Robinhood’s stock has dropped 15% after the company lost active users and forecasted dismal revenue

App for stock trading On Thursday, Robinhood issued a dismal revenue forecast for the first quarter of 2022, citing a drop in active users in its most recent earnings report.

In after-hours trading, Robinhood’s stock dropped 15%.

The newly listed brokerage expects revenue of less than $340 million in the first quarter, down 35% from 2021. According to FactSet, Wall Street’s consensus estimate for Q1 revenue was $448.2 million.

The number of monthly active users fell to 17.3 million in the fourth quarter, down from 18.9 million in the third. According to FactSet, this number was also lower than expectations of 19.8 million.

Meanwhile, at the end of the fourth quarter, net cumulative funded accounts totaled 22.7 million, roughly in line with expectations. This is an increase from the third quarter’s 22.4 million accounts. To be sure, in 2021, Robinhood alone added 10 million accounts.

Robinhood reported a net loss of $423 million in the fourth quarter, or 49 cents per diluted share, which was higher than the 45 cent loss estimate compiled by Refinitiv. However, in the final three months of 2021, Robinhood generated $363 million in sales, which was slightly more than analysts’ forecasts of $362.1 million.

Following a record year in 2021 thanks to events like the GameStop short squeeze, Robinhood is going to confront its hardest comps in the first and second quarters of 2022.

Since the trading app’s public debut in July 2021, the stock has fallen by more than 86 percent from its previous high. In January, the company’s stock fell more than 34%, bringing its market valuation to less than $10 billion.

Transaction-based revenue was $264 million in the fourth quarter. In Q4, transaction-based revenue was made up of $163 million from options trading, $48 million from cryptocurrency trading, and $52 million from stocks trading.

Since the second quarter of 2021, crypto revenue has been falling. Crypto-based revenue was only $51 million in the third quarter of 2021, down from a high of $233 million in the second quarter. And, according to Thursday’s study, it’s still on the slide.

Robinhood, on the other hand, continues to make significant investments in its cryptocurrency business.

“Robinhood has set aggressive goals to start opening its crypto platform up to customers internationally in 2022. The company believes in the immense potential of the crypto economy and sees a big opportunity in serving customers across the globe,” the company stated in a statement.

On a yearly basis, Robinhood’s assets under custody increased to $98 billion. Year over year, average revenue per user fell by 39% to $64 from $106.

Looking ahead to 2022, Robinhood announced that it will develop tools to promote long-term investing, as well as spending and savings. Instant debit card deposits and withdrawals will be one of these products.