Robinhood shares fall after retail broker posts drop in revenue, users

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(Reuters) -Shares in Robinhood Markets Inc, the brokerage on the middle of final yr’s retail buying and selling frenzy, slipped to a file low on Thursday after it posted a 43% fall in first-quarter income and a decline in month-to-month lively users.

Shares of the Menlo Park, California-based agency dropped greater than 12% to $8.83 in prolonged buying and selling following the outcomes. The shares, which have misplaced greater than 43% of their market worth to this point this yr, had been bought in its IPO final July for $38 apiece.

“For most of our historical past, Robinhood has operated in a interval of low rates of interest, low inflation and rising markets. Our prospects are actually experiencing all three of those traits going in the other way, maybe for the primary time in their lives,” stated Robinhood Chief Executive Officer Vlad Tenev on a name with analysts.

Trading volumes have eased from final yr’s frenetic tempo when retail buyers used the platform to pump cash into shares of so-called meme shares together with GameStop and AMC Entertainment.

Robinhood stated on Tuesday it was shedding about 9% of its full-time workers, including speedy headcount development had led to some duplicate roles and job features.

“We’re transferring again to being a extra lean firm with a leaner working mannequin, beginning with the discount in drive that we introduced earlier this week,” stated Chief Financial Officer Jason Warnick on a name with reporters.

High-growth expertise shares have come below stress this yr because the poor efficiency of shares and falling analyst confidence sours investor sentiment.

Common with different high-growth tech corporations, Robinhood has but to show a revenue since its market debut. The firm reported a web lack of $392 million or $0.45 per share in the three months ended March. A yr earlier, which was earlier than its IPO, it firm posted web lack of $1.4 billion or $6.26 per share.

Analysts on common had anticipated a web lack of $0.36 per share, in keeping with IBES information from Refinitiv.

Total web revenues decreased to $299 million, in contrast with $522 million a yr earlier.

Robinhood’s month-to-month lively users fell 10% to fifteen.9 million for March 2022, in contrast with 17.7 million for March 2021. The firm attributed the decline to users with decrease balances.

Transaction-based income from cryptocurrencies, which has been a boon for Robinhood in earlier quarters, fell 39% to $54 million.

(Reporting by Manya Saini in Bengaluru and Hannah Lang in Washington; Editing by Aditya Soni, Will Dunham and Richard Pullin)



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