Robinhood shares fall as retail brokerage reports shrinking revenue, fewer active users

Retail brokerage firm Robinhood reported a wider-than-expected loss and shrinking revenue for the first quarter, showing signs that the small-dollar trading boom that captivated Wall Street a year ago may have run out of steam.

Shares of the company were down more than 8% in after hours trading, hitting all-time lows.

Robinhood emerged as one of the key players in last year's meme stock saga, with retail traders signing up for accounts and helping drive rapid moves in stocks like GameStop. That made for tough comparisons in the first quarter, but the slowdown in trading activity was even more dramatic than anticipated.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Robinhood also reported that its monthly active users declined to 15.9 million, down from 17.7 million in the year ago period and 17.3 million in the previous quarter. The company's average revenue per user came in at $53, down from $137 a year prior and $64 in the previous quarter.

Net revenue was down 43% year over year. Net loss was $392 million, which was smaller than the $1.4 billion loss in the first quarter of 2021.

In an effort to jumpstart revenue, Robinhood has been rolling out new products and features. The company announced in late March that it had expanded extended trading hours.

Robinhood is also watching its costs. On Tuesday, Robinhood said it will cut its full-time workforce by about 9%, citing "duplicate roles and job functions" for the layoffs. 

The company said Thursday it now expects operating expenses to increase between 2% and 5% in 2022, excluding share-based compensation. Previous guidance called for an increase of 15% to 20%.

Robinhood went public in July 2021 at $38 per share, but the stock has struggled to find traction. It was trading just above $10 per share on Thursday.