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Robinhood (HOOD) Q4 2021 earnings results miss expectations, stock craters to new all-time low

One of the world's worst apps just reported another terrible quarter, because they don't seem to know how to make money. Find out more about the Robinhood Q4 2021 earnings results here.

Asif Khan

January 27, 2022 1:30 PM

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On the eve of the first anniversary of shutting off the buy button for clients, Robinhood has reported another quarter highlighting the problems with their business model. Robinhood just reported Q4 2021 earnings results with a loss of 49 cents per share, worse than Wall Street estimates, and revenues of $363 million. The revenue number came in-line with some expectations, but the stock is reacting negatively in after-hours trading. Probably because it is a terrible company.

Here are some highlights (or lowlights) from this trash panda of a company's earnings release:

• Total net revenues for the quarter increased 14% to $363 million, compared with $318 million in the fourth quarter of 2020, and for the year increased 89% to $1.82 billion, compared with $959 million for the year ended December 31, 2020.
• Transaction-based revenues for the quarter increased 12% to $264 million, compared with $235 million in the fourth quarter of 2020, and for the year increased 95% to $1.40 billion, compared with $720 million for the year ended December 31, 2020.
  • Options for the quarter increased 14% to $163 million, compared with $142 million in the fourth quarter of 2020, and for the year increased 57% to $689 million, compared with $440 million for the year ended December 31, 2020.
  • Cryptocurrencies for the quarter increased 304% to $48 million, compared to $12 million in the fourth quarter of 2020, and for the year increased to $419 million, compared with $27 million for the year ended December 31, 2020.
  • Equities for the quarter decreased 35% to $52 million, compared with $80 million in the fourth quarter of 2020, and for the year increased 15% to $288 million, compared with $251 million for the year ended December 31, 2020.
• Loss before income tax for the quarter was $420 million, compared with income before income tax of $19 million in the fourth quarter of 2020, and for the year loss before income tax was $3.68 billion, compared with income before income tax of $14 million for the year ended December 31, 2020.
• Net loss for the quarter was $423 million, or $0.49 per diluted share, compared with net income of $13 million, or $0.02 per diluted share in the fourth quarter of 2020, and for the year net loss was $3.69 billion, or $7.49 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, for the year ended December 31, 2020.
• Monthly Active Users (MAU) increased 48% to 17.3 million for December 2021, compared with 11.7 million for December 2020. On a sequential basis, MAU decreased 8% compared with 18.9 million for September 2021.
• Assets Under Custody (AUC) increased 56% to $98 billion as of December 31, 2021, compared with $63 billion as of December 31, 2020. On a sequential basis, AUC increased 3% compared with $95 billion as of September 30, 2021.
• Average Revenues Per User (ARPU) for the quarter decreased 39% to $64 on an annualized basis, compared with $106 in the fourth quarter of 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. ARPU for the year decreased 5% to $103, compared with $109 for the year ended December 31, 2020. On a sequential basis, ARPU remained consistent compared with the quarter ended September 30, 2021.
• Cash and cash equivalents at December 31, 2021 totaled $6.3 billion, compared with $1.4 billion at December 31, 2020.

“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,” said Vlad Tenev, CEO and Co-Founder of Robinhood Markets. “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."

These are terrible results for Robinhood, with the only bright spots appearing when they compare their growth to their pre-IPO days in 2020. Shareholders are in for some pain, but many former clients wronged by the company last year are probably feeling a bit better watching the company circle the drain.

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Asif Khan

CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.