Robinhood Eyes Europe for Expansion: Q3 Crypto Revenue Plunges 55% YoY

by Arnab Shome
  • The broker is currently offering crypto trading only in the US.
  • It reported a net loss of $85 million in Q3.
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Robinhood (Nasdaq: HOOD) plans to launch brokerage operations in the United Kingdom and crypto trading operations in the European Union, the American broker revealed as it released its financials for the third quarter of 2023. Currently, its crypto brokerage services are only available in the United States.

Robinhood's Ambitions for Europe

While the broker is planning for expansion, its transaction-based revenue, between July and September, decreased 11 percent year-over-year to $185 million. The revenue from options remains unchanged at $124 million; however, revenue from equities and cryptocurrencies dropped 13 percent and 55 percent, respectively. From cryptocurrencies, the broker only generated $23 million. In the previous quarter, cryptocurrencies brought $31 million in revenue, a downtick of 26 percent.

"Looking ahead, we remain focused on providing industry-leading products that serve far more of customers' financial needs, gaining market share, expanding internationally, and continuing to change the industry for the better," said Vlad Tenev, the CEO and Co-Founder of Robinhood Markets.

Meanwhile, the total net revenue of the broker came in at $467 million, an increase of 29 percent year-over-year but declined 4 percent quarter-over-quarter. The yearly push was due to "higher net interest and other revenues, partially offset by lower transaction-based revenues."

Indeed, the net interest revenue of the exchange rocketed 96 percent year-over-year to $251 million.

The broker managed to reduce its operating expenses by 1 percent to $580 million. It ended the quarter with a net loss of $85 million, narrowing down from a loss of $175 million in Q3 2022. However, the broker turned a profit of $25 million in the second quarter of the ongoing year.

Reaction of the Market

Although the American broker posted its financials post-market, its investors reacted strongly in the after-hours trading. Shares of the company closed Tuesday, gaining 1.7 percent; however, it slipped 8.3 percent in after-hours trading, affected by the results.

Movement of Robinhood shares since Tuesday morning
Movement of Robinhood shares since Tuesday morning

User Metrics

The official results published by the California-headquartered broker revealed that the number of its net cumulative funded accounts elevated 360,000 year-on-year to reach 23.3 million.

The overall assets under custody on the brokerage platform saw a yearly escalation of 34 percent to $87 billion. While at $10.2 billion, crypto assets held on behalf of customers improved about 9 percent year-over-year, it declined 11 percent quarter-over-quarter.

"With growing market share of retail trading and increased customer adoption… we're excited to see momentum building," said Jason Warnick, Chief Financial Officer of Robinhood Markets. "As we continue to grow revenues and stay lean on expenses, we're focused on delivering strong operating leverage over time to drive shareholder value."

Robinhood (Nasdaq: HOOD) plans to launch brokerage operations in the United Kingdom and crypto trading operations in the European Union, the American broker revealed as it released its financials for the third quarter of 2023. Currently, its crypto brokerage services are only available in the United States.

Robinhood's Ambitions for Europe

While the broker is planning for expansion, its transaction-based revenue, between July and September, decreased 11 percent year-over-year to $185 million. The revenue from options remains unchanged at $124 million; however, revenue from equities and cryptocurrencies dropped 13 percent and 55 percent, respectively. From cryptocurrencies, the broker only generated $23 million. In the previous quarter, cryptocurrencies brought $31 million in revenue, a downtick of 26 percent.

"Looking ahead, we remain focused on providing industry-leading products that serve far more of customers' financial needs, gaining market share, expanding internationally, and continuing to change the industry for the better," said Vlad Tenev, the CEO and Co-Founder of Robinhood Markets.

Meanwhile, the total net revenue of the broker came in at $467 million, an increase of 29 percent year-over-year but declined 4 percent quarter-over-quarter. The yearly push was due to "higher net interest and other revenues, partially offset by lower transaction-based revenues."

Indeed, the net interest revenue of the exchange rocketed 96 percent year-over-year to $251 million.

The broker managed to reduce its operating expenses by 1 percent to $580 million. It ended the quarter with a net loss of $85 million, narrowing down from a loss of $175 million in Q3 2022. However, the broker turned a profit of $25 million in the second quarter of the ongoing year.

Reaction of the Market

Although the American broker posted its financials post-market, its investors reacted strongly in the after-hours trading. Shares of the company closed Tuesday, gaining 1.7 percent; however, it slipped 8.3 percent in after-hours trading, affected by the results.

Movement of Robinhood shares since Tuesday morning
Movement of Robinhood shares since Tuesday morning

User Metrics

The official results published by the California-headquartered broker revealed that the number of its net cumulative funded accounts elevated 360,000 year-on-year to reach 23.3 million.

The overall assets under custody on the brokerage platform saw a yearly escalation of 34 percent to $87 billion. While at $10.2 billion, crypto assets held on behalf of customers improved about 9 percent year-over-year, it declined 11 percent quarter-over-quarter.

"With growing market share of retail trading and increased customer adoption… we're excited to see momentum building," said Jason Warnick, Chief Financial Officer of Robinhood Markets. "As we continue to grow revenues and stay lean on expenses, we're focused on delivering strong operating leverage over time to drive shareholder value."

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