Robinhood Markets Clocks 44% Decline In Q2 Revenues, 1.9M Decline In Monthly Active Users

Robinhood Markets Inc HOOD reported a second-quarter net revenue decline of 44% year-over-year to $318 million, missing the consensus of $321.12 million. The revenue increased 6% sequentially, with a net interest revenue increase of 35%.

EPS was $(0.34), beating the consensus of $(0.37). Total operating expenses increased 22% Y/Y to $610 million.

Adjusted EBITDA loss was $(80) million, compared to an income of $90 million in 2Q21.

Net Cumulative Funded Accounts were 22.9 million, an increase of 100 thousand sequentially. Monthly Active Users decreased 1.9 million sequentially to 14 million as customers navigated the volatile market environment.

Assets Under Custody decreased 31% sequentially to $64.2 billion, primarily driven by lower market asset valuations. Net Deposits were $5.2 billion, which translates to an annualized growth rate of 22% relative to the prior period AUC.

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Average Revenues Per User increased to $56 from $53 in 1Q22.

The company also announced a headcount reduction of approximately 23%. "While employees from all functions will be impacted, the changes are particularly concentrated in our operations, marketing, and program management functions," said CEO and Co-Founder Vlad Tenev in a press release.

HOOD's net cash used in operating activities year-to-date was $826 million, compared to cash provided of $399 million in 2Q21. It had cash and cash equivalents of $5.96 billion as of June 30, 2022.

FY Outlook: The company expects GAAP total operating expenses of $2.46 billion to $2.60 billion, and $1.70 billion to $1.76 billion on an adjusted basis.

Price Action: HOOD shares are trading lower by 2.28% at $9.02 during the post-market session on Tuesday.