Robinhood (HOOD) reported fourth-quarter revenue on Thursday which missed Wall Street analysts’ estimates. The company’s revenue outlook for the current quarter also came in below expectations. Shares of the commission-fee trading platform declined around 10% in after-hours.
The newly public brokerage anticipates first-quarter revenue of less than $340 million, down 35% compared with 2021. Wall Street’s consensus estimate was for $448.2 million in revenue for the first quarter, according to FactSet. Plus, monthly active users fell to 17.3 million last quarter from 18.9 million in the third quarter. This number was also below estimates of 19.8 million.
Most analysts were disappointed with the first quarter guidance but were hopeful about the launch of fully-paid securities lending, the crypto wallet, and a top-line boost for monetary tightening.
Financial Highlights
Total net revenues for the quarter increased 14% to $363 million, compared with $318 million in the fourth quarter of 2020, and for the year increased 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, and for the year increased 95% to $1.40 billion, compared with $720 million for the year ended December 31, 2020.
Monthly active users fell to 17.3 million last quarter from 18.9 million in the third quarter. This number was also below estimates of 19.8 million, according to FactSet.
Meanwhile, net cumulative funded accounts totaled 22.7 million at the end of the fourth quarter, about in line with estimates. This is up from 22.4 million accounts in the third quarter. To be sure, Robinhood added 10 million accounts alone in 2021.
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, and for the year 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.
Adjusted EBITDA (non-GAAP) for the quarter was negative $87 million, compared with positive $79 million in the fourth quarter of 2020, and for the year was positive $34 million, compared with positive $155 million for the year ended December 31, 2020.
Cash and cash equivalents on December 31, 2021, totaled $6.3 billion, compared with $1.4 billion on December 31, 2020.
Outlook
Robinhood said that it expects to generate total revenue of less than $340 million in Q1 FY 2022. At the top end of its estimate, that would imply a revenue decline of 35% compared to Q1 FY 2021. In which trading activity was heightened, particularly for certain “meme stocks.”
Robinhood’s next earnings report (for Q1 FY 2022) is expected to be released on May 12, 2022.
About Robinhood
Robinhood Markets is on a mission to democratize finance for all. With Robinhood, people can invest with no account minimums through Robinhood Financial, LLC, buy and sell crypto through Robinhood Crypto, LLC, and learn about investing through easy-to-understand educational content.
Robinhood intends to use its blog, Under the Hood, as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg. FD). Under the Hood can be accessed at blog.robinhood.com and investors should routinely monitor that website, in addition to Robinhood’s press releases, SEC filings, and public conference calls and webcasts, as information posted on Robinhood’s blog could be deemed to be material information.
