Robinhood’s L2 and prediction market wager proceed to repay as a key revenue driver. According to the fintech’s Q3 earnings report, its crypto revenue surged by 20% to $120M from Q2’s $100M. The Q3 crypto revenue was primarily pushed by prediction markets and its Ethereum L2 Robinhood Chain.
In specific, prediction markets raked in $173M, marking an 11% enhance from Q2’s $156M. The L2, then again, introduced in $26M, offsetting crypto buying and selling revenue, which cooled to $94M from Q2’s $100M.
Robinhood’s crypto revenue beats expectations
The crypto buying and selling revenue consists of the Robinhood client app and Bitstamp exercise. Overall, the fintech generated $1.4B in revenue in This fall, up 12% on a year-over-year (YoY) foundation. But this was barely under analysts’ estimate of $1.43B. It additionally missed the earnings per share (EPS) by 6% ($0.60 towards anticipated $0.64).
But crypto’s $120M revenue contributed 8.4% to the revenue share. Interestingly, the $120M crypto revenue was above analysts’ estimate of $114M.
The prediction markets part contributed 12%, whereas the remaining 79% was from choices, equities, and so on.
That mentioned, the L2 was launched in July and leverage memcoin mania to draw customers earlier than providing tokenized shares and different companies. As of late October, the L2 has $1.24B in complete worth locked (TVL), underscoring spectacular DeFi exercise.
The chain additionally did almost $90B in DEX quantity in Q3 and is already dealing with $25B in This fall, underscoring robust hypothesis.
As such, whether or not the L2 makes extra money in This fall could rely on broader crypto buying and selling quantity and market sentiment. In truth, VanEck’s head of digital analysis, Matthew Sigel, echoed an identical sentiment.
That mentioned, Robinhood inventory, HOOD, dumped by 7.45% to $92.84 on Tuesday as a result of a revenue and EPS miss. Overall, the inventory has declined 31% from its September peak of $126, amid a broader US fairness meltdown.
Despite the pullback, Wall Street analysts’ consensus worth goal is $130, implying a 38% upside potential from present ranges.
Overall, Robinhood’s crypto buying and selling exercise softened, however its L2 and prediction market boosted revenue. Whether the expansion will lengthen into This fall stays unclear.
Final Summary
- Robinhood’s crypto revenue elevated by 20% to $120M in Q3, up from $100M in Q2
- HOOD inventory dumped 7% on revenue and EPS miss, extending the worth pullback to 31% since September
