Robinhood shares fell about 11% in after-hours trading Thursday after it posted a net loss for the quarter, despite analysts’ previous estimates for quarterly revenue, as strong crypto trading boosted transaction volumes at the online brokerage.
Robinhood, in its third set of results as a publicly traded company, reported a net loss of $423 million or $0.49 per share for the three months ended December. A year earlier, prior to its IPO, the company posted net income of $7 million or $0.01 per share.
Shares of the company fell a whopping 11% to $10.32 in after-hours trading Thursday after the news.
The company posted total revenue of $363 million for the fourth quarter ended Dec. 31, compared to $318 million a year earlier, surpassing analyst expectations of $362.14 million in revenue, according to IBES data from Refinitiv.
Transaction-based revenue from cryptocurrencies rose 304% to $48 million, while revenue from stock trading fell 35% to $52 million.
Robinhood had a strong run during the pandemic, with domestic investors using its app to trade stocks and other assets. It was at the center of a trading mania for meme stocks last January.
Trading activity surged during the pandemic as the Federal Reserve injected massive liquidity into the capital markets and investors rushed to cash in on the boom.
But the Fed is expected to cut asset purchases and raise interest rates, which analysts say will put a brake on trading.
Cryptocurrencies have been hammered recently. Bitcoin, the largest cryptocurrency, fell 50% last week to $32,951, the lowest level since July last year.