New York, Thursday, October 31, 2024-Robinhood reported a third-quarter revenue of $637 million on Wednesday, missing Wall Street’s $657.9 million estimate due to unaccounted “contra revenue” from customer incentives.
Shares of the commission-free trading platform dropped 11% in after-hours trading. The Q3 Report can be reached here.
The $27 million revenue hit stemmed from Robinhood’s 1%-3% asset transfer match promotions, intended to attract funds from other platforms.
Despite this revenue impact, Robinhood saw an increase in trading activity.
Equity and crypto trading volumes rose 65% and 112%, respectively, amid heightened market volatility. Robinhood’s Q3 transaction-based revenue surged 72% to $319 million, with options and crypto trading contributing the most.
While retail investors remained active in the volatile market, Robinhood’s net deposits dropped to $10 billion from $13.2 billion sequentially.
The incentive program, including a 1% “gold deposit” match, added $14 million in contra revenue since Q2 and will taper off in November.
