A major mobile-based cryptocurrency trading platform, Robinhood has once again found itself drowning in the hot waters.
The situation does not look good for the crypto-trading application as its revenues could be seen dropping as shown in the Q4 2022 report.
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Robinhood’s Fourth Quarter Revenue Report
Robinhood officials recently shared information for the fourth quarter of 2022 where they revealed the profits and losses.
The company went on to share the profits and losses they were able to generate and register for the crypto trading segment.
The company claimed that although the overall figures they have generated are positive, they consider them to be mixed and alarming.
The executives stated that the traditional assets they have been offering have reportedly outperformed their previous performances within the crypto segment.
The assets demonstrating outperforming performance is a positive thing but Robinhood teams do not seem happy about the developments.
According to a recent statement by Robinhood, they are not too hopeful about the latest developments. As per them, the developments taking place may change soon change.
Crypto Market Situation is Uncertain
Although the crypto market may be hovering in positive territory for now, things still remain uncertain about the industry’s future.
The future of cryptocurrencies is still uncertain and the situation may change, making things worse for the crypto segment in the future.
They are hopeful that positive things will happen in the future but they are not too certain about it. The executives stated that they have been working on the development of the crypto wallet.
So far, they have only launched the beta version of the crypto wallet. They are yet to roll out the full version of the wallet to their users.
They will be able to assess the real growth of their cryptocurrency business just as they make the cryptocurrency wallets public.
Strong Revenues versus Weak Share Prices
While sharing earnings for the fourth quarter of 2022, Robinhood revealed that their sequential revenue was much higher.
They confirmed that the revenue they generated in the fourth quarter was $82 million. They claimed that they recorded a 74% sequential improvement in the fourth quarter of 2022.
The net interest revenue for the company also increased in the fourth quarter. They reported an increase of 30% in the net interest revenue.
Robinhood revealed that a significant surge was recorded in the interest-earning assets as the US Feds increased the interest rates.
Despite the revenue figures looking so promising, the bottom line the company has shared does not look much promising.
Robinhood has reported a $166 million worth of loss in the fourth quarter. The significant drop suggests that the company’s earnings fell to $0.19 per share.
The officials stated that despite the fourth quarter earnings decline, there is a silver lining. They talked about the company’s third quarterly earnings revealing they dropped by $0.20 per share.
Even in the fourth quarter, the company’s shares experienced a slight push in the upward direction. They performed well in the fourth quarter, which is also a good sign for the company’s future.
Shares BuyBack from SBF
Like most cryptocurrency firms, Robinhood has faced a major problem involving Sam Bankman-Fried. The former CEO of the defunct FTX exchange had purchased shares in Robinhood as it went public.
With the entire FTX dilemma, Robinhood has announced that it is going to buy back the shares it had sold to SBF.
The company does not want to have any ties with SBF, as it considers that its public image will be negatively impacted if it does.
The firm revealed that although their overall earnings and revenues were promising, their earnings/revenues do not look good for the crypto segment.
They reported only $39 million in revenue in the fourth quarter of 2022 from cryptocurrencies. They confirmed a 24% decline in their revenue in the respective quarter.