Robinhood's surges 10% after posting a profit for the second time ever
2min read Robinhood Markets (HOOD), the trailblazer of commission-free trading apps, has reported impressive fourth-quarter results that exceeded analysts' expectations. With a 24% increase in net revenue. This marked the second profitable quarter since its IPO (4Q21) and a substantial improvement from the loss of 19 cents per share reported a year ago.
Shares jumped 10% in reaction to the news. Shares hit $13.05 in after hours, its best level since December 27. The 2023 high is $13.51 which is on the radar following the earnings push.
Robinhood's fourth-quarter net revenue of $471 million surpassed analysts' estimates of $457 million, highlighting the company's ability to capitalize on market opportunities. Robinhood posted a 41% year- over-year increase in net interest revenues, reaching $236 million. The online broker's revenue growth was driven by higher net interest and transaction-based revenue.
Revenue from transactions increased by 8% year-over -year, amounting to $200 million. This rise was primarily driven by cryptocurrencies revenue of $43 million, marking a 10% increase, and equities revenue of $25 million, a growth of 19%. However, options revenue experienced a slight decline of 2% to $121 million.
The company also reported net income of $30 million, or earnings per share (EPS) of $0.03, compared with a net loss of $166 million, or EPS of -$0.19, in Q4 2022. Adjusted EBITDA (non-GAAP) increased 62% year-over-year to $133 million.
Robinhood recorded net deposits of $4.6 billion in the fourth quarter, reflecting an annualized growth rate of 21% relative to Assets Under Custody (AUC) year-over-year. Over the past twelve months, net deposits amounted to $17.1 billion, reflecting a growth rate of 27% relative to the end of Q4 2022. . Over the past twelve months, Net Deposits were $17.1 billion, which translates to a growth rate of 27% relative to AUC at the end of Q4 2022. Gold subscribers increased 25% year- over-year to 1.42 million. Average Revenue Per User (ARPU) increased by 23% year-over-year to $81.
Assets Under Custody (AUC) increased by an impressive 65% year-over-year to $102.6 billion. This growth was primarily driven by continued net deposits and higher equity valuations.
The number of funded customers increased by 420 thousand year-over-year, reaching 23.4 million.
Robinhood's robust financial results and strong growth metrics demonstrate its position as a leading player in the financial technology industry.
The stock surged 9% in reaction as investors were encouraged by the flip into profitable territory. While there may be differing opinions among market participants, the overall sentiment appears to be bullish regarding Robinhood's future growth potential.
Robinhood's fourth-quarter results highlight its ability to generate substantial revenue growth and increase its customer base. With impressive net interest revenues, transaction-based growth, and positive net deposits, the company has demonstrated its potential to outpace its prior performance. As Robinhood continues to evolve and expand its suite of financial services, it is well-positioned to capitalize on emerging market opportunities. Investors should monitor the stock closely as it demonstrates significant growth potential.
$HOOD(HOOD)
