Friday, August 12, 2022

Robinhood’s Quarterly Revenue Drops Nearly Half

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Robinhood’s transaction-based revenue in the second quarter of 2022 fell to $202 million from $451 million in the second quarter last year, down more than half. The overall revenue picture isn’t much better: down 44 percent to $318 million from $565 million a year ago. Yes, about a quarter of the company will be laid off.

Hilarious, in the text of their earnings press release, they give sequential numbers and note that this quarter was better than last quarter. That’s true, but that’s not the point!

Robinhood was the figurehead of the meme stock trading revolution, which reached public awareness through the GameStop debacle. But with interest rates rising and pandemic restrictions easing, retailers appear to have lost interest in the market. (Or money – possibly both.)

Monthly active users fell to 14 million in the second quarter, which was a 10 percent drop from the first quarter, according to the press release. It is also a 33 percent decrease from the second quarter of 2021when the company reported 21.3 million monthly active users.

Assets in custody are down a third from the first quarter, the press release said, to $64.2 billion. In the second quarter of 2021, the company had $102 billion in assets in custody. I find it curious that the 2021 earnings are being used year after year, and these earnings are now using consecutive quarters and make me look up the old numbers. The numbers are bad and the vibes are off.

Also, the chief product officer leaves. Aparna Chennapragada, who left Google for Robinhood, will remain an advisor until January 2023. hired as the first chief product officer at Robinhood last year.

The quarterly earnings call is scheduled for tomorrow.

Update August 2, 5pm ET: Adds details about MAU and AUM numbers.

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