- Robinhood (NASDAQ:HOOD) announced that it will no longer be providing revenue guidance.
- Shares of the trading app have reportedly lost roughly 9% in after-hours trading.
- The firm has also fired 9% of its 3,800 member workforce.
Popular investing app Robinhood announced on Thursday that it will no longer be providing revenue guidance after it posted the first-quarter results. In detail, the company has seemed to miss Wall Street revenue estimates.
Shares of the trading app have reportedly lost roughly 9% in after-hours trading. The firm declared a loss of $392 million, or 45 cents a share, on a revenue of $299 million, which shows a 43% drop from the quarter a year ago.
Moreover, Robinhood’s active users dropped 10% from 17.7 million (March 2021) to 15.9 million (March 2022). Notably, Robinhood has not realized profit since its market debut.
Another point to note is that transaction-based revenue from cryptocurrencies, which has been an advantage for Robinhood in previous quarters, fell 39% to $54 million this quarter.
Robinhood Chief Executive Officer Vlad Tenev on a call with analysts said:
For most of our history, Robinhood has operated in a period of low interest rates, low inflation and rising markets. Our customers are now experiencing all three of these trends going in the opposite direction, perhaps for the first time in their lives.
Furthermore, in what can be seen as an act of desperation, Robinhood has fired 9% of its 3,800 member workforce. Tenev attributed this massive termination to the creation of duplicate roles and job functions that resulted from the rapid headcount growth. He said it caused more layers and complexity than are optimal.
Chief Financial Officer Jason Warnick explained to reporters that they were moving back to being a lean company with a leaner operating model, starting with the reduction in force.
Robinhood had grown immensely in popularity, especially after helping traders support GameStop (NYSE:GME) and AMC. However, now the fame has waned off and it remains to be seen what the future holds for the trading app.