interestingly, the company did predict a decline in trading activity for Q3. It is likely to see an uptick in crypto revenue for Q4 as markets have recovered.
Robinhood’s Net Income Declines
The company’s total net revenue for the period is $ 365 million, with crypto accounting for 14%. This is down 35% from the $565 million reported for the second quarter, where digital asset transactions made up 41% of the total net revenue for the firm.
Wall Street analysts expected Robinhood to drop six cents a share on revenue of $ 437 million, although the actual figure was well below their estimates. The company actually lost closer to $2 per share on the disappointing results and reported a net loss of $1.32 billion.
Total transaction-based revenue was $ 267 million, down 41% from $ 451 million in the previous quarter. Vlad Tenev, CEO and co-founder of Robinhood Markets, stated:
“This quarter was dedicated to developing more products and services for our clients, including crypto wallets. More than one million people have joined our crypto wallets waitlist to date.”
He added that in the future, the company is committed to providing “tax-efficient retirement accounts to help everyone invest for the long term.”
HOOD Prices Slump 10%
Robinhood stock has taken a predictable hit on the news as the disappointing revenue report has rattled shareholders. HOOD prices fell 10.5% in after-hours trading, according to MarketWatch.
The stock reached $40 in anticipation of the report but slumped to $35.8 after-hours when the results were revealed.
Robinhood stock has fallen 11.4% in the past 30 days and is down 44% from its all-time high of $ 70.40 in early August.
