Fee-free trading platform Robinhood’s crypto revenue declined 78% in the third quarter this year, earning only US$51 million during that time according to the company’s Q3 report released Tuesday. This is compared to the US$233 million the company earned in the previous quarter in which the market hit the height of the bull run, from which the market spent much of Q3 recovering.
Fast facts
- The firm attributed this in particular to a decline in the price of Dogecoin, the meme-based cryptocurrency whose explosion in popularity earlier in the year helped spur strong sign-ups at the company. The price of Dogecoin jumped roughly 900% in less than a month in May to reach an all-time high of US$0.7376, though quickly receded in the months that followed and has been treading water around US$0.20 ever since, according to data from CoinMarketCap.
- “In Q2, the story was about crypto, especially Doge,” said CFO Jason Warnick in a call with reporters.
- Robinhood earned US$365 million overall in the quarter, down from the US$565 million it earned last quarter but still higher than its Q3 earnings last year. The company saw a loss before income tax of US$1.37 billion, most of which came in the form of share-based compensation expenses based on the company’s initial public offering from earlier in the year.
- In some positive news, company spokespeople said that more than 1 million people had already joined the waitlist for the company’s upcoming crypto wallet.
- Following the release of the underwhelming earnings report, Robinhood’s share price fell 8% in after-hours trading, closing the day at US$39.57, according to data from MarketWatch.