Robinhood Plans UK and EU Expansion Amid Q3 2023 Struggles

Robinhood Q3 2023 financials disappoint, but the neobroker reveals expansion into the UK and EU markets.

Home » Robinhood Plans UK and EU Expansion Amid Q3 2023 Struggles

Robinhood has shared plans for the United Kingdom (UK) and European Union (EU) expansion. Before we read about that let’s delve into their Q3. Robinhood faced disappointment among investors as it reported another challenging quarter in Q3 2023. Following the release of its quarterly results, Robinhood’s shares plummeted by more than 8% in after-hours trading. Despite this, the company made a notable announcement in its press release, stating its plans to launch brokerage operations in the UK and expand into cryptocurrency trading in the European Union (EU) in the upcoming weeks.

Let’s delve into the financials first. Robinhood (NASDAQ: HOOD) disclosed that its Q3-2023 revenues stood at $467 million, representing a 4% decline from the previous quarter’s $486 million. The company’s underlying issues go beyond these figures, with net interest revenues accounting for over half (54%) of its total revenues, amounting to $251 million.

Robinhood Plans UK & EU Expansion

Remarkably, Robinhood continues to attract client assets despite its financial struggles. Assets Under Custody (AUC) surged 34% year-over-year, reaching $87 billion. This growth can be attributed to ongoing net deposits and higher equity valuations, even though it dropped from $89 billion at the end of Q2. Capitalizing on the prevailing high-interest rate environment, Robinhood has managed to offset. It’s declining revenues from brokerage and crypto trading with interest income.

Specifically in its brokerage business, Transaction-based revenues decreased by 11% year-over-year, totaling $185 million. Options revenues remained unchanged at $124 million. Equities revenues witnessed a 13% decline, amounting to $27 million. Cryptocurrency revenues dipped by 55% to $23 million.

On the bottom line, Robinhood reported a net loss of $85 million, a significant improvement compared to the $175 million net loss in Q3 2022. Of particular interest to the UK and EU-based online trading industry is Robinhood’s expansion plans. The company identified three main growth opportunities, two of which revolve around international expansion. Robinhood has assembled an experienced team and is gearing up to launch brokerage operations in the UK. As of July, there were reports indicating that Robinhood was staffing up in the UK in preparation for a launch in the near future.

As part of its global expansion strategy, Robinhood is set to introduce cryptocurrency trading services in the EU following its launch in the UK. Robinhood is also actively working on building futures trading, with the goal of bringing the intuitive mobile experience that customers have come to expect from the platform to the futures trading industry.

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