Robinhood's Q1 revenue and profit both fell short of expectations, with cryptocurrency trading income plummeting 47%, dropping over 6% after hours.

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Author: Claude, Deep Tide TechFlow

Deep Tide Editorial: Robinhood’s first-quarter revenue was $1.07 billion, with earnings per share of $0.38, both below Wall Street expectations. The main culprit is a 47% year-over-year plunge in crypto trading revenue to $134 million, but the forecast of record-breaking market contract trading volume reaching 8.8 billion contracts and revenue soaring 320% is becoming a new growth engine. The company has raised its full-year operating expense guidance by $100 million to build the “Trump Account,” and the stock price fell over 8% after hours.

Robinhood delivered a “mixed but biased” first-quarter performance.

According to the company’s earnings report released after the market close on April 28, Robinhood’s total net revenue for Q1 was $1.07 billion, up 15% year-over-year but below analysts’ expected $1.14 billion (Bloomberg consensus); 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, only a 3% increase year-over-year, the lowest quarterly profit in the past year.

After the announcement, HOOD’s stock price fell about 8% after hours, then slightly narrowed the decline, with an after-hours trading price of approximately $81.35. Before the earnings release, HOOD had declined about 27% year-to-date, far below last year’s 52-week high of $153.86.

Crypto revenue nearly halved, becoming the biggest drag

Crypto trading revenue declined 47% year-over-year to $134 million, compared to $252 million in the same period last year. Nominal crypto trading volume also fell 48% year-over-year to $24 billion. This is the steepest decline among Robinhood’s trading categories and is the core reason for the underperformance this quarter.

This downturn was not sudden. In Q4 last year, crypto trading revenue had already decreased 38% year-over-year to $221 million, and further deterioration in Q1 reflected the overall sluggish crypto market starting from late 2024 and continuing into early 2026. The total global cryptocurrency market cap declined about 20.4% year-over-year in Q1, with falling prices and shrinking trading volume creating a double whammy.

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

Forecast market explosive growth, “Other Trading Revenue” soars 320%

On the flip side of collapsing crypto revenue, the forecast market is booming.

“Other trading revenue” (mainly event contracts) surged 320% to $147 million, with a record 8.8 billion event contracts traded in Q1. This category’s revenue has surpassed crypto trading revenue, becoming Robinhood’s fastest-growing trading business line.

According to DeFi Rate, CFO Shiv Verma said during the call that April’s forecast market trading volume “may reach about 3 billion contracts, possibly the second-highest month ever.”

Robinhood is accelerating vertical integration in this sector. The company is planning to launch the Rothera exchange, a joint venture with market maker Susquehanna International Group, in Q2. This will allow Robinhood to list and clear event contracts independently, rather than relying on third-party exchanges like Kalshi. Tenev described this as a key step toward “end-to-end control of the customer experience,” including product selection and pricing power.

In traditional trading categories, stock trading revenue was $82 million, up 46%; options trading revenue was $260 million, up 8%. Total trading revenue was $623 million, up 7%, but the growth rate slowed significantly due to crypto drag.

User and asset scales continue to hit new highs, Gold subscriptions shine

The earnings report also highlighted bright spots, mainly in user and asset metrics.

Net deposits in Q1 reached $17.7 billion, with an annualized growth rate of 22%; total platform assets were $3.07 trillion, up 39%. Gold subscription users hit a record 4.3 million, up 36%, adding 1.2 million new users. The penetration rate of Gold among paid users increased from 7% at the start of 2024 to 15.8%. The total number of paid customers was 27.4 million, up 6%; investment accounts numbered 29.1 million, up 8%.

The revenue structure is also shifting. Net interest income grew 24% year-over-year, and subscription-driven “other income” increased 57%. The annualized revenue from Gold subscriptions reached $200 million. This indicates Robinhood’s reliance on trading revenue is decreasing, but whether this decline can offset crypto cycle volatility remains a market focus.

“Trump Account” boosts operating expenses, full-year guidance raised by $100 million

The biggest new variable this quarter was the “Trump Account.” The company raised its full-year adjusted operating expense and stock-based incentive guidance from previously $2.6–$307B to $2.7–$2.6B, with an additional $100 million allocated for building and supporting the Trump Account user interface.

According to Yahoo Finance, CFO Verma said during the call that about half of this increase will occur in Q2. The project is signed under a “cost-plus” model, and the company expects revenue to exceed costs. Tenev described it as a key step toward reaching “the next generation of investors, 60 million people.”

Overall operating expenses for Q1 were $656 million, up 18%, mainly driven by marketing, growth investments, and acquisition-related costs. Adjusted EBITDA was $534 million, up 14%.

Additionally, the company repurchased $250 million worth of stock in Q1, at an average price of about $81 per share, with the board renewing the repurchase authorization to $1.5 billion in March.

Strong start to Q2, but the shift in crypto narrative remains to be validated

Management expressed optimism about the start of Q2. According to Robinhood’s official press release, Verma said that April’s stock and options trading volume is expected to be the highest of the year, despite tax season, with net deposits reaching about $5 billion.

On the product side, Robinhood is advancing on multiple fronts. Besides the Rothera exchange, the company is launching crypto services in Canada, brokerage in Singapore, and expanding its AI tool Cortex. Robinhood Social beta has been opened to 10k customers, offering verified trading sharing and community interaction. Additionally, in February, the company launched a testnet for “Robinhood Chain,” an Ethereum L2 blockchain based on Arbitrum, aimed at supporting tokenized stocks and ETFs for around-the-clock trading.

However, the core market concern remains: whether the growth of forecast market and subscription revenue can continue to fill the gap left by crypto revenue? Based on the “Rule of 40” (revenue growth rate plus profit margin), the past 12 months scored 98%, well above the 40% healthy threshold, but down from the 131% peak in Q3 last year. According to Sherwood News analysis, HOOD’s stock correlation with the Grayscale Bitcoin Trust (GBTC) even exceeds its correlation with the S&P 500 ETF (SPY) by 2026, indicating that as long as the crypto market remains sluggish, Robinhood’s valuation recovery will face resistance.