Cryptocurrency investment platform Robinhood in its earnings report for the third quarter of this year, which was published last Tuesday, November 7, announced intention to expand its offers for trading virtual assets in Europe.
This company intends to start cryptocurrency trading activities in the European Union after a successful similar experience in the UK. The mentioned report of this firm indicates that the corresponding initiative will be launched in the coming weeks. There is no information about the exact dates yet.
The media notes that expanding the company’s activities in the international commercial space is part of its current development strategy. Robinhood is ready to have a significant share in the crypto market. As part of the relevant efforts, the company is taking steps to provide its products to a larger consumer audience. Special attention should be paid to the fact that the firm’s solutions are among the most advanced in the cryptocurrency sphere.
In the third quarter of this year, which ended on September 30, the company’s revenue from crypto trading decreased, which was recorded at 55% compared to the result for the same period in 2022. This decrease in income is significant. This is not the case when there is a reason to characterize the decline in the indicator as a minimally sensitive negative financial result. According to experts, the negatory dynamic of Robinhood is surprising, since the popularity of cryptocurrencies is currently showing growth. Also, the negative dynamic is unexpected in the context of the trend of expanding the scale of investor interest in trading virtual assets.
At the same time, the negative results of crypto trading did not prevent the company from receiving a total net revenue of $467 million by the end of the third quarter. This indicator is 29% higher than the result for the same period last year. The positive dynamic of the net revenue indicator is largely due to the growth of net interest income, which at the end of the third quarter amounted to $251 million, an increase of 96% year-on-year. In this case, the important factors were the expansion of assets that bring interest income and the increase in short-term interest rates.
The company’s revenues from transactions in the third quarter showed a downward trend. This indicator includes earnings from options, stocks, and cryptocurrencies. On an annualized basis, transaction-based revenue decreased by 11% to $185 million. In this category, the company earned $23 million on cryptocurrency at the end of the last quarter. This indicator decreased by 55% year-on-year. The decline in income from trading virtual assets has become the main factor influencing the overall negative dynamic of the financial results associated with transactions.
Robinhood specializes not only in crypto trading. The company also offers consumers a range of other services and products. The firm is engaged in stock trading and specializes in managing retirement accounts. Net savings accounts are growing on the company’s platform. This figure rose to 23.3 million in the third quarter, an increase of 360,000 year-on-year. This fact is evidence of investors’ trust in Robinhood and their interest in interacting with the company.
The firm’s net loss for the third quarter was $85 million. In this case, a negative impact on the share for $0.11 was recorded due to a regulatory charge of $104 million. At the same time, the company’s adjusted profit for the mentioned period showed an increase of 191% year-on-year, amounting to $137 million. The dynamic of this indicator confirm Robinhood’s ability to generate positive cash flow
Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said that over the past year, the company has invested much more in products such as Robinhood Gold. He also noted that the firm’s main plans for the future are focused on the desire to provide industry-leading offers that meet the financial needs of an increasing number of consumers.
As we have reported earlier, Robinhood to Buy Credit Card Startup.