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Robinhood Markets (HOOD) surges ahead by 15% Thursday morning, continuing gains since the brokerage platform posted its fourth quarter earnings beat on Wednesday. Revenue tied to crypto trading is one factor contributing to this ride higher as Robinhood reported $358 million in crypto revenue, above expectations for $329.7 million, jumping by 700% year-over-year.
The Morning Brief's Brad Smith and Madison Mills highlight this aspect of Robinhood's latest release.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Luke Carberry Mogan.
Robinhood's revenue more than doubled its most recent quarter after the online trading platform benefited from a surge in activity around the presidential election. Cryptocurrency trading revenue, a particular bright spot around that time, soaring more than 700%. And it's really interesting, Brad, in particular to see the degree of the move upward in the stock price, up 14% right now, but that's actually coming in a bit from some of the moves we saw earlier this morning. That record revenue doubling is such a huge growth story. My big question is going to be where they go from here, how they deploy some of that capital internally in order to maintain that growth story moving forward.
No, it's a great point. I kind of pulled this down to to three things after being able to hop on the phone on a call that Jason Warnick, who is the CFO at Robin Hood had with media, and really kind of laying out some of their own growth trajectories, some of the advancements that they'd seen in the most recent quarter and fiscal year as well, which by every measure was a record-breaking quarter and year. That's kind of where I started off my analysis of this. And you really think about where the Q4 revenues moved up 115% year over year. That was a record $1.01 billion here. And within that, if you look further under the hood, what he also gave us was a little bit more color. There are nine areas of the business that are all contributing $100 million. That's annualized, I believe. And so, all those things considered, this also, and the growth that they have seen, really hinges on how many more kind of gold subscriptions they're able to continue to grow at. That's hitting 2.6 million, that too a record here, and that is up 86% year over year. And then, lastly here, we heard them talk a lot about tokenization. And they discussed this on the earnings call. Vlad Tenev, who we've had on Yahoo Finance several times over the past year, he was talking about this on the earnings call, and the tokenization of private assets. And this is something that I don't think we've really got a full handle on how that could be leveraged for investment platforms. And we actually heard, um, uh, we heard Apollo Global's uh CEO talk about this when we were at Invest. And he was essentially saying, yeah, private assets could be the next major investment vehicle. And it really is the tokenization of some of those private assets or things that don't have traditional securitized elements to them. That is the next major uh element of opportunity or supreme opportunity they were talking about on the call last night too. So kind of, once again, opened up my mind and connected the dots between something that we had heard at Yahoo Finance Invest to again, something that is connecting with a user base that spans generations, Gen Z, Gen Alphas, like this is going to be the investment platform that they kind of look to for decades to come. And even those who are close to retirement, they got some love on the call too.
I think it's so well said, Brad, and I'll just quickly add there that private credit is something that I think our audience knows about, but doesn't always know how to play. And if Robinhood can find a way to make private credit investing accessible the way they've made crypto investing accessible, that could be the next big growth story.
Absolutely.
