Robinhood profit misses estimates as crypto trading slows
HOOD•Robinhood posted third-quarter earnings of 51 cents per share, below analysts’ 55-cent estimate, as cryptocurrency transaction revenue fell 55% to $120 million. Overall transaction-based revenue rose 19% to $867 million, while operating expenses increased 16% to $739 million.
1. Crypto revenue declines
Robinhood Markets missed Wall Street estimates for third-quarter profit as slower cryptocurrency trading and higher expenses overshadowed stronger options and prediction-market activity. Cryptocurrency transaction revenue fell 55% year over year to $120 million.
2. Other trading grows
Overall transaction-based revenue rose about 19% to $867 million, driven by a more than sixfold increase in event-contracts revenue and a 31% rise in options revenue. CFO Shiv Verma said prediction markets were nearly a $500-million-a-year business, while analyst Bill Birmingham said they may be drawing on existing customers’ activity. Operating expenses rose 16% to $739 million, partly due to higher credit-loss provisions, spending on new businesses and increased marketing.
