U.S. online brokerage Robinhood's after-hours earnings report on Tuesday showed that the sharp drop in cryptocurrency trading volume caused the company's third-quarter revenue to fall far short of market expectations. The company said that unless there is any change in the market environment, the headwinds that dragged down the results in the last quarter, such as reduced retail trading activity, will continue until the end of the year.
The financial report shows that Robinhood reported a net loss of $1.32 billion, or $2.06 per share, for the third quarter, with the market expecting a loss of $1.37 per share; revenue of $365 million, up 35% year-over-year, and the market expected $431.5 million, well down from $565 million in the second quarter; transaction-based revenue of $267 million, of which only $51 million came from cryptocurrency trading, while revenue from crypto trading in the second quarter reached $233 million, driven by Dogecoin.
In addition, of the transaction-based revenue, option trading revenue was $164 million and stock trading was $50 million.
Robinhood Chief Financial Officer Jason Warnick said the second quarter was a special market event, especially with investors having a strong interest in Dogecoin, which is a great way to bring a large number of new customers to the platform. "But we're really thinking about investing in cryptocurrencies for the long term." So frankly, it's impossible to accurately forecast quarterly revenue. ”
Robinhood said it expects fourth-quarter revenue to be no more than $325 million, compared to market expectations of $500.7 million.
The company said in a press release: "For the three months ended December 31, 2021, we expect many of the factors that affected the third quarter results, such as seasonal market headwinds and reduced retail trading activity, to persist." ”
The company said the net cumulative funding account fell to 22.4 million in the third quarter from 22.5 million in the second quarter. The total number of monthly active users was 18.9 million, compared to 21.3 million in the second quarter. The average revenue per user decreased 36% year-over-year to $65.
This article originated from the Financial Circle Network
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