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Vlad Tenev, co-founder and CEO of Robinhood rings the opening bell on the Nasdaq on July twenty ninth, 2021.
Supply: The Nasdaq
Inventory buying and selling app Robinhood reported Tuesday an enormous income miss for the third quarter, as cryptocurrency buying and selling dropped off.
Robinhood stated that, barring any change out there atmosphere, the headwinds that dragged down final quarter — like decrease retail buying and selling exercise — will persist into year-end.
Shares of the newly public firm tanked by 8% in after-hours buying and selling.
For the third quarter, whole web income got here in at $365 million, lacking a Refinitiv estimate of $431.5 million. Revenues elevated 35% 12 months over 12 months however have been properly beneath the second quarter’s income of $565 million, which was bolstered by a large surge in crypto buying and selling.
Third-quarter transaction primarily based income totaled $267 million, with solely $51 million coming from cryptocurrency buying and selling. Income from crypto buying and selling totaled $233 million within the second quarter, helped by curiosity in meme-inspired dogecoin.
“Q2 was sort of a type of idiosyncratic market occasions the place there’s this huge curiosity particularly in doge,” Robinhood CFO Jason Warnick advised CNBC. “We like it when these moments occur. It is a good way to convey a number of new prospects onto the platform. However we’re actually fascinated about investing in crypto over the long run. And so it is you realize, frankly, it is gonna be unattainable for us to precisely predict … income on a quarter-to-quarter foundation.”
Choices buying and selling contributed $164 million, and equities buying and selling added $50 million to transaction-based income.
Web cumulative accounts dropped to 22.4 million within the third quarter from 22.5 million within the second quarter. Month-to-month energetic customers totaled 18.9 million, down from 21.3 million within the second quarter.
Common income per consumer decreased by 36% to $65 12 months over 12 months from $102.
Robinhood reported a web lack of $1.32 billion, or $2.06 per share. Wall Road was anticipating a lack of $1.37 per share, in response to Refinitiv. Share-based compensation expense totaled $1.24 billion within the third quarter of 2021.
“This quarter was about growing extra services and products for our prospects, together with crypto wallets,” stated Vlad Tenev, CEO and co-founder of Robinhood Markets. “A couple of million individuals have joined our crypto wallets waitlist thus far.”
Wanting forward, Robinhood stated it expects fourth-quarter income no higher than $325 million. The corporate sees account progress in step with the 660,000 opened within the third quarter of 2021.
“For the three months ending December 31, 2021, we anticipate that most of the elements that impacted our third-quarter outcomes, akin to seasonal headwinds and decrease retail buying and selling exercise, could persist,” the corporate stated in a press launch.
Robinhood hit the general public markets in July, opening at $38 per share. The inventory closed at $39.57 per share Tuesday.
— with reporting from CNBC’s Kate Rooney.
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