Robinhood Surpasses Q1 Estimates Despite Dip in Revenue and Crypto Trading

Robinhood reported its Q1 earnings, revealing an 8.6% revenue drop to $927 million but still beat analyst expectations. Crypto revenue fell by 30%, and trading volume decreased by 35%. However, year-on-year, crypto earnings doubled. The firm’s buyback plan has been expanded, and shares rose post-announcement. CEO Tenev noted ongoing regulatory processes and ambition towards crypto tokenization.

Robinhood, the popular trading platform, has managed to surpass Wall Street forecasts for Q1, even though it saw a decline in revenue and a noticeable dip in crypto trading activity. The figures were released on April 30, revealing a drop of 8.6% in revenues, bringing it to $927 million, which was still above analyst expectations by about 3.16%.

The company’s crypto revenues took a sharp hit, dropping nearly 30% from the previous quarter to $252 million. This decline was potentially influenced by tariffs imposed during the Trump administration that reportedly led to an 18% decrease in the overall crypto market cap during the quarter.

Moreover, when looking at the trading statistics, Robinhood reported a 35% decline in its crypto trading volume compared to Q4 2024. This was attributed to both a 10% decrease in customer trades and a striking 27% drop in the average volume per trade. CEO Vladimir Tenev noted on the earnings call that while crypto trading activity is expected to fluctuate, the priority is on gathering as much market share as they can.

Interestingly, even with the recent downturn, Robinhood’s crypto revenue actually doubled compared to the same quarter last year, and trading volumes went up by 28% over that timeframe. Looking out for investor interests, Robinhood has also increased its buyback authorization by an additional $500 million, now totaling $1.5 billion. So far, the firm has repurchased shares worth $667 million.

Following the release of its Q1 results, Robinhood’s shares (HOOD) experienced a slight increase of 1.51%, reaching $49.85 in after-hours trading, according to Google Finance data. Tenev also shared details about their $200 million acquisition plan for the Bitstamp crypto exchange, hinting that they expect regulatory clearance by mid-2025, which could pave the way for catering to institutional investors in the US.

Additionally, there seems to be some relief from regulatory pressures, as the Securities and Exchange Commission (SEC) wrapped up its investigation into Robinhood’s crypto operations on February 21.

A significant ambition for the company is crypto tokenization, which Tenev highlighted as a transformative opportunity. He described the potential for tokenizing private equities as a “huge unlock” that could tackle challenges in secondary market transactions.

Tenev believes this could generate substantial economic value for the crypto industry in the US. Previously, he mentioned how crypto tokenization may facilitate buying tokenized shares in high-profile private companies like OpenAI and SpaceX almost instantaneously. “That’s been kind of our primary policy objective in Washington when it comes to crypto,” he said, reflecting on these aspirations.