It Seems Like Crypto Winter Affected Financial Result of Robinhood

In the recent Financial Results, Robinhood’s crypto transaction revenue fell 12% from its previous quarter.
The trading platform further an overall net loss of $175 Million.

On November 02, 2022, Robinhood, released its Third Quarter 2022 results. In the Robinhood reports, the total net revenue increased 14% sequentially to $361 Million, while transaction-based revenues increased 3% sequentially to $208 Million.

Third Quarter Report Amid Crypto Winter

Robinhood is an American Financial Services Company, which provides crypto investing. According to its website, the firm has around 22.9 Million net cumulative funded accounts with more than 12 Million monthly active users.

The firm mentioned as cryptocurrencies decreased 12% consecutively to $51 Million. However, its net interest revenue increased 73% to $128 Million. But it notes the net loss of $175 Million, or $0.20 per share as compared with net loss of $295 Million, or $0.34 per share in the second quarter of 2022, in regular successive improvement of $120 Million or $0.14 per share.

Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said over the Q3 2022 report release that “In the third quarter we achieved our goal of reaching adjusted EBITDA profitability, a quarter earlier than planned. We delivered on top feature requests for customers including advanced charts, options in cash accounts, instant withdrawals and our self-custody, web3 wallet.”

He also shared about the next-week plan as he added “In the next week, we are raising the yield on uninvested cash for Gold members – making it one of the best rates in the industry.”

EBITDA is an acronym for “Earnings Before Interest, Taxes, Depreciation, and Amortization,” that measures any company’s financial health and ability to generate cash flow.

Additionally, Jason Warnick, Chief Financial Officer of Robinhood Markets also states as “We remained focused on serving our customers and driving long-term shareholder value in Q3. We drove positive Adjusted EBITDA by increasing revenues and reducing expenses. We also continued to deliver on our 2022 product roadmap, which helped maintain steady net funded accounts and drive strong net deposits.”

In September, 2022 Robinhood rolled out the beta version of Robinhood Wallet, self-custody, web3 wallet to the first ten thousand customers on the waitlist. This app gives customers total control of their crypto, allowing them to trade and swap with no network fees. Robinhood also expanded its coin listings, adding USDC, Cardano, Uniswap, Stellar Lumens and Avalanche to its platform.

And In October 2022, the firm started rolling out instant withdrawal to provide customers with a new option to withdraw cash instantly to participating banks.

On the Financial Outlook, Robinhood stated the actual results might differ materially from its outlook due to several factors including crypto winter too.