Software has eaten the world, and now generative artificial intelligence (AI) is eating it.
Robinhood Markets co-founder and CEO Vlad Tenev told investors at the commission-free trading app’s Q1 2023 earnings call that “every company needs to transition to an AI company. there is,” he said.
As reported by PYMNTS, “AI” was mentioned more than 200 times in the first quarter earnings calls from Meta, Microsoft and Alphabet.
“Companies that have been able to move forward and create differentiated value throughout history are technology companies,” Tenev said. He added that just as “every company today needs to be a technology company,” every company tomorrow needs to be an AI company.
“The impact of AI and other tools we’ve seen so far will be immense,” he said.
Perhaps becoming an AI business will serve Robinhood’s unique long-term business model.
The retail trading platform’s latest reported financial results were up quarter-over-quarter (QoQ), beating Wall Street’s expectations, but still declined year-over-year (YoY) across key metrics. The company reported a loss of 57 cents per share.
Balance sheet losses soared by nearly a third (30%) to $511 million. Most of that was a one-time hit from his $485 million stock-based compensation expense. By comparison, revenue for the quarter was $441 million for him, up 16%. .
Looking ahead, the company expects total operating expenses to be in the $2.35 billion to $2.9 billion range for fiscal 2023, and will begin trading 24/5 in select equities and exchange-traded funds next week. announced plans to expand
“We delivered four consecutive quarters of revenue growth while striving for a leaner operating model. We will continue to focus on our services, business growth and long-term shareholder value,” said Jason Wernick, chief financial officer of the platform.
Greater focus on customer safety
As revealed in PYMNTS’ ranking of personal finance app providers, the Chime app still holds the number one spot, while Robinhood has recently moved up one spot to Fidelity, which has moved up one spot to take the second spot. It’s stolen.
“We are the most innovative trading platform on the market and have introduced several innovations that have become standard,” Teneff told investors.
Robinhood’s Monthly Active Users (MAUs) increased by nearly 400,000 to 11.8 million in the most recent quarter, almost half of the platform’s 21.3 million MAU at the peak of personal investment in Q2 2021. corresponds to
The trading app had 11.8 million MAU in Q1 2023, representing a drop in activity over the same period last year (26%).
“We are not a bank.
The platform’s annual net deposit growth rate was 29% in the quarter and 18% over the past year.
Net interest income ($208 million) exceeded transaction-based income ($207 million) for the first time.
Over the conference call, platform executives reiterated Robinhood’s focus on launching and offering products that always put customer safety at the forefront.
“We have long been a safety-first company and that is our greatest corporate value,” Wernick said.
Leaders look to the future of cryptocurrencies
Robinhood’s cryptocurrency trading volume fell 46% year-on-year, but rose 12% in March when it was last reported. Stock trading fell 20% year-on-year.
“Resilience continues to be great for cryptocurrencies, we see a future there and will continue to grow market share,” Teneff told investors on a conference call.
“The cryptocurrency environment faces increasing regulatory scrutiny. This means that we are very cautious in how we expand our coin offerings and how we value those coins. ‘, Warnick said.
“We have consistently demonstrated respect for the country’s securities regulators, which has led to some tough decisions regarding product selection,” said the company’s CFO. added. We want to put these decisions on the right side while innovating for our customers. ”
Further clarification in regulation would be “very helpful” in this regard, Warnick said.
Tenev also announced potential plans for an AI-powered robo-advisor, telling investors: [high net worth] Investors will pay an AUM advisory fee of 1%. Robinhood can build amazing experiences that are mobile-first. We use whatever technology we think will help us make it happen, and we do it in a scalable way. ”
