Robinhood
released data on its first quarter 2023 financial performance on Wednesday,
reporting a 208% decrease in net loss, swallowing the 16% increase in total net revenue.
The loss reached $511 million during the period, beating the $441 million
quarterly revenue.
During the
last quarter of 2022, Robinhood’s total net revenue stood at $380 million with net loss at $166 million. Compared to Q1
2022, the revenue surged by 47% from $299 million. On the contrary, the net loss tumbled by
30% from $392
million from the prior period.
In the
latest report, Robinhood said its earnings per share also declined by $345
million or $0.38 per share, compared to the last quarter of 2022. The online
brokerage attributed the loss to a one-time $485 million share-based
compensation (SBC) expense related to its Co-Founders’ cancellation of their
2021 market-based restricted stock unit awards in February.
“Operating
expenses increased by $416 million sequentially to $950 million, primarily due
to the 2021 Founders Award Cancellation,” Robinhood explained. “Operating
expenses prior to SBC decreased 6% sequentially to $352 million.”
Revenue
Beats Expectation despite Huge Loss
However,
despite the huge net loss on its record, Robinhood’s $441 million quarterly
revenue beats market expectation as analysts projected $424.53 million,
according to Refinitiv IBES data. The California-based firm, which provides
platforms for commission-free trading of stocks, exchange-traded funds and
cryptocurrencies , also reported an 11% quarter-over-quarter (QoQ) increase in
its transaction-based revenues.
The
revenues reached $207 million during the first quarter, pushed by a 7% increase
in options trading and 29% increase in equities . Both asset classes generated
$133 million and $27 million in transactions-based revenues, respectively. On
the contrary, revenues from cryptocurrencies shrank by 1% to $38 million.
Furthermore,
Robinhood reported a 25% QoQ increase in its net interest revenue as the American
financial services company’s return from its borrowings to customers, such as
for securities purchase, reached $208 million. The revenue beats $167 million
from the prior quarter and $55 million a year earlier, propped by the US Federal Reserve’s rapid rate hikes.
Robinhood Eyes UK Launch, to Open 24-Hour Market
Meanwhile,
Robinhood in the report noted that it will launch a 24-hour market next week to
enable its customers to trade individual stocks all-day-long for five days a
week.
“We had a
great start to the year in Q1, which is a testament to our relentless pursuit
of innovation – and the launch of 24-Hour Market next week shows we’re not
slowing down,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets.
In another development, Robinhood in February shelved its
planned acquisition of Ziglu, a cryptocurrency portfolio investment platform,
after first announcing the plan in April last year in its bid to re-enter the
UK. Giving an update on this in the latest financial report, the firm said it is about to set sail for the UK.
“With an
experienced team leading and an existing license in place, we believe we’re on
track for our ambitious goal of launching brokerage services in the UK by the
end of the year,” Robinhood explained.
News Nuggets Special: highlights from FMAS 23; read today’s news nuggets.
Robinhood
released data on its first quarter 2023 financial performance on Wednesday,
reporting a 208% decrease in net loss, swallowing the 16% increase in total net revenue.
The loss reached $511 million during the period, beating the $441 million
quarterly revenue.
During the
last quarter of 2022, Robinhood’s total net revenue stood at $380 million with net loss at $166 million. Compared to Q1
2022, the revenue surged by 47% from $299 million. On the contrary, the net loss tumbled by
30% from $392
million from the prior period.
In the
latest report, Robinhood said its earnings per share also declined by $345
million or $0.38 per share, compared to the last quarter of 2022. The online
brokerage attributed the loss to a one-time $485 million share-based
compensation (SBC) expense related to its Co-Founders’ cancellation of their
2021 market-based restricted stock unit awards in February.
“Operating
expenses increased by $416 million sequentially to $950 million, primarily due
to the 2021 Founders Award Cancellation,” Robinhood explained. “Operating
expenses prior to SBC decreased 6% sequentially to $352 million.”
Revenue
Beats Expectation despite Huge Loss
However,
despite the huge net loss on its record, Robinhood’s $441 million quarterly
revenue beats market expectation as analysts projected $424.53 million,
according to Refinitiv IBES data. The California-based firm, which provides
platforms for commission-free trading of stocks, exchange-traded funds and
cryptocurrencies , also reported an 11% quarter-over-quarter (QoQ) increase in
its transaction-based revenues.
The
revenues reached $207 million during the first quarter, pushed by a 7% increase
in options trading and 29% increase in equities . Both asset classes generated
$133 million and $27 million in transactions-based revenues, respectively. On
the contrary, revenues from cryptocurrencies shrank by 1% to $38 million.
Furthermore,
Robinhood reported a 25% QoQ increase in its net interest revenue as the American
financial services company’s return from its borrowings to customers, such as
for securities purchase, reached $208 million. The revenue beats $167 million
from the prior quarter and $55 million a year earlier, propped by the US Federal Reserve’s rapid rate hikes.
Robinhood Eyes UK Launch, to Open 24-Hour Market
Meanwhile,
Robinhood in the report noted that it will launch a 24-hour market next week to
enable its customers to trade individual stocks all-day-long for five days a
week.
“We had a
great start to the year in Q1, which is a testament to our relentless pursuit
of innovation – and the launch of 24-Hour Market next week shows we’re not
slowing down,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets.
In another development, Robinhood in February shelved its
planned acquisition of Ziglu, a cryptocurrency portfolio investment platform,
after first announcing the plan in April last year in its bid to re-enter the
UK. Giving an update on this in the latest financial report, the firm said it is about to set sail for the UK.
“With an
experienced team leading and an existing license in place, we believe we’re on
track for our ambitious goal of launching brokerage services in the UK by the
end of the year,” Robinhood explained.
News Nuggets Special: highlights from FMAS 23; read today’s news nuggets.
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