Shares of US neobroker Robinhood Markets (NASDAQ:HOOD) sank by upwards of 15% in aftermarket trading Wednesday after the company reported its Q3 2024 results, indicating a decline in Revenues and Net Profit from what was a record Q2 at Robinhood.

On the top line, Robinhood reported Revenues of $637 million in Q3-2024 – 36% up year-on-year from Q3-2023, but down 7% from Q2’s record result of $682 million. Net Profit of $150 million was down from $188 million in Q2.

Robinhood shares were trading (prior to the results release) at a 52 week high, closing Wednesday at $28.21. Aftermarket trading saw Robinhood shares changing hands at about $25, down 11.4%.

Vlad Tenev, CEO and Co-Founder of Robinhood, said of Q3,

“I’m really proud of our Q3 results and how smoothly our product engine is humming. In the past month, we introduced Robinhood Legend, our new desktop offering, and announced index options, futures, and a realized profit and loss tool are coming soon. And just this week, we launched our Presidential Election Market. We have a ton of momentum, and we’re just getting started.”

Jason Warnick, Chief Financial Officer of Robinhood added,

“Q3 was another strong quarter, as we drove 36% year-over-year revenue growth, and dropped most of that to the bottom line. We entered 2024 with the goal of delivering another year of profitable growth, so we’re excited to have already broken prior full year records for both revenue and EPS.”

On the Revenues side of the equation, Robinhood reported that total net revenues increased 36% year-over-year to $637 million (but again down from Q2-2024), broken down as follows:

• Transaction-based revenues increased 72% year-over-year to $319 million, primarily driven by options revenue of $202 million, up 63%, cryptocurrencies revenue of $61 million, up 165%, and equities revenue of $37 million, up 37%.
• Net interest revenues increased 9% year-over-year to $274 million, primarily driven by growth in interest-earning assets.
• Other revenues increased 42% year-over-year to $44 million, primarily due to increased Gold subscription revenues.
• Total net revenues were reduced by $27 million in Q3 2024 (and $13 million in Q2 2024) due to matches paid to customers on transfers and deposits.

When it comes to expenses, Robinhood – which has prioritized expense control lately – said that total operating expenses in Q3-2024 decreased 10% year-over-year to $486 million. This includes a $10 million regulatory accrual, which compares to a $104 million regulatory accrual in Q3 2023. Adjusted Operating Expenses (non-GAAP) increased 12% year-over-year to $397 million, primarily due to increased marketing and growth investments. Share-Based Compensation (SBC) decreased 5% year-over-year to $79 million.

Other financial highlights for Robinhood in Q3-2024 included:

• Funded Customers increased by 1.0 million year-over-year to 24.3 million.
• Investment Accounts increased by 1.5 million year-over-year to 25.1 million.
• Assets Under Custody (AUC) increased 76% year-over-year to $152.2 billion, driven by continued Net Deposits and higher equity and cryptocurrency valuations.
• Net Deposits were $10.0 billion, an annualized growth rate of 29% relative to AUC at the end of Q2 2024. Over the past twelve months, Net Deposits were $39.0 billion, a growth rate of 45% relative to AUC at the end of Q3 2023.
• Average Revenue Per User (ARPU) increased by 31% year-over-year to $105.
• Gold Subscribers increased by 860 thousand, or 65%, year-over-year to 2.2 million.
• Cash and cash equivalents totaled $4.6 billion compared with $4.9 billion at the end of Q3 2023.