Robinhood experienced a turbulent evening on Tuesday as it unveiled its Q1 earnings report, showcasing a miss on both revenue and earnings per share (EPS). Following the announcement, shares of Robinhood Markets, ticker HOOD, plummeted approximately 9.4% in after-hours trading.
The financial metrics revealed that adjusted EPS stood at $0.38, marginally below the anticipated $0.39, while total revenue reached $1.07 billion, marking a 15% year-over-year increase but falling short of forecasts that expected $1.14 billion. This discrepancy represented a 6% miss on revenue and an 11.6% shortfall on EPS.
The primary factor behind this disappointing performance was the downward trend in the company’s crypto segment. Crypto transaction revenue experienced a staggering 47% drop year-over-year, declining from $252 million to $134 million. Additionally, crypto trading volume decreased by 48%, settling at $24 billion. This represents the third consecutive quarter of dwindling crypto transaction revenue for Robinhood.
CEO Vlad Tenev addressed the issue candidly during the earnings call, suggesting that the company would pivot away from being tethered solely to fluctuating cryptocurrency prices. He emphasized a forward-looking perspective, indicating that Robinhood is prioritizing a shift towards crypto as a long-term infrastructure play. “We’re at the very beginning of what’s going to be a tokenization supercycle,” Tenev remarked, underscoring the company’s broader blockchain aspirations.
Despite the challenges in its crypto sector, Robinhood managed to report a slight increase in total transaction-based revenue, climbing to $623 million from $583 million the previous year. Notably, net income rose by 3% year-over-year, totaling $346 million, which affirms the company’s ongoing profitability amidst a cooling core crypto business.
Prediction Markets Surge Amid Crypto Decline
One of the bright spots in the otherwise lackluster report was the performance of Robinhood Predictions. The platform observed a remarkable surge, with users trading a record 8.8 billion event contracts in Q1, reflecting a staggering 780% increase from the previous quarter in 2025. This surge contributed to a 320% year-over-year rise in “other transaction revenue,” soaring to $147 million and helping to cushion the losses incurred from the decline in crypto revenue.
Tenev highlighted that Robinhood Predictions is poised to continue its growth trajectory, estimating approximately $3 billion in trading volume for April alone. This product, which integrates through Kalshi, has fundamentally transformed the trading experience on the platform since its launch in March 2025.
Moreover, additional revenue streams such as net interest income and Gold subscription revenues have further bolstered the company’s broader financial services initiative.
Bitstamp’s Performance Not Included
It’s also important to note that trading volumes from Bitstamp, which Robinhood acquired in June 2025, were not included in the aforementioned crypto metrics. The exchange reported an impressive $42 billion in trading volume during Q1, though it marked a 13% decrease compared to Q4 of 2025. Thus, the overall crypto activity on Robinhood’s platform is likely more substantial than the reported figures suggest.
In tandem with Robinhood’s struggles, fellow trading platform Coinbase, whose earnings will be disclosed on May 7, saw a slight dip of around 1% in stock prices, typically reflecting the interconnected nature of retail crypto trading between the two platforms.
Robinhood’s latest earnings report paints a picture of a company in transition, actively exploring prediction markets and expanding financial service offerings while navigating the cooling off period in its foundational crypto business.
