Robinhood Cryptocurrency Transaction Revenue Shrinks Nearly 80% in Q3

Robinhood Cryptocurrency Transaction Revenue Shrinks Nearly 80% in Q3

Millennial-focused trading company Robinhood released its third-quarter revenue report on October 26, and things aren't looking good on the crypto front.

The Company specified that digital asset activity fell from record highs in the previous quarter, resulting in significantly fewer newly funded accounts. This has resulted in lower sales 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 whopping 860% increase over the $5 million in Q3 2020, but a 78.1% decrease compared to $233 million in crypto revenue in Q2 2021.

Interestingly, the company has Predictions a decline in trading activity for Q3. Crypto revenues are likely to increase for the fourth quarter as markets have recovered.

Robinhood's net revenue fell

The company's total net revenue for the period is $365 million, with crypto accounting for 14%. This is a 35% decrease from the $565 million reported for the second quarter, where digital asset transactions accounted for 41% of the company's total net revenue.

Wall Street analysts expected Robinhood to fall six cents per share on revenue of $437 million, although the actual figure was well below their estimates. The company actually lost nearly $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 prior quarter. Vlad Tenev, CEO and co-founder of Robinhood Markets, said:

"This quarter was about building more products and services for our customers, including crypto wallets. More than a million people joined us Crypto wallet waiting list to date."

He added that looking forward, the company aims to “provide tax-advantaged retirement accounts that help everyone invest for the long term.”

HOOD prices drop by 10%

Robinhood stock has taken a predictable hit on the news as its disappointing revenue report rattled shareholders. HOOD prices plunged 10.5% in after-hours trading, according to reports Market observation.

The stock hit $40 in anticipation of the report, but slumped to $35.8 after the results were released.

Robinhood shares have fallen 11.4% in the past 30 days and are down 44% from their all-time high of $70.40 set in early August.

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