Robinhood Markets Posts 43% Y/Y Drop in Total Net Revenues for Q1 2022

Robinhood Markets, Inc. ("Robinhood") (NASDAQ: HOOD) today announced financial results for the first quarter, which ended March 31, 2022.

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First Quarter 2022 Results Summary

• Total net revenues decreased 43% to $299 million, compared with $522 million in the first quarter of 2021.

• Transaction-based revenues decreased 48% to $218 million, compared with $420 million in the first quarter of 2021.

• Options decreased 36% to $127 million, compared with $198 million in the first quarter of 2021.

• Cryptocurrencies decreased 39% to $54 million, compared to $88 million in the first quarter of 2021.

• Equities decreased 73% to $36 million, compared with $133 million in the first quarter of 2021.

• ​Net loss was $392 million, or $0.45 per diluted share, compared with net loss of $1.4 billion, or $6.26 per diluted share in the first quarter of 2021.

• Share-based compensation expense totaled $220 million for the first quarter of 2022, compared with $9 million for the first quarter of 2021. Share-based compensation for the first quarter of 2021 related entirely to stock options; no expense relating to restricted stock units was recognized because our initial public offering had not yet occurred.

• Net loss for the first quarter of 2021 also included total expense of $1.5 billion associated with the change in fair value of convertible notes and warrants issued in February 2021.

• Adjusted EBITDA (non-GAAP) was negative $143 million, compared with positive $115 million in the first quarter of 2021.

• Net Cumulative Funded Accounts increased 27% to 22.8 million as of March 31, 2022, compared with 18.0 million as of March 31, 2021 as we added 7.1 million new funded accounts primarily driven by large customer interest in cryptocurrencies during the second quarter of 2021, and 0.7 million resurrected accounts, partially offset by 3.0 million churned accounts. On a sequential basis, Net Cumulative Funded Accounts increased slightly compared with 22.7 million as of December 31, 2021. Churn continues to improve and as a percentage of Net Cumulative Funded Accounts has reached one of the lowest quarterly rates we have seen in years.

• Monthly Active Users (MAU) decreased 10% to 15.9 million for March 2022, compared with 17.7 million for March 2021 during which we experienced high trading volumes and account sign-ups as well as high market volatility, particularly in certain sectors. On a sequential basis, MAU decreased 8% compared with 17.3 million for December 2021. The sequential decline was primarily attributable to users with lower balances, who are engaging less in the current market environment.

• Assets Under Custody (AUC) increased 15% to $93.1 billion as of March 31, 2022, compared with $80.9 billion as of March 31, 2021, as result of the growth in our user base. On a sequential basis, AUC decreased 5% compared with $98.0 billion as of December 31, 2021, primarily due to decreasing asset values in this market environment, partially offset by an increase in net deposits of 30%.

• Average Revenues Per User (ARPU) decreased 62% to $53, compared with $137 in the first quarter of 2021. On a sequential basis, ARPU decreased 18% compared with $64 in the fourth quarter of 2021. The decreases were primarily related to lower transaction-based revenue driven by the current market environment, which had a negative impact on the number of traders and notional trading volumes in all asset classes.

• Cash and cash equivalents at March 31, 2022 totaled $6.2 billion, compared with $6.3 billion at March 31, 2021.

"We're seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter," said Jason Warnick, Chief Financial Officer of Robinhood Markets. "At the same time, we've also made progress on our long-term plans and continue to pursue them aggressively."

"This quarter saw our product development engine gain velocity with the rollout of some of our most requested features and capabilities," said Vlad Tenev, CEO and Co-Founder of Robinhood Markets. "With the introduction of the Robinhood Cash Card, the release of crypto wallets to all customers, the addition of new coins to our platform, and our agreement to acquire Ziglu Limited, we've made huge strides against our roadmap. Looking ahead, we have a suite of new products and services slated for release that we believe will excite and delight our customers."