Robinhood (HOOD.US) stock tumbled more than 10% during today's session, after the trading platform operator posted a larger-than-expected loss and quarterly revenue that missed estimates. The company saw fewer new accounts amid a slowdown in activity related to cryptocurrencies.
Total quarterly net revenue came in at $365 million, well below analysts' expectations of $431.5 million. Revenue rose 35% on an annual basis, but was much below the second-quarter figure of $565 million.
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Open account Try demo Download mobile app Download mobile appRobinhood posted a net loss of $1.02 billion, or $2.06 per share, while Wall Street expected a loss of $1.37 per share. Number of monthly active users dropped to 18.9 million, from 21.3 million in the second quarter. Average revenue per user fell 36% year-on-year to $65, compared to $102 in the same period last year. Transaction-based revenue came in at $267 million, with revenue from crypto trading falling 78% from the prior quarter to $51 million.
"Crypto activity came off record highs leading to fewer new funded accounts and lower revenue," CEO Vlad Tenev said. While crypto activity declined, Tenev outlined his optimism for the firm’s long term prospects in digital assets, as he emphasized the new products and services built for retail traders in Q3, such as a digital wallet that will finally enable users to withdraw and deposit crypto to and from the platform.
According to Robinhood, its business has been impacted by factors including market volatility, retail trading behavior and unanticipated market events that may continue to be the case in the next quarter. The company announced, if there are no changes to the market environment, the firm may continue to see quarterly revenues of less than $325 million. Still Robinhood sees account growth in line with the 660,000 accounts opened in the third quarter of 2021.
Robinhood (HOOD.US) stock price dipped below the IPO price of $38 per share after the retail broker reported its latest quarterly results. Source: xStation5
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