Robinhood to Launch European Crypto Offerings Despite Q3 Revenue Miss
The U.S. fintech broker Robinhood is gearing up to introduce its crypto services in Europe and the U.K. in the near future, despite falling short of revenue estimates in Q3. The company, based in Menlo Park, plans to expand its offerings in the region as it aims to generate more revenue.
In its Q3 2023 financial results press release, Robinhood disclosed that its crypto-related revenue dropped by 55% to $23 million. Nevertheless, the trading company is determined to push ahead with its crypto offerings in Europe as part of its global expansion strategy.
However, the company did not provide details about the scale of its planned crypto products in the European Union.
Challenges and Future Outlook for Robinhood
Aside from crypto, Robinhood also faced a decline in transaction-based revenues, which decreased by 11% year-over-year to $185 million. Despite this, the firm’s assets under custody increased by 34% year-over-year to $87 billion due to net deposits and higher equity valuations.
During a call with analysts, Robinhood’s chief financial officer Jason Warnick acknowledged the possibility of even lower revenue in Q4 2023 if current levels of securities lending and free credit balances persist. This news led to a more than 9% drop in HOOD shares during after-hours trading.
In addition, Robinhood had let go of 150 employees, representing 7% of its full-time workforce, earlier in the summer of 2023. These layoffs affected various departments including customer trust and safety, customer experience and platform shared services, and safety and productivity.
Hot Take: Challenges and Opportunities for Robinhood
Despite facing revenue challenges and recent layoffs, Robinhood remains determined to expand its offerings in Europe and the U.K., signaling confidence in its future growth potential. With a focus on crypto and other financial products, the company aims to navigate through current setbacks and emerge stronger in the long run.
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