Robinhood loses $392 million in Q1, crypto revenue halved YoY

abdelaziz Fathi

Commission-free brokerage Robinhood Markets gave weaker-than-expected revenue guidance for the second quarter of 2022 after posting a bigger-than-feared loss for the Q1 as the number of its active users fell.

In the last three months, the disruptive stock-broking app posted a $392 million net loss, or a 45 cent loss per diluted share. Robinhood reported total revenue of $299 million for the fourth quarter, down 43 percent from $522 million a year earlier. The figure was also down from $363 million in the fourth quarter.

Monthly active users fell 10 percent to 15.9 million last quarter from 17.7 million in the three months through March 2021 and 17.3 million in the Q4. The sequential decline was primarily attributed to users with lower balances, who are engaging less in the current market environment.

Transaction-based revenues for the quarter decreased 48 percent to $218 million, compared with $420 million in the first quarter of 2021.

Meanwhile, crypto activity declined from record highs in the prior year, the company said. As a result, Robinhood sees revenue from crypto of no more than $54 million in the Jan-Mar quarter, down from $88 million in the first quarter of 2021. The crypto revenue was, however, slightly better than the $51 million it reported in the Q4, though both metrics were well below a record of $233 million in the second quarter of 2021.

Options and equities revenues were also lower by 36 percent and 73 percent, respectively, coming in at $127 million and $36 million.

The newly public brokerage reported 22.8 million cumulative funded accounts in the first quarter, virtually unchanged from the prior quarter but was up from 18.0 million users the company claimed in the Q1 2021. As a result, assets under custody (AUC) increased 15 percent to $93.1 billion as of March 31, 2022, compared with $80.9 billion a year earlier.

Robinhood makes strides in crypto business

Robinhood’s Average Revenues Per User (or ARPU) declined 62 percent to $53, compared with $137 in the first quarter of 2021. The decreases were primarily related to lower transaction-based revenue driven by the current market environment, which had a negative impact on the number of traders and their turnover.

Commenting on the results, Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said: “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 our customers.”

At the beginning of April, Robinhood rolled out crypto wallets to the approximately two million customers on its waitlist and just this week completed the full roll-out to all customers. In addition, the app recently added four new coins and the company expects to add additional assets over time.

Crypto customers will also benefit from Robinhood’s planned integration with the Lightning Network, which will power near-instantaneous Bitcoin transfers globally. Eventually, this technology, once fully integrated, is expected to help accelerate Robinhood’s ability to serve Bitcoin remittances on a global scale – at virtually no cost – and will be important for international expansion.

Read this next

Digital Assets

Revolut receives FCA’s go-ahead to launch crypto trading

British fintech and banking firm Revolut has received a regulatory go-ahead to launch its cryptocurrency services in the UK.

Digital Assets

GBTC share is trading at 36% below bitcoin spot price

Grayscale Bitcoin Trust share has widened its discount relative to the underlying cryptocurrency held in the fund, the highest margin ever since its debut in 2013. Digital Currency Group’s flagship GBTC shares traded at a discount of 35.8% to net asset value (NAV) today.

Digital Assets

Crypto lender Nexo investigated by 8 US state regulators

State securities regulators in New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont are investigating crypto lender Nexo for allegedly failing to register its Earn Interest Product.

Metaverse Gaming NFT

Astar Network’s ad features 329 top brands to support Web3 in Japan

Blockchain innovation hub Astar Network is making strides in promoting the Web3 adoption worldwide. In yet another milestone, the smart contracts platform has run a national newspaper ad in Japan that set a new global record with participation from 329 blue-chip firms.

Digital Assets

Pyth Network welcomes onchain data from crypto market maker Auros

“By sharing our high-frequency trading data with a truly onchain decentralized network, we aim to foster innovation that will lead to better financial solutions for all participants.”

Digital Assets

Tokeny integrates Ownera to boost liquidity of tokenized assets

“The adoption of FinP2P will result in higher liquidity and better access to capital and assets by providing regulated firms with one secure point of connection to multiple digital asset networks across the globe.”

Digital Assets

BingX launches subsidy vouchers to cover user losses in copy trading

“With the introduction of copy trade subsidy vouchers, new users can easily try out trading strategies without incurring losses.”

Digital Assets

Talos expands sales team: Frank van Zegveld, Matt Houston, Hillary Conley

“The extensive leadership and industry expertise of these new hires will enable us to build long-lasting relationships as we continue to build out our global presence in EMEA and beyond.”

Executive Moves

FX and CFD broker Emporium Capital hires industry veteran Robert Woolfe as COO

His past experience within the FX and CFD industry includes top roles at Capital Index, London Capital Group, GKFX, ETX Capital, and IG.  “I’m delighted to be part of the Emporium Capital team and spearheading the brokerages global expansion plans”, he said about the appointment.