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Robinhood (HOOD) third-quarter earnings 2021

Stock buying and selling app Robinhood reported Tuesday an enormous income miss for the third quarter, as cryptocurrency buying and selling dropped off.

Robinhood mentioned that, barring any change within the market atmosphere, the headwinds that dragged down final quarter — like decrease retail buying and selling exercise — will persist into year-end.

Shares of the newly public company tanked by 8% in after-hours buying and selling.

For the third quarter, whole web income got here in at $365 million, lacking a Refinitiv estimate of $431.5 million. Revenues elevated 35% year over year however have been properly beneath the second quarter’s income of $565 million, which was bolstered by an enormous surge in crypto buying and selling.

Third-quarter transaction based mostly income totaled $267 million, with solely $51 million coming from cryptocurrency buying and selling. Revenue from crypto buying and selling totaled $233 million within the second quarter, helped by curiosity in meme-inspired dogecoin.

Vlad Tenev, co-founder and CEO of Robinhood rings the opening bell on the Nasdaq on July twenty ninth, 2021.

Source: The Nasdaq

“Q2 was kind of one of those idiosyncratic market events where there’s this massive interest specifically in doge,” Robinhood CFO Jason Warnick advised 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.”

Options buying and selling contributed $164 million, and equities buying and selling added $50 million to transaction-based income.

Net cumulative accounts dropped to 22.4 million within the third quarter from 22.5 million within the second quarter. Monthly energetic customers totaled 18.9 million, down from 21.3 million within the second quarter.

Average income per person decreased by 36% to $65 year over year from $102.

Robinhood reported a web lack of $1.32 billion, or $2.06 per share. Wall Street was anticipating a lack of $1.37 per share, in keeping with Refinitiv. Share-based compensation expense totaled $1.24 billion within the third quarter of 2021.

“This quarter was about developing more products and services for our customers, including crypto wallets,” mentioned Vlad Tenev, CEO and co-founder of Robinhood Markets. “More than one million people have joined our crypto wallets waitlist to date.”

Looking forward, Robinhood mentioned it expects fourth-quarter income no better than $325 million. The company sees account progress consistent with the 660,000 opened within the third quarter of 2021.

“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 mentioned in a press launch.

Robinhood hit the general public markets in July, opening at $38 per share. The stock closed at $39.57 per share Tuesday.

— with reporting from CNBC’s Kate Rooney.

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