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HOOD Stock Down 11%, Robinhood Announces Declines in Q1 2022 Earnings

UTC by Ibukun Ogundare · 3 min read
HOOD Stock Down 11%, Robinhood Announces Declines in Q1 2022 Earnings
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Robinhood Chief Financial Officer Jason Warnick noted that the macroeconomic environment affecting customers has an impact on the company’s Q1 2022 financial performance.

Shares of financial services company Robinhood Markets Inc (NASDAQ: HOOD) dropped more than 11% in extended trading after the company announced a revenue loss in Q1 2022. The stock decline came in addition to the past failures the company has been recording. From plummeting more than 43% since the beginning of the year, Robinhood stock has fallen over 13% in the last three months. Data shows that the financial services company has been down 3.35% in the last five days, having shed 25.31% over the past month. At writing, HOOD is trading at $8.94 in the after-hours session.

In Q1 2022, Robinhood saw net revenue of $199 million. This represents a 43% drop from the $522 million reported in the same quarter of the previous year. Similarly, transaction-based revenues decreased 48% to 218 million. In the first quarter of 2021, transaction-based revenue was $420 million. Robinhood announced more losses in its Q1 2022 financial results. Under the transition-based revenues, options declined 36% to $127 million YoY, crypto fell 39% to $54 million YoY, and equities shed 73% to $36 million YoY.

Robinhood Releases Q1 2022 Financial Results

Furthermore, adjusted EBITDA (non-GAAP) came out negative at 4143 million. Meanwhile, adjusted EBITDA (non-GAAP) in Q1 2021 was $115 million. Monthly Active Users (MAUs) for March 2022 was 15.9 million, down 10% compared with 17.7 million MAUs seen in March 2021. Also, Average Revenues Per User (ARPU) lessened by 61% to $53 YoY. On a Sequential level, ARPU was down 18% compared with the $64 reported in Q4 2021. Robinhood added that the net loss in the last quarter was $392 million, or $0.45 per diluted share.

In Q1 2022 ended March 31st, Robinhood said Asset Under Custody (AUC) was $93.1 billion. This shows that the AUC for the quarter was 15% higher than $80.9billion in Q1 2021. Also, Net Cumulative Funded Accounts advanced by 27% to 22.8 million.

Robinhood Chief Financial Officer Jason Warnick noted that “the macroeconomic environment” affecting customers is reflecting on the company’s Q1 2022 financial performance. Warnick revealed that the financial services company has long-term plans that it plans to pursue “aggressively.”

The CEO and founder of Robinhood Markets, Vlad Tenev, commented:

“This quarter saw our product development engine gain velocity with the rollout of some of our most requested features and capabilities. With the introduction of the Robinhood Cash Card, the release of crypto wallets to all customers, the addition of new coins to our platform, and our agreement to acquire Ziglu Limited, we’ve made huge strides against our roadmap. Looking ahead, we have a suite of new products and services slated for release that we believe will excite and delight customers.”

Hopefully, the “suite of new products and services” that Robinhood has in stock will rejuvenate its stock.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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