Shares in Robinhood Markets Inc. dropped in after-hours trading after the company missed expectations on earnings and estimates in its fourth-quarter earnings report.
For the quarter ending Dec. 31, Robinhood reported a net loss of $ 423 million or 49 cents per share. Revenue in the quarter was $ 363 million, up 13% compared to the same quarter last year. Analysts had been predicting a loss of 45 cents per share on revenue of $ 362.1 million.
For the full year 2021, Robinhood reported a net loss of $ 3.69 billion or $ 7.49 per share compared to net income of $ 7 million or one cent per share in 2020. Revenue for the year came in at $ 1.82 billion versus $ 959 million the previous year.
Transaction-based revenue in the quarter was up 12% year-over-year to $ 264 million and up 95% to $ 1.4 billion for the full year 2021. Revenue from options in the quarter was up 14% to $ 163 million and cryptocurrency-based revenue grew 304% to $ 48 million. Revenue from equities dropped 35% compared to the same quarter in 2020 to $ 52 million.
Highlights in the quarter included trade recommendations to new customers who have yet to place a trade and the introduction of Automated Customer Account Transfer Service, a service that allows customers to transfer assets from other brokerages into Robinhood.
For the full year, Robinhood added over 10 million net funded accounts, nearly doubling the customers on the platform. The company also invested heavily in the service and reliability of its platform and added 24/7 live phone support for all logged-in users.
“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,” Vlad Tenev, chief executive officer and co-founder of Robinhood, said in a statement. “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.”
Looking forward, Robinhood said it expected total net revenues of less than $ 340 million in the first quarter of 2022, assuming some incremental improvement in trading volumes. The figure is down 35% compared to the same quarter in 2021, with the company noting that Q1 2021 was outsized due to heightened trading activity, particularly meme stocks. Although not the only meme stock traded in that quarter, the best known of those meme stocks was GameStop Corp.
Analysts had been predicting that Robinhood would estimate revenue of $ 448.2 million for the first quarter.
The miss on earnings and estimates was not well received by investors. Shares in Robinhood dropped as much as 15% after the bell before settling to 12.83% down at $ 10.12 per share as of 8 pm EST.