Robinhood Faces Share Drop Despite Surge in Crypto Trading Volumes and Yearly Growth

Robinhood's shares dropped 12.4% in after-hours trading after its third-quarter earnings missed Wall Street expectations.

Despite this, the company reported significant growth in cryptocurrency trading, with volume increasing 112% year-on-year to $14.4 billion and revenue rising 165% to $61 million, contributing to a return to profitability.

The firm showed a net income of $150 million and revenue of $637 million, falling short of industry estimates, which led to the stock decline. Robinhood’s earnings per share of $0.17 missed the expected $0.18, and revenue was 3.6% below forecasts.

Robinhood’s CFO expressed satisfaction with the company’s performance this year, highlighting that the last three quarters have been the most profitable in its history. However, crypto trading volume decreased from $36 billion in Q1 and $21 billion in Q2.

Assets under custody increased 76% year-on-year to $152.2 billion, boosted by rising crypto valuations. The firm also announced plans to acquire the Bitstamp exchange for $200 million, pending regulatory approval expected in early 2025. Since launching its crypto services in February 2018, Robinhood has expanded its offerings to include various tokens.

Despite the recent share drop, Robinhood’s stock has risen 128% this year, currently trading at $28.21.