Robinhood Shares Slump as Crypto Trading Weakness Continues

Robinhood (HOOD) shares slid almost 13% to $10.12 in after-hours trading Thursday after the commission-free trading platform reported a decline in crypto revenue, and overall fourth-quarter revenue and earnings that fell short of analyst expectations.

• Transaction-based cryptocurrency revenue totaled $48 million compared to $51 million in the third quarter, which was down from a record $233 million in the second quarter. The $48 million in crypto trading revenue did represent a 304% increase over last year's fourth quarter, however. Meanwhile, revenues from equity trading in Q4 fell 35% year-over-year to $52 million.
• The company said it has “set aggressive goals” to start opening up its crypto platform to international customers this year, which it sees as a "big opportunity."
• Robinhood recently launched the public beta of its Crypto Wallets and plans for a full launch before the end of the first calendar quarter of 2022. It also noted it launched Crypto Gifts over the holidays to allow users to send crypto to family and friends.
• Total revenue for the fourth quarter totaled $363 million, below the $376.3 million expected by analysts, according to FactSet data. The adjusted net loss was $0.49 per share, compared to the $0.36 adjusted loss per share that analysts forecast. The company guided for first-quarter revenues of "less than $340 million," which was below the $444 million forecast by analysts.
• Robinhood went public last July at an initial public offering price of $38 per share. The stock hit a new all-time low on Monday amid an overall tech and crypto sell-off.
• On the earnings call with analysts, Robinhood management was asked about plans to add new crypto coins to the platform, including Shibu Inu (SHIB). CEO Vlad Tenev said the company has been “proactively engaging with regulators” to address concerns about listing unregistered securities. “We’re being very deliberate. We want to avoid triggering SEC registration requirements for cryptocurrencies.”
• Asked separately about potential plans to offer crypto staking and a marketplace for non-fungible tokens (NFTs), Robinhood management said the company is building out its crypto team and looking at the regulatory landscape, but offered no specifics on future plans.

This is a developing story and will be updated.

UPDATE (Jan. 27, 22:20 UTC): Updated with details throughout.

UPDATE (Jan. 27, 23:01 UTC): Updated with management comments from earnings call.