Robinhood Markets (Nasdaq: HOOD) witnessed a slowdown in demand in April, with declining active users and trading volume, the broker revealed in its training metrics published on Wednesday.

Is Robinhood Facing Declining Demand?

The brokerage ended the month with 11.5 million monthly active users, which is down by about 300,000 from the previous month. The number of these users fell 26 percent from the same month of the previous year. However, the number of net cumulative funded accounts improved by about 30,000 to reach 23.1 million.

In addition, trading volume on the platform took a significant hit in April. Trading with equities instruments was $38.9 billion, which sank 32 percent from March and 29 percent from April 2022. Options trading, which brings the highest chunk of Robinhood’s trading volume, also depleted to 75.3 million contracts, a monthly decline of 25 percent but an increase of 7 percent year-over-year.

Moreover, cryptocurrency trading faced demand dullness as trading volumes declined to $3.7 billion from the previous month’s $3.9 billion. On a yearly basis, crypto trading volume on the platform decreased by 47 percent.

The daily average revenue of trades (DARTs) also felt a downfall across instruments, monthly and yearly. DARTs for equities came in at 1.4 million, which is 11 percent lower from March, while options and cryptos were at 0.5 million and 0.2 million, declining 14 percent and 2 percent, respectively.

The trading platform held $77.4 billion in assets under custody (AUC) at the end of this month, which is marginally down by 1 percent from March. The net deposits in April were at $1.4 billion.

A Popular Platform

Robinhood is a popular retail trading platform that has grown with a zero-commission model and an intuitive interface. The popularity of the platform even forced other established players across the globe to introduce zero-fee trading.

However, the retail trading platform was at the center of a number of controversies, mostly due to its opaque business model. Over the years, the platform has paid heavy fines for multiple violations: $30 million in 2023 to the NYDFS, $70 million in 2021 to FINRA, and $65 million in 2020 to the SEC. Alabama state regulators recently fined the platform $10.2 million for a system outage in 2020.

While the revenue of the trading platform continues to grow, its losses are mounting. It generated $441 million in revenue in the first quarter of 2023, while losses at $511 million deepened by over 200 percent.