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Robinhood edges past revenue estimates on crypto boom

Published 28/01/2022, 08:07 am
© Reuters. FILE PHOTO: Robinhood logo is seen on a smartphone in front of a displayed same logo in this illustration taken, July 2, 2021. REUTERS/Dado Ruvic/Illustration

(Reuters) -Commission-free brokerage Robinhood Markets Inc (NASDAQ:HOOD) edged past analysts' estimates for quarterly revenue on Thursday as strong crypto trading boosted transaction volumes at the online brokerage, and it posted a net loss for the period.

Robinhood, in its third set of results as a public company, posted total revenue of $363 million for the fourth quarter ended Dec. 31, compared to $318 million a year earlier.

Analysts on average had expected revenue of $362.14 million, according to IBES data from Refinitiv.

Robinhood reported a net loss of $423 million or $0.49 per share in the three months ended December. A year earlier, which was before its IPO, the company posted net income of $7 million or $0.01 per share.

Transaction-based revenue from cryptocurrencies jumped 304% to $48 million, while revenue from equity trading declined 35% to $52 million.

Robinhood enjoyed a strong run during the pandemic, with homebound investors using its app to trade stocks and other assets. It was at the center of a trading mania for meme stocks in January last year.

Trading activity rose during the pandemic when the Federal Reserve injected massive liquidity into capital markets and investors raced to cash in on the boom.

© Reuters. FILE PHOTO: Robinhood logo is seen on a smartphone in front of a displayed same logo in this illustration taken, July 2, 2021. REUTERS/Dado Ruvic/Illustration

But the Fed is expected to scale back asset purchases and raise interest rates, which analysts expect will put a damper on trading.

Cryptocurrencies have been hammered recently. Bitcoin , the largest cryptocurrency, plunged 50% to $32,951 last week, lowest since July last year.

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