Robinhood recently announced its fiscal 2022 fourth-quarter results, presenting the profits and losses of its popular retail investor-friendly trading platform.
The numbers, while generally positive, were mixed with traditional asset classes outperforming cryptocurrencies. However, it is worth noting that this may change soon. After all, Robinhood’s crypto wallet was, until recently, limited to beta testers and will be released to the general public shortly.
Higher revenue, lower stock prices
Robinhood’s detailed fourth-quarter earnings report was published during the company’s quarterly meeting with the board of investors. Overall, total company revenue (EBITDA) was $82 million, a 74% sequential improvement.
Net interest income was also up 30%, which Robinhood attributes to higher short-term interest rates and a sharp increase in interest-bearing assets.
Unfortunately, the end result doesn’t look too rosy. Overall, Robinhood lost $166 million over the past quarter, causing a $0.19 drop in earnings per share. There’s a silver lining, though: Q3 saw a $0.20 drop in earnings per share, meaning Robinhood’s stock performed better over the last quarter.
Crypto Revenue Tanking, Robinhood to Buy Back SBF Shares
As Robinhood prepares to roll out its cryptocurrency wallets to all users, cryptocurrency-related revenue has taken a hit. Cryptocurrency-related products generated only about $39 million in revenue, a 24% decline from the last quarter.
However, Vlad Tenev, the CEO of Robinhood, remains positive about the introduction of new products, among them the crypto wallet.
“Looking back over the last year, I am incredibly proud of our team’s tremendous execution on our 2022 product roadmap. We are now starting to see significant traction on a number of the products we launched, which gives us confidence. that they can become significant lines of business over time.”
Tenev also announced that the board of investors has given Robinhood the green light to buy back as many shares as possible of Emergent Fidelity Technologies, the company that owns about $55 million of Robinhood stock for Sam Bankman-Fried. Currently, the shares in question are being seized by the Department of Justice, a move challenged by SBF, who requested to keep them to finance their legal defense.
Despite the lackluster results for the last quarter, and for fiscal 2022 in general, Robinhood’s leadership remains confident in its business model and expects a more profitable 2023.
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