Robinhood (NASDAQ :), the popular brokerage app for GenZ, entered the spotlight last year. But its time in the sunlight seems to be diminishing. As shown in Robinhood’s financial results, the first quarter of 2022 has been a far cry from its excellent start to 2021. Robinhood’s 2022 has been further marred by unsettling losses.

Robinhood released a press statement saying that total revenue from the investment app fell by 43%, to $299 million, in comparison with $522 millions in the prior year.

Double-Digit Losses
The notable decline was mainly caused by a 48% drop in the broker’s revenue from transactions carried out by users. Robinhood’s transaction fees generated $218 million of revenue, and $420 million during the first quarter 2021.

The earnings from crypto transactions fell to $54million, 39% less than the Q1 2021 $88 million. Meanwhile, equities decreased by 73% to $36 million, down from last year’s $133 million.

Users numbers decline
Another worrying sign was revealed by the Fintech firm in its financial report. The data shows that there was a drastic drop in monthly active users during the first quarter 2022. The current investment app has lost 10% of its users and now has 15.9 million users. However, it still had 17.7 millions monthly active users one year ago.

Robinhood’s average revenues per user also decreased by 62% to $53, from $137 in the first quarter of 2021, the company says.

“The decreases were primarily related to lower transaction-based revenue driven by the current market environment, which had a negative impact on the number of traders and notional trading volumes in all asset classes,” the Robinhood press release stated.

Robinhood became a very popular app for trading and investing last year among retail customers, particularly GenZers. They used Robinhood to find readily accessible investments options and took their first steps in finance.

Robinhood’s simple and easy-to-use interface made it one of the most attractive options for retail investors, as hundreds of thousands of new users poured their money into digital currencies and trendy meme stocks like GameStop (NYSE:).

But the increasing energy prices, inflation, war in Ukraine, and strengthening monetary policies in the world’s economies have drastically changed the macroeconomic environment, and therefore investor behavior, a significant number of whom have chosen to wait and steer clear of the volatile markets.

Robinhood announced earlier this month that it plans to reduce the total number of employees working full time by almost 10%. As of December 2021, the company had approximately 3,800 workers.

Flipside

• Although the company faces financial problems, it is still working hard to develop major products. Last month, it introduced the Robinhood Cash Card, and opened its fully-paid securities lending product ‘Stock Lending’.

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