American broker Robinhood announced a decrease of 208% in net loss for Q1 2023. Despite the huge loss, the firm’s total net revenue increased by 16%, reaching $441 million. The net loss stood at $511 million, beating the $441 million quarterly revenue. Robinhood’s Q1 2022 revenue surged by 47% from $299 million, while the net loss dropped 30% from $392 million.
Robinhood attributed the loss to a one-time share-based compensation expense of $485 million related to its co-founders’ cancellation of their 2021 market-based restricted stock unit awards in February.
The company said in the official announcement:
Operating expenses increased by $416 million sequentially to $950 million, primarily due to the 2021 Founders Award Cancellation.
Operating expenses prior to SBC decreased 6% sequentially to $352 million.
However, Robinhood’s $441 million revenue for the first quarter still exceeded market expectations. The company reported an increase of 11% quarter-over-quarter (QoQ) in its transaction-based revenues, reaching $207 million during the first quarter. This was driven by an increase of 7% in options trading and 29% in equities, generating $133 million and $27 million in transaction-based revenues, respectively. Revenues from cryptocurrencies came in at $38 million with a 1% reduction.
Additionally, Robinhood reported an increase of 25% QoQ in its net interest revenue as the company’s return from its borrowings to customers for securities purchase reached $208 million. The revenue was higher than the $167 million generated in the previous quarter and $55 million from the same period last year. This growth was supported by the US Federal Reserve’s fast rate hikes.
Despite the huge net loss on its record, Robinhood’s Q1 2023 financial performance highlights significant growth in its transaction-based revenues, indicating its growing popularity in the investment industry.
24-hour market launch and plans to expand to the UK
Robinhood announced it will launch a 24-hour market next week to allow customers to trade individual stocks all-day-long for five days a week.
CEO and Co-Founder, Vlad Tenev, stated:
Vlad Tenev Source: Twitter
We had a great start to the year in Q1, which is a testament to our relentless pursuit of innovation – and the launch of 24-Hour Market next week shows we’re not slowing down.
The company added:
With an experienced team leading and an existing license in place, we believe we’re on track for our ambitious goal of launching brokerage services in the UK by the end of the year.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
