Robinhood HOOD will report earnings on Tuesday after the closing bell. These are the metrics Wall Street analysts will be expecting for the investing app's third quarter results, according to consensus estimates compiled by Bloomberg.
Investors will be paying attention to commentary around the company's new crypto wallet. CEO Vlad Tenev told CNBC that more than 1 million people are on the waiting list since announcing the wallet last month.
Cryptocurrency has become increasingly important for trading platform. More than 60% of Robinhood users traded digital currencies in Q 2. Crypto transaction-based revenue for the quarter ballooned to $233 million, compared to just $5 million in the second quarter of last year.
Investors will also keep an eye out for any commentary about payment for order flow, the model which has enabled zero-commission trades from the likes of Robinhood and other investing apps.
The U.S. Securities and Exchange Commission SEC chair Gary Gensler told Yahoo Finance that banning the practice is a possibility.
Gensler said inherent conflicts in the payment for order revenue model may incentivize brokerages to gamify stock betting to increase the volume of trading.
Robinhood has been moving away from payment for order flow as a revenue generator.
Over time, as our various products mature, you should see continued diversification and less reliance on any one revenue stream, such as payment for order flow, Robinhood CFO Jason Warnick said during the company's second quarter earnings call.
We are already seeing promising signs of this in Q 2 with payment for order flow for equities and options as a percentage of our revenue, declining the 38% from 64% in the prior quarter as customer interest in crypto increased, he added.
Investors can expect lower trading activity for the 3 rd quarter as the company has warned of seasonal headwinds across the industry going into the second half of the year, which could result in lower revenues and considerably fewer new funded accounts. Robinhood went public on the Nasdaq IXIC on July 28th with an IPO price of $38 share. The app was whirled into the GameStop GME saga earlier this year as so many retail traders were using Robinhood to execute their orders. Shares were trading around $39 each on Monday.