Robinhood Plummets 10% After Q1 2022 Financials Show Decline In Revenue, Active Users

Robinhood Markets, Inc. (Nasdaq: HOOD) released on Thursday its Q1 2022 financial results. The company posted US$299 million in revenue, a decline from Q4 2021’s US$362.7 million and Q1 2021’s revenue of US$522 million. This is also far from the company’s expected US$340 million announced in the previous quarter.

The firm also recorded a year-on-year decline in monthly active users. March 2022 had 15.9 million users compared to 17.7 million in the comparable period last year.

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

Following the post-closing earnings release, the company’s shares dipped 10% pre-market.

The firm saw a 49% increase in operating expenses year-on-year, ending at US$690 million in Q1 2022 from US$464 million in Q1 2021. Tech and development expenses saw a 127% increase while general and administrative expenses saw a 96% increase.

On Wednesday, the tech firm announced it will be laying off 9% of its workforce as the company’s “hyper growth” has led “to some duplicate roles and job functions, and more layers and complexity than are optimal.”

This led to notching a quarterly net loss of US$392 million compared to a the net losses of US$423.3 last quarter and US$1.45 billion last year. Calibrating for financial items, adjusted EBITDA for the quarter came in at a loss of US$143 million, down from a gain of US$34.1 million last quarter and US$115 million last year.

The quarterly loss translates to US$0.45 per share.

The company also ended the year with US$6.19 billion in cash and cash equivalents, bringing the balance of current assets to US$18.36 billion. Current liabilities ended at US$11.58 billion.

Robinhood last traded at US$10.09 on the Nasdaq, followed by a sharp 10% decline pre-market.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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