Robinhood reports record quarterly revenue on retail trading strength

Feb 10 (Reuters) - Robinhood Markets HOOD.O reported record fourth-quarter revenue on Tuesday, as the retail brokerage taps into the growing role of individual traders in the equities markets.

The Menlo Park, California-based company's revenue rose to a record $1.28 billion during the three months ended December 31, up 27% from a year earlier.

Individual investors have become a major force supporting equities markets, snapping up stocks during selloffs driven by AI bubble fears and geopolitical turmoil.

Still, the Menlo Park, California-based company's profit fell to $605 million, or 66 cents per share, from $916 million, or $1.01 per share.

The fall reflected a $56 million provision for income taxes made during the quarter, compared with a $358 million benefit recognized in the year-ago period.

Transaction-based revenue rose to $776 million. Equities revenue rose 54% while options climbed 41%.

However, revenue from crypto trading fell 38% at Robinhood. The volatile sector has now struggled for months since a crash last October sent bitcoin nearly halving from its October 6 peak as leveraged positions were washed out.

U.S. spot-bitcoin ETFs witnessed outflows of about $2 billion in December and $7 billion in November, Deutsche Bank analysts said in a note to clients.

The results come amid a selloff across U.S. brokerages as AI-fueled disruption fears transcend software and IT stocks to financials.

Brokerages, such as Robinhood and rival Public, have been making headway into the sector via their low-cost and tech-enabled offerings.

Robinhood offers its Gold subscribers an AI-powered investing assistant that allows users to chat through trading ideas and enact orders.

Gold subscribers increased 58% to 4.2 million in the quarter from the previous year.