Users of Robinhood Have Decreased by 3,200,000 This Year

According to the most recent report from the company, the number of active Robinhood users has now dropped by a startling 3,200,000 this year.

Users of Robinhood Have Decreased by 3,200,000 This Year

Robinhood stock fell as much as 7% on Thursday following the company's latest earnings report, which revealed that its monthly active users fell by about 1 million in the second quarter.

According to the company, the average number of monthly active users fell to 10.8 million during the most recent quarter. There were more than 21 million at the height of the pandemic meme-stock craze in 2021, but that number is down from 11.8 million in the first quarter.

As a result of the U.S. central bank's campaign to tighten monetary policy in order to combat decades-high inflation, net interest revenue increased by 243% to $442 million in the second quarter from a year earlier.
According to Refinitiv data, the earnings per share for the second quarter were $0.03, surpassing the average estimate of analysts, who had predicted a loss of $0.01.

"We've been talking about for the last several quarters how we want to be lean and scrappy from a cost perspective, and we've been keeping our eye on that very closely," Robinhood's chief financial officer, Jason Warnick, told reporters.

In 2023, Robinhood remains under scrutiny by numerous retail investors for its involvement with big hedge funds, including Citadel, during the 'meme stock' frenzy of 2021.

The Menlo Park, California-based business announced in June that it would acquire financial technology company X1 Inc for about $95 million in cash as it searches for new revenue sources to offset weakness in its core trading unit. In an effort to reduce costs in the face of declining demand for its services, the company also announced that it was eliminating some of its full-time positions.

According to Mizuho Americas Senior Financial Technology Analyst Dan Dolev, Robinhood has the potential to become the next Charles Schwab or TD Ameritrade.

Users of Robinhood Have Decreased by 3,200,000 This Year.

Robinhood announced its third round of layoffs in 14 months in late June, resulting in a 7% staff reduction. According to Chief Financial Officer Jason Warnick, approximately 150 full-time employees will be let go in order to adjust to shifting volumes and better align team structures.The company's annual report states that as of the end of 2022, Robinhood employed about 2,300 people full-time. However, it had about 1,000 more workers at the start of that year; however, those positions were eliminated during the layoffs that took place in April and August.

Employees in roles related to customer experience, platform shared services, customer trust and safety, safety and productivity, as well as these roles, were affected by the layoffs. At its height in 2021, Robinhood had 21.3 million active users and $565 million in revenue.It had fewer than 11 million active users as of May, and transaction-based revenue had more than decreased in half since the same period in 2021.

Also Read: California Joins Other States in $10 Million Robinhood Settlement for Failing Investors

Disclaimer: The information provided in this article is for general informational purposes only and should not be considered as a recommendation to use or endorse Robinhood. We do not endorse or recommend the usage of Robinhood as a broker due to concerns about its practices. We strongly advise individuals to conduct thorough research and consider all aspects before making any decisions regarding Robinhood or any other financial service. Users should exercise caution and make informed choices based on their own judgment and risk tolerance.

What's Your Reaction?