Robinhood Markets Inc (NASDAQ:HOOD) sunk over 15% on Thursday after reporting incentives aimed at drawing in customers had eaten into revenue over the third quarter.
Matches on asset transfers and individual retirement arrangement (IRA) contributions caused a $27 million reduction in revenue over the quarter, the company said in results.
While aimed at attracting investors from other platforms to drive growth, this contributed to a miss in total net revenue against market expectations.
Though revenue was up 36% year on year at $637 million, estimates had been for the figure to hit $653.35 million.
Earnings also undershot expectations, having climbed to $0.17 from a loss of $0.09 a year earlier but not as high as the $0.18 estimated.
Robinhood noted customers had received over $200 million in IRA matches since January 2023, while retirement assets under custody jumped by nine times to $9.9 billion year over year in the third quarter.
Shares fell 15.3% to $23.90 on Thursday.