Robinhood shares plummet as Q3 revenue misses mark
Popular US investment app Robinhood reported weak Q3 financial results on Tuesday, resulting in its shares falling by 8%.
While Robinhood’s third-quarter revenue increased by 35% from the same period last year to $365 million, it missed Wall Street expectations of $423.9 million. Net loss revealed by the company was $1.32 billion, a glaring figure in the face of last year’s Q3 loss of $11 million.
The company cited lowering users’ interest in crypto assets trading as the reason behind the huge revenue miss. According to Robin Hood, crypto transaction-based revenues increased 860% compared to the same period in 2020 to reach $ 51 million. On the other hand, it has fallen sharply from $233 million reported in the second quarter.
Robinhood CFO Jason Warnick reasoned dwindling interest in Dogecoin as the reason behind lower crypto trading. In Q2, 62% of the company’s cryptocurrency transaction revenue came from Dogecoin.
“Q2 was kind of one of those idiosyncratic market events where there’s this massive interest specifically in doge,” Warnick told CNBC in an interview.
“We love it when those moments happen. It’s a great way to bring a lot of new customers onto the platform. But we’re really thinking about investing in crypto over the long term. And so it’s you know, frankly, it’s gonna be impossible for us to accurately predict … revenue on a quarter-to-quarter basis.”
Robinhood currently deals in seven cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), and Ethereum Classic (ETC).
In addition, Robinhood is set to release its crypto wallet which will allow users to send and receive virtual currencies as well as offer “an intuitive user experience and low-cost, competitive pricing.”
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