Robinhood's fourth-quarter explosion in crypto revenue could signal strong results are in store for Coinbase , according to Needham. Robinhood, the stock and crypto brokerage, posted record profit for the fourth quarter thanks to a surge in trading activity during the postelection rally. Within its transaction-based revenue, the company posted a 700% year-over-year spike in revenue from crypto trading, and a more than 400% increase in crypto volumes. Shares of Robinhood jumped 12% on Thursday following the report, while Coinbase gained 6% in sympathy. "We are expecting a strong Q4 from COIN after HOOD posted better than expected results," Needham analyst John Todaro said in a note Thursday. "HOOD's crypto revenue increased … amidst a surge in retail activity in November and December and [management] expressed a high degree of confidence in 2025 stating that 'AI and Crypto' were main focus items," Todaro added. Todaro said he is focused on retail trading fees for Coinbase and commentary on activity for 2025, as well as stablecoin adoption and crypto legislation timelines. Analysts are expecting a blowout quarter from Coinbase, which likely benefited from the postelection crypto rally. They expect earnings per share to have surged more than 70% from the year-earlier period, per LSEG. Revenue is forecast to have nearly doubled. The company has been making efforts to diversify its revenue streams away from trading through services such as staking, stablecoins and custodial revenue. As of the third quarter of 2024, trading makes up 47.5% of its total revenue, with most of it coming from retail traders. However, Todaro is cautious on the current quarter, as the altcoin crash driven by a meme coin mania in January could weigh on February volumes and extend into the second quarter. If Robinhood's January crypto volumes, which suggest a 15% drop in the first quarter from the fourth, are any indication, then Coinbase could see weakness for February. Robinhood CEO Vlad Tenev told CNBC on Thursday that although crypto snagged the headline from its financial results, it was a "balanced" and "diversified quarter." He emphasized that nine different business lines generated more than $100 million in annual revenue, with demand for trading in options, equities and futures in addition to crypto driving net deposits to more than $50 billion for the year.
