As a seasoned researcher with a keen eye for market trends and financial performance, I find Robinhood’s Q3 results to be a mixed bag, much like a box of chocolates – some pieces are sweet, others bitter, but overall, it’s hard to resist the allure.
After-hours, Robinhood’s shares dropped by 12.4%, as their Q3 earnings didn’t meet Wall Street expectations. However, the company saw a doubling of both cryptocurrency trading volume and revenue compared to the same period last year.
In the third quarter, Robinhood’s crypto trading activity and associated earnings significantly increased by 112% and 165% compared to the same period last year. This surge led to a record-breaking $14.4 billion in trading volumes and $61 million in revenue from cryptocurrencies. As a result, Robinhood managed to move back into profitability.
Even though Robinhood reported a net income of $150 million and revenue of $637 million during the third quarter, these figures were lower than what analysts had anticipated. As a result, Robinhood’s shares experienced a decline of approximately 12.4% in after-hours trading, as indicated by data from Google Finance.
Robinhood’s actual earnings per share were lower than expected at $0.17, contrasting with the predicted $0.18 by Zacks Consensus Estimate. Additionally, the company’s reported revenue came in under the Zacks estimated figure of $661.2 million, showing a decrease of 3.6%.
Even though Robinhood’s performance fell short of financial experts’ predictions, its Chief Financial Officer, Jason Warnick, remains optimistic about the company’s progress throughout the 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.”
Despite a significant surge of 112% in cryptocurrency trading on Robinhood between Q3 2023 and the previous quarter, the trading volume dropped noticeably from $36 billion in Q1 2024 and $21 billion in Q2 2024.
Crypto revenue also fell from $81 million in the previous quarter.
The firm’s assets under custody also increased 76% year-on-year to $152.2 billion.
The increase in the value of cryptocurrencies was partly due to this, as the company’s total crypto assets under management reached $19.45 billion – a growth of 32.3%, from $14.7 billion in the fourth quarter of 2023.
In June, Robinhood reached an agreement to buy the Bitstamp cryptocurrency exchange for approximately $200 million. This acquisition aims to expand Robinhood’s capabilities, allowing them to cater to institutional investors within the United States.
The agreement is pending regulatory clearance, with plans for it to be officially completed by mid-2025.
In the month of February 2018, Robinhood introduced its digital currency division, enabling users from various states to trade Bitcoin and Ether (ETH).
Since then, it has broadened the range of options available for trading tokens like Litecoin (LTC), Uniswap (UNI), Avalanche (AVAX), Chainlink (LINK), and numerous others.
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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2024-10-31 05:05