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Robinhood reported its smallest quarterly profit in a year on Tuesday, highlighting the retail brokerage’s lingering exposure to retail traders whose engagement has shown signs of cooling alongside a sharp downturn in cryptocurrency prices.
The company disclosed a first-quarter profit of $346 million, or $0.38 per share, compared to $336 million a year ago. Representing a 3% year-over-year increase, the performance fell slightly short of analysts’ expectations of a $0.39 gain per share for the firm.
Robinhood indicated that revenue clocked in at $1.07 billion, a performance that the company attributed to “double-digit growth across equities and options, and record volumes for prediction markets, futures, and index options” in an announcement. Analysts had expected the company that offers commission-free stock and crypto trading to post $1.14 billion in revenue.
In after-hours trading, Robinhood’s shares fell 6% to $82, according to Yahoo Finance. Last year, the Menlo Park, California-based firm benefited from a booming crypto market, with its stock price peaking alongside Bitcoin at an all-time high of $153.86 in October.
“Robinhood is increasingly positioned at the center of our customers’ financial lives,” Chairman and CEO Vlad Tenev said in a statement.
The company disclosed $134 million in first-quarter revenue from crypto transactions, marking a 34% decrease from $221 million the previous quarter. In the three months ended March 31, Bitcoin’s price fell 22%, paralleling declines for the previous period, according to CoinGlass.
Not long after Robinhood began providing users access to Kalshi-powered prediction markets, analysts identified wagers on sports as a tailwind for the firm. The company indicated that its users continued to embrace the offering, reporting record volumes.
Although Robinhood popularized a commission-free model among retail traders, it charges customers a one-cent fee on transactions involving prediction markets. In January, Robinhood began rolling out access to “custom combos,” which mirror sportsbook parlays.
The company reported $307 billion in total platform assets, a sequential decrease from $324 billion late last year. On a year-over-year basis, Robinhood said the metric had increased 39%, partly driven by continued net deposits and higher equity valuations.
Robinhood noted that the company debuted its public testnet for Robinhood Chain, an Ethereum layer-2 scaling network, in the first quarter. The firm described those efforts as part of its approach to creating a “global financial ecosystem” for tokenized assets.
Since the firm began offering customers in Europe access to digital representations of companies like OpenAI and SpaceX, Robinhood reported that its associated offering has already processed over 100 million transactions.
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