Robinhood shares fall sharply due to crypto revenue drop

After a splendid growth due to the past quarter’s performance, shares of Robinhood (HOOD) fell sharply. This is due mainly to the lower-than-expected crypto trading revenue.

The popular trading firm posted its third-quarter report yesterday. The report of Robinhood states that crypto accounted for 19% ($51 million) of the total $267 million worth of transaction-based revenue.

Moreover, the report coincided with its share HOOD falling at $35.70, degrowth of 10%. However, the stock soon bounced back and is trading at $39.57 as of writing.

However, the $51 million generated from crypto revenue is substantially lower than the record $233 million Robinhood had in Q2. A major part of that revenue is due to the DOGE community, which represented a big 62% of the crypto revenue.

Overall, the firm posted total net revenue of $365 million for this quarter. According to FactSet, Wall Street analysts predicted net revenues at $437.1 million.

Robinhood has given its statement for the third-quarter report. In fact, they’ve stated that the business had some impact due to seasonality, volatility & retail trading behaviour. Moreover, they also added that the same issues would persist in Q4.

The report read:

“In the absence of any changes to the market environment or exogenous events, we believe this may result in quarterly revenues no greater than $325 million and full-year revenue of less than $1.8 billion.”

CEO of Robinhood, Vlad Tenev said that while crypto activity declined, he is optimistic for the firm’s long-term prospects. Moreover, he emphasized that new features such as a digital wallet will increase the convenience prospects for the customers on the platform.

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