By Dhirendra Tripathi
Investing.com – Robinhood stock (NASDAQ:HOOD) tumbled more than 14% in premarket trading Friday as the fourth-quarter numbers dealt a rude jolt to one of the key players of the 2021 meme stock rally.
Several metrics deteriorated for the trading platform in the December quarter: the net loss widened by a factor of over 30 to $423 million. On a sequential basis, monthly active users fell 8% to come in at just over 17 million. Average revenue per user plunged as much as 39% to $64 because of lower trading volumes in options and equities. Market rates earned on loaned securities declined and that hit the company too.
The company’s projection for revenue in the current quarter, at less than $340 million, also disappointed. This will be 35% lower year-on-year against a tough comparison quarter which included the peak of the 'meme' stock boom. That frenzy is now waning.
Robinhood said it expects operating expenses to rise 15%-20% this year, excluding compensation costs. It had risen 266% in 2021.
Total net revenues for the quarter increased 14% to $363 million. Of this, transaction-based revenue was $235 million, rising 12%. Revenue from crypto trading climbed more than four-fold to $48.
Chief Financial Officer Jason Warnick told Bloomberg Robinhood plans to cut its dependence on transaction revenue over the next two years. The launch of new products is key, he added.
According to Bloomberg, the company will add tax-advantaged retirement accounts, likely by midyear. Chief Executive Officer Vlad Tenev said he hopes to launch fully-paid lending in the first half of the year as well.