In the third quarter ending September 30, Robinhood reported earnings per share of 51 cents, falling short of the expected 56 cents, while revenue matched expectations at $1.42 billion. The company's net income decreased to $468 million from $556 million a year earlier.
Although revenue increased by 12% year-over-year, transaction-based revenue of $867 million was below the anticipated $879 million, raising concerns about Robinhood's ability to maintain momentum in its trading businesses. The company is diversifying its offerings, with significant growth in options trading and event contracts, which saw a 31% and over 500% increase in revenue, respectively.
However, a 55% drop in cryptocurrency revenue to $120 million has impacted overall profitability. CFO Shiv Verma noted that event contracts related to crypto movements performed well, providing investors with alternative avenues despite the downturn in crypto prices.
Net deposits on the platform reached $15.7 billion for the quarter, reflecting a 17% annualized growth rate, contributing to a total of $71 billion in net deposits over the past year, a 21% increase compared to the previous year