On June 12, Robinhood Markets, Inc. (NASDAQ: HOOD) reported surprisingly weak monthly operating data for May 2023, particularly given the generally strong equity markets that prevailed during the month and really throughout the first five months of 2023.
Monthly active users (MAU) fell to 10.6 million in May from 11.5 million in April, and an average of 11.8 million in 1Q 2023. The number of MAUs has reached its lowest total since the summer of 2020 when Robinhood was still a private company. In November 2021, some 18.6 million active users traded on Robinhood’s online platform. Even in the ugly trading days of June 2022, Robinhood had 14.0 million MAUs.
ROBINHOOD MARKETS MONTHLY OPERATING STATISTICS
| May 2023 | April 2023 | March 2023 | February 2023 | January 2023 | |
| Cumulative Funded Accounts (millions) | 23.1 | 23.1 | 23.1 | 23.1 | 23.0 |
| Monthly Active Users (millions) | 10.6 | 11.5 | 11.8 | 12.0 | 12.0 |
| Assets Under Custody (US$ billions) | $81.8 | $77.4 | $78.4 | $74.7 | $74.7 |
| Trading Volumes: | |||||
| Equity (US$ billions) | $49.4 | $38.9 | $56.8 | $57.3 | $46.0 |
| Option Contracts (millions) | 97.5 | 75.3 | 100.1 | 89.4 | 82.9 |
| Cryptocurrencies (US$ billions) | $2.1 | $3.7 | $3.9 | $3.5 | $3.7 |
| Trading Days (Equity and Options) | 22 | 19 | 19 | 19 | 20 |
| Trading Volume Per Trading Day: | |||||
| Equity per Day (US$ billions) | $2.2 | $2.0 | $3.0 | $3.0 | $2.3 |
| Option Contracts per Day (millions) | 4.4 | 4.0 | 5.3 | 4.7 | 4.1 |
| Cryptocurrencies Per Day (US$ billions) | $0.1 | $0.2 | $0.2 | $0.2 | $0.2 |
| Average Account Balance (US$) | $3,541 | $3,351 | $3,394 | $3,234 | $3,248 |
| Sequential Growth | 5.7% | -1.3% | 5.0% | -0.4% | 20.1% |
Similarly, Robinhood’s equity trading volume in May 2023 fell to US$2.2 billion per day from an average of around US$2.8 billion in 1Q 2023. A slight positive is that May 2023 per-day equity trading volumes were up from US$2.0 billion in April 2023, which represented the slowest volume since Robinhood began reporting monthly data in April 2022.
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Robinhood’s May 2023 options contract trading volume amounted to 4.4 million contracts per day, down from around 4.7 million per day in 1Q 2023. The company’s cryptocurrency trading volume was US$2.1 billion in May, about 40% lower than US$3.5 billion in 1Q 2023.
A slight positive in the May 2023 report was that Robinhood’s total assets under custody reached US$81.8 billion as of May 31, up from US$78.4 billion at the end of the first quarter. The average Robinhood account now has an average balance of about US$3,550.
READ: Robinhood Ends Support For Solana, Cardano, Polygon
The weak May (and April) equity and options contract trading in May (and in April) are difficult to understand after the company posted marked gains in those categories in 1Q 2023. It is unclear just what caused Robinhood traders to pull back from trading in the first two months of 2Q 2023.
While Robinhood looks reasonably valued — its enterprise value is only about US$3.7 billion — the weak operating metrics over the first two months of the second quarter, as well as uncertainties over the company’s future revenue profile (namely the future of payment for order flow), suggest investors may want to limit exposure to Robinhood’s shares.
Robinhood Markets, Inc. last traded at US$10.03 on the NASDAQ.
Information for this story was found via Robinhood and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
