Premarket trading on Friday saw Robinhood shares drop nearly 11% after it reported poor first quarter results.

HOOD Q1 net income was $299,000,000, far below the $352.9 million consensus estimate. The analyst consensus estimate of $255 million was for transaction-based revenue. However, it came in at $218 millions. Robinhood’s adjusted EBITDA loss was $143 million. This is higher than the loss expected to be $97.8million.

In crypto revenue, the company earned $54million less than expected at $56.1 million. Analysts had expected 18.2 Million active monthly users, which was 15.9M in this period.

Net cumulative funded accounts reached 22.8million, as compared with 23.1million.

Assets under custody for the company totalled $93.1 billion. Average revenue per user was $53, which is lower than the consensus estimate of $62.46.

Robinhood announced that revenue guidance is no longer planned and said it will continue to follow the 2022 roadmap.

“We’re seeing our customers affected by the macroeconomic environment, which is reflected in our results this quarter,” said CFO Jason Warnick.

Wolfe Research analyst Steven Chubak said results “fell woefully short of our estimates and consensus.” Chubak cut the price target to $10.00 per share from the prior $15.00.

“Headcount reduction(s) which were announced earlier this week proved to be the robin in the coalmine with 1Q22 KPIs disappointing across-the-board this quarter, with weaker engagement metrics and crypto/options softness the biggest areas of disappointment. While management sees a path to adjusted EBITDA profitability by year-end, we are still waiting for a meaningful inflection in KPIs before we can get more constructive on the name,” Chubak said in a note.

J.P. Morgan analyst Kenneth Worthington said results reflected “challenging markets.”

“It was the weakest results reported as a public company and, while poor market conditions were to blame, we highlight that the negative trends for Hood started when market conditions were better. It was the lowest account growth in three years. RPU of $53/acct was also low. We maintain our Underweight rating on Robinhood,” Worthington wrote to clients.

By Senad Karaahmetovic