Robinhood Eyes European Expansion As Exchange Gains Momentum In Q3 2023

Crypto and traditional exchange Robinhood has released its financial results for the third quarter of 2023, revealing a 29% increase in total net revenues, hitting $467 million. The total revenue generated by crypto and financial assets decreased, but the company announced an expansion in the sector for the European market. 

Robinhood’s Net Revenue Rises as It Prepares for International Growth

Robinhood’s growth spurt, largely attributed to a 96% increase in net interest revenues amounting to $251 million, has outshined the 11% decrease in transaction-based revenues, which stood at $185 million. Despite this, net loss narrowed to $85 million, improving from the previous year’s $175 million loss.

Recently, cryptocurrencies and legacy financial markets have been enjoying a relief rally, but overall, they have been trending to the downside for most of 2023. As a result, the company reported the above-mentioned losses.

According to a report released to the public, the company’s financial landscape appears positive, with net cumulative funded accounts growing to $23.3 million and assets under custody ballooning by 34% to $87 billion.

The average revenue per user has also spiked, reaching $80, a 27% year-over-year growth. The company also revealed a big cash reserve of $4.9 billion, despite a dip from last year’s $6.2 billion, largely due to strategic acquisitions and share repurchases.

As mentioned, the platform was impacted by the volatility of the crypto market, with revenues from crypto trading down by 55% to $23 million. This hasn’t deterred Robinhood’s plans for expansion; the company is poised to launch brokerage operations in the United Kingdom (UK) and introduce crypto trading in the European Union (EU).

If the company decides to follow through with its plans, it will join the likes of Coinbase, Kraken, and other crypto exchanges looking to get a stronger foothold in the region. The upcoming implementation of the Markets in Crypto Assets Regulation (MiCA) has brought some certainty to the region’s legal framework.

Thus, these entities have been pursuing licenses to operate in the EU. MiCA is set to be implemented by the end of 2024, but some countries have begun efforts to attract capital to their territories, such as Spain, Romania, and others.

Cryptocurrency And Global Trading In Focus

On the product front, Robinhood Gold subscriptions have surged to over 1.3 million, with the service now offering a 4.9% annual yield on cash and 3% on US retirement accounts. The platform’s recent innovations, like extended hours trading and the introduction of the Crypto Pricing Dashboard, highlight Robinhood’s commitment to enhancing its offerings.

CEO Vlad Tenev is optimistic about the future, stressing the company’s focus on industry-leading products and market share growth. CFO Jason Warnick echoes this sentiment, underlining Robinhood’s momentum with products like Robinhood Retirement and Securities Lending, according to the financial report.

As of this writing, Bitcoin trades at $35,700 with sideways movement in the last 24 hours.

Cover image from Unsplash, chart from Tradingview