The first thing you may notice will be profit.
In the amazing IPO parade of FinTech and the platform, which marked the past few months, the theme was double-digit (and in some cases three-digit) big point growth. However, there is a sea of red ink on the operating and net profit lines.
Robin hoodArguably one of the more promising IPOs of the year, in sharp contrast to net income. It is disclosed in its S-1 filing. In terms of headcount, in 2020, the company recorded 245% year-on-year revenue growth, reaching $ 959 million in the most recent period.
Net profit was $ 7 million from a net loss of $ 107 million. The company’s adjusted EBITDA (a rough indicator of cash flow), a number that Wall Street tends to focus on, was $ 155 million, down from $ 74 million in the previous year.
The pace of revenue accelerated in the first quarter of this year, with total revenue of $ 522 million, an increase of more than 300% over the previous year. As widely reported this year, the need for urgent funding has boosted net losses to $ 1.4 billion. However, the adjusted EBITDA was positive, just over $ 114.7 million.
A little digging, the company said it has 18 million net funds accounts on the platform. This is a significant increase from the 12.5 million seen a year ago in March. In parallel with that growth, assets under custody increased from $ 19.2 billion in March last year to $ 80 billion. Among the assets in custody, crypto was $ 11.6 billion in the most recent period and $ 481 million in March last year.
Memes and crypto
As it turns out Meme stock And a bit of cryptographic volatility is very helpful. As Robin Hood stated in the document, “From January 1, 2015 to March 31, 2021, more than half of the customers funding our platform accounts were Robin Hood’s first intermediary account. We believe that nearly 50% of all new retail funded accounts opened in the United States between 2016 and 2021 are new accounts created in Robin Hood. “
In addition, word of mouth seems to be a powerful conduit to growth. 80% of the net increase in 2020 came through a referral program.
Regarding the app and platform strategy, Robin Hood said in its filings that it “assumes users to seamlessly move all of their investments, savings and spending on the Robin Hood platform.” If you check your email, you will find a reliable app. When you need a map, there are apps you can count on. We imagine a world where Robin Hood is a reliable app for money. We believe that we want people to have the tools and abilities to build financial independence and possess financial well-being. We look forward to becoming your single-money app that will enable you to reach these goals. “
Ambitions that can be hit by big ambitions and speed spikes, at least in part, as regulators continue to scrutinize the company. In one example mentioned in the filing, the company paid the SEC $ 65 million at the end of last year to resolve a claim that the broker failed to disclose the payment to the route transaction and did not meet the “best execution” of the transaction. Did. In another example, Robin Hood’s CEO Vlad Tenev’s mobile phone was used as part of a search warrant performed by authorities involved in trading activities on the Memestock platform () GameStop Others). There was also a class action pending against the company related to the protection of assets and data, claiming that the platform was “improperly designed to handle customer demand,” as stated in the filing. doing.
Rapid growth is also increasing pain.
https://www./news/ipo/2021/robinhood-sec-filing-shows-subscriber-growth-and-growing-pains/ Robinhood SEC Filing Shows Subscriber Growth