Robinhood third quarter earnings 2021

Robinhood co-founder and CEO Vlad Tenev rings the opening bell on the Nasdaq Stock Exchange on July 29, 2021.

Source: Nasdaq

Stock trading app Robinhood reported a huge revenue loss in the third quarter as cryptocurrency trading declined.

Shares of the new public company fell 8% after market trading.

For the third quarter, total net revenue was $365 million, beating estimates of $431.5 million, according to Refinitiv. Revenue increased 35% year over year but was well below the $565 million in second quarter revenue, which was boosted by the massive boom in cryptocurrency trading.

Transaction-based revenue in the third quarter totaled $267 million, of which only $51 million came from cryptocurrency trading. Total revenue from cryptocurrency trading was $233 million in the second quarter.

Robinhood posted a net loss of $1.32 billion, or $2.06 per share. Wall Street had expected a loss of $1.37 per share, according to Refinitiv. It was not immediately clear whether these numbers were comparable.

Robinhood warned investors that third-quarter results could be affected by a slowdown in trading after a record second quarter. But this was much worse than expected.

“For the three months ending September 30, 2021, we expect seasonal headwinds and lower trading activity across the industry to result in lower revenue and significantly lower new funded accounts than in the prior quarter,” the company said in the earnings statement.

Funded accounts (linked to a bank account) totaled 22.5 million as of the second quarter.

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