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Robinhood sinks after reporting Q3 earnings

Yahoo Finance's Jared Blikre breaks down Robinhood's Q3 earnings report.

Video Transcript

ADAM SHAPIRO: We've got to get to Jared Blikre. We've got Robinhood earnings. And OK, move over, all the old guys. Let's talk about the new game-- new kid on the block.

JARED BLIKRE: Exactly, except the new kid, that stock is off about 7%, 8% here. It was a pretty big revenue miss for the third quarter, the number coming in at $364.9 million. And guess what? The Street was looking for $423.9 million. Third quarter crypto revenue was down. It was at $51 million, and the loss per share coming at $2.06. I don't necessarily have a comparison for that just yet.

But I want to go through some of the other numbers here. Third quarter monthly active users, 18.9 million. I believe that is a sequential decline. The Street was looking for declines of up to 25%, 27%, so some of that baked in here. Third quarter transaction-based revenue, that came in at $266.8 million. And the assets under custody in the third quarter were $95 million-- or $95 billion, excuse me.

The outlook for the fourth quarter, that is another disappointment. They're seeing fourth quarter with a revenue no greater than $325 million. They see their year revenue less than $1.8 billion. And in the fourth quarter, they are expecting new funded accounts to be about 660,000.

Now, I want to make a couple of notes here from the report. They talk about their crypto wallets. That is something that they recently engaged in. Robinhood opened up the waitlist for crypto wallets, one of its most heavily requested products. More than one million customers have signed up to date.

And here is something that I've been harping on for about two years now. Finally, Robinhood has recently launched 24/7 live phone support in our app, giving customers the ability to get phone support at any time and on any topic. Robinhood is the first major crypto platform to provide 24/7 support. So that is good news for their users, should the platform go down again, as all of them do from time to time.

So, all in all, a pretty big revenue miss. The outlook for revenue in the fourth quarter in the full year short of expectations here. And you can see the stock suffering a bit in after hours trading.

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