Nikolas Sargeant
Robinhood is planning to launch crypto trading in the European Union (EU) soon. This move is part of their strategy to expand into international markets and offer their products to a larger audience. They had a successful launch in the U.K. and now aim to gain market share globally.
The company reported a significant 55% decrease in crypto trading revenues for the third quarter ending Sept. 30 compared to the previous year. This decline is noteworthy given the rising popularity of cryptocurrencies and the increasing interest of investors in crypto trading.
Robinhood's total net revenues for the third quarter of 2023 increased by 29% compared to the previous year, reaching $467 million. This increase in net revenues can be attributed to sources other than crypto trading, such as net interest revenues. Net interest revenues experienced a significant growth of 96% YoY, amounting to $251 million. This growth was driven by the expansion of interest-earning assets and the higher short-term interest rates.
Transaction-based revenues, which include options, equities, and cryptocurrencies, dropped by 11% YoY to $185 million. In particular, revenues from cryptocurrencies saw a significant decline of 55%, reaching $23 million for the quarter. This decrease in crypto trading revenues is one of the factors contributing to the overall decrease in transaction-based revenues.
Robinhood provides a variety of products and services, such as equities trading and retirement accounts, in addition to crypto trading. The platform has experienced growth in its net cumulative funded accounts, increasing by 360,000 from the previous year to reach 23.3 million. This signifies that investors continue to show interest in and trust Robinhood's offerings.
In the third quarter, Robinhood reported a net loss of $85 million. This loss was impacted by a regulatory accrual of $104 million, resulting in a negative $0.11 per-share impact. However, the company's adjusted earnings showed significant improvement, increasing by 191% yearly to $137 million. This demonstrates Robinhood's ability to generate positive cash flow.
