Robinhood’s Q3 Crypto Gains Couldn’t Prevent a 12.5% Share Drop: What Happened?Arnab Shome


From financemagnates by Arnab Shome

Robinhood (Nasdaq: HOOD) saw substantial gains from its crypto offerings, with crypto trading volume on the platform doubling to $14.4 billion, resulting in a 65 percent increase in revenue from this segment, totalling $61 million.

A Profitable Quarter

According to figures released yesterday (Wednesday), the American trading platform generated $637 million in revenue for the third quarter of 2024, marking a 36 percent increase. Of this, transactions-based revenue grew to $319 million, up 72 percent.

Although crypto revenue posted the largest gains, options trading remained Robinhood’s primary revenue generator, contributing $202 million, a year-over-year increase of 63 percent. Revenue from equities trading also rose by 37 percent to $37 million.

The platform’s net income increased to $150 million, which translates to $0.17 in diluted earnings per share (EPS). In the same quarter last year, Robinhood reported a net loss of $85 million.

Falls Short of Market Expectations

Despite the strong overall figures, the retail broker’s shares dropped by nearly 12.5 percent after-hours, falling short of Wall Street expectations. According to the Zacks Consensus Estimate, the market anticipated Robinhood to generate $661.21 million in revenue for the quarter and an EPS of $0.18.

HOOD share price after the Q3 results; Source: Google Finance

On a media call, Robinhood’s Chief Financial Officer, Jason Warnick, explained that the gap between market expectations and actual results was due to analysts overlooking “contra revenue” from the brokerage’s match promotions.

Jason Warnick, Chief Financial Officer of Robinhood