Robinhood posts 44% slump in revenue, slashes headcount by 23%

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      <br>By Hannah Lang and Michelle Price<br> <br>Aug 2 (Reuters) – Robinhood Markets Inc said on Tuesday it was slashing 23% of its staff as it posted a 44% decline in revenue on slumping trading activity, in an earnings announcement that came a day earlier than scheduled and beat analyst expectations.<br> <br>The Menlo Park, California-based brokerage posted net revenue for the second quarter ended June 30 of $318 million as revenue from equity, options and crypto trading more than halved, compared with $565 million a year earlier, according to a filing with the U.S.

      Securities and Exchange Commission.<br> <br>The company said it would commence another round of layoffs affecting 780 employees, on top of the 9% of full-time staff laid off earlier this year. It will also change its organizational structure to drive greater cost discipline.<br> <br>Robinhood’s total operating expenses for the second quarter rose 22% on the same period last year.

      The reorganization will cost the firm between $30 million to $40 million, Robinhood said.<br> <br>The company posted a net loss of $295 million. Stripping out the restructuring charges, Robinhood reported a loss of 32 cents per share versus analyst estimates of a loss of 37 cents per share, according to Refinitiv IBES data.<br> <br>It was originally scheduled to report earnings on Aug.

      3, but released them a day early after publishing a blog post about the job cuts and reorganization.<br> <br>Robinhood’s shares were down nearly 1% at $9.15 in after-hours trading.<br> <br>Robinhood’s easy-to-use interface made it a hit among young investors trading from home on cryptocurrencies and stocks such as GameStop Corp during the COVID-19 pandemic.<br> <br>But its customer base has been spooked by decades-high inflation and rising interest rates, which have sucked liquidity out of global markets and sent cryptocurrencies slumping.<br> <br>Robinhood is one of many fintech upstarts that have started slashing jobs ahead of an expected recession, along with crypto exchange Coinbase Global Inc., buy-now-pay-later company Klarna and NFT platform OpenSea, while a handful of crypto companies including Celsius Network and Voyager Digital collapsed amid the broader crypto crash.<br> <br>Robinhood Chief Executive Officer Vlad Tenev said in a blog post Tuesday that staff cuts earlier this year had not gone far enough.<br> <br>”As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me,” Tenev said.<br> <br>Transaction-based revenues across Robinhood’s three main business lines of options, equities and cryptocurrencies fell 55%, with crypto transaction revenue, which had buffered the company’s results last year, falling 75% year-on-year.<br> <br>Robinhood’s monthly active users also appeared to fall by roughly a third, at 14 million for June 2022 compared with 21.3 million in the second quarter of 2021.<br> <br>Fintech stocks bore the brunt of a broader market decline as a risk-off environment coupled with higher funding costs and sluggish e-commerce growth led to traders pull back from high-growth tech so far this year.<br> <br>Shares of Robinhood, which were sold at $38 a share in its initial public offering last year, were also caught in the crosshairs of the crypto meltdown and have shed nearly 88%.

      (Reporting by Hannah Lang and Michelle Price in Washington; Additional reporting by Mehnaz Yasmin and Ankur Banerjee; Editing by David Gregorio and Stephen Coates)<br>

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