Robinhood Reports Disappointing Q4 Revenue Amid Crypto Market Decline, Stock Plummets

The Robinhood Markets, Inc. logo is showcased on a screen during its IPO at the Nasdaq Market site in Times Square, New York City, on July 29, 2021. REUTERS/Brendan McDermid. On February 10, Reuters reported that Robinhood's (HOOD.O) fourth-quarter revenue fell short of Wall Street forecasts as a shaky digital asset market impacted the company's crypto trading income, leading to a 6.3% decline in its shares during after-hours trading. The Menlo Park, California-based firm disclosed record revenue of $1.28 billion for the three months ending December 31, below the analysts' average estimate of $1.34 billion, based on LSEG data. Individual investors have increasingly supported equities markets, purchasing stocks amid selloffs triggered by AI bubble concerns and geopolitical instability. However, not all asset classes experience gains from ongoing volatility. Robinhood's transaction-based revenue increased by 15% to $776 million for the quarter, primarily driven by a 54% surge in equities revenue and a 41% rise in options. Meanwhile, revenue from cryptocurrency trading reached $221 million, falling short of the anticipated $248 million. This sector has faced difficulties for several months after a crash last October caused bitcoin's value to nearly halve from its peak on October 6. Deutsche Bank analysts noted that U.S. spot-bitcoin ETFs saw outflows of approximately $2 billion in December and $7 billion in November. Robinhood's finance chief, Shiv Verma, mentioned in an interview that active traders—who typically fall into the lower pricing tier—remained engaged, which contributed to a rebate rate lower than what was expected. These results emerge during a selloff among U.S. brokerages as AI-driven disruption concerns spread beyond software and IT sectors into financial markets. Companies like Robinhood and its competitor Public are advancing in this space with their affordable and tech-savvy solutions. Notably, Robinhood provides Gold subscribers with an AI-powered investing assistant that facilitates trading discussions and order placements, with Gold subscribers rising by 58% to 4.2 million compared to the previous year. The company's fourth-quarter profit was reported at 66 cents per share, surpassing Wall Street's estimate of 63 cents. Reporting by Ateev Bhandari in Bengaluru; Edited by Sriraj Kalluvila and Alan Barona. Our Standards: The Thomson Reuters Trust Principles.