The post Robinhood Crypto Trading Revenue Plummets 55% in Q3 appeared first on Coinpedia Fintech News
Robinhood played a vital role in the 2021 retail trading frenzy. It provided a commission-free platform that allowed small-scale investors to pour money into popular “meme stocks” amid the pandemic-induced lockdowns. However, since then, things have not been good with the firm; following Robinhood’s Q3 earnings report, their shares experienced a 6% drop in after-hours trading, while the overall drop is noted as 55% from the last quarter.
While earnings per share exceeded expectations by 1 cent, the company’s revenue of $467 million fell short of Wall Street estimates by 2.4%. Plus, monthly active users declined by 16% to 10.3 million, and the EPS was recorded at -$0.09 compared to -$0.20 in the same quarter last year. At the same time, Coinbase’s third-quarter transaction revenue fell 12%. Post the SEC’s regulatory intervention; many crypto exchanges are juggling to stay strong in the market.
Notably, Co-founder Baiju Bhatt has also sold around 20% of his stake in October. Despite this, Robinhood remains optimistic about its future, with plans to expand its brokerage operations to the UK and introduce cryptocurrency trading in the EU. The company has also extended its services, now offering 24-hour trading for 95 stocks and a 1% match for IRA deposits, which increases to 3% for gold members, showcasing its efforts to appeal to a broader market.
Additionally, Chief Financial Officer Jason Warnick said Robinhood needs crypto regulation “to innovate even faster.” In line with SEC’s regulation, Rohinhood recently removed Jump Trading from its token list.
Q3 Earning Went into Losses, Rohinhood in Sinking Mode?
In Q3 2023, Robinhood reported a 29% YoY increase in total net revenues, reaching $467 million. Higher net interest revenues mainly drove this rise. Net interest revenues saw a 96% YoY increase to $251 million. However, transaction-based revenues decreased by 11% YoY to $185 million.
The company reported a net loss of $85 million, which included a per-share impact of -$0.11 from a regulatory accrual of $104 million. Operating expenses decreased by 1% YoY to $540 million, while adjusted operating expenses (non-GAAP) increased 5% YoY to $353 million.
Non-GAAP Showing Some Hope
Interestingly, adjusted EBITDA (non-GAAP) surged by 191% YoY to $137 million. Net Cumulative Funded Accounts grew by 360 thousand YoY to reach 23.3 million. Assets Under Custody (AUC) increased 34% YoY to $87 billion, driven by continued Net Deposits and higher equity valuations. Net Deposits were $4.0 billion, translating to an annualized growth rate of 18% relative to AUC at the end of Q2 2023. Despite a decrease in Monthly Active Users (MAU) by 16% YoY to 10.3 million, Robinhood remains focused on providing industry-leading products and expanding its market presence.
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