Shares of Robinhood fell Wednesday after the retail brokerage reported a drop in trading volumes in the last quarter and said it's looking to expand growth in Europe.
Robinhood also reported fewer monthly active users, which fell 16% to 10.3 million in the third quarter from the same period last year.
Although third-quarter revenue rose 29% to $467 million, it fell short of the $480 million analysts were predicting. Its net loss narrowed to $85 million, or 9 cents a share, and topped Wall Street's expectations.
Revenue was hurt by a 13% decline in third-quarter transaction revenue tied to stock trading, compared with the same period last year. Crypto trading dropped 55% year over year. Options trading was unchanged. That translated to an overall decline of 11% in its transaction-based revenue.
The stock was last down more than 14%. Shares have gained nearly 20% year to date.
"Over the past year, we've put a lot more value in products like Robinhood Gold, including a 4.9% annual yield on cash and a 3% match on IRA contributions," Robinhood CEO Vlad Tenev said in the earnings release. "Looking ahead, we remain focused on providing industry-leading products that serve far more of customers' financial needs, gaining market share, expanding internationally and continuing to change the industry for the better."
The company is also seeking growth opportunities in Europe. It said in its earnings release that it will soon launch its brokerage in the U.K. and will open crypto trading to its EU customers.
The drop in trading coincides with rising treasury yields — with the 10-year Treasury yield topping 5% just last month — that have been weighing on equities. Stocks are off to a strong start for November but that follows three consecutive months of declines that likely affected activity in retail trading.
Similarly, cryptocurrencies have held on to recent gains after a big rally at the end of October, but trading across the market has been stagnant since about May. At the end of August, bitcoin trading volume hit its lowest level in more than four years, according to CryptoQuant, as investors waited for reasons to jump back into a market hampered by regulatory uncertainty.
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