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Robinhood shares fall as retail brokerage reports shrinking revenue, fewer active users

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Vlad Tenev, CEO and co-founder 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 firm Robinhood released its first-quarter results on Thursday, showing a wider-than-expected loss and shrinking revenue.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Losses per share: 45 cents vs. 36 cents expectedRevenue: $299 million vs. $355.8 million expected

Robinhood also reported that its monthly active users declined to 15.9 million, down from 17.7 million in the year ago period and 17.3 million in the previous quarter. The company’s average revenue per user came in at $53, down from $137 a year prior.

Shares of the company were down more than 8% in after hours trading. The stock is trading at all-time lows.

Robinhood was up against some tough comparisons in the first quarter. A year ago, there was robust trading in GameStop and other so-called meme stocks, which helped fuel its rapid growth.

Net revenue was down 43% year over year. Net loss was $392 million, which was smaller than the $1.4 billion loss in the first quarter of 2021.

In an effort to jumpstart revenue, Robinhood has been rolling out new products and features. The company announced in late March that it had expanded extended trading hours.

Robinhood is also watching its costs. On Tuesday, Robinhood said it will cut its full-time workforce by about 9%, citing “duplicate roles and job functions” for the layoffs.

This was the second straight quarter of declining users. In the fourth quarter, Robinhood’s monthly active users fell to 17.3 million, a decline from the third quarter, while net cumulative funded accounts rose 1% to 22.7 million.

Robinhood went public in July 2021 at $38 per share, but the stock has struggled to find traction. It was trading just above $10 per share on Thursday.

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