Robinhood’s Impressive Fourth-Quarter Performance and Its Implications for Coinbase
Trading platform Robinhood (HOOD) has delivered a robust performance in its fourth quarter, surpassing both earnings and revenue expectations. This positive outcome could signal favorable trends for its competitor, Coinbase (COIN). In its recent report, Robinhood announced that its fourth-quarter revenue skyrocketed by an impressive 115% year-over-year, reaching $1.01 billion. This figure exceeded Wall Street analysts’ projections, which estimated revenue at approximately $945.8 million, according to data from FactSet.
One of the standout elements of Robinhood’s financial performance was its transaction-based revenue, which surged by 200% compared to the previous year. This remarkable growth was largely attributed to a staggering 700% increase in revenue from cryptocurrencies, as highlighted in the company’s official statement. Given this context, the forthcoming earnings report from Coinbase, scheduled for Thursday after the market closes, becomes particularly significant.
Both Robinhood and Coinbase cater to a similar clientele and derive a substantial portion of their revenue from trading fees. Analysts on Wall Street anticipate that Coinbase will showcase one of its strongest quarters in terms of trading volume since the fourth quarter of 2021. This expected uptick is attributed to the election of a crypto-friendly president, Donald Trump, which propelled cryptocurrency prices to unprecedented heights in November.
According to estimates on FactSet, Coinbase is projected to report revenue of $1.8 billion, a notable increase from $1.26 billion in the third quarter. Additionally, the exchange’s trading volume is expected to reach $195.9 billion, up from $185.3 billion in the prior quarter. Robinhood also reported earnings per share of $1.01, which significantly exceeded the average estimate of $0.42. Following this announcement, shares of the trading app rose by over 5% in post-market trading on Wednesday, while COIN’s stock saw a modest increase of about 0.3%.
UPDATE (Feb. 12, 2025, 21:30 UTC): Additional information regarding COIN’s earnings has been included.
CORRECT (Feb. 13, 14:02 UTC): The year in the third paragraph has been corrected to 2021.
