Robinhood stock falls more than 11% after quarterly miss, fewer users

The shares of Robinhood Markets Inc. they fell more than 11% on Thursday afternoon after the company lost Wall Street expectations for its first quarter and said it saw fewer people trading stocks, cryptocurrencies and options on its online platform, blaming the mistakes in the “macroeconomic environment”.

Robinhood HOOD,
+ 6.10%
it said it lost $ 392 million, or 45 cents a share, during the quarter, compared to a net loss of $ 1.4 billion, or $ 6.26 a share, in the period last year.

Revenue fell 43% to $ 299 million, compared to $ 522 million in the first quarter of 2021.

The FactSet consensus called for a loss of 38 cents per share on sales of $ 355 million.

Transaction-based revenue fell 48 percent to $ 218 million, including a 39 percent drop in cryptocurrency revenue and a 73 percent drop in stock earnings, the company said.

“We are seeing our clients affected by the macroeconomic environment, which is reflected in our quarterly results,” Chief Financial Officer Jason Warnick said in a statement. “At the same time, we have also made progress on our long-term plans and continue to pursue them aggressively.”

Co-founder and CEO Vlad Tenev highlighted new products, such as cryptocurrencies for all customers, and said Robinhood had advanced. The new products “will excite and delight our customers,” he said.

Monthly active users fell 10% to 15.9 million in March 2022, compared to 17.7 million in March 2021, Robinhood said. The number of active users fell by 8% compared to December 2021, mainly due to users with lower balances dealing with “less in the current market environment,” the company said.

Robinhood announced on Tuesday that it was laying off 9% of its workforce, saying in a blog post that the company experienced “rapid staff growth” recently and that it caused some duplicate roles and “more layers and complexity. of the best “.

With regard to layoffs and other cost reductions, Robinhood said it expects operating expenses for 2022, excluding stock-based compensation, to increase by 2% to 5% year-on-year, compared to previous expectations of a increase between 15% and 5%. 20%.

The company also said it will start reporting some of its metrics on a monthly basis and with that change will stop offering revenue guidance.

Shares of Robinhood have flirted with lows this week, but ended the usual trading day on Thursday with a 6% increase. The stock is trading at about $ 10, well below its initial public offering price of $ 38. Robinhood went public in July.

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