Robinhood, an American financial services platform that allows its users to invest in stocks, exchange-traded funds (ETFs), options, gold, and cryptocurrencies, has announced its third-quarter earnings report and it revealed a decline in their cryptocurrency revenue by 78%.
According to the report, $51 million was generated from cryptocurrency-related transactions in Q3 which represents a 78% decrease compared to the $233 million generated from cryptocurrency-related transactions in Q2 of 2021.
Total revenue for the quarter as per the report, stood at $365 million, short of analyst estimates of $437.1 million, according to FactSet and also represents a 35% decrease, compared to Q2, 2021. The firm posted a net loss of $1.32 billion, or $2.06 per diluted share compared to a $502 million loss, or $2.16 per share, in Q2.
What you should know
Robinhood’s crypto revenue last quarter was supported majorly by the Dogecoin (DOGE) community, with the Elon Musk backed meme coin representing a whopping 62% of crypto revenue.
The monthly active users on the platform also dropped from 21.3 million in Q2 to 18.9 million last quarter. However, Robinhood’s user base could be set to increase in Q4, due to speculation in the Shiba Inu (SHIB) community that the dog-themed token may be listed on the platform soon.
As previously reported by Nairametrics, Robinhood stated that over one million customers have signed up on the waiting list for its crypto wallet, which is one of its “most heavily requested products.”
The company also launched recurring crypto investments, allowing customers to automatically buy crypto, without paying commissions and on their own schedule.
What they are saying
Speaking at the investor earnings call, Vlad Tenev, the CEO & Co-Founder said, “As we previewed last quarter, in Q3, we saw considerably fewer new funded accounts and lower revenue as compared to Q2. In Q3, we added 660,000 new funded accounts bringing our total additions for the year to 11.4 million nearly doubling our customer base since the end of last year. It’s been an incredible year and we are still very early in our journey of democratizing finance for all.”
He further added, “Going forward, we see an opportunity to continue building on this momentum to revolutionize the way retail shareholders connect with the companies they own. This is truly an exciting moment for retail investors. On to radical customer focus, we’ve been ramping up the pace of product development this quarter. We’ve opened the wait list for crypto wallets. This has been one of the most requested features from our customers and we’re excited that over one million customers have signed up to date. We’re making our wallet features simple, and intuitive, and expect to begin introducing this to customers in the coming weeks.”
He also said the company was awaiting regulatory clarity before adding more cryptocurrencies to the seven that customers can currently trade which include; bitcoin, bitcoin cash, bitcoin SV, dogecoin, ethereum, ethereum classic and litecoin.
Robinhood went public on July 28 at an IPO price of $38 per share. As of the time of this writing, HOOD is currently down 8.47% in pre-market skirmish, putting its price at $36.22.
