Robinhood Net Revenue Slided 43% With Crypto Trading Down 39%

Robinhood Net Revenue Slided 43% With Crypto Trading Down 39%

Millennial-focused exchange Robinhood saw a sharp drop in trading activity in the first quarter of 2022, according to the company’s latest financial report. The report suggested that the broader cryptocurrency market remained bearish and the recent global equity sell-off led to disappointing financial data.

The company reported total net income of $299 million in the first quarter, down 43% from $522 million in the first quarter of 2021. Transaction-based cryptocurrency trading revenue fell 39 percent to $54 million. Similar to most high-growth tech companies, Robinhood has struggled to become profitable — but it has cut losses sharply over the past year. The company reported a net loss of $392 million, or $0.45 a share, compared with $1.4 billion, or $6.26 a share, a year ago. However, Wall Street had expected a net loss of $0.36 per share, according to IBES data from Refinitiv. The company’s adjusted EBITDA (non-GAAP) was negative $143 million, again down significantly from positive $115 million a year ago. Additionally, monthly active users in March 2022 fell 10% to 15.9 million compared to 17.7 million 12 months ago. The company said the results reflected macroeconomic changes and, as its CEO Vlad Tenev put it, perhaps for the first time, its clients were experiencing the opposite of “low interest rates, low inflation and a rising market.” Fever trading activity from Meme stocks, including GameStop and AMC Entertainment, and the king of meme coins – Dogecoin – accounted for a large portion of the company’s revenue last year. Growth stocks and cryptocurrencies have come under pressure as market conditions have changed over the past 12 months, making it difficult for the millennial-loved trading firm to gain investor confidence. Although the company vowed to focus on “long-term growth,” as the report stated, it announced a few days ago that it was laying off 9% of its full-time workforce — a red flag that Wall Street interpreted as a red flag. At the time of writing, the company’s stock, HOOD, has rebounded from a slump in the premarket session, trading just above $10.00.

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