Vlad Tenev, CEO and co-founder of Robinhood Markets, Inc., attends his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021.
Brendan McDermid | Reuters
Retail brokerage company Robin Hood hero reported a larger-than-expected loss and falling revenue for the first quarter, suggesting signs that the small-dollar trading boom that captivated Wall Street a year ago may have dried up.
The company’s shares fell more than 8% in after-hours trading, hitting an all-time low.
Robinhood emerged as one of the key players in the stock meme story last year, with retail traders signing up for accounts and helping drive rapid movement in stocks like GameStop. That made for tough first-quarter comparisons, but the slowdown in trading activity was even more severe than anticipated.
Here’s what the company reported versus what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Loss per share: 45 cents vs. 36 cents expected
- Revenue: $299 million vs. $355.8 million expected
Robinhood also reported that its monthly active users fell to 15.9 million, down from 17.7 million in the same period last year and 17.3 million in the previous quarter. The company’s average revenue per user was $53, down from $137 a year ago and $64 last quarter.
Net sales fell 43% year-over-year. The net loss was $392 million, smaller than the $1.4 billion loss in the first quarter of 2021.
In an effort to grow revenue, Robinhood has launched new products and features. The company announced at the end of March that it has extended trading hours extended.
Robinhood is also looking at its costs. On Tuesday, Robinhood said it would cut about 9% of its full-time workforcecites “duplicate job roles and functions” for layoffs.
The company said Thursday that it expects operating costs to grow between 2% and 5% in 2022, excluding stock-based compensation. Previous guidance called for an increase from 15% to 20%.
Robinhood goes public in July 2021 at $38 per share, but the stock has struggled to find traction. It was trading at just over $10 per share on Thursday.
