Shares in trading platform Robinhood fell 12.4% in after-hours as its third-quarter earnings missed Wall Street estimates, though crypto trading volume and revenue doubled year-on-year.
Robinhood’s Q3 results show that crypto trading volume and crypto revenue soared 112% and 165% year-on-year, coming to $14.4 billion and $61 million, respectively, helping the firm swing back to profit.
Still, the $150 million net income and $637 million revenue Robinhood posted in Q3 missed industry estimates, and consequently, HOOD shares fell 12.4% in after-hours trading, Google Finance data shows.
Robinhood’s $0.17 earnings per share missed the Zacks Consensus Estimate of $0.18, while its reported revenue fell 3.6% short of Zacks’ $661.2 million estimate.
HOOD’s change in share price on Oct. 30 (including after-hours). Source: Google Finance
Despite missing industry estimates, Robinhood’s chief financial officer Jason Warnick was pleased with how the firm has fared so far this year:
“When we reflect on our revenue so far this year, it feels good that our last three quarters are the three highest in company history.”
While Robinhood’s crypto trading volume increased 112% from Q3 2023, it declined considerably from $36 billion in Q1 2024 and $21 billion in Q2 2024.
Crypto revenue also declined from $81 million in the previous quarter.
The firm’s assets under custody increased 76% year-on-year to $152.2 billion.
It partially attributed this to rising crypto valuations as its total crypto assets under custody increased to $19.5 billion — up 32.3% from $14.7 billion in Q4 2023.
Robinhood’s change in assets under custody by asset type since Q3 2022. Source: Robinhood
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In June, Robinhood agreed to acquire the Bitstamp crypto exchange in a $200 million deal that would enable it to serve institutional investors in the United States.
The deal is still subject to regulatory approval and is expected to be finalized in the first half of 2025.
Robinhood launched its cryptocurrency unit in February 2018, offering Bitcoin and Ether (ETH) trading in several states.
It has since expanded its offering for Litecoin (LTC), Uniswap (UNI), Avalanche (AVAX), Chainlink (LINK) and several other tokens.
Despite HOOD’s fall in after-hours trading, it is still up 128% so far in 2024, trading at $28.21.
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