Robinhood Markets (NASDAQ:HOOD) shares dropped 6% in after-hours trading after announcing Q3 earnings on Tuesday, Nov. 7. Though earnings per share (EPS) came in 1 cent better than expected, the California-based financial services company reported revenues of $467 million that missed Wall Street estimates of $478.4 million by 2.4%. Monthly active users (MAU) also decreased by 16% to 10.3 million.
This comes on top of a significant share sale by Robinhood’s co-founder and Chief Creative Officer Baiju Bhatt. In October, Bhatt sold approximately 20% of his stake, as InvestorPlace.com’s Larry Ramer recently noted.
Nevertheless, Robinhood’s management remains bullish on its future prospects. The company announced expansion plans, specifically the upcoming launch of brokerage operations in the United Kingdom and cryptocurrency trading in the European Union.
The third quarter also saw Robinhood extend its services. It is now offering 24-hour trading for 95 stocks and a 1% match for IRA deposits. The benefits increased to a 3% match for its gold members, fragmenting its offerings in order to cater to a broader market.
“Looking ahead, we remain focused on providing industry-leading products that serve far more of customers’ financial needs, gaining market share, expanding internationally, and continuing to change the industry for the better,” stated CEO Vlad Tenev.
Still, investors will likely remain cautious about Robinhood’s prospects. Critics have previously warned that Robinhood’s IRA products might be unsuitable for younger investors who joined the platform for speculative trading. And though the recent cryptocurrency rally has helped Robinhood’s shares gain 15% year to date, another stumble in crypto prices could send HOOD shares back down again.
Thomas Yeung produced this article using data from Thomson Reuters and unique generative AI prompts. These prompts help distill real-time quarterly earnings data and combine it with InvestorPlace.com’s best-in-class analysis. Our readers get a deep dive into financial results at lightning speed. These articles have been reviewed by a human editor prior to publication. To report any concerns or inaccuracies, please contact us at editor@investorplace.com.
