Robinhood Crypto revenue fell by 25% during the last quarter
Robinhood recently announced its FY2022 Q4 results, presenting profits and losses on its popular retail investor-friendly trading platform.
The numbers, while generally positive, were a mixed bag – with traditional asset classes outperforming crypto. However, it is worth noting that this may soon change. After all, Robinhood’s crypto wallet was until recently limited to beta testers and will be rolled out to the general public shortly.
Higher incomes, lower share prices
Robinhood’s detailed earnings report for the fourth quarter was published during the company’s quarterly meeting with the board of investors. Overall, the firm’s total earnings (EBITDA) were up to $82 million, a sequential improvement of 74%.
Net interest income also increased by 30%, which Robinhood attributes to higher short-term interest rates and a marked increase in interest-earning assets.
Unfortunately, the bottom line is not looking too rosy. Overall, Robinhood lost $166 million during the most recent quarter, leading to a $0.19 drop in earnings per share. It’s a treat, though – Q3 saw a $0.20 decline in EPS, meaning Robinhood’s stock outperformed last quarter.
Crypto Revenue Tanking, Robinhood to buy back shares from SBF
As Robinhood prepares to launch its cryptocurrency wallets to all users, crypto-related revenue has taken a hit. Only about $39 million in revenue was generated by crypto-related products, down 24% from the previous quarter.
However, Vlad Tenev – CEO of Robinhood – remains positive about the introduction of new products, with the crypto wallet among them.
“Looking back over the past year, I’m incredibly proud of our team’s tremendous execution on the 2022 product roadmap. We’re now starting to see meaningful traction on a number of the products we launched, which gives us confidence that they can grow into significant business areas over time.”
Tenev also announced that the investor board has given Robinhood the green light to buy back as many shares as possible from Emergent Fidelity Technologies, the company that holds about $55 million in Robinhood shares for Sam Bankman-Fried. The shares in question are currently being pursued by seizure by the DOJ, a move disputed by SBF, which asked to keep them to fund its legal defense.
Despite the mediocre results of the last quarter – and the 2022 financial year at large – Robinhood’s management remains confident in its business model and looks forward to a more profitable 2023.
