Robinhood Markets reported its smallest quarterly profit in a year on Tuesday, with first-quarter earnings missing analyst expectations as a sharp downturn in cryptocurrency prices dampened retail trading activity. The company posted a net profit of $346 million, or $0.38 per share, compared to $336 million a year ago — a modest 3% year-over-year increase that fell short of the $0.39 per share analysts had forecast. Revenue came in at $1.07 billion, below the $1.14 billion consensus estimate.
Shares of Robinhood fell 6% in after-hours trading to $82, according to Yahoo Finance. Prior to the announcement, insider trading allegations surfaced after a wallet linked to a Robinhood employee opened a short position on Hyperliquid for HOOD shares before the earnings release, according to reports. The stock later dropped approximately 8% following the report.
The primary drag on Robinhood's quarterly performance was a dramatic decline in crypto transaction revenue. The company disclosed just $134 million in crypto revenue for the first quarter, a 34% drop from $221 million in the previous quarter. This decline coincided with a 22% fall in Bitcoin's price during the three months ended March 31, according to CoinGlass.
Despite the weakness in crypto trading, Robinhood saw strength in other areas. The company reported record volumes in prediction markets, futures, and index options, as well as continued growth in equities and options trading. Robinhood's foray into prediction markets through a partnership with Kalshi has been a tailwind, with the firm charging a one-cent fee on each prediction market transaction. The company also expanded access to “custom combos” in January, mirroring sportsbook parlays.
Robinhood reported $307 billion in total platform assets, down from $324 billion at the end of last year, but up 39% year-over-year driven by net deposits and higher equity valuations. The company also highlighted progress on its blockchain infrastructure, launching a public testnet for Robinhood Chain, an Ethereum layer-2 scaling network, in the first quarter.
“Robinhood is increasingly positioned at the center of our customers' financial lives,” Chairman and CEO Vlad Tenev said in a statement. The firm also noted that its offering of tokenized assets representing companies like OpenAI and SpaceX in Europe has processed over 100 million transactions since launch.
