Robinhood shares hit record low on yet-another poor earnings report

Robinhood shares hit record low on yet-another poor earnings report

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Shares in popular no-commission stock and cryptocurrency trading platform company Robinhood Markets Inc. dropped to a record low in late trading after it missed all estimates for the fourth straight quarter since going public in July.

For the quarter ending March 31, Robinhood reported a net loss of $392 million or 45 cents per share compared to a loss of $1.4 billion or $6.26 per share in the same quarter of last year. Revenue came in a $299 million, down 43% from $522 million year-over-year.

Analysts had expected an EPS loss of 36 cents on revenue of $355.8 million.

Despite the lower than expected figures, there were some positives for the company in the quarter. Net cumulative funded accounts increased to 22.8 million as of the end of March, up 27% compared to the same time last year. The new accounts are said to have been driven by customer interest in investing in cryptocurrency.

However, monthly active users were down 10% year-over-over to 15.9 million compared to 17.7 million compared to the same quarter in 2021. Assets under custody increased 15% year-over-year to $93.1 billion but were down from $98 billion in Robinhood’s previous quarter.

The figures kept dropping across the board, with those using Robinhood not using the company’s service as much as they once did. The average revenue per user in the quarter was down 62% year-over-year to $53 and down 18% compared to the previous quarter. As of the end of March, Robinhood’s cash and cash equivalents were $6.2 billion, down slightly from $6.3 billion as of Match 31, 2021.

Highlights in the quarter included Robinhood introducing the Robinhood Cash Card, a debit card that offers rewards to customers similar to a credit card. The company also extended trading hours in March, with users now able to trade between 7 a.m. and 8 p.m. EDT.

“We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter,” Jason Warnick, the chief financial officer of Robinhood, said in a statement. “At the same time, we’ve also made progress on our long-term plans and continue to pursue them aggressively.”

Robinhood did not provide an outlook, instead saying that it “is going to start reporting certain limited purpose statistical and operational results on a monthly basis.” The first report regarding April will be available in mid-May 2022.

Shares in Robinhood dropped 11.4% after the bell to be sitting at $8.94 as of 8 p.m. EDT. The company floated in July at $38 per share and has seen its share price drop ever since.

Earlier this week, Robinhood announced that it was laying off 9% of its full-time employees due to “duplicated roles and job functions” following its rapid growth in 2021.

Photo: Robinhood

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