It has been around three months since Robinhood Market Inc. officially, although confidentially, filed for an IPO in the United States with the US SEC. While the company kept the details of the filing a secret for all this time, it finally came out with the details, which revealed some interesting facts.
Robinhood’s IPO filing details
The details of the S-1 filing have revealed quite a few things, including Robinhood’s financials, which is something that the company never made publicly known before. Now that the details are out, many have found the numbers to be quite impressive.
For example, last year, the company generated $959 million in revenue, which is a 245% increase from the year before. The reported figures are before interest, taxes, depreciation, amortization ($155m) and alike, which leaves it in a much better position when compared to a $74 million loss from a year before that.
During the first quarter, which ended with March, the company saw a staggering 309% surge in revenue compared to the first quarter of the previous year. Revenue climbed to $522 million, with an adjusted profit of $115 million, while the year before brought a loss of $47m.
By the end of 2020, the company had around $12.5 million in something called ‘net cumulative funded accounts.’ These are essentially the funds of its customers, and the amount is 143% higher than what the company held in late 2019. In Q1 2020 alone, the company’s number of funded accounts was 80% higher than in Q1 2019, which brought it to 18 million funded accounts.
Robinhood and crypto
Then, there are the details connected to the crypto industry. Robinhood, as many likely know, acts as a crypto asset holder on behalf of many of its crypto-friendly clients. By the end of March, the company held $11.6 billion in cryptocurrency, which is significantly higher than at the same time last year, when it held only $481 million. However, it is assumed that a big reason for this is the fact that Dogecoin rose as much as it did earlier this year.
Dogecoin is a joke cryptocurrency that was created in 2013 based on the doge meme, featuring a popular image of a Shiba Inu. The coin was supposed to be a funny addition to the crypto industry which was growing very serious and dark back in those days, but ultimately, even its creator expected that it was doomed to fail. Against all odds, however, DOGE survived for the next 8 years, and it became a favorite of a lot of traders and investors.
It even attracted Elon Musk, one of the richest people in the world, who also acts as the CEO of Tesla, SpaceX, and several other companies. Earlier this year, DOGE skyrocketed, dwarfing all other price surges in its history. Now, Robinhood details revealed that DOGE accounted for as much as 34% of the revenue that came from crypto transactions in the first quarter of the year. This is as much as 30% higher than in 2019 when only 4% came from it.
Robinhood seems to be very well aware of the risks, however, as it noted that, if the demand for DOGE transactions drops and it doesn’t get replaced by new demand for some other coin or coins that the platform offers, it could severely affect its business, financial condition, and results of operations.
Robinhood continues to face troubles
One interesting thing, however, is that Robinhood filing went public only a day after the company got a $70 million-large fine from the FINRA (Financial Industry Regulatory Authority). The fine arrived to settle charges due to the previous issues with the company’s stock trading service. Allegedly, the company has provided its customers with false and/or misleading information, which caused significant harm to them.
The company was also fined another $65 million last December, this time by the US SEC, as it was accused of deceiving customers about how it made money for itself. Furthermore, it promised the best execution of trades, which it also failed to deliver.