Robinhood had a net loss of $1.32 billion last quarter, and crypto trading revenue has fallen by 78% since the second quarter. Their stock price fell 12% to $34.80 at 9:46 a.m. in New York, which was $38 lower than the IPO price at the end of July. Bloomberg Report.
In an earlier Bloomberg survey, analysts estimated that Robinhood Markets Inc.’s total revenue would reach 423.9 million U.S. dollars, but the figure was lower than expected, only 364.9 million U.S. dollars.
Robinhood CEO Vlad Tenev had predicted that trading activity would decline in the third quarter of 2021 and fewer accounts would be opened.As he said during the meeting Third Quarter Earnings Conference CallThe falling numbers do not worry them because they have different short-term goals.
The fourth quarter may be due to tThe heir’s expectation for the fourth quarter is that “total revenue will be less than 325 million U.S. dollars, and full-year revenue will be less than 1.8 billion U.S. dollars. At the high end, this means annual revenue growth of 85%.” CFO Jason Warnick said.
Warnick also reminded that they usually show a “seasonal curve, compared with the past three quarters, the growth rate in the first quarter of this year is higher.”, and further explained their focus on team building in the third quarter:
We continue to make progress in team building, mainly by adding engineering, customer service, and our regulatory and compliance teams. During the quarter, we added 580 full-time employees across the company, a 21% increase compared to the second quarter.
Warnick added that they are not worried about near-term profitability, but feel safe to be “a long-term profitable company.”
Robinhood’s crypto activity drops
In Robin Hood’s report Their monthly active users (MAU) dropped from 21.3 million in the second quarter to 18.9 million in the third quarter. Their cryptocurrency activity has also fallen sharply because their new fund accounts have been significantly reduced.
Many people believe that Robinhood will improve the way they invest in the crypto market. However, many people want to know whether they can satisfy the interests of many customers, such as integrating new digital coins.
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Crypto activities and revenue play an important role in Robinhood’s platform. Since they announced their intention to provide crypto wallets, the waiting list of 1 million customers has skyrocketed. Regarding the potential growth that the project may bring, Tenev commented:
We actually believe that by launching the wallet, we will largely solve the main pain points that customers are now experiencing.
Regulatory requirements vs. encryption platforms
Tenev stated on the earnings conference call that “the regulatory environment is becoming increasingly uncertain.” As they want to increase their participation in the encryption field, they also intend to monitor their platform and ensure that it will “launch products that meet legal and regulatory requirements” Safety.
He explained that Robinhood is carefully studying new virtual currencies, but they are focusing on meeting regulatory guidelines because they don’t want to run in again
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In a recent interview BloombergSpencer Bogart, general partner of Blockchain Capital, reacted to Robinhood’s plummeting numbers and said that this decline is consistent with the frustration of crypto platforms caused by the traditionally unfriendly regulations in the United States.
Bogart explained: “Historically, the United States has been so unfriendly to innovation in the encryption field that most platforms have been forced to ban Americans.” In his view, regulations only affect the freedom of the American people, not It’s good for them.
For a country built on the principles of freedom, growth, and innovation, it is not only a shame, but also a right Should be able to use this technology to cause harm to the American people.
He clarified that he is not sure about Robinhood’s internal issues, but he understands the prospects behind Tenev’s comments on the regulatory situation and is “actually not clear”. However, when he saw the “trend” of cryptocurrency, he remained optimistic.
Robinhood doesn’t sound worried about the results of the fourth quarter. Their goal is to achieve profitability slowly and steadily. Warnick stated that they are investing in cryptocurrencies and look forward to diversifying their product selection.