Robinhood Markets Inc (HOOD) unveiled its financial performance for the third quarter, delivering a mixed bag of results. While the company met analysts’ expectations on earnings per share, its revenue fell short of estimates. Despite the revenue miss, Robinhood demonstrated strong user growth and a significant increase in Assets Under Custody (AUC), indicating a positive direction for the platform.
Here’s a breakdown of the key figures from the report:
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Earnings per Share:
Robinhood reported earnings of 17 cents per share, aligning with analyst consensus estimates.*
Revenue:
The company generated $637 million in revenue, missing the analyst consensus estimate of $650.67 million. Although the revenue growth was impressive, increasing by 36.4% compared to the same period last year, it wasn’t enough to meet market expectations.*
User Growth:
Robinhood experienced significant user growth during the quarter. Funded Customers climbed by 1 million year-over-year to reach 24.3 million. Investment Accounts also saw a rise of 1.5 million year-over-year, hitting 25.1 million.*
Assets Under Custody:
AUC surged by 76% year-over-year to $152.2 billion, fueled by continuous Net Deposits and elevated valuations in equity and cryptocurrency markets.*
Net Deposits:
Robinhood saw $10 billion in Net Deposits, demonstrating an annualized growth rate of 29% relative to AUC at the end of the quarter. This positive trend continued over the past 12 months, with Net Deposits reaching $39 billion, representing a 45% growth rate relative to AUC at the end of the third quarter.*
Average Revenue Per User (ARPU):
ARPU experienced a 31% year-over-year increase to $105.*
Gold Subscribers:
The number of Gold Subscribers jumped by 860,000, or 65%, year-over-year, reaching 2.2 million.Robinhood’s CEO and co-founder, Vlad Tenev, expressed satisfaction with the company’s Q3 results and the smooth operation of their product engine. He highlighted recent product launches and upcoming features, including the new desktop offering ‘Robinhood Legend,’ index options, futures, a realized profit and loss tool, and a Presidential Election Market. Tenev emphasized the company’s significant momentum and its commitment to continued innovation.
Despite the positive developments, Robinhood’s stock price took a hit in after-hours trading. As of publication, HOOD shares were down 10.84% at $25.15, signaling investors’ concern about the revenue miss.
The future of Robinhood remains to be seen, but its strong user growth and increasing AUC suggest a potential for future success. However, the revenue miss serves as a reminder that the company needs to continue to find ways to monetize its user base effectively to meet investor expectations.
