Transaction-based revenue totaled $267 million in the third quarter, with bitcoin trading accounting for only $51 million. Approximately the second quarter, crypto trading brought in $233 million in revenue.
The challenges that dragged down last quarter would linger into the end of the year, according to Robinhood, barring any changes in the market climate.
App for stock trading Robinhood revealed a big revenue miss for the third quarter on Tuesday, owing to a decline in bitcoin trading.
The challenges that weighed down last quarter — such as fewer retail trading activity — will linger into the end of the year, according to Robinhood, barring any changes in the market situation.
In after-hours trading, shares of the newly public business plummeted by 8%.
Total net revenue for the third quarter was $365 million, missing Refinitiv’s forecast of $431.5 million. Revenues grew 35% year over year, but were still significantly behind the $565 million in the second quarter, which was boosted by a massive boom in crypto trading.
Transaction-based revenue totaled $267 million in the third quarter, with bitcoin trading accounting for only $51 million. In the second quarter, revenue from crypto trading reached $233 million, boosted by demand in meme-inspired dogecoin.
“Q2 was kind of one of those idiosyncratic market events where there’s this massive interest specifically in doge,” Robinhood CFO Jason Warnick told CNBC. “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.”
Transaction-based revenue was boosted by $164 million from options trading and $50 million from stocks trading.
In the third quarter, net cumulative accounts fell to 22.4 million from 22.5 million in the previous quarter. The number of monthly active users fell to 18.9 million in the third quarter, down from 21.3 million in the second.
Year over year, average income per user fell by 36% to $65 from $102.
Robinhood reported a $1.32 billion net loss, or $2.06 per share. According to Refinitiv, Wall Street expected a loss of $1.37 per share. In the third quarter of 2021, share-based compensation costs reached $1.24 billion.
“This quarter was about developing more products and services for our customers, including crypto wallets,” said Vlad Tenev, CEO and co-founder of Robinhood Markets. “More than one million people have joined our crypto wallets waitlist to date.”
Robinhood’s fourth-quarter revenue is expected to be no more than $325 million, according to the company. Account growth is expected to be in line with the 660,000 accounts opened in the third quarter of 2021, according to the firm.
“For the three months ending December 31, 2021, we anticipate that many of the factors that impacted our third-quarter results, such as seasonal headwinds and lower retail trading activity, may persist,” the company said in a press release.
Robinhood went public in July, with a share price of $38. On Tuesday, the stock finished at $39.57 per share.