Popular commission-free trading platform Robinhood released its third-quarter earnings on Wednesday. Robinhood recorded a 112% YoY growth in cryptocurrency trading volumes exceeding $14 billion in Q3 2024.
However, this marked a decline from earlier in the year, reflecting a broader cooling off in trading activity.
Robinhood Crypto Trading Volumes Rise, But Momentum Slows
Robinhood reported that its crypto trading volumes grew by 112% year-over-year, reaching $14.4 billion in the third quarter.
This growth highlights the increasing interest in cryptocurrency among retail investors, as crypto remains a key focus for many traders on the platform. However, compared to the previous quarters of this year, the volume has dropped significantly.
In the second quarter, crypto trading volume stood at $21.5 billion and was as high as $36 billion in the first quarter. This means that although there has been a yearly growth, the trading momentum has slowed down throughout 2024.
One possible reason for this decline could be the waning excitement around certain cryptocurrencies that initially surged earlier in the year.
In addition to crypto, Robinhood also saw growth in equity trading volumes, which rose 65% year-over-year, totaling $286.2 billion for Q3. This shows that while crypto remains popular, equities still play a large role in the platform’s overall trading activity.
Revenues Surge Across All Trading Categories
Robinhood also saw significant increases in its transaction-based revenues. The company reported a 72% increase in this category compared to the same period last year, bringing in $319 million.
Breaking this down, cryptocurrency trading contributed $61 million to Robinhood’s revenue, an increase of about 165% from last year. Despite this growth, crypto revenues did drop compared to the previous quarter, where Robinhood earned $81 million from crypto trades.
Other areas of Robinhood’s business also saw revenue increases. Options trading, for example, brought in $202 million, up 63% from last year. Meanwhile, equities trading generated $37 million, marking a 37% increase.
Although Robinhood’s cryptocurrency earnings have slowed since Q1, this area still grew enough to keep the platform among others. However, the company’s total revenue for the quarter was $637 million, slightly less than the expected $650.67 million.
Assets Under Custody See Substantial Growth
In addition to the rise in trading volumes, Robinhood reported significant growth in its Assets Under Custody (AUC).
The company’s AUC rose by 76% year-over-year to $152.2 billion. This growth was driven by both net deposits from users and the increased valuation of stocks and cryptocurrencies held by customers.
AUC reflects the total value of assets, including equities, options, cryptocurrencies, and cash, minus any receivables owed by users.
The CFO of Robinhood, Jason Warnick, said, “Q3 was another strong quarter, as we drove 36% year-over-year revenue growth and dropped most of that to the bottom line.”
He added, “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.”
Robinhood has also been working on expanding its crypto offerings. Earlier this month, at a summit, the company confirmed plans to introduce Bitcoin and Ether futures to its platform.
Recently, Robinhood also launched event contracts, allowing users to bet on the outcome of the U.S. presidential election.
Despite missing its revenue target for the quarter, Robinhood’s overall performance reflects strong demand for its services, especially in the crypto space.
