The stock trading app Robinhood reported a huge drop in revenue for the third quarter on Tuesday as cryptocurrency trading collapsed.

Robinhood said the headwinds that dragged down last quarter – like lower retail activity – will persist until the end of the year unless the market environment changes.

The shares of the newly listed company lost 8% in after-hours trading.

Total net sales for the third quarter were $ 365 million, missing a refinitive estimate of $ 431.5 million. Revenue was up 35% year-over-year but was well below its second-quarter revenue of $ 565 million, which was backed by a massive surge in crypto trading.

Transaction-based revenue for the third quarter was $ 267 million, with only $ 51 million from cryptocurrency trading. Crypto trading revenues totaled $ 233 million in the second quarter, aided by interest in meme-inspired Dogecoins.

Vlad Tenev, Co-Founder and CEO of Robinhood, will ring the opening bell on July 29, 2021 on Nasdaq.

Source: The Nasdaq

“The second quarter was sort of one of those idiosyncratic market events that had this massive interest in Dogen specifically,” Robinhood CFO Jason Warnick told CNBC. “We love it when these moments happen. It’s a great way to bring a lot of new customers to the platform. But we’re really thinking about investing in crypto for the long term. It’s impossible for us to accurately predict quarter-to-quarter revenue. “

Options trading contributed $ 164 million and stock trading contributed $ 50 million to transaction-based revenue.

The accumulated net accounts decreased to 22.4 million in the third quarter from 22.5 million in the second quarter. The monthly active users were 18.9 million, compared to 21.3 million in the second quarter.

Average revenue per user decreased 36% year over year from $ 102 to $ 65.

Robinhood reported a net loss of $ 1.32 billion, or $ 2.06 per share. Wall Street expected a loss of $ 1.37 per share, according to Refinitiv. Share-based compensation expense was $ 1.24 billion for the third quarter of 2021.

“This quarter was about developing more products and services for our customers, including crypto wallets,” said Vlad Tenev, CEO and co-founder of Robinhood Markets. “To date, more than a million people have joined our crypto wallet waiting list.”

Looking to the future, Robinhood does not expect fourth quarter revenues to exceed $ 325 million. The company sees account growth in line with the 660,000 accounts opened in the third quarter of 2021.

“For the three months ended December 31, 2021, we expect many of the factors that impacted our third quarter results, such as seasonal headwinds and lower retail activity, to persist,” the company said in a press release.

Robinhood hit public markets in July and opened at $ 38 per share. The stock closed Tuesday at $ 39.57 per share.

– with coverage by Kate Rooney of CNBC.