Robinhood Q4 Crypto Revenue Dips, Board Approves Buyback of SBF Stocks

Thursday, 09/02/2023 | 10:06 GMT by Arnab Shome
  • Crypto revenue on the platform dipped in the last two consecutive quarters.
  • It narrowed its net quarterly losses to $166 million.
Robinhood

Robinhood Markets, Inc. (NASDAQ: HOOD) announced its financials for the fourth quarter of 2022, with a 5 percent increase in total net revenue to $380 million, despite an 11 percent decrease in transaction-based revenues to $186 million.

Robinhood’s Crypto Revenue Dips

cryptocurrencies scam crypto robinhood

The platform’s revenue from cryptocurrency trading took a massive hit as it declined to $39 million, which is a 24 percent fall from the third quarter due to lower crypto trading volumes. It was the second consecutive quarter exhibiting a decline in crypto revenue, as the figure also dropped 12 percent in Q3.

Additionally, revenue from equities trading declined by 32 percent to $21 million. However, options revenue remains unchanged at $124 million.

The total net revenue was pushed higher, with a 30 percent increase in net interest revenue to $167 million. It was driven by higher short-term interest rates and growth in interest-earning assets.

The company ended the quarter with a net loss of $166 million, narrowing from the previous quarter’s loss of $175 million. The earnings per share came in at a negative $0.19. Moreover, the EBITDA strengthened by 74 percent to $82 million.

The monthly active users on the trading platform decreased by 0.8 million to 11.4 million. The assets under custody of the platform also declined by 4 percent to $62 billion due to lower market valuations for growth stocks and crypto assets.

The company reported a total net revenue of $1.36 billion for the entire year, with a net loss of $1.03 billion. Its adjusted EBITDA stood at negative $94 million.

“We stayed focused in the fourth quarter on serving customers, growing our business, and driving long-term shareholder value,” said Robonhood’s CFO, Jason Warnick. “We continued to deliver on our product roadmap and kept our costs lean.”

Buyback of Shares from Sam Bankman-Fried

Meanwhile, the board of Robinhood approved the repurchase of 55 million Robinhood shares that Emergent Fidelity Technologies, an entity controlled by Sam Bankman-Fried, bought in May 2022.

Bankman-Fried became a 7.6 percent stakeholder in Robinhood after purchasing shares worth $648 million but currently has a market value of $578 million. Later, it was revealed that he took out a direct loan from Alameda Research, a firm he owned, to purchase the Robinhood shares. The United States Justice Department seized all 55 million shares on 9 January as a part of its investigations against Bankman-Fried.

“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business,” Warnick added.

Robinhood Markets, Inc. (NASDAQ: HOOD) announced its financials for the fourth quarter of 2022, with a 5 percent increase in total net revenue to $380 million, despite an 11 percent decrease in transaction-based revenues to $186 million.

Robinhood’s Crypto Revenue Dips

cryptocurrencies scam crypto robinhood

The platform’s revenue from cryptocurrency trading took a massive hit as it declined to $39 million, which is a 24 percent fall from the third quarter due to lower crypto trading volumes. It was the second consecutive quarter exhibiting a decline in crypto revenue, as the figure also dropped 12 percent in Q3.

Additionally, revenue from equities trading declined by 32 percent to $21 million. However, options revenue remains unchanged at $124 million.

The total net revenue was pushed higher, with a 30 percent increase in net interest revenue to $167 million. It was driven by higher short-term interest rates and growth in interest-earning assets.

The company ended the quarter with a net loss of $166 million, narrowing from the previous quarter’s loss of $175 million. The earnings per share came in at a negative $0.19. Moreover, the EBITDA strengthened by 74 percent to $82 million.

The monthly active users on the trading platform decreased by 0.8 million to 11.4 million. The assets under custody of the platform also declined by 4 percent to $62 billion due to lower market valuations for growth stocks and crypto assets.

The company reported a total net revenue of $1.36 billion for the entire year, with a net loss of $1.03 billion. Its adjusted EBITDA stood at negative $94 million.

“We stayed focused in the fourth quarter on serving customers, growing our business, and driving long-term shareholder value,” said Robonhood’s CFO, Jason Warnick. “We continued to deliver on our product roadmap and kept our costs lean.”

Buyback of Shares from Sam Bankman-Fried

Meanwhile, the board of Robinhood approved the repurchase of 55 million Robinhood shares that Emergent Fidelity Technologies, an entity controlled by Sam Bankman-Fried, bought in May 2022.

Bankman-Fried became a 7.6 percent stakeholder in Robinhood after purchasing shares worth $648 million but currently has a market value of $578 million. Later, it was revealed that he took out a direct loan from Alameda Research, a firm he owned, to purchase the Robinhood shares. The United States Justice Department seized all 55 million shares on 9 January as a part of its investigations against Bankman-Fried.

“The proposed share purchase underscores the confidence the Board of Directors and management team have in our business,” Warnick added.

About the Author: Arnab Shome
Arnab Shome
  • 6368 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6368 Articles
  • 80 Followers

More from the Author

Retail FX

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}