Robinhood Q4 Earnings Highlights: Revenue, ARPU Up Sequentially, Company Buying Back SBF's Shares And More

Zinger Key Points
  • Robinhood reported fourth-quarter revenue of $380 million, which was up 5% sequentially.
  • The company also provided updates on shares owned by Sam Bankman-Fried and share-based compensation.

Equity and crypto trading company Robinhood Markets Inc HOOD reported fourth-quarter financial results after the market close Wednesday. Here are the key highlights.

What Happened: Robinhood reported fourth-quarter revenue of $380 million, which was up 5% sequentially. The total came in shy of a Street estimate of $397.1 million, according to data from Benzinga Pro.

The company reported a loss of 19 cents per share in the fourth quarter, missing a Street estimate of a loss of 14 cents per share.

In the fourth quarter, Robinhood saw transaction-based revenue down 11% sequentially to $186 million. Options transaction revenue was unchanged, while cryptocurrency and equity transaction-based revenues were down 24% and 32% sequentially.

The company ended the fourth quarter with 23 million net cumulative funded accounts, up by around 50,000 sequentially.

Robinhood had 11.4 million monthly active users at the end of the fourth quarter, down 800,000 sequentially.

The company has $62 billion in assets under custody, down 4% sequentially, due to lower market valuations for “growth stocks and crypto assets.”

Net deposits in the fourth quarter were $4.8 billion.

The company saw the average revenue per user grow from $63 in the third quarter to $66 in the fourth quarter.

Robinhood posted full-year revenue of $1.36 billion and reported a loss of $1.17 per share.

"Looking back over the past year, I’m incredibly proud of the tremendous execution of our team on our 2022 product roadmap,” Robinhood CEO Vlad Tenev said.

Related Link: Trading Strategies For Robinhood Stock Before And After Q4 Earnings 

What’s Next: Robinhood is guiding for operating expenses for fiscal 2023 to be in a range of $2.375 billion to $2.515 billion.

Share-based compensation for fiscal 2023 is expected to be in range of $955 million to $1.035 billion.

The company announced Wednesday that Tenev and Robinhood co-founder Baiju Bhatt are cancelling $500 million of share-based compensation. Tenev said this will help to ensure the company has “as many resources as possible to deliver value to customers and shareholders.”

Robinhood also announced its board has authorized to pursue the purchase of the 55 million shares that were previously bought by Emergent Fidelity Technologies, related to a stake in the company owned by FTX co-founder and former CEO Sam Bankman-Fried.

The company said the plan to buy back the shares shows the board’s confidence in the plan ahead.

“We’re now starting to see meaningful traction on a number of the products we launched, which gives us confidence they can grow into significant business lines over time,” Tenev said.

HOOD Price Action: Robinhood shares are up 3% to $10.74 in after-hours trading Wednesday versus a 52-week trading range of $6.81 to $16.49. 

Read Next: A Q4 Eranings Tale: Will Robinhood Investors Be Rewarded With Riches Or Continue To Sufer From Stock's Poor Performance

Photo via Shutterstock.

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Posted In: CryptocurrencyEarningsNewsGuidanceTop StoriesAfter-Hours CenterMarketsMoversTrading IdeasFTXSam Bankman-FriedShare buybackStock BrokersVlad Tenev
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