NEW YORK: Commission-free brokerage Robinhood Markets Inc on Thursday posted a $423 million net loss in the latest quarter, and its shares tumbled as much as 15% in after-hours trade even as revenue edged past analysts' estimates as strong crypto trading boosted transaction volumes.

       Robinhood reported a net loss of US$423 million or $0.49 per share in the three months ended December. A year earlier, which was before its IPO, the company posted net income of $7 million or $0.01 per share.

       Shares of Robinhood sank as much as 15% to $9.98 in extended trading following results. The share price at its IPO in July last year was $38, and its record high in August was $85.

       Robinhood, in its third set of results as a public company, posted total revenue of $363 million for the fourth quarter ended Dec. 31, compared to $318 million a year earlier.

       Analysts on average had expected revenue of $362.14 million, according to IBES data from Refinitiv.

       On a call with reporters, Robinhood chief financial officer Jason Warnick attributed much of the company's recent costs to share-based compensation and increasing its headcount.

       "We think we’re in a really good position to start slowing that from here," he said.

       The company's transaction-based revenue from cryptocurrencies jumped 304% to $48 million in the fourth quarter, while revenue from equity trading declined 35% to $52 million.

       Like many tech start-ups, Robinhood has yet to turn a profit following its IPO. Although the company’s revenue was a positive sign, its monthly active users declined 8% from the previous quarter to 17.3 million as retail investors pulled back from the market.

       Still, Warnick said that "there is nothing to suggest our customers are disengaging."

       Robinhood enjoyed a strong run during the pandemic, with homebound investors using its app to trade stocks and other assets. It was at the center of a trading mania for meme stocks in January last year.

       Trading activity rose during the pandemic when the Federal Reserve injected massive liquidity into capital markets and investors raced to cash in on the boom.

       But the Fed is expected to scale back asset purchases and raise interest rates, which analysts expect will put a damper on trading.

       Cryptocurrencies have been hammered recently. Bitcoin, the largest cryptocurrency, plunged 50% to $32,951 last week, lowest since July last year.

       Several analysts also believe the company's share price could be pressured https://www.reuters.com/business/finance/robinhood-shares-stumble-trading-frenzy-wanes-regulators-circle-2022-01-27 by worries about a potential crackdown from the U.S. Securities and Exchange Commission (SEC) on payment for order flow (PFOF) — whereby brokers route trades to wholesale market makers in return for a fee.

       Robinhood derived approximately 72% of its revenue from PFOF and other transaction rebates in the fourth quarter of 2021.

       For the first quarter of this year, Robinhood is expecting its total net revenue will be less than $340 million, which would be a decline of 35% compared to revenue in the first quarter of 2021, which was buoyed by meme stock trading- Reuters