Bitcoin Trading Boosts Robinhood Crypto Transaction Revenues 700%

The crypto and stock market surges leading into the presidential election and beyond helped buoy Robinhood’s fortunes in the fourth quarter.

Results released after the markets closed on Wednesday (Feb. 12) noted that accounts were up 10% to 26.2 million.

And transaction based top lines were $672 million in the period, surging 236% from the same period in 2023, and a 111% jump from the third quarter.

Within that revenue line item, $358 million was tied to crypto-based revenues, which was 700% higher than the fourth quarter last year.

During remarks on the company’s video earnings call, CEO Vlad Tenev said the company passed the $1 billion revenue mark for the first time, and said during the presentation that Gold subscribers were 2.6 million, which was up 1.2 million year over year. Net deposits of about $50.5 billion were up 49% on a trailing 12-month basis.

“Perhaps the thing that I’m most excited by is,” the CEO said, “if you look at the net new customer-funded accounts in Q4, of those new customers that joined … over 30% have adopted Gold.”

CFO Jason Warnick said that the more-than-doubling of revenues year over year helped drive profitability; the company’s net income per share of $0.17 surged above $0.03 in the fourth quarter of last year.

The stock soared 12% in after-hours trading.

Forward Thinking

Later in the presentation, Tenev said “On the share-of-wallet front, we’re going to grow the Robinhood Gold Card from about a 100,000 holders today two multiples of that size. … We’re also investing in the Robinhood wallet, which is a separate app, and it’s our non-custodial crypto wallet. And that’s the gateway to thousands of additional coins for our customers,” he said.

Later during the call he noted that, in reference to tokenization, the firm is “uniquely positioned at the intersection of traditional finance and DeFi — we’re one of the few players that has scale both in traditional financial assets and cryptocurrencies. And what that means for us is bringing real assets onto crypto technology, and giving people access to real-world productive assets using crypto rails.” Those assets would include equities and private investments, he said.

During the question-and-answer session, Tenev stated that the demand for the Gold Card has come in the midst of 3% cash back, and the digital features inherent in the virtual card itself.

The company is also examining offering a broader range of lending products, Tenev said, which would “cover the wide range of customer borrowing needs.” As Tenev told analysts, “You should see us accelerate more products, more features, to further wallet share and put us in a position where I think relatively few companies are … to capture the $84+ trillion in assets that are going to be flowing down to younger generations in the next few decades.”

Asked later in the call about the general crypto environment, Tenev contended that “more regulatory clarity is needed — and across multiple domains. We have been adding more assets, but … I think the real power of crypto technology is when it’s able to be applied to real-world productive assets which would be under the securities regime. So, we still need a comprehensive set of rules and regulations for listing crypto asset securities that will allow us to tokenize private companies, as well as public securities.”