Robinhood Shares Plummet 12% in After-Hour Trading Following Earnings Call
Shares in trading platform Robinhood plummeted in a major market turnaround, tumbling 12.4% in extended trading after its third-quarter earnings report failed to meet analysts' expectations despite its cryptocurrency operations recording stellar growth.
The fintech firm recorded a net income of $150 million and revenues of $637 million for the quarter, a strong swing into profitability. However, the number fell short of Wall Street's expectations, with earnings per share amounting to 0.17, shy of an expected 0.18.
Crypto trading, on the other hand, saw a steep 112% increase in volume compared to the same quarter last year, with volumes touching $14.4 billion. This was translated into crypto revenues of $61 million, an astonishing 165% year-over-year rise. However, it reflects a cooling trend from the earlier quarters of 2024; crypto trading volumes peaked at $36 billion during Q1.
Chief Financial Officer Jason Warnick assured that the company's last three quarters were its strongest historically in terms of raking in revenue. Total assets under custody for the platform grew to $152.2 billion from the same period last year, a 76% growth, with cryptocurrency assets accounting for $19.45 billion of the total.
Further ahead, Robinhood sets the stage for institutional growth with its planned $200-million takeover of Bitstamp, a crypto exchange. While the immediate market reaction to the earnings report was negative, the company's stock had remained strong throughout 2024, holding onto a 128% gain year-to-date before the earnings call.