Robinhood’s Q1 Revenue and Profits Miss Expectations; Crypto Trading Revenue Plummets 47%, Shares Drop Over 6% After Hours
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Robinhood’s Q1 Revenue and Profits Miss Expectations; Crypto Trading Revenue Plummets 47%, Shares Drop Over 6% After Hours
The market’s core concern is whether the growth rates of prediction markets and subscription revenue can sustainably fill the gap left by crypto revenue.
Navigating Web3 tides with focused insightsAuthor: Claude, TechFlow
TechFlow Introduction: Robinhood reported Q1 revenue of $1.07 billion and EPS of $0.38—both below Wall Street expectations. The main culprit was a 47% year-on-year plunge in crypto trading revenue to $134 million. In contrast, prediction market contract volume hit a record 8.8 billion contracts, driving related revenue up 320%, emerging as a new growth engine. The company raised its full-year operating expense guidance by $100 million to build the “Trump Account,” sending its stock down over 8% after hours.
Robinhood delivered a “mixed—but skewed” Q1 earnings report.
According to its earnings release after market close on April 28, Robinhood’s total net revenue for Q1 stood at $1.07 billion, up 15% year-on-year but below the Bloomberg consensus estimate of $1.14 billion. Diluted EPS was $0.38, up 3% year-on-year but below the market expectation of $0.42. Net income totaled $346 million, up only 3% year-on-year—the lowest quarterly profit in the past year.
Following the announcement, HOOD shares fell nearly 8% after hours before paring some losses, closing the after-hours session at approximately $81.35. Year-to-date, HOOD is down roughly 27%, significantly off its 52-week high of $153.86 reached last year.
Crypto Revenue Nearly Halved—Largest Drag on Performance
Crypto trading revenue dropped 47% year-on-year to $134 million, down from $252 million in the same period last year. Crypto nominal trading volume declined 48% year-on-year to $24 billion. This category posted the steepest decline across all trading segments and was the primary reason for the company’s underperformance this quarter.
This downturn did not emerge suddenly. In Q4 last year, crypto trading revenue had already fallen 38% year-on-year to $221 million—and deteriorated further in Q1, reflecting the broad crypto market slump that began in late 2025 and extended into early 2026. Global cryptocurrency market capitalization declined approximately 20.4% year-on-year in Q1, with falling prices and shrinking trading volumes delivering a double blow.
On the earnings call, CEO Vlad Tenev attempted to shift the narrative away from Bitcoin price volatility. According to CoinDesk, he stated, “I don’t want to talk about Bitcoin’s price anymore.” Instead, Robinhood is focusing on leveraging blockchain technology as “infrastructure” for financial services. He introduced the concept of a “tokenization supercycle,” noting the company is in the early stages of moving assets such as equities onto blockchains.
Prediction Markets Explode—“Other Trading Revenue” Surges 320%
Amid the collapse in crypto revenue, prediction markets surged.
“Other trading revenue”—primarily event contracts—soared 320% year-on-year to $147 million, while Q1 event contract trading volume hit a record 8.8 billion contracts. This category’s revenue has now surpassed crypto trading revenue, making it Robinhood’s fastest-growing trading business line.
According to DeFi Rate, CFO Shiv Verma said on the earnings call that April’s prediction market trading volume “is expected to reach around 3 billion contracts—potentially the second-highest month ever.”
Robinhood is accelerating vertical integration in this space. Its joint venture with market maker Susquehanna International Group, the Rothera exchange, is scheduled to launch in Q2. Once live, Robinhood will be able to list and clear event contracts independently, rather than 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 authority.
In traditional trading categories, equity trading revenue totaled $82 million, up 46% year-on-year; options trading revenue reached $260 million, up 8% year-on-year. Total trading revenue amounted to $623 million, up 7% year-on-year—but growth slowed significantly due to the drag from crypto.
User and Asset Metrics Hit New Highs—Gold Subscriptions Shine
The earnings report contained notable bright spots—chiefly in user and asset metrics.
Net client deposits for Q1 totaled $17.7 billion, up 22% annualized. Platform assets under custody reached $307 billion, up 39% year-on-year. Gold subscription users hit a record 4.3 million, up 36% year-on-year—or 1.2 million new users. Gold’s penetration rate among paying users rose from 7% at the start of 2024 to 15.8%. Total paying customers reached 27.4 million, up 6% year-on-year; investment accounts totaled 29.1 million, up 8% year-on-year.
Revenue composition is also shifting. Net interest income rose 24% year-on-year, while subscription-driven “other income” increased 57% year-on-year. Annualized Gold subscription revenue reached $200 million. This signals Robinhood’s decreasing reliance on trading revenue—though whether this trend can sufficiently offset crypto-cycle volatility remains a key market concern.
“Trump Accounts” Drive Operating Expense Increase—Full-Year Guidance Raised by $100 Million
The biggest new variable for Robinhood this quarter is the “Trump Account.” The company raised its full-year adjusted operating expense and stock-based compensation guidance from $2.6–$2.725 billion to $2.7–$2.825 billion—an increase of $100 million allocated to building and supporting the Trump Account’s user interface.
According to Yahoo Finance, CFO Verma stated on the earnings call that roughly half of this amount will be incurred in Q2. The project is being executed under a “cost-plus” model, and the company expects revenue to exceed costs. Tenev positioned the initiative as a gateway to “the next generation of investors—60 million people.”
Total operating expenses for Q1 were $656 million, up 18% year-on-year, driven primarily by marketing and growth investments as well as acquisition-related costs. Adjusted EBITDA totaled $534 million, up 14% year-on-year.
In addition, Robinhood repurchased $250 million worth of shares in Q1 at an average price of ~$81 per share. In March, the board increased its share buyback authorization to $1.5 billion.
Strong Q2 Start—but Shift in Crypto Narrative Remains Unproven
Management signaled optimism regarding Q2’s start. According to Robinhood’s official press release, Verma noted that April’s equity and options trading volume may become the highest of the year—even during tax season—while net client deposits have already reached ~$5 billion.
Across product lines, Robinhood is advancing on multiple fronts. Beyond the Rothera exchange, the company launched crypto services in Canada and brokerage operations in Singapore, while continuing to expand its AI tools—including Cortex. The beta version of Robinhood Social has been rolled out to 10,000 customers, enabling verified trade sharing and community interaction. Additionally, in February, Robinhood launched the testnet for its Arbitrum-based Ethereum L2 blockchain, “Robinhood Chain,” designed to support 24/7 trading of tokenized stocks and ETFs.
Yet the core market question remains: Can the growth pace of prediction markets and subscription revenue sustainably fill the gap left by declining crypto revenue? From the perspective of the “Rule of 40” (revenue growth rate plus profit margin), Robinhood’s trailing-twelve-month score stands at 98%—well above the healthy threshold of 40%, though down from last quarter’s peak of 131%. As Sherwood News analysis notes, HOOD’s stock price correlation with BlackRock’s iShares Bitcoin Trust (IBIT) in 2026 even exceeds its correlation with the S&P 500 ETF—meaning continued crypto market weakness poses a headwind to Robinhood’s valuation recovery.
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