Robinhood (Nasdaq: HOOD) announced a 43 percent decline in its total net revenue for the first quarter of 2022 as retail trading demand dropped drastically. The quarterly revenue figure came in at $299 million compared to $522 million generated in Q1 of the previous year.
The American broker disrupted the retail brokerage industry by introducing commission-free services. However, its transaction-based revenues decreased by 48 percent between January and March to $218 million.
Though options trading brought in most of the revenue with $127 million, its demand dropped by 36 percent. Cryptocurrency trading also went down by 39 percent to $54 million, whereas equities
Equities
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Read this Term trading witnessed a drastic fall to $36 million, which is a yearly decline of 73 percent.
The broker closed the quarter with a net loss of $392 million or $0.45 per diluted share. On a positive note, it narrowed its losses significantly: it reported a loss of $1.4 billion in the first quarter of 2021, while the figure was at $423 million in Q4.
However, the adjusted EBITDA for the last quarter came in at a negative $143 million, compared with the positive $115 million in Q1 2021.
Poor Client Metrics
Robinhood also witnessed a massive decline across the crucial client metrics. The number of monthly active users on the platform declined by 10 percent to 15.9 million at the end of March when compared to a year before. The figure also declined by 8 percent from the end of December 2021. The broker highlighted the vanishing market volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term and the disappearance of clients with small deposits as reasons behind this decline.
The average revenue per user also decreased by 62 percent to $53.
However, the number of net cumulative funded accounts and assets under custody increased by 27 percent and 15 percent, respectively. In absolute terms, these figures came in at 22.8 million and $93.1 billion, respectively.
“We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter,” Robinhood’s Chief Financial Officer, Jason Warnick said. “At the same time, we’ve also made progress on our long-term plans and continue to pursue them aggressively.”
The broker published the quarterly financials only days after it announced the layoff of 9 percent of its staff. Also, the company’s shares are trading near an all-time low value since its initial public offering (IPO) last year.
Meanwhile, Robinhood continued to expand its international footprint and recently acquired UK-licensed crypto company, Ziglu.
Robinhood (Nasdaq: HOOD) announced a 43 percent decline in its total net revenue for the first quarter of 2022 as retail trading demand dropped drastically. The quarterly revenue figure came in at $299 million compared to $522 million generated in Q1 of the previous year.
The American broker disrupted the retail brokerage industry by introducing commission-free services. However, its transaction-based revenues decreased by 48 percent between January and March to $218 million.
Though options trading brought in most of the revenue with $127 million, its demand dropped by 36 percent. Cryptocurrency trading also went down by 39 percent to $54 million, whereas equities
Equities
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Read this Term trading witnessed a drastic fall to $36 million, which is a yearly decline of 73 percent.
The broker closed the quarter with a net loss of $392 million or $0.45 per diluted share. On a positive note, it narrowed its losses significantly: it reported a loss of $1.4 billion in the first quarter of 2021, while the figure was at $423 million in Q4.
However, the adjusted EBITDA for the last quarter came in at a negative $143 million, compared with the positive $115 million in Q1 2021.
Poor Client Metrics
Robinhood also witnessed a massive decline across the crucial client metrics. The number of monthly active users on the platform declined by 10 percent to 15.9 million at the end of March when compared to a year before. The figure also declined by 8 percent from the end of December 2021. The broker highlighted the vanishing market volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term and the disappearance of clients with small deposits as reasons behind this decline.
The average revenue per user also decreased by 62 percent to $53.
However, the number of net cumulative funded accounts and assets under custody increased by 27 percent and 15 percent, respectively. In absolute terms, these figures came in at 22.8 million and $93.1 billion, respectively.
“We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter,” Robinhood’s Chief Financial Officer, Jason Warnick said. “At the same time, we’ve also made progress on our long-term plans and continue to pursue them aggressively.”
The broker published the quarterly financials only days after it announced the layoff of 9 percent of its staff. Also, the company’s shares are trading near an all-time low value since its initial public offering (IPO) last year.
Meanwhile, Robinhood continued to expand its international footprint and recently acquired UK-licensed crypto company, Ziglu.
Source: https://www.financemagnates.com/forex/brokers/robinhoods-q1-revenue-tumbles-43-narrowed-losses/