Has Robinhood’s Growth Stalled? Earnings Plunge Amid Crypto Winter
Robinhood, a leading U.S. retail investment platform, reported fourth-quarter results that fell short of Wall Street expectations amid a downturn in the cryptocurrency market, sending its stock sharply lower in after-hours trading. The decline in major digital asset prices, including Bitcoin (BTC), led directly to reduced trading volumes, dealing a blow to Robinhood’s core source of revenue—transaction-based income.
According to crypto-focused media outlet Decrypt on February 11 (local time), Robinhood posted fourth-quarter revenue of $1.28 billion, up 27% year-over-year, but below analysts’ expectations of $1.35 billion. Net income fell 33% from a year earlier to $605 million, or 66 cents per share, missing Wall Street estimates of 67 cents per share.
The primary driver of the earnings miss was a sharp decline in cryptocurrency trading revenue. Crypto-related revenue came in at $221 million in the fourth quarter, down from $268 million in the previous quarter and representing a 38% decline year-over-year. The downturn reflects broader market weakness, as Bitcoin prices fell 23% over the three months through December, dampening overall trading activity.
Following the earnings announcement, Robinhood shares fell 6.5% to $80 in after-hours trading. According to CoinGecko data, Bitcoin was trading around $69,000 on Tuesday and remains down 21% so far this quarter, suggesting that subdued market conditions may continue to weigh on Robinhood’s performance.
Despite weakness in its crypto segment, the Prediction Market has emerged as a new growth driver for Robinhood. CEO Vlad Tenev emphasized that the prediction market is the fastest-growing product line in the company’s history in terms of revenue, maintaining strong momentum with 12 billion event contracts executed on the platform over the past year.
Amid ongoing market volatility, Robinhood continues to pursue its vision of building a financial super app while advancing development of its proprietary Ethereum Layer 2 network, Robinhood Chain. The network currently supports stock tokens that provide synthetic exposure to U.S. equities for European customers, accelerating the company’s service expansion.
Disclaimer: This article is for investment reference purposes only, and we are not responsible for any investment losses arising from it. The content should be interpreted solely for informational purposes.
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