Net revenue

Robinhood net revenue plummeted 43% with crypto trading down 39%

Millennial-focused exchange Robinhood saw a sharp decline in trading activity for the first quarter of 2022, according to the company’s latest financial report. The broader crypto market remains bearish, and recent global equity selloffs have contributed to the disappointing financial numbers, according to the report.

  • The Q1 report said the company’s total net income was $299 million, down 43% from $522 million in the first quarter of 2021. Transaction-based revenue from crypto trading -currencies fell 39% to $54 million.
  • Similar to most high-growth tech companies, Robinhood struggled with profitability – but it cut its loss significantly over the year. The company reported a net loss of $392 million or $0.45 per share, compared with $1.4 billion or $6.26 per share a year ago. However, Wall Street expected a net loss of $0.36 per share, according to IBES data from Refinitiv.
  • The company’s adjusted (non-GAAP) EBITDA was negative $143 million – another striking decline from the positive $115 million recorded a year ago. Additionally, monthly active users fell 10% to 15.9 million in March 2022 from 17.7 million 12 months ago.
  • The company said the results reflected macroeconomic change, as its CEO Vlad Tenev said perhaps for the first time its customers are experiencing the opposite of “low interest rates, low inflation and rising markets”.
  • Frenzied trading activities derived from meme stocks, including GameStop and AMC Entertainment, and the king of meme coins – Dogecoin – accounted for a significant portion of the company’s revenue last year.
  • As the market environment has changed over the past 12 months, with growth stocks and cryptocurrencies under pressure, millennials’ favorite trading firm has struggled to gain investor confidence.
  • Although promising to focus on “long-term growth”, as stated in the report, the company announced a few days ago the cut of 9% of its full-time employees – a red flag according to the interpretation of Wall Street.
  • As of this writing, the company’s HOOD stock has rebounded from the outrageous drop during the pre-market hours, trading slightly above $10.00.
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