The stock trading app Robinhood gave a gloomy revenue forecast for the first quarter of 2022 on Thursday as its latest earnings report showed a decline in active users.
Shares of Robinhood rose 9.7% on Friday after losing more than 14% earlier in the day.
The new public brokerage firm expects first-quarter revenue of less than $ 340 million, down 35% from 2021. Wall Street’s consensus estimate was $ 448.2 million in first-quarter revenue, according to FactSet.
Monthly active users fell to 17.3 million last quarter from 18.9 million in the third quarter. This figure was also below estimates of 19.8 million, according to FactSet.
Meanwhile, net accumulated funded accounts amounted to 22.7 million at the end of the fourth quarter, roughly in line with estimates. That is an increase from 22.4 million accounts in the third quarter. To be safe, Robinhood added 10 million accounts in 2021 alone.
Vlad Tenev, co-founder and CEO of Robinhood will ring the opening bell on Nasdaq on July 29, 2021.
For the fourth quarter, Robinhood reported a net loss of $ 423 million, or a loss of 49 cents per share. diluted stock, wider than the 45 cent loss estimate collected by Refinitiv. Robinhood, however, had $ 363 million in revenue in the last three months of 2021, slightly above analysts’ expectations of $ 362.1 million.
Robinhood is facing its toughest comps in the first and second quarters of 2022 after the record year of 2021 from events like the GameStop short squeeze.
Robinhood’s stock is more than 86% lower than the most recent high since the trading app’s public debut in July 2021. Shares fell more than 34% in January, bringing the market value to less than $ 10 billion.
Transaction-based revenue in the fourth quarter was $ 264 million. Options trading amounted to $ 163 million, cryptocurrency trading added $ 48 million and equities contributed $ 52 million to transaction-based revenue in Q4.
Crypto revenue has been declining since the second quarter of 2021. Following a banner of $ 233 million in the second quarter of 2021, crypto-based revenue was only $ 51 million in the third quarter. And Thursday’s report shows that it continues to fall.
However, Robinhood is still investing heavily in its crypto business.
“Robinhood has set itself the aggressive goal of starting to open up its crypto platform to customers internationally by 2022. The company believes in the enormous potential of the crypto economy and sees a great opportunity in serving customers across the globe,” the company said in a statement.
Robinhood’s assets under custody rose to $ 98 billion on an annual basis. The average earnings per user fell by 39% to $ 64 year over year from $ 106.
Looking ahead to 2022, Robinhood said it will build products designed to support long-term investment, as well as products in consumption and savings. Some of these products will include instant debit card deposits and withdrawals.