Robinhood files to go public after squeaking to profitability in 2020
This afternoon Robinhood, the popular investing app for consumers filed to go public. The company intends to list on the NASDAQ under the symbol “HOOD.”
That Robinhood released an S-1 filing today is not a surprise. The company privately filed to go public back in March, leaving the startup-watching world waiting for the eventual filing drop. Robinhood’s public offering document includes a placeholder $100 million raise figure, though that will change the closer we get to its debut.
The company is pursuing a public listing after a period of rapid growth. Robinhood saw its revenues soar from $277.5 million in 2019 to $985.8 million in 2020.
The company’s first-quarter numbers are even more impressive. During the first three months of 2021, Robinhood generated revenues of $522.2 million, up around four times from its Q1 2020 result of $127.6 million. TechCrunch expected Robinhood to post a strong first quarter based on previous filings relating to its payment-for-order-flow (PFOF) business.
Notably, Robinhood was profitable in 2020, generating net income of around $7.4 million during the one-year period. However, the company’s most recent period includes an epic $1.49 billion cost relating to “change[s] in fair value of convertible notes and warrant liability,” leading the company to post an astronomical net loss of $1.44 billion in the first quarter of the year. That compares with a net loss of $107 million for 2019.
For the three-month period ended March 31, Robinhood posted $463.8 million in operating expenses, inclusive of “brokerage and transaction” costs. The company’s business then, apart from its fair-value changes, had a good start to the year in profitability terms.
That Robinhood closed the first quarter of 2021 on a more than $2 billion annual run rate is notable; the firm has quickly scaled to mammoth size on the back of rising consumer interest in investing in both stocks and cryptocurrencies.
Robinhood has proved to be a lightning rod for oversight, fines, mass usage and culture in the last year. And it raised billions this year after running into operational issues regarding trading of certain stocks that retail investors found particularly appealing.
Turning to investor results, DST Global, Index Ventures, New Enterprise Associates and Ribbit capital are listed as shareholders with more than 5% of the company apiece, though certain information in the S-1 filing is yet to be included, including share counts for most of those groups. DST’s 58,102,765 Class A shares, however, are listed.
Robinhood has three classes of shares, including Class A shares with one vote, Class B shares with 10, and Class C shares with none.
TechCrunch is parsing the S-1 and will have more in a following piece.
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