Robinhood Markets (NASDAQ: $HOOD) is a commission-free and FINRA-regulated electronic-based online platform that allows users to trade stocks, ETFs, cryptocurrencies, and individual retirement accounts. The headquarters of the company is in Menlo Park, California.
After markets closed on February 13, 2024, Robinhood announced its fourth quarter and full-year earnings results for the year ending December 31, 2023.
Fourth Quarter and Full-Year Results
Robinhood stock rose during after-hours trading after Q4, and full-year results beat analysts’ revenue and earnings estimates. The company reported an EPS of $0.03, surpassing analysts’ expectations of $0.01. Revenue reached $471 million, exceeding the estimated $457 million, a 24% year-over-year increase. Full-year revenue rose 37% to $1.87 billion.
Robinhood also reported a 41% Y/Y increase in net interest revenue to $236 million in Q4, fueled by the growth of interest-earning assets and higher short-term interest rates.
The adjusted EBITDA (non-GAAP) also rose 62% year-to-year, totaling $133 million in the fourth quarter and $630 million for the whole year. However, Robinhood reported a 4% slump in monthly users year-over-year, to 10.9 million in the fourth quarter.
Additionally, revenues generated from transactions exceeded expectations, rising 8% year-over-year to $200 million in the quarter, driven by crypto transactions.
In a post-earnings call with analysts, CEO Vlade Tene stated that Robinhood market share rose by 14% for equities and 19% for options.
Robinhood CEO & CFO Statements
CEO and Co-founder of Robinhood, Vlade Tenev, said, “2023 was a strong year as our product velocity continued to accelerate, our trading market share increased, and we started to expand globally.”
He added, “And we’re off to an even better start in 2024, as we’ve already brought in more Funded Customers and Net Deposits through the first half of Q1 than we did in all of Q4 2023.”
Jason Warnick, the Robinhood CFO, said, “We delivered significant profitable growth in 2023. We drove record full-year revenues and substantially higher margins, and in Q4, we had positive GAAP net income. In 2024, we aim to continue delivering profitable growth as we work to maximize earnings per share over time to drive long-term shareholder value.”
The CFO added, “Looking at revenues, with the current macro backdrop, we’re finding for strong growth in 2024, driven by continued 20-plus percent net deposit growth, increasing gold adoption, double-digit gains and trading market share.”
Robinhood Financial Outlook for 2024
Robinhood’s plans for 2024 include growth investment in new features, products, international expansion, and improving the efficiency of its current business. Moreover, the company anticipates “both GAAP total operating expenses and Non-GAAP combined Adjusted Operating Expenses and SBC for full-year 2024 to be in the range of $1.85 billion to $1.95 billion.”
According to Robinhood, factors such as growth in funded customers, managing credit losses, preventing fraud, and promoting cross-selling of products impact variable marketing expenses and can affect the outlook for 2024.
Stock Update: HOOD
HOOD stock is currently trading at $13.37, rising 12.92% from its previous close of $11.85. The company’s impressive fourth-quarter and full-year earnings results drove the stock uptick. At the time of writing, the market cap is 11.543 billion, with a volume of 47,961,539.
Is HOOD Wroth Buying in 2024?
Robinhood’s fourth-quarter results signal that the company is on a growth trajectory. When coupled with the company’s 2024 guidance, HOOD stock is worth adding to your portfolio as it looks set for growth in 2024.
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