Robinhood sees a 43% revenue drop in Q1 2022

Robinhood Markets, Inc. has posted a 43% drop in total net revenue for the first quarter of the year. The numbers stood at $299 million, compared with $522 million generated in the same period last year.

The American broker offering commission-free services reported a decline in trading demand in the first three months of the year. Transaction-based revenues fell by 48% to $218 million during the period between January and March 2022.

Options trading brought in $127 million revenue, registering a 36% drop in demand. Cryptocurrency trading decreased 39% to $54 million and equities trading fell drastically by 73% to $36 million.

Robinhood ended the quarter with $392 million net loss or $0.45 per diluted share. However, the net loss for the period were significantly lower than first quarter of 2021 when the numbers reached $1.4 billion and Q4 2021 when it was $423 million.

Adjusted EBITDA in Q1 2022 was a negative $143 million, compared with the positive $115 million in the first quarter last year.


Client numbers were also down

Robinhood saw significant drops in client metrics, as well. Monthly active users on the platform decreased 10% to 15.9 million for March 2022, compared with 17.7 million for March the previous year. The numbers were also down 8% form the end of December 2021. The broker attributed the decline to users with lower balances, who are engaging less in the current market environment.

The average revenue per user fell 62% to $53.

Robinhood’s Chief Financial Officer, Jason Warnick said:

We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter. At the same time, we’ve also made progress on our long-term plans and continue to pursue them aggressively.

The quarterly metrics report follows the broker’s announcement of a 9% layoff of its staff. The company’s shares are also trading near an all-time low since Robinhood’s IPO last year.

However, the company continued its international expansion by acquiring UK-licensed crypto company, Ziglu.

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