27 January online broker Robinhood reported for the fourth quarter of 2021. The number of active users of the platform has decreased, The company also gave a weak outlook for the current quarter.. In postmarket terms, HOOD shares fell by 13%, to 10 $.
Financial results
Compared to the fourth quarter of 2020, Robinhood's total revenue grew by 14%, up to 363 million dollars. The same amount the company earned in the previous, third quarter, and analysts expected the same.
The broker's main income is not commissions, and selling data on transactions of their clients to market makers in exchange for a part of the profit. Robinhood earned $264 million from this - same as in the previous quarter.
Here, income from different instruments also did not change much quarter to quarter.:
- shares — $52 million;
- options — $163 million;
- cryptocurrency — 48 million dollars.
Cryptocurrency trade data revenue falls for second quarter in a row. So, in the second quarter of 2021, the company's revenue was $233 million, in the third - 52 million dollars. And that worries investors.
Revenue per user for the year fell by 39%, from 106 to 64 $, and remained at the level of the previous quarter.
The number of monthly active users compared to the previous quarter decreased from 18.9 to 17.3 million people. Analysts expected to see 19.8 million people.
Quarterly loss amounted to $423 million, or 0,49 $ per share. This is more than the loss expected by analysts in 0,45 $.
What about stocks
Losses, declining user activity and threats from the regulator to ban the sale of transaction data are putting pressure on the broker's shares. And also in the current, in the first quarter of 2022, the company will face a high base effect. A year ago, when did the meme stock boom start, broker made good money on traders from Reddit. Now, according to Robinhood, quarterly revenue will be no more than 340 million dollars. It's on 35% less, than a year ago, and far short of analysts' expectations of $448m.
Robinhood went public at the end of July 2021. On the first trading day, the company's shares closed at about 35 $. A week later, the stock rose by 100% - up to maximum 70 $. Since then, the broker's shares have fallen by 86%, to 10 $.
