Robinhood Q3 financial report: cryptocurrency trading revenue fell 12% month-on-month

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Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- Robinhood monthly active users fell by 1.8 million to 12.2 million in September.

- Cryptocurrency trading revenue fell 12% from the previous quarter to $51 million.

- Robinhood CFO Jason Warnick said on the Q3 earnings call on Nov. 2 that the company will not complete the acquisition of U.K. encryption app Ziglu this quarter.

Robinhood reported a net loss of $175 million in the third quarter, missing analysts' consensus estimate for a loss of $311 million, according to FactSet. Its shares rose more than 4 percent in after-hours trading.

The retail investing platform returned to profitability on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which totaled $47 million in the quarter. It also beat analysts' expectations for a negative $48 million and was an improvement from negative $80 million in the second quarter, according to FactSet.

Meanwhile, the platform's monthly active users fell 1.8 million from the previous month to 12.2 million in September, and net revenue rose 14% from the second quarter to $361 million.

Cryptocurrency trading revenue fell 12% quarter-over-quarter to $51 million, missing expectations for $58 million and also down from $58 million in the second quarter.

Overall, Robinhood's transaction revenue rose 3% to $208 million from the second quarter's $202 million.Layoffs announced twice。

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Ziglu Acquisition Progress

Additionally, Robinhood will not complete its long-awaited acquisition of U.K.-based crypto startup Ziglu this quarter.

Chief Financial Officer Jason Warnick raised the possibility that the deal might never get done at all during the company's third-quarter earnings call on Nov. 2.

“While both parties are working hard to reach an agreement, there is still some regulatory uncertainty about whether a deal will be done,” Warnick told investors and analysts. “What we know so far is that this deal will not completed this quarter."The platform significantly increased in Augustclosed its takeover bid for Ziglu, lowering its value from $170 million to $72.5 million. Robinhood and Ziglu debuted in April of this yearAnnounceAnnounce

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Global launch of crypto wallet plannedDespite the uncertainty surrounding the Ziglu acquisition, Robinhood executives emphasized that expansion outside the U.S. is still a work in progress. As exchanges scrambled for dwindling trading volumes, the retail investing platform ended the quarter withLaunched its own cryptocurrency wallet, Robinhood Wallet

, and plans to start offering Robinhood Wallet globally "early next year."

At the end of September, Robinhood rolled out its self-hosted Web3 wallet to 10,000 test users. Robinhood Wallet websiteshowshow

, the waiting list exceeds 1 million.

Robinhood will roll out the wallet to more people in the coming months, company executives said on an earnings call. Robinhood expects to make the wallet "generally available" in early 2023, possibly adding NFT functionality. Crypto enthusiasts need to check out the functionality of NFTs in wallet apps.