The stock of Robinhood Markets (HOOD) is down 10% after the online brokerage reported third-quarter financial results that missed Wall Street forecasts.
Robinhood, whose mobile app allows investors to trade stocks and cryptocurrencies, announced earnings per share (EPS) of $0.17 U.S., which was shy of the $0.18 U.S. expected amongst analysts.
Revenue in the quarter came in at $637 million U.S., which was well below the $661 million U.S. forecast on Wall Street. Nevertheless, sales were up 36% from a year earlier.
Management blamed the poor showing on matching bonuses that the company has been paying to incentivize customers to move their accounts to Robinhood from rival brokerages.
Customers have received more than $200 million U.S. in matches on retirement account transfers since Robinhood began offering the incentives in 2023.
Despite missing targets on the top and bottom lines, Robinhood still recorded strong growth in many areas of its business during Q3.
The company’s client assets increased 76% year-over-year to $152.2 billion U.S. Transaction-based revenue grew 72% from a year ago.
Additionally, the company’s gold subscription service that gives customers access to additional features on its trading app added 860,000 new additions in the quarter.
There are now a total of 2.2 million gold subscribers at Robinhood Markets.
The company continues to introduce new products and services to attract new customers, including offering a credit card.
Before today (Oct. 31), Robinhood’s stock had risen 128% this year and was trading at $28.21 U.S. per share.
