Robinhood loses active users in the fourth quarter, forecasts weak revenue

Inventory-trading app Robinhood gave a bleak income forecast for the primary quarter of 2022 on Thursday as its newest earnings report confirmed a decline in lively customers.

Shares of Robinhood rose 9.7% on Friday after dropping greater than 14% earlier within the day.

The newly public brokerage anticipates first-quarter income of lower than $340 million, down 35% in contrast with 2021. Wall Road’s consensus estimate was for $448.2 million in income for Q1, in keeping with FactSet.

Month-to-month lively customers fell to 17.3 million final quarter from 18.9 million within the third quarter. This quantity was additionally under estimates of 19.8 million, in keeping with FactSet.

In the meantime, internet cumulative funded accounts totaled 22.7 million on the finish of the fourth quarter, about in-line with estimates. That is up from 22.4 million accounts within the third quarter. To make sure, Robinhood added 10 million accounts alone in 2021.

For the fourth quarter, Robinhood reported a internet lack of $423 million, or a 49 cent loss per diluted share, wider than the 45 cent loss estimate collected by Refinitiv. Nonetheless, Robinhood posted $363 million in income within the ultimate three months of 2021, barely above analysts expectations of $362.1 million.

Robinhood is about to face its hardest comps within the first and second quarters of 2022 following its report yr in 2021 from occasions just like the GameStop brief squeeze.

Robinhood’s inventory is greater than 86% off its most up-to-date excessive for the reason that buying and selling app’s July 2021 public debut. Shares are down greater than 34% in January, bringing its market capitalization to lower than $10 billion.

Fourth-quarter transaction-based income was $264 million. Choices buying and selling made up $163 million, cryptocurrency buying and selling added $48 million and equities contributed $52 million to transaction primarily based income in This fall.

Income from crypto has been declining for the reason that second quarter of 2021. After a banner $233 million within the second quarter of 2021, crypto-based income was solely $51 million within the third quarter. And Thursday’s report reveals its persevering with to say no.

Nonetheless, Robinhood remains to be investing closely in its crypto enterprise.

“Robinhood has set aggressive targets to begin opening its crypto platform as much as clients internationally in 2022. The corporate believes within the immense potential of the crypto economic system and sees an enormous alternative in serving clients throughout the globe,” the corporate stated in a launch.

Robinhood’s property below custody rose to $98 billion on an annualized foundation. Common income per person decreased by 39% to $64 yr over yr from $106.

Looking forward to 2022, Robinhood stated it’ll construct merchandise supposed to help long-term investing, in addition to merchandise in spending and financial savings. A few of these merchandise will embody immediate debit card deposits and withdrawals.