Robinhood Says Q3 Revenue Will Drop Because Of Lower Crypto Trading Activity In Updated IPO Filing

Soon-to-be publicly traded stock and crypto brokerage app Robinhood expects its upcoming quarterly revenue to be lower than previous quarters.

What Happened: According to a recently amended Form S-1, Robinhood noted its trading activity during the first two months of 2021 was “particularly high” but has now returned to “levels more in line with prior periods.”

“We expect our revenue for the three months ending September 30, 2021, to be lower, as compared to the three months ended June 30, 2021, as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies, during the three months ended June 30, 2021, and expected seasonality,” stated the trading app in the filing.

The company also expects to report net revenue between $546 million and $574 million in Q2, which it says is primarily driven by a 130% increase in Net Cumulative Funded Accounts and increased trading activity related to options and cryptocurrencies.

It also expects to report $102 billion in assets under custody this year, which represents a 205% increase from the $33 billion it reported at the same time last year.

Read also: Robinhood Crypto Entity Faces $30M Fine After Money Laundering Probe

“The increase in these Key Performance Metrics resulted primarily from an increase in new users joining our platform, driven by general market interest trading,” said the platform.

However, Robinhood anticipates that the rate of growth in these metrics is also likely to be lower in the next few months as a result of a slowdown in crypto trading activity.

Last month, the platform revealed that 34% of its crypto revenue in Q1 came from Dogecoin DOGE/USD alone.

Price Action: At press time, the leading cryptocurrency Bitcoin BTC/USD, was trading at $32,156, up 0.30% over the past 24-hours.

Dogecoin also traded 0.04% higher over the same period, exchanging hands for $0.1902 at the time of writing.