Robinhood losses continue in Q3 as company looks to UK, EU expansion
Watch out UK and EU, here comes Robinhood.
While US based neobroker Robinhood continued to disappoint investors with another poor quarter in Q3 2023 – Robinhood shares were down more than 8% in After Hours trading after the results were released – the company’s headline in its press release stated: “Company plans to launch UK Brokerage operations and EU Crypto trading in the coming weeks.”
First, to the results.
Robinhood (NASDAQ:HOOD) reported that Q3-2023 Revenues came in at $467 million, which was down 4% from Q2 ($486 million). But Robinhood’s fundamental problems run deeper than that, with Net Interest Revenues ($251 million) making up more than half (54%) of Robinhood’s total Revenues.
Despite its troubles and inability to actually make money, Robinhood has continued to be very good at attracting client assets. Assets Under Custody (AUC) increased 34% year-over-year to $87 billion (although down from $89 billion as at the end of Q2), primarily driven by continued Net Deposits and higher equity valuations. With the current high interest rate environment, Robinhood has been able to cover its dwindling Brokerage and Crypto trading related Revenues with interest.
In its Brokerage business, Robinhood said that Transaction-based revenues decreased 11% year-over-year to $185 million.
- Options was unchanged at $124 million.
- Equities decreased 13% to $27 million.
- Cryptocurrencies decreased 55% to $23 million.
On the bottom line, Robinhood posted a Net loss of $85 million, compared with a net loss of $175 million in Q3 2022.
Probably more interesting to the UK and EU based online trading industry was, as noted above, Robinhood’s main headline that it plans to expand soon in the UK and EU. Specifically, in listing its main growth opportunities, Robinhood gave three points, two of which had to do with oversees expansion:
- With an experienced team in place, Robinhood said it will soon launch brokerage operations in the UK. (Back in July FNG had reported that Robinhood was staffing up in the UK, in preparation for a UK launch in the coming months.)
- As another step in global expansion, it is also planning to launch crypto trading in the EU, following the UK launch.
- Robinhood is continuing work to build futures trading, aiming to bring the intuitive mobile experience that customers know from Robinhood to the industry.
Robinhood’s full Q3 2023 results release can be seen here.