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Robinhood shares tank 15% after it loses customers, forecasts weak income

Vlad Tenev, co-founder and CEO of Robinhood rings the opening bell on the Nasdaq on July twenty ninth, 2021.

Supply: The Nasdaq

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 customers.

Shares of Robinhood tanked 15% in after hours buying and selling.

The newly public brokerage anticipates first-quarter income of lower than $340 million, down 35% in comparison with 2021.Wall Road’s consensus estimate was for $448.2 million in income for Q1, based on 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 beneath estimates of 19.8 million, based on 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.

For the fourth quarter, Robinhood reported 49 cents per diluted share, wider than the 45 cent loss estimate collected by Refinitiv. Nevertheless, Robinhood posted $363 million in income within the closing 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 document 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 because the 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 based mostly income in This autumn.

A few of Robinhood’s inventory weak spot got here after its final earnings report when lighter cryptocurrency buying and selling brought about an enormous income miss.

Third-quarter transaction based mostly income totaled $267 million, with solely $51 million coming from cryptocurrency buying and selling. Income from crypto buying and selling totaled $233 million within the second quarter, helped by curiosity in meme-inspired dogecoin.

For the third quarter, whole internet income got here in at $365 million. Robinhood reported a internet lack of $1.32 billion, or $2.06 per share, within the third quarter.

Internet cumulative accounts dropped to 22.4 million within the third quarter from 22.5 million within the second quarter.

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