Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California, known for offering commission-free trades of stocks and exchange-traded funds via a mobile app introduced in March 2015. Robinhood is a FINRA-regulated broker-dealer, registered with the U.S. Securities and Exchange Commission. The company’s revenue comes from three main sources: interest earned on customers’ cash balances, selling order information to high-frequency traders and margin lending. As of 2021, Robinhood has 31 million users.

Robinhood revealed both its surging revenues and losses ahead of ahead of its much anticipated IPO.

New retail investors flocked to Robinhood last year, pushing its first-quarter revenue 300% higher and its monthly active users to 18 million – twice as many as the same time the year before. That was mostly down to an explosion in cryptocurrency trading, which made up 17% of Robinhood’s first-quarter revenue. A lot of the crypto revenue was from less-than-reliable dogecoin trading – the joke cryptocurrency that’s now down by more than 65% from May highs.

Robinhood’s revenue has surged almost fourfold to $1.3 billion in the last four quarters – a growth trajectory that could see its revenue hit $5 billion over the next four. With its IPO rumored to value the firm as much as $40 billion, that’d imply a valuation multiple of 8x forecasted sales. The bulk of Robinhood’s revenue comes from selling its customer’s orders to so-called market makers in a practice known as “payment for order flow” – one that’s increasingly at risk of regulatory clampdown.