Robinhood discloses pre-IPO financials, shows $11.6 billion in crypto holdings

Robinhood, a financial technology firm that’s been catering to a younger audience of investors and crypto enthusiasts, recently made an S-1 filing to the U.S. Securities and Exchange Commission (SEC), shows that it has made north of $7.5 million in profits on a $959 million revenue for 2020.

The filing also reveals that as of March 31st, 2021, Robinhood now holds nearly $11.6 billion in crypto holdings on behalf of its users and customers, a number that went up rapidly from $480 million in the past year. The filing is Robinhood’s first move in terms of a financial performance disclosure prior to its planned initial public offering (IPO) slated for sometime in late August or September (Q3) this year.

In line with its planned IPO, Robinhood disclosed that it intends to raise up to $100 million in funding to support its IPO process, with shares to be listed on Nasdaq with $HOOD as its ticker symbol. Robinhood first revealed its IPO plans in March this year, a couple of weeks before Coinbase, a company that rivals its traction, went public. Robinhood confirms that it will reserve up to 35% of shares for its customers, available for purchase prior to the IPO, enabling more equitable participation from retail investors.

According to the S-1 filing, 17% of the firm’s overall revenue was sourced from crypto trading, while 34% of the crypto trading revenue came from Dogecoin ($DOGE). The meme coin has seen popularity in other crypto trading and acquisition platforms, but Robinhood’s audience of mostly millennials and Gen Z traders has proven to provide traction on the matter.

Robinhood, however, describes the meme coin’s traction as a risk:

"[if] demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies."

Despite the sharp increase in the firm’s crypto holdings, most of its revenue is still pulled off of its stocks and options trading activities. To date, Robinhood hasn’t updated its policy regarding crypto offerings: users still cannot move these assets off of the Robinhood platform.

Launched in mid-2013, Robinhood has grown its user base to over 17.7 million monthly active users, with over $81 billion in assets under custody spread over 18 million net cumulative funded accounts.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.