On Tuesday, Robinhood announced its smallest quarterly profit in a year, underscoring the brokerage’s continued reliance on retail traders whose engagement has diminished alongside falling cryptocurrency prices.
The firm reported a first-quarter profit of $346 million, or $0.38 per share, compared to $336 million from the previous year, marking a 3% increase year-over-year but missing analysts’ predictions of a $0.39 gain per share.
Revenue stood at $1.07 billion for the quarter, falling short of the anticipated $1.14 billion, despite Robinhood’s statement highlighting ‘double-digit growth in equities and options, along with record volumes in prediction markets, futures, and index options.’
In after-hours trading, shares declined 6% to $82 as per Yahoo Finance, following a year where Robinhood’s stock surged alongside Bitcoin, peaking at an all-time high of $153.86.
“Robinhood is increasingly positioned at the center of our customers’ financial lives,” stated Chairman and CEO Vlad Tenev.
The company reported first-quarter crypto transaction revenue of $134 million, a 34% drop from $221 million in the preceding quarter. Over this period, Bitcoin’s price decreased by 22%, similar to prior declines as noted by CoinGlass.
Following its launch of Kalshi-powered prediction markets, analysts pointed out that sports betting wagers could benefit Robinhood. The company reported record volumes for these offerings despite maintaining a one-cent fee per transaction in its commission-free model.
Robinhood’s platform assets totaled $307 billion, down sequentially from $324 billion last year but up 39% compared to the previous year, driven by net deposits and rising equity valuations.
The firm announced the debut of its Robinhood Chain public testnet in the first quarter, part of efforts towards a ‘global financial ecosystem’ for tokenized assets. Since extending European customers access to digital company representations like OpenAI and SpaceX, Robinhood has processed over 100 million transactions related to this service.