revenue
Auto Added by WPeMatico
How Robinhood’s explosive growth rate came to be
This afternoon Robinhood filed to go public. TechCrunch’s first look at its results can be found here. Now that we’ve done a first dig, we can take the time to dive into the company’s filing more deeply.
Robinhood’s IPO has long been anticipated not only because there are billions of dollars in capital riding on its impending liquidity, but also because the company became something of a poster child for the savings and investing boom that 2020 saw and the COVID-19 pandemic helped engender.
The consumer trading service’s products became so popular and enmeshed in popular culture thanks to both the “stonks” movement and the larger GameStop brouhaha, that the company’s public offering carries much more weight than that of a more regular venture-backed entity. Robinhood has fans, haters, and many an observer in Congress.
Regardless of all that, today we are digging into the company’s business and financial results. So, if you want to better understand how Robinhood makes money, and how profitable or not it really is, this is for you.
We will start with a more in-depth look at growth and profitability, pivot to learning about the company’s revenue makeup, discuss a risk factor or two, and close on its decision to offer some of its own shares to its users. Let’s go!
Inside Robinhood’s growth engine
Before we get into the how of Robinhood’s growth, let’s discuss how big the company has become.
The fintech unicorn’s revenue grew from $277.5 million in 2019 to $958.8 million in 2020, which works out to growth of around 245%. Robinhood expanded even more quickly in the first quarter of 2021, scaling from year-ago revenue of $127.6 million to $522.2 million, a gain of around 309%.
Those are numbers that we frankly do not see often amongst companies going public; 300% growth is a pre-Series A metric, usually.
Powered by WPeMatico
The bullish case for Palantir’s direct listing
The Palantir S-1 finally dropped yesterday after TechCrunch spilled a bunch of its guts last Friday. You can read the filing here, if you are so inclined.
Today, however, instead of our usual overview, I have a different goal: We’re going to be a bit more specific.
It’s fun and easy to clown on Palantir’s ridiculous ownership structure, in which a few dudes have decided that, in perpetuity, they must remain co-Lords of the Ring. And, sure, the company is smaller in terms of revenue-scale than many expected (a bit more Hobbiton than Bree, really). And, yes, its net losses are somewhat staggering (post-Helm’s Deep Saruman?), reaching nearly 100% of revenue in 2018.
But things have gotten better in Palantir-land (Mordor?) in recent quarters, which we should note.
So, in light of the generally negative reviews of Palantir’s finances (similar to what is left of Moria?) that I’ve seen in the media and from investors both publicly and privately, here are the bullish bits about the impending direct listing.
The good stuff
In brief, falling net losses in absolute and percent-of-revenue terms paint the picture of a company that is past a high-burn period, allowing profitability to continue to improve; improving gross margins point to a company that is less service-focused and more software-driven over time; the company’s falling operating cash burn is encouraging, and new customer revenue appears sharply higher in 2020 than 2019.
Let’s examine each in order:
- Falling net losses in absolute terms: Palantir lost fractionally less money in 2019 than 2018, but it was a decline all the same. More recently, the first two quarters of 2020 have seen Palantir cut its net loss from $280.5 million in 2019 to $164.7 million. Even better, the company grew during the same period, which means that in percent-of-revenue terms, Palantir did even better.
Powered by WPeMatico
App revenue climbs 23% year-over-year to $21.9B in Q3
Global app revenue continues to climb, thanks to the growth in mobile gaming and the subscription economy. In the third quarter of 2019, consumer revenue grew 22.9% year-over-year from $17.9 billion to reach an estimated $21.9 billion across both the App Store and Google Play worldwide, according to new data from Sensor Tower.
Notably, the App Store continues to account for the large majority of this revenue, the report found, making up 65% of total spending compared with just 35% on Google Play.
App Store users spent $14.2 billion, up 22.3% from the $11.6 billion they spent in Q3 2018. Google Play generated $7.7 billion in revenue, up 24% from the $6.2 billion spent in the year-ago quarter.
Sensor Tower’s revenue estimates are a bit lower than those provided by App Annie’s recent report, which said the quarter saw $23 billion in consumer spending, not ~$22 billion.
App Annie also estimated nearly 31 billion downloads in Q3, while Sensor Tower claimed 29.6 billion.
In both cases, Google Play is still said to be the main source for downloads, with nearly three times more first-time installs than the App Store. In Q3, the total number of downloads was up 9.7% year-over-year to 29.6 billion, said Sensor Tower, with Google Play accounting for 21.6 billion of those.
Despite the overall growth, one big app market — China — saw a slight decline, Sensor Tower found. Its installs dropped 6% year-over-year to 2.2 billion in the quarter. But its revenue grew by 26.9% to $4.1 billion, up from $3.2 billion the year prior. This could be attributed to the nine-month game license freeze in China which, though now lifted, had slowed momentum.
Sensor Tower’s charts don’t include third-party app stores, so it’s not a full picture of the Chinese app market, it’s worth noting.
