Robinhood (NASDAQ:HOOD), a leading digital asset exchange and broker platform, has reported Q4 earnings results which have disappointed the markets.
According to the company, the net loss for the quarter was $423 million, or $0.49 per diluted share, compared with net income of $13 million, or $0.02 per diluted share in the fourth quarter of 2020. For the full year 2021, the net loss was $3.69 billion, or $7.49 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, for the year ended December 31, 2020.
The consensus estimate for Q4 was for a loss of $0.34 a share so Robinhood whiffed in a big way.
Total Q4 revenues were anticipated at $325 million versus an actual amount of $363 million but a top-line beat was not enough for shares to shrug off the bottom-line miss. Shares are currently trading at around $10.70 each, or over 10% lower in after-hours trading. Robinhood IPO’d last summer at an IPO price of $38, creating huge destruction in shareholder value.
Vlad Tenev, CEO and co-founder of Robinhood Markets, issued the following statement:
“We had a momentous year, nearly doubling the number of customers on the platform and making critical investments in our team and infrastructure to support growth. This year, we’ll expand our ecosystem of products that make Robinhood the best place to start investing and build wealth for the long term.”
Full year 2020 revenue increased by 89% to $1.82 billion, compared with $959 million for the year ended December 31, 2020.
Transaction-based revenues for the quarter increased 12% to $264 million, compared with $235 million in the fourth quarter of 2020. For the full year revenue increased by 95% to $1.40 billion, compared with $720 million for the year ended December 31, 2020.
Options revenue for the quarter increased 14% to $163 million, compared with $142 million in the fourth quarter of 2020. For the full year revenue increased 57% to $689 million, compared with $440 million for the year ended December 31, 2020.
Crypto trading for the quarter increased 304% to $48 million, compared to $12 million in the fourth quarter of 2020. For the year, crypto increased to $419 million, compared with $27 million for the year ended December 31, 2020.
Equities sank during the quarter by 35% to $52 million, compared with $80 million in the fourth quarter of 2020. For the year equities increased 15% to $288 million, compared with $251 million for the year ended December 31, 2020.
Monthly Active Users (MAU) increased by 48% to 17.3 million for December 2021, compared with 11.7 million for December 2020. On a sequential basis, Robinhood reported that MAU decreased 8% compared with 18.9 million for September 2021 quarter.
Assets Under Custody (AUC) increased by 56% to $98 billion as of December 31, 2021, compared with $63 billion as of December 31, 2020. On a sequential basis, AUC increased 3% compared with $95 billion as of September 30, 2021.
Average Revenues Per User (ARPU) dropped by 39% to $64 – a dramatic decline from Q4 2020 of $106.
Robinhood said that had ambitious plans for 2022 focusing on getting first time investors investing, growing long term investors and aiding more sophisticated investors.
Robinhood provided guidance on Q1 anticipating total net revenues of less than $340 million. This implies a year-over-year revenue decline of 35% compared to the first quarter of 2021, during which Robinhood saw outsized revenue performance due to heightened trading activity, particularly relating to certain meme-stocks.
Robinhood will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET today, January 27, 2022. The live webcast of Robinhood’s earnings conference call can be accessed at investors.robinhood.com.
The earnings deck is available below.