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Jul 01, 2023

Robinhood stock slides after monthly active users miss estimates

Robinhood's (HOOD) second quarter results beat Wall Street estimates. The company reported adjusted earnings of $0.03 a share, while analysts were anticipating a $0.02 loss. Revenue of $486 million

Robinhood's (HOOD) second quarter results beat Wall Street estimates. The company reported adjusted earnings of $0.03 a share, while analysts were anticipating a $0.02 loss. Revenue of $486 million beat the $472 million estimate. Monthly active users did miss estimates however, 10.8 million compared to the estimate of 11.7 million. Yahoo Finance Live breaks down the report.

AKIKO FUJITA: Robinhood out with their quarterly results. Seana, the stock under heavy pressure right now. What do we have?

SEANA SMITH: Yeah. Akiko, we're looking at losses of just about 6%. Revenue did beat expectations, coming in at $486 million. Estimate was for $472 million. The company was expected to report a loss of $0.02 a share. Earnings came in at $0.03 a share.

And the company highlighting in this report in Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company. Now, CEO Vlad Tenev went on to say, "Guided by our bold product roadmap, we're continuing to innovate for our customers grow assets, gain market share, and change the industry for the better."

But that's not enough for the Street, because you're looking at the stock, under a significant amount of pressure right now. One of those reasons, monthly active users. That decreasing once again. And this has been a trend here for Robinhood over its past several quarters. This past quarter decreased by 1 million to 10.8 million. That missed the Street's expectations of 11.7 million.

A couple of other things to note within this release, net revenue, like I said, beat expectations, up 10%. Sequentially here, total operating expenses for the year, that was revised, lower to 2.33 billion to 2.41 billion. Robinhood also highlighting a couple of new products that they have launched recently, one of those being 24-hour market, which is now available to all customers as of the last month.

And we know Robinhood has tried to bring new products to market in order to entice more users onto their site. They're trying to do everything they can to halt the slide that they are seeing with some of those new offerings, but it looks like, as of right now, that has not been able to do the trick here with once again monthly active users, Akiko, declining by about 1 million to 10.8 million.

AKIKO FUJITA: Yeah. I mean, this is a company that is very much in transition, as you point out, really trying to diversify its revenue stream. And they've really touted some of these new products, whether it's their product for retirement, whether it's Robinhood Gold, which is, of similar to a high-yield savings account for some of their best customers. At the end of the day, though, it is that number that you highlighted, Seana, which is the monthly active users, that being down 1 million, certainly significant investors not liking it with those shares down now more or roughly 7%.

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