Robinhood Q1 Revenue and Earnings Miss Estimates, Crypto Revenue Falls 47%

Author: Claude, Shenchao TechFlow

DeepChain Summary: Robinhood's first-quarter revenue of $1.07 billion and EPS of $0.38 both fell short of Wall Street expectations. The primary culprit was a 47% year-over-year decline in crypto trading revenue to $134 million; however, contract trading volume on its prediction market hit a record 8.8 billion contracts, with revenue surging 320%, emerging as a new growth engine. The company raised its full-year operating expense guidance by $100 million to build the "Trump Account," causing its stock to drop more than 8% in after-hours trading.

Robinhood delivered a mixed but skewed first-quarter performance.

According to Robinhood’s post-market earnings report on April 28, the company reported total net revenue of $1.07 billion for the first quarter, a 15% year-over-year increase but below the analyst consensus estimate of $1.14 billion (Bloomberg Composite); diluted earnings per share were $0.38, up 3% year-over-year but below the market expectation of $0.42. Net profit was $346 million, representing just a 3% year-over-year increase—the lowest quarterly profit in the past year.

After the announcement, HOOD's stock plunged as much as 8% in after-hours trading, before slightly recovering to around $81.35. Prior to the earnings release, HOOD had declined approximately 27% year-to-date, far below its 52-week high of $153.86 last year.

Crypto trading revenue decreased 47% year-over-year to $134 million, compared to $252 million in the same period last year. Crypto notional trading volume declined 48% year-over-year to $24 billion. This was the steepest decline among all trading categories at Robinhood and the primary reason for the quarter’s miss against expectations.

This downturn did not emerge suddenly. In the fourth quarter of last year, the company’s cryptocurrency trading revenue had already declined by 38% year-over-year to $221 million, and the situation worsened further in the first quarter, reflecting the broader crypto market slump that began at the end of 2025 and continued into early 2026. In the first quarter, the global cryptocurrency market capitalization fell by approximately 20.4% year-over-year, with falling prices and shrinking trading volumes delivering a double blow.

CEO Vlad Tenev attempted to shift the narrative away from cryptocurrency price volatility during the earnings call. According to CoinDesk, he stated, “I don’t want to talk about the price of Bitcoin anymore,” emphasizing that Robinhood is more focused on using cryptocurrency technology as an “infrastructure” for financial services. He further introduced the concept of a “tokenization supercycle,” noting that the company is in the early stages of moving assets such as stocks onto the blockchain.

On the other side of the collapse in crypto revenues is the explosion of prediction markets.

"Other trading revenue" (primarily from event contracts) surged 320% year-over-year to $147 million, with event contract trading volume reaching a record 8.8 billion contracts in the first quarter. Revenue from this category has now surpassed crypto trading revenue, becoming Robinhood's fastest-growing trading business line.

According to DeFi Rate, CFO Shiv Verma stated on the earnings call that April's prediction market trading volume "is expected to reach approximately 3 billion contracts, potentially the second-highest month on record."

Robinhood is accelerating vertical integration in this space. The Rothera exchange, a joint venture between Robinhood and market maker Susquehanna International Group, is scheduled to launch in the second quarter, enabling Robinhood to independently list and clear event contracts without relying on third-party exchanges like Kalshi. Tenev described this as a critical step toward end-to-end control of the customer experience, including product selection and pricing power.

In traditional trading categories, stock trading revenue reached $82 million, a 46% year-over-year increase; options trading revenue reached $260 million, an 8% year-over-year increase. Total trading revenue amounted to $623 million, up 7% year-over-year, with growth significantly slowed due to crypto-related headwinds.

The financial report contains several highlights, primarily in user and asset metrics.

Net deposits for the first quarter amounted to $17.7 billion, representing an annualized growth rate of 22%; total platform assets reached $307 billion, up 39% year-over-year. Gold subscribers reached a record 4.3 million, a 36% increase year-over-year, or an addition of 1.2 million. The penetration rate of Gold among paying users rose from 7% at the beginning of 2024 to 15.8%. Total paying customers reached 27.4 million, up 6% year-over-year; investment accounts totaled 29.1 million, up 8% year-over-year.

The revenue structure is also shifting. Net interest income increased by 24% year-over-year, while subscription-driven "other income" rose by 57% year-over-year. The annualized revenue from Gold subscriptions has reached $200 million. This indicates that Robinhood's reliance on trading revenue is decreasing, but whether this decline can offset crypto market volatility remains a key focus for the market.

The biggest new variable this quarter for Robinhood is "Trump Accounts." The company raised its full-year guidance for adjusted operating expenses and stock-based compensation from $2.6 billion to $2.725 billion to $2.7 billion to $2.825 billion, with the additional $100 million allocated to building and supporting the user interface for Trump Accounts.

According to Yahoo Finance, CFO Verma stated on the earnings call that approximately half of this will occur in the second quarter. The project was signed under a cost-plus model, and the company expects revenue to exceed costs. Tenev positioned this as an entry point to reach "the next generation of investors—60 million people."

The total operating expenses for the first quarter were $656 million, an 18% year-over-year increase, primarily driven by marketing and growth investments as well as acquisition-related costs. Adjusted EBITDA was $534 million, up 14% year-over-year.

In addition, the company repurchased $250 million in shares during the first quarter at an average price of approximately $81 per share, and the board renewed the share repurchase authorization to $1.5 billion in March.

Management has signaled optimism about the start of the second quarter. According to Robinhood’s official press release, Verma stated that April trading volumes for stocks and options are on track to be the highest of the year, despite being during tax season, with net deposits reaching approximately $5 billion.

On the product front, Robinhood is advancing on multiple fronts. In addition to the Rothera exchange, the company has launched cryptocurrency services in Canada, a brokerage business in Singapore, and continues to expand its AI tools, Cortex. The Robinhood Social beta is now available to 10,000 customers, offering verified trade sharing and community interaction. Additionally, in February this year, Robinhood launched its testnet, “Robinhood Chain,” built on the Arbitrum-based Ethereum L2 blockchain, designed to enable round-the-clock trading of tokenized stocks and ETFs.

However, the core market concern is whether the growth rates of prediction markets and subscription revenue can continue to fill the gap left by declining crypto revenues. From the perspective of the Rule of 40 metric—summing revenue growth rate and profitability—the company scored 98% over the past twelve months, well above the 40% health threshold, but down from its peak of 131% in Q3 last year. According to Sherwood News analysis, HOOD’s stock price has become even more correlated with the BlackRock iShares Bitcoin Trust (IBIT) than with the S&P 500 ETF as of 2026, meaning that Robinhood’s valuation recovery will face headwinds as long as the crypto market remains sluggish.