Shares of Robinhood (NASDAQ:HOOD) are down nearly 11% in premarket trading Friday after the company reported disappointing first quarter results.
HOOD reported Q1 net revenue of $299 million, well below the consensus estimates of $352.9 million. Transaction-based revenue came in at $218 million, missing the analyst consensus of $255.5 million. Robinhood reported an adjusted EBITDA loss of $143 million, wider than the expected loss of $97.8 million.
The company generated $54 million in crypto revenue, short of the expected $56.1 million. The number of monthly active users stood at 15.9 million in the period, while analysts were expecting 18.2 million.
Net cumulative funded accounts totaled 22.8 million, compared to the estimates of 23.1 million.
The company reported $93.1 billion in assets under custody. The average revenue per user came in at $53, missing the consensus projection of $62.46.
Robinhood said it no longer plans to provide revenue guidance and added it is on track with the 2022 roadmap.
“We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter,” said CFO Jason Warnick.
Wolfe Research analyst Steven Chubak said results “fell woefully short of our estimates and consensus.” Chubak cut the price target to $10.00 per share from the prior $15.00.
“Headcount reduction(s) which were announced earlier this week proved to be the robin in the coalmine with 1Q22 KPIs disappointing across-the-board this quarter, with weaker engagement metrics and crypto/options softness the biggest areas of disappointment. While management sees a path to adjusted EBITDA profitability by year-end, we are still waiting for a meaningful inflection in KPIs before we can get more constructive on the name,” Chubak said in a note.
J.P. Morgan analyst Kenneth Worthington said results reflected “challenging markets.”
“It was the weakest results reported as a public company and, while poor market conditions were to blame, we highlight that the negative trends for Hood started when market conditions were better. Account growth was a tepid 100k and RPU $53/acct, the lowest level seen in three years, the limit of our historical data. We maintain our Underweight rating on Robinhood,” Worthington wrote to clients.
By Senad Karaahmetovic