Robinhood Markets Inc.
"Last year, we staffed many of our operations functions under the assumption that the heightened retail engagement we had been seeing with the stock and crypto markets in the COVID era would persist into 2022." Robinhood co-founder and CEO Vlad Tenev wrote in a blog post announcing the layoffs. "In this new environment, we are operating with more staffing than appropriate. As CEO, I approved and took responsibility for our ambitious staffing trajectory - this is on me."
The company's layoffs come amid a rough earnings round for many in the tech space, with companies from Alphabet
How Dismal of a Quarter Was It?
Aside from beating earnings-per-share estimates, there aren't too many positives to be found in Robinhood's earnings report. EPS losses came in at $.34 a share, a moderate improvement over analyst projections of losses at $.37 a share.
Revenue increased 6% to $318 million but fell $10 million short of analyst targets. Transaction based revenues declined 7% to $202 million, with options and equities-based revenues both decreasing by 11% and 19%, respectively. Non-GAAP adjusted EBITDA improved considerably, but still sat in the red at an $80 million loss.
The more ominous line of Robinhood's earnings report was Monthly Active Users, which decreased by nearly 2 million users in June. At least seven million users have ditched the app altogether this year, reflecting growing skepticism among retail investors as inflation and high interest rates present unnavigable obstacles.
Robinhood Isn't Alone by Any Means
Silicon Valley has been hit hard in the latest round of earnings, giving Robinhood plenty of company in its misery.
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The trend seems to have been shared by Robinhood's more closely related colleagues in the de-fi space as well. Companies with greater exposure to crypto markets than Robinhood such as Coinbase
