- Robinhood saw more crypto trading volume in the fourth quarter.
- The company beat both earnings and sales estimates for the quarter.
- Its peer, Coinbase, is reporting this week and could see similar results.
Robinhood, the popular trading platform, announced that its cryptocurrency revenue for the fourth quarter increased by 10% compared to the previous year, reaching $43 million. This growth was attributed to a higher number of users engaging in crypto trading.
The company also revealed that the notional volume of crypto trading rose by 89% from the previous quarter, driven by an increased number of customers making higher-volume trades.
The surge in trading volume is not surprising, given the optimistic market sentiment surrounding the potential approval of spot bitcoin exchange-traded funds (ETFs) in the U.S., which did materialize in January. Robinhood's transaction-based revenues for the quarter saw an 8% increase from the previous year, primarily fueled by crypto trading.
Looking ahead, Robinhood expressed its expectation to gain more market share in crypto trading and expand internationally. The platform recently allowed European Union customers to trade crypto. CEO Vlad Tenev highlighted the strength of 2023, with increased product velocity, growing trading market share, and global expansion. The company reported overall fourth-quarter revenue of $471 million, surpassing the average analyst estimate of $454.7 million. Earnings per share stood at $0.03, beating the estimated loss of $0.01 per share.
Following the positive results, Robinhood's shares saw a 15% increase on Tuesday. Despite a 7% decline for the year compared to the S&P 500's 4.4% advance, the platform is optimistic about its performance in 2024, citing a strong start with more Funded Customers and Net Deposits in the first half of Q1 than in all of Q4 2023.