Robinhood Markets Inc. said it was now profitable ahead of its initial public offering. It aims to raise around $100 million.
In a Securities and Exchange Commission filing Robinhood said it turned a profit last year. However, that was followed by a loss in the first quarter of this year. The company attributed the downturn to the recent meme stock frenzy.
According to its filing, the company generated a net income of $7.45 million on net revenues of $959 million last year. It was a significant improvement from the $107 million loss on $278 million in revenues in 2019.
For its first quarter, the company generated revenues of $522 million - from the $128 million gained in the same period last year. The company said cryptocurrency trading contributed to increased revenue, accounting for about 17%. However, the increase in revenue was overshadowed by its loss of more than $1.44 billion for its latest quarter ended March 31.
The company said the loss was mainly tied to convertible notes and liabilities from its latest fundraising. The company was forced to seek new capital to deal with the volatility in the trading of stocks such as GameStop and AMC Entertainment.
Robinhood is expected to disclose further details about its public offering - including the number of shares it plans to sell and its price range. Analysts at Bloomberg Intelligence expect the company's market valuation to be as much as $40 billion following the deal.
Robinhood's offering is expected to boost U.S. capital markets. Since the start of the year, companies, including special purpose acquisition companies, have raised more than $210 billion on U.S. exchanges. Apart from Robinhood, other listings include those from Warby Parker Inc., Sweetgreen Inc. and Allbirds Inc.
The company's largest stockholder is a group of venture capitalists, which include DST Global, Index Ventures, New Enterprise Associates and Ribbit Capital.
