On January 27, Robinhood Markets Inc. (HOOD) reported worst-than-expected results for Q4 and full-year 2021. Consequently, the stock plunged further deep in the after-hours.
During the regular trading session, the stock saw a decrease of 6.45% at its closing price of $11.61. Following the announcement, HOOD nosedived to $10.13 in the after hours. Therefore, losing a huge 12.75% at an after-hours volume of 12.76 million shares.
The financial services platform, Robinhood Markets Inc. offers commission-free stock trading along with no account minimums and fractional share trading. Currently, the company has a market capitalization of $10.67 billion with its 729.55 million shares outstanding.
HOOD’s Earnings Report
In Q4 2021, the company had total net revenues of $363 million and $1.82 billion for the full year of 2021. Comparatively, the total net revenues in Q4 and full-year 2020 were $318 million and $959 million, respectively. The consensus estimate for revenue in Q4 2021 was $376 million, thus the revenue missed the expectations.
Moreover, HOOD incurred a net loss of $423 million in Q4 2021 and $3.69 billion for the full year 2021. In comparison, the company had a net income of $13 million or $7 million in Q4 and full-year 2020, respectively.
Resultantly, the respective diluted net loss per share was $0.49 and $7.49 for Q4 and full-year 2021. Against, respective diluted net income per share of $0.02 and $0.01 for Q4 and full-year 2020. The consensus was looking forward to a loss of $0.35 per share for Q4 2021.
Additionally, the monthly active users (MAU) saw an increase of 48% year over year but the average revenues per user (ARPU) suffered a hit of 39% year over year.
HOOD’s Future Guidance
In addition, the company also provided guidance for its upcoming Q1 2022. According to this, HOOD expects a 35% year-over-year decline in total net revenues to less than $340 million. The Wall Street consensus expectation for revenue in Q1 2022 was $448.2 million.
What Else Happened?
As per reports on Reuters on January 27, a lawsuit against HOOD was dismissed by a federal court in the U.S. The lawsuit was filed against the company accusing it of violating state laws due to the restriction of trades on mem stocks in 2021 January’s rally. According to Chief Judge Cecilia Altonaga, the customer agreement permitted the company to restrict trading. Hence, the investors cannot pursue claims against the company.
Conclusion
In conclusion, the company disappointed its investors as it reported the latest earnings that missed the expectations. Along with that, the company’s poor guidance for the upcoming quarter, caused the stock to fall hard in the after-hours on Thursday.
