Robinhood SEC Filing Shows Subscriber Growth
The first thing you will notice would be the profits.
In the grand parade of FinTechs and platform IPOs that have marked the past few months, the theme has been double-digit (in some cases even triple-digit) percentage point growth. But a sea of ââred ink on the operating lines and the bottom line.
Robinhood, one of arguably the most anticipated IPOs of this year, stands in stark contrast to the net profit disclosed in its S-1 filing. In terms of numbers, in 2020 the company saw a 245% revenue growth from the previous year, reaching $ 959 million in the most recent period.
Net income was $ 7 million, compared with a net loss of $ 107 million. A figure that tends to be watched closely by Wall Street, the company’s Adjusted EBITDA (a rough measure of cash flow) was $ 155 million, up from a negative total of $ 74 million the year before. .
The pace of revenue accelerated in the first quarter of the year, when total revenue stood at $ 522 million, up more than 300% year-over-year. Net losses reached $ 1.4 billion due to the need for emergency financing, as was widely reported this year. Adjusted EBITDA was positive, however, at just over $ 114.7 million.
Going a little deeper, the company said it has 18 million net funded accounts on its platform, which is a significant jump from the 12.5 million recorded a year ago in March. Along with this growth, assets under custody stood at $ 80 billion, up from $ 19.2 billion in March last year. Among assets under custody, cryptos stood at $ 11.6 billion in the most recent period, up from $ 481 million last March.
Memes and cryptos
It turns out that memes stocks and a little bit of crypto volatility are going a long way. As Robinhood noted in the document, from January 1, 2015 to March 31, 2021, over half of client fundraising accounts on our platform told us that Robinhood was their first brokerage account. We believe that almost 50% of all new personal funded accounts opened in the US from 2016 to 2021 were new accounts created on Robinhood. “
In addition, word of mouth appears to be a powerful vector for growth. Up to 80% of the net additions in 2020 were made through the referral program.
Regarding app and platform strategy, Robinhood said in its brief that it envisions users “seamlessly shifting between investing, saving, and spending everything on the Robinhood platform. When we check our email, there is a referral app. When we need a map, there is a must-have app. We envision a world where Robinhood is that go-to app for the money. We think people want develop their financial independence and have the tools and ability to take ownership of their financial well-being.We look forward to being our clients’ unique money application that enables them to achieve these goals.
Dizzying ambitions, and those that could hit speed bumps, at least in part as regulators continue to scrutinize the company. In one example noted on the record, the company paid the SEC $ 65 million at the end of last year to settle fees that it did not disclose payments from brokers to route trades and failed. had not met the “best execution” of transactions. In another example, Robinhood CEO Vlad Tenev’s cell phone was taken as part of a search warrant executed by authorities related to trading activity on the stock platform itself (such as GameStop and others). There are also ongoing class actions against the company over asset and data protection, and claims the platform was “insufficiently designed to meet customer demand,” as stated in the filing.
The heady growth also has growing pains.