By
Mayowa Adebajo
April 11th, 2024
On the financial outlook for the year, Robinhood expects its full-year total operating expenses to fall between $2.375 billion and $2.515 billion.
In Q4 2022, financial services company Robinhood Markets Inc (NASDAQ: HOOD) saw its crypto trading revenue drop 24% from $51 million recorded in Q3. Notably, the third quarter crypto trading revenue was also a 12% loss from the $58 million recorded in Q2. The crypto transaction revenue for Robinhood in Q4 2022 was $39 million, missing analysts’ estimates. In addition to the decline, the company also reported a net loss of $166 million, and earnings per share was -$0.19. Meanwhile, an estimate by analysts compiled by FactSet placed the expected net loss at $131 million.
Robinhood in Q4 2022
Robinhood also revealed in a press release that its equities plunged 32% to $21 million in Q4 2022. At the same time, monthly active users (MAU) lowered by 0.8 million amid the volatile market. The company added that its assets under custody (AUC) reduced by 4% sequentially to $62 billion. The loss in crypto market valuations and stock declines triggered the lower AUC.
According to the full-year result, Robinhood recorded a net loss of $1.03 billion loss per share of $1.17. The company’s co-founder and CEO, Vlad Tenev, applauded the team for their effort over the past year. He continued:
“We are 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.”
Chief financial officer Jason Warnick said Robinhood committed to catering to customers, expanding the business, and pursuing “long-term shareholder value” in the previous quarter. He revealed that the Board gave the company the go-ahead to buy back most or all its shares purchased by a holding company for ex-FTX boss Sam Bankman-Fried.
“On the capital management front, our Board authorized us to pursue purchasing most or all of our shares that Emergent Fidelity Technologies bought in May 2022. The proposed share purchase underscores the confidence the Board of Directors and management team have in our business.”
The financial services company boasted more than $6 billion in cash, which is available for investment and execution of future opportunities. However, Robinhood added in the Q4 2022 announcement that there is no certainty about the success of the share repurchase plans. The company said it cannot predict when or if the purchase will happen as “there is limited precedent for this type of situation”.
On the financial outlook for the year, Robinhood expects its full-year total operating expenses to fall between $2.375 billion and $2.515 billion.
After losing more than 6% in the last five days, Robinhood stock is currently up 4.78% to $10.97 in extended trading. The company’s shares have gained 28.62% since the year started and increased almost 13% in the last three months. HOOD has added 15.82% over the past month.