Robinhood has shared ambitious plans to expands its financial services offerings both in the United Kingdom (UK) and across the European Union (EU). The popular American brokerage platform announced this strategic move as part of its third-quarter 2023 financial report. The company, which is known for its commission-free stock and cryptocurrency trading, currently only offers its crypto brokerage services in the United States.
Despite its plans for international expansion, Robinhood reported a decline in transaction-based revenue during the third quarter. Between July and September, the company’s transaction-based revenue decreased by 11 % year-over-year, amounting to $185 million. Revenue from options trading remained stable at $124 million, while revenue from equities and cryptocurrencies dropped by 13 % and 55 %, respectively. Specifically, cryptocurrency-related revenue saw a significant decline from $31 million in the previous quarter to $23 million, marking a decrease of 26 %.
Robinhood Expands into UK & EU Crypto Trading
Vlad Tenev, the CEO and Co-Founder of Robinhood Markets, expressed the company’s commitment to offering innovative products that cater to a broader range of customers’ financial needs, expanding its market share, and making a positive impact on the industry.
The company’s total net revenue for the quarter reached $467 million, representing a 29 % year-over-year increase. This growth was primarily driven by higher net interest and other revenues, which were partially offset by the decline in transaction-based revenues. Robinhood’s net interest revenue experienced remarkable growth, surging by 96 % year-over-year to $251 million.
Robinhood also demonstrated cost-efficiency by reducing its operating expenses by 1 %, bringing them to $580 million. The company reported a net loss of $85 million for the quarter, significantly narrowing the loss compared to the same period in 2022, when it reported a loss of $175 million. Notably, Robinhood achieved a profit of $25 million in the second quarter of 2023.
The financial results announcement had a notable impact on Robinhood’s stock price. While shares of the company closed with a 1.7 % gain on Tuesday, they slid 8.3 % in after-hours trading, reflecting the market’s response to the financial figures.
Despite the market reaction, the company revealed impressive growth in its user base. The number of net cumulative funded accounts increased by 360,000 year-on-year, reaching a total of 23.3 million accounts. Additionally, the assets under custody on Robinhood’s platform saw a significant annual increase of 34 %, reaching $87 billion. However, the value of crypto assets held on behalf of customers, which stood at $10.2 billion, experienced an 11 % decline in the quarter-over-quarter comparison.
Jason Warnick Statement
Jason Warnick, Chief Financial Officer of Robinhood Markets, expressed optimism about the company’s future, emphasizing its growing market share in retail trading and increased customer adoption. He highlighted the company’s focus on delivering strong operating leverage over time to enhance shareholder value.
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