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

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

<