Robinhood (NASDAQ:HOOD) Markets, the brokerage known for its significant role in meme stock trading during the pandemic, reported a drop in Q3 revenue, underperforming Wall Street expectations and leading to a near 7% decline in share prices. The company witnessed a 16% reduction in active users to 10.3 million, due to economic challenges including high interest rates and a cost-of-living crisis.
The brokerage reported an 11% decrease in transaction-based revenue, amounting to $185 million. This was primarily driven by a 13% drop in equities and a substantial 55% dip in cryptocurrencies. However, Robinhood managed to boost its net interest revenue by 96% to $251 million, leveraging income from loan interests charged to customers.
Despite these headwinds, Robinhood's Q3 earnings announced on Tuesday surpassed EPS estimates by 10%, coming in at $-0.09, with a YoY revenue increase of $106 million. This was despite a 7.23% share price drop post the previous quarter's EPS beat.
In response to these setbacks, Robinhood has outlined plans to venture into the UK brokerage market and initiate EU crypto trading as part of its diversification strategy. These earnings details, generated by an automated content engine and reviewed by an editor, are accessible via Robinhood's earnings calendar, illustrating the impact on share price.
InvestingPro Insights
In addition to the article's analysis, InvestingPro data and tips provide further insights into Robinhood's financial performance. Despite not being profitable over the past year, Robinhood exhibits a consistent increase in earnings per share, hinting at a potential turnaround. InvestingPro Tips also highlight that net income is expected to grow this year, with two analysts revising their earnings upwards for the upcoming period.
From a data perspective, Robinhood's Market Cap is $8890 million, with a P/E Ratio of -10.49 and a Revenue of $1668 million. This is particularly noteworthy given the company's revenue growth of 24.01% over the last twelve months as of Q2 2023.
It's worth mentioning that these insights are just a fraction of the data and tips available on InvestingPro. For a more comprehensive analysis, consider exploring the full range of InvestingPro Tips and real-time metrics for Robinhood.
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