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HOOD Stock Down 11% in Pre-market, Robinhood Reveals Huge Revenue Miss in Q3 2021

UTC by Steve Muchoki · 2 min read
HOOD Stock Down 11% in Pre-market, Robinhood Reveals Huge Revenue Miss in Q3 2021
Photo: Depositphotos

Robinhood revealed that the Monthly Active Users (MAU) increased by 76% to 18.9 million, compared to 10.7 million in the third quarter of 2020.

Robinhood Markets Inc (NASDAQ: HOOD) stock traded around $35.26, down approximately 11.17% as of October 27, 2021, at 4:45 a.m EDT. The drop was attributed to a report that the company recorded a huge revenue followed by a substantial guidance miss. The commission-free stock trading pioneer said the company’s main business unit is facing consistent headwinds that are expected to persist in the fourth quarter. The total net revenues for Robinhood in Q3 increased by 35% to $365 million, compared with $270 million in the third quarter of 2020. Additionally, the company noted that the transaction-based revenues increased by 32% in the third quarter to $267 million, compared with $202 million in the third quarter of 2020.

Strikingly, the cryptocurrencies increased by 860% in the third quarter of 2021 to $51 million, compared to $5 million in the third quarter of 2020.

A plausible explanation of its stock dip during the early New York hours, since the larger crypto market had experienced a small shake-off. According to data provided by TradingView, the Bitcoin price dropped to as low as $58k. However, the asset and the crypto industry had since recovered some of the losses at the time of reporting.

The trading platform has heavily invested in the crypto industry as the industry continues to widen up. Moreover, institutional investors and more retail traders have continued to proliferate the crypto market seeking a portion of the profits.

Robinhood and Its Performance in Q3 2021

In the third quarter, the company reported a loss before income tax of $1.37 billion, compared with a loss before income tax of $11 million in the third quarter of 2020. The net loss for the company, therefore, came in at $1.32 billion, or $2.06 per diluted share, compared with a net loss of $11 million, or $0.05 per diluted share in the third quarter of 2020.

Worth noting, the Monthly Active Users (MAU) increased by 76% to 18.9 million, compared with 10.7 million in the third quarter of 2020.

“This quarter was about developing more products and services for our customers, including crypto wallets,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets. “More than one million people have joined our crypto wallets waitlist to date. With 24/7 live phone support, we believe that Robinhood is becoming the most trusted and intuitive platform for retail and crypto investors. And looking ahead, we’re committed to delivering tax-advantaged retirement accounts to help everyone invest for the long term.”

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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