Crypto revenue at Robinhood Markets (HOOD) increased from $44 million in the fourth quarter to $54 million in the first quarter. In the third quarter of last year, the company reported $51 million in crypto revenue. Down from a record $233 million in the previous quarter.
The popular free trading software had overall Q1 revenue of $299 million. Well below the FactSet analyst consensus forecast of $355 million. According to analysts’ consensus estimates, the company reported a loss of 38 cents per share. However, it it actually lost 45 cents.
As of the end of the most recent quarter, the net cumulative funded accounts at the company had climbed to 22.8 million from 18.0 million. This is according to a press release released on March 31. During the second quarter of 2021, high client interest in cryptocurrencies drove the increase at Robinhood, according to the company.
Effortless Robinhood Chains
According to Robinhood, its basic crypto infrastructure has been refined to “effortlessly” hold and support new coins, tokens and chains. “Relatively low effort,” according to CEO Vlad Tenev. It is what it takes for Robinhood to add new coins on its platform.
Recently, Robinhood decided to buy London-based crypto platform Ziglu. Which has been allowed to provide crypto services in the United Kingdom by the Financial Conduct Authority. It also added tokens SHIB, SOL, Polygon’s MATIC and Compound’s COMP to its platform. After activating its crypto wallet for two million “qualified” consumers. Additionally, making digital asset transfers more widely available in the long-firewalled financial app.
After-hours trading on Thursday saw Robinhood’s stock fall around 12 percent.
Uncertainty in the Market
Because of the difficult macroeconomic climate, consumers at Robinhood Markets Inc. have become more conservative in their investing decisions. Which has reduced the company’s earnings from bitcoin trading.
The online brokerage reported Thursday that its first-quarter cryptocurrency income decreased 39% from a year earlier to $54 million. As reported by Bloomberg, the median forecast of the 11 experts polled was $56.1 million short of the actual amount. The company’s total net sales were down 43% from last year. New York City’s post-market trade at 6:15 p.m. saw shares fall by 11 percent.
In the wake of a 43 percent drop in revenue, Robinhood’s stock has soared to new heights.
According to CEO Vlad Tenev, with uncertainty in the market our consumers became more cautious. The trading less frequently and in smaller quantities across all asset classes. But crypto activity in particular decreased “quite considerably.”
Also, low interest rates, low inflation and increasing stock markets have been the norm for Robinhood for the majority of its existence. According to Tenev, customers are now experiencing the opposite tendencies.
Still, Robinhood places a high priority on crypto. During the third quarter, crypto revenue accounted for 18% of total net revenue compared to 13% in the previous quarter. In response to user requests, it launched four new currencies in April: Compound, Polygon, Solana, and Shiba Inu. Additional coins are expected to be added in the future, according to the business.