Users are leaving Robinhood — DailyCoin

Charm Faded Users Leave Robinhood social

GenZ’s trendy brokerage app, Robinhood, came into the limelight last year, but now time seems to be fading in the sun. As Robinhood’s financial results show, the first quarter of 2022 was far from an excellent start to 2021. Robinhood’s 2022 was further marred by troubling losses.

The investment app’s total net sales fell 43% to $299 million in the first three months of the year, compared to $522 million the year before, Robinhood said in a press release.

Double-digit losses

The notable drop was mainly driven by a 48% drop in the broker’s revenue from transactions executed by users. Transaction costs contributed $218 million in revenue for Robinhood, as it generated $420 million in the first quarter of 2021.

Crypto transaction revenues fell to $54 million, or 39% lower compared to the $88 million seen in Q1 2021. Meanwhile, shares fell 73% to $36 million, down from $133 million last year.

User numbers are declining

The Fintech company released another worrying sign in its financial report. Data shows a sharp decline in monthly active users in the first quarter of 2022. The investment app lost 10% of its users and currently has 15.9 million, while at the same time a year ago it had 17.7 million monthly active users. registered .

Robinhood’s average revenue per user also fell 62% to $53, from $137 in the first quarter of 2021, the company says.

“The declines were primarily related to lower transaction-based earnings due to the current market environment, which negatively impacted the number of traders and notional trading volumes across all asset classes,” Robinhood’s press release said.

Last year, Robinhood became one of the most popular investing and trading apps among retail users, especially among GenZers, who were taking their first steps in finance and using the broker to search for easily accessible investment options.

Robinhood’s simple and easy-to-use interface made it one of the most attractive options for retail investors as hundreds of thousands of new users have poured their money into digital currencies and trendy meme stocks like GameStop.

But rising energy prices, inflation, the war in Ukraine and strengthening monetary policies in global economies have drastically changed the macroeconomic environment, and with it the behavior of investors, a significant number of whom have chosen to wait and see the volatile environment. avoid markets.

Earlier this month, Robinhood announced it plans to cut the number of full-time employees by nearly 10%. The company employed approximately 3,800 employees in the last month of 2021.

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