Robinhood (HOOD) third-quarter earnings 2021

Inventory 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 available in the market setting, the headwinds that dragged down final quarter — like decrease retail buying and selling exercise — will persist into year-end.

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

For the third quarter, complete internet income got here in at $365 million, lacking a Refinitiv estimate of $431.5 million. Revenues elevated 35% 12 months over 12 months however have been effectively under the second quarter’s income of $565 million, which was bolstered by a large surge in crypto buying and selling.

Third-quarter transaction primarily based income totaled $267 million, with solely $51 million coming from cryptocurrency buying and selling. Income 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.

Supply: The Nasdaq

“Q2 was form of a type of idiosyncratic market occasions the place there’s this large curiosity particularly in doge,” Robinhood CFO Jason Warnick informed CNBC. “We find it irresistible when these moments occur. It is an effective way to deliver loads of new clients onto the platform. However we’re actually eager about investing in crypto over the long run. And so it is you realize, frankly, it is gonna be unattainable for us to precisely predict … income on a quarter-to-quarter foundation.”

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

Web cumulative accounts dropped to 22.4 million within the third quarter from 22.5 million within the second quarter. Month-to-month lively customers totaled 18.9 million, down from 21.3 million within the second quarter.

Common income per consumer decreased by 36% to $65 12 months over 12 months from $102.

Robinhood reported a internet lack of $1.32 billion, or $2.06 per share. Wall Avenue 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 creating extra services for our clients, together with crypto wallets,” mentioned Vlad Tenev, CEO and co-founder of Robinhood Markets. “Multiple million folks have joined our crypto wallets waitlist thus far.”

Wanting forward, Robinhood mentioned it expects fourth-quarter income no higher than $325 million. The corporate sees account development in step with the 660,000 opened within the third quarter of 2021.

“For the three months ending December 31, 2021, we anticipate that most of the elements that impacted our third-quarter outcomes, equivalent to seasonal headwinds and decrease retail buying and selling exercise, might persist,” the corporate mentioned in a press launch.

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

— with reporting from CNBC’s Kate Rooney.

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