The top money-making (non-game) app in the quarter was again Tinder, which generated $233 million in consumer spending, up 7% over the prior quarter. Netflix was No. 2 and YouTube clocked in at No. 3, at $164 million in Q3.
App Annie has a slightly different ranking. It has Tinder and Netflix leading the top-grossing charts, but puts IQIYI ahead of YouTube. This could be because App Annie has a bigger window into the Chinese app market.
In terms of downloads, TikTok is continuing to disrupt Facebook-owned apps’ dominance over the top of the charts. In Sensor Tower’s rankings, WhatsApp was No. 1 and Messenger was No. 3, but Facebook and Instagram dropped to No. 4 and No. 5, respectively. And TikTok reached No. 2.
This isn’t the first time TikTok has passed Facebook, Sensor Tower said — it did so back in Q4 2018 and in Q1 2019, before dropping to No. 4 again last quarter. But with 177 million downloads in Q3, it’s inching its way up to the top.
App Annie, on the other hand, sees TikTok having just a bit more of climb, sticking it at No. 3 in the quarter, behind Messenger and Facebook. It also called out some Q3 break-out hits, like the return of FaceApp’s popularity (No. 9 in downloads) and the growing subscription revenue of Google One (No. 7 in non-game revenue). Sensor Tower put FaceApp at No. 6 instead, but agreed on Google One.
Mobile gaming continues to generate most of the cash, and did so again in Q3 with $16.3 billion in mobile game gross revenue — or 74% of the total in-app spending, the new report said. The App Store accounted for $9.8 billion of that figure, with Google Play users spending $6.5 billion.
Game downloads across both Google Play and the App Store increased by 17.6% in Q3 from 9.5 billion last year to 11.1 billion.
The top three games in the quarter by downloads were Fun Race 3D (123 million downloads), PUBG Mobile (94 million) and newcomer Mario Kart Tour, which hit 86 million downloads despite only launching in late September.
PUBG Mobile was the top-grossing game with $496 million in revenue, up 652% over last year. The No. 2 title, Tencent’s Honor of Kings, and No. 3 Aniplex’s Fate/Grand Order generated $377 million and $354 million, respectively.
Image credits: Sensor Tower
Correction: App Annie estimated nearly 31 billion downloads in Q3, not 23 billion as first written. We corrected this. Apologies for the error.
Powered by WPeMatico
U.S. iPhone users will spend an average of $88 per year on apps by 2020
U.S. iPhone users will spend an average of $88 per year on paid apps and in-app purchases by 2020, according to a new forecast out this week from Sensor Tower. The firm found that the dollar amount spent on apps and in-app purchases is continuing to increase, year-over-year. iPhone users spent an average of $63 this year, up 33 percent over 2016. Read More
Powered by WPeMatico
Okta has a great earnings day on the back of strong international growth
Okta kept its beat-streak alive today with a healthy earnings report. On the back of international growth and a healthy services business, Okta beat revenue expectations by nine percent and managed to handily top EPS expectations. App stores saw record revenue and downloads in Q1 2017
Mobile applications saw a record number of downloads and revenue in the first quarter of the year, according to a new report from app store analytics firm App Annie out this morning. Across both iOS and Android, downloads grew by 15 percent year-over-year to reach nearly 25 billion worldwide – a figure that includes only new downloads, and not re-installs or downloads from prior quarters.… Read More
Powered by WPeMatico
Dropbox really wants us to know its finances are healthy
Healthy financial milestones sugarcoat the conversation temporarily, but eventually Drew Houston is going to have to step into the public markets. At that point nobody will care how fast Dropbox grew its revenue back in the day. The question will be whether Dropbox is a company that can eventually sustain $10 billion in yearly revenue. Read More
Powered by WPeMatico
Spotify, Netflix, LINE, Pandora & HBO NOW top the list of 2016’s biggest apps by revenue
According to a new year-end report from Sensor Tower detailing the top apps of 2016, streaming services dominated when it came to which apps, outside of games, pulled in the most revenue over the past year. At the top of the list is Spotify, which not only scored the number one spot on the iTunes App Store, but also was the number one revenue earner across both platforms, including both… Read More
Powered by WPeMatico
China overtakes the U.S. in iOS App Store revenue
China has now overtaken the U.S. to become the largest market in the world for App Store revenue, according to a new report out this morning from app intelligence firm App Annie. The country earned over $1.7 billion in Q3 2016, which puts it ahead of the U.S. by over 15 percent. The U.S. had been the number one iOS market since 2010, the report notes. Today, Chinese consumers spend more than… Read More
Powered by WPeMatico
China is now #2 in iOS revenue, behind the U.S.
Earlier this year, app store analytics firm App Annie predicted that China could overtake both the U.S. and Japan in terms of revenue generated from iOS applications as soon as this year. The year isn’t yet half over, but that prediction appears to be on its way to coming true: China has just moved past Japan to take the number two position for iOS revenue – up from third place… Read More
Powered by WPeMatico