Despite a minor overall increase in net revenue and a stellar EBITDA, the trading platform’s crypto revenues have tanked substantially.
Robinhood recently announced its FY2022 Q4 results, laying out the profits and losses of its popular retail investor-friendly trading platform.
The numbers, although overall positive, were a mixed bag – with traditional asset classes outperforming crypto. However, it’s 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 Revenues, Lower Share Prices
Robinhood’s detailed Q4 earnings report was published during the company’s quarterly meeting with the board of investors. Overall, the firm’s total revenue (EBITDA) was up to $82 million, a sequential improvement of 74%.
The net interest revenue 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 doesn’t look too rosy. Overall, Robinhood lost $166 million over the last quarter, leading to a $0.19 drop in earnings per share. There is a silver lining, however – Q3 saw a $0.20 drop in EPS, meaning Robinhood’s shares performed better over the past quarter.
Crypto Revenue Tanking, Robinhood to Buy Back Shares From SBF
As Robinhood prepares to launch its cryptocurrency wallets to all users, crypto-related revenues have taken a hit. Only about $39 million in revenues were generated by crypto-related products, a 24% decrease since the last quarter.
However, Vlad Tenev – the CEO of Robinhood – remains positive about the introduction of new products, with the crypto wallet being among them.
“Looking back over the past year, I’m incredibly proud of the tremendous execution of our team on our 2022 product roadmap. We’re 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.”
Tenev also announced that the board of investors has given Robinhood the green light to buy back as many shares as possible from Emergent Fidelity Technologies, the company holding about $55 million in Robinhood stocks for Sam Bankman-Fried. The shares in question are currently being pursued by seizure by the DOJ, a move contested by SBF, who requested to keep them in order to fund his legal defense.
Despite the mediocre results over the past quarter – and the fiscal year 2022 at large – Robinhood leadership remains confident in their business model and looks forward to a more profitable 2023.