Robinhood Shares Plunge After Q1 Revenue and Crypto Volume Slump

Shares of Robinhood (HOOD) fell 9.4% in after-hours trading on Tuesday after the company reported first-quarter financial results that failed to meet industry estimates for both revenue and earnings per share. The downturn was primarily driven by a significant contraction in the company's cryptocurrency segment, reflecting broader market volatility and a shift in retail trading behavior. The company reported revenue of $1.07 billion and earnings per share of $0.38, missing expectations by 6.1% and 11.6%, respectively. The crypto segment was hit particularly hard, with transaction revenue plummeting 47% year-on-year to $134 million, while crypto trading volume dropped 48% to $24 billion. This marks the third consecutive quarter of decline for transaction-based crypto revenue. Despite the misses, Robinhood remained profitable, reporting a 3% year-on-year increase in net income to $346 million. CEO Vladimir Tenev attributed the crypto slump to market price swings but emphasized a strategic pivot toward building crypto infrastructure and integrating assets with real-world utility, citing an upcoming 'tokenization supercycle.' To offset the losses in crypto, the firm is diversifying its revenue streams. The 'other' trading category, which includes the Robinhood Predictions market integrated via Kalshi, saw revenue surge 320% year-on-year to $147 million. The predictions platform recorded 8.8 billion event contracts traded in Q1, a 780% increase from the previous year's second quarter. Additionally, the company provided data on its June 2025 acquisition of Bitstamp. The exchange recorded $42 billion in trading volume over the quarter, though this represented a 13% decline compared to the fourth quarter of 2025.