Robinhood (NASDAQ:HOOD) posted earnings yesterday, which unfortunately did not match investor expectations. Shares of Robinhood closed at $94.56 but opened this morning at under $90. Today, shares regained the $90 level.
Robinhood reported $1.4 billion in revenue for the quarter, up 12% year-over-year. At the same time, net income fell 14% year-over-year to $476 million, and diluted earnings per share fell 16% year-over-year to $0.51.
Net Deposits were $16 billion. Funded Customers increased by 1.9 million, or 7%, year-over-year to 28.7 million.
Total Platform Assets increased 19% year-over-year to $396 billion.
Shiv Verma, Robinhood Chief Financial Officer, put a positive spin on the numbers:
“We also added a new business cylinder with over $100 million in annualized revenues this quarter as Rothera scaled rapidly. And we’re entering Q4 with strong momentum, as October Net Deposits have already topped $13 billion month-to-date, including $6 billion from the Dell family’s contribution to Trump Accounts.”
Robinhood claimed the title of the number-one platform for active traders and the number-one global financial ecosystem.
Analyst response was mixed.
Wells Fargo cut its price target by $20 to $100 while keeping it at equal weight. Rosenblatt kept its buy rating and a $135 price target.
Robinhood’s disappointment sets up Coinbase (NASDAQ:COIN) earnings, due tomorrow after market close. Revenue is expected to land from $1.2 to $1.22 billion, a steep decline from the prior year. An EPS loss may be in the cards.
Meanwhile, some analysts remain bullish on the “everything exchange,” with JPMorgan at Overweight and Oppenheimer at Outperform, while Barclays maintains an Underweight rating.
Much of Coinbase’s price action has been driven by optimism that key digital asset legislation will become law. After the CLARITY Act failed to garner sufficient bipartisan support, focus has shifted to the midterms, with some still hopeful a deal could be worked out after next week’s elections.
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