Robinhood's crypto revenue fell 55% from last year, but topped Street forecasts

Robinhood's HOOD$94.61·Market Closed third-quarter cryptocurrency trading business was down 55% from last year but still topped Street forecasts.

Crypto transaction revenue dropped to $120 million in the third quarter, according to the company's earnings report released Tuesday. That was down from about $267 million in the same period last year, but ahead of Wall Street analysts’ expectations of $114.1 million.

That left crypto accounting for just 8.4% of Robinhood's $1.42 billion in total quarterly revenue, compared with roughly 21% a year earlier.

The decline came as customers traded less crypto across Robinhood's platforms. Total crypto trading volume fell 38% to $50 billion, including $21 billion through the Robinhood app, down 48%, and $29 billion through crypto exchange Bitstamp, down 28%.

The slump in crypto trading revenue stood in contrast to Robinhood's broader business. Total revenue rose 12% year-over-year to $1.424 billion, helped by growth in options, equities and prediction markets. Street estimates had been for $1.43 billion.

Options trading generated $399 million in revenue, up 31%, while equities revenue climbed 41% to $121 million. Prediction markets brought in $173 million, more than six times the year-earlier figure.

Third-quarter EPS of $0.51 was less than consensus forecasts for $0.55.

Despite weaker crypto trading, Robinhood continued to build out its digital asset business.

The company said Robinhood Chain, its blockchain network, processed more than $80 billion in decentralized exchange trading volume and generated over $50 million in chain fees during its first quarter operating on mainnet.

Those fees reflect activity on the blockchain and should not be confused with Robinhood's reported crypto transaction revenue. The company did not disclose how much of the chain fees it recognized as revenue.

Shares of the company were down about 5% in post-market trading.