Robinhood (HOOD) Shares Plunge 9% as Q1 Results Disappoint on Crypto Weakness

Key Highlights

• The company fell short of Wall Street projections with earnings per share of $0.38 versus the expected $0.39, while revenue of $1.07B missed the $1.14B consensus
• Cryptocurrency transaction revenue plummeted 47% compared to the previous year, declining to $134 million as crypto trading volumes dropped 48% to $24 billion
• Revenue per average user declined from $191 in the previous quarter