Robinhood publishes Q3 report, as shares fall by 10%

Robinhood shares (HOOD) in an unexpected twist, have fallen sharply following the firm’s Q3 results which posted below expectations, with regards to crypto trading revenue.

Publishing its Q3 report on Tuesday October 26, the well-known retail trading firm revealed that it made a total revenue of $267 million within the quarter, with crypto transactions accounting for $51 million (19%).

Analysis of Q3 Report by Robinhood

The report by Robinhood on Tuesday immediately saw its shares, HOOD dropping around 10% to $35.70, however the price has since gained 3.87% to sit at $39.57 at the time of this writing.

Now, in comparison to the record $233 million that the firm made on crypto transactions in Q2, this $51 million generated on same crypto-based transactions in Q3 represents a 78% decrease. Recall that Robinhood had the Dogecoin (DOGE) community to thank for its crypto revenue last quarter, with the memecoin accounting for a whopping 62% of its crypto revenue at the time.

The firm also posted a total net revenue of $365 million for Q3, falling way below predictions of $437.1 million by Wall Street analysts, according to FactSet.

Also in the Q3 report, Robinhood stated that its business had been affected by several factors bordering on the volatile nature of market, seasonality, unexpected market events, and retail trading behavior. The firm then noted that same issues may linger into in Q4.

According to the report, should any major changes or exogenous events fail to happen to the market environment, and the current situation persists, then it may result in quarterly revenues not greater than $325 million and possibly a full-year revenue below $1.8 billion.

Although crypto activity obviously reduced,, the CEO of Robinhood, Vlad Tenev has shared his positive hopes for the firm’s long term goals for digital assets. He also made mention of the new products and services built for retail traders in Q3.  Products such as a digital wallet that will finally enable users to withdraw and deposit crypto to and from the platform.