Robinhood reveals $363 million in Q4 revenue and $423 million quarterly loss

Commission-free brokerage Robinhood Markets gave weaker-than-expected revenue guidance for the first quarter of 2022 after posting a bigger-than-feared loss for the Q4 2021 as the number of its active users fell.

In the last three months, the disruptive stock-broking app posted a $423 million net loss, or a 49 cent loss per diluted share, even as Q4 revenue edged slightly past analysts’ estimates. Robinhood reported total revenue of $363 million for the fourth quarter, up from $318 million a year earlier.

Monthly active users fell to 17.3 million last quarter from 18.9 million in the three months through September 2021.

“We had a momentous year, nearly doubling the number of customers on the platform and making critical investments in our team and infrastructure to support growth. This year, we’ll expand our ecosystem of products that make Robinhood the best place to start investing and build wealth for the long term,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets.

Transaction-based revenues for the quarter increased 12% to $264 million, compared with $235 million in the fourth quarter of 2020. Over a yearly basis, it rose 95% to $1.40 billion, compared with $720 million for the year ended December 31, 2020.

The newly public brokerage reported 22.7 million cumulative funded accounts in the fourth quarter, up from 22.4 million users the company claimed in the third quarter.

Crypto activity declined from record highs in the prior quarter, the company said. That led to “considerably fewer” sequential revenues. As a result, Robinhood sees revenue from crypto of no more than $51 million in the Oct-Dec quarter, sharply down from $233 million in the second quarter of 2021.

Robinhood’s Average Revenues Per User (or ARPU) declined 9% to $64, compared with $106 in the fourth quarter of 2020. ARPU for the year decreased 5% to $103, compared with $109 for 2020.

“The decrease was primarily related to lower trading volumes per user for options and equities and lower interest earnings per user from securities lending due to declines in market rates earned on loaned securities, partially offset by higher trading volumes per user for cryptocurrencies,” the company explains.

In 2021, Robinhood added over 10 million net funded accounts, nearly doubling the customers on the platform. Additionally, the company has more than doubled its team, adding talent to important areas like engineering, product, customer service, and compliance. Robinhood also made strong executive additions over the past year and is excited to have most recently welcomed Steve Quirk as Chief Brokerage Officer.