Robinhood Markets, the online brokerage firm, has reported a significant decrease in its quarterly loss, accompanied by a strong growth in revenue. However, the company has experienced a decline in monthly active users.
According to the company’s financial report for the third quarter ended Sept. 30, the loss was narrowed down to $85 million, or 9 cents a share. This represents a significant improvement from the previous year’s loss of $175 million, or 20 cents a share. Analysts predicted a loss of 10 cents a share, showing that Robinhood exceeded expectations.
In terms of revenue, Robinhood experienced a 29% increase, reaching $467 million compared to $361 million in the previous year. Despite falling short of analysts’ expectations of $479.5 million, this growth is still notable.
Unfortunately, monthly active users saw a decline of 16% from the previous year, now totaling 10.3 million users. This decrease in user activity is an area of concern for Robinhood.
The growth in revenue for Robinhood can be attributed to several factors. Primarily, higher net interest and other revenue played a significant role. However, this growth was partially offset by a decrease in transaction-based revenue.
Net interest revenue showed a substantial increase of 96% from the previous year, reaching $251 million. This growth was fueled by an increase in interest-earning assets and higher short-term interest rates. On the other hand, transaction-based revenue witnessed an 11% decline from the previous year, totaling $185 million.
Additionally, Robinhood has announced its plans to expand its cryptocurrency trading services to the European Union after its successful launch in the U.K.
Overall, although Robinhood has managed to narrow down its losses and achieve growth in revenue, the decline in monthly active users is a major concern for the company. It remains to be seen how Robinhood will address this issue moving forward.