Shares of U.S.-based broker Robinhood ( NASDAQ:HOOD ) soared in premarket trading on Wednesday after the company reported better-than-expected results for the fourth quarter and full year 2023.
In fact, Robinhood had only its second profitable quarter in Q4 (the other was Q2 2023), with net income of $30 million. For the full year 2023, Robinhood posted a net loss of $487 million. But then again, the company seems headed in the right direction, favoring profitability over the growth at all costs that characterized its early years.
On the revenue side, Robinhood saw revenue of $471 million for Q4 2023, up slightly from $467 million in Q3. For the full year 2023, Robinhood’s revenue was $1.87 billion, up 37% year over year.
Shares of Robinhood reacted by trading higher in the premarket, settling at $13.63 by press time, up 15% from Tuesday’s close of $11.84.
Robinhood share price, last 12 months. Source: Google Finance.
Robinhood’s revenue was certainly helped by the higher interest rate environment, with net interest income of $236 up 41% year-over-year, and therefore accounting for more than 50% of the company’s total revenue.
However, transaction-based revenue also rose 8% year-over-year in the fourth quarter to $200 million, driven primarily by crypto revenue of $43 million (up 10), equity revenue of $25 million (up 19 %), partially offset by soft options revenue of $121 million (down 2%).
Robinhood once again reported international expansion in its results release, although not as prominently as after the third quarter. The company said that based on early progress following the launch of Robinhood’s waiting list in the UK and the cryptocurrency launch in the EU, Robinhood plans to explore opportunities to continue growing its customer base outside of the US. We reported earlier this month that Robinhood is expanding into Canada, although it has yet to formalize plans to offer services to Canadian traders and investors.
Vlad Tenev, CEO and Co-Founder of Robinhood said of the results,
“2023 was a strong year as our product velocity continued to accelerate, our market share in transactions increased and we began to expand globally. And we’re off to an even better start in 2024, as we’ve already brought in more Funded Customers and Net Deposits in the first half of Q1 than we did in all of Q4 2023.”
The full release of Robinhood’s Q4 and full year 2023 results you can see here.