Robinhood Markets Inc (NASDAQ:HOOD) shares slumped overnight as its quarterly results statement revealed an unexpected drop in revenues from cryptocurrency trades.
The Nasdaq-listed stock fell 8.47% in after-hours dealing, down US$3.35 to US$39.57.
Investors using Robinhood’s app to trade crypto generated just US$51mln of revenue for the fintech firm in the third quarter, versus US$233mln in the preceding three month period.
Wall Street analysts pointed to tougher and more widespread competition in retail crypto dealing. Media reports also suggested Robinhood missed out on market share because it has not added the popular Shiba Inu crypto, a so-called ‘meme-coin’, to its trading platform.
Robinhood reported US$365mln of net revenue, up 35% year-on-year, but down from US$565mln in the second quarter of 2021.
In results published after the close yesterday, transaction-based revenue totalled US$267mln in the third quarter. In the preceding three-month period the trading app generated US$451mln. It reported a US$1.37bn pre-tax loss for the quarter, up substantially from the US$464mln loss in Q2.
Robinhood noted that crypto activity had “declined from record highs” with the app seeing fewer new funded accounts and a slight decline in the number of net funded accounts.
Chief executive and founder Vlad Tenev said the quarter “was about developing more products and services for customers, and specifically highlighted its crypto wallets technology.
“More than one million people have joined our crypto wallets waitlist to date. With 24/7 live phone support, we believe that Robinhood is becoming the most trusted and intuitive platform for retail and crypto investors,” Tenev said.
“Looking ahead, we’re committed to delivering tax-advantaged retirement accounts to help everyone invest for the long term.”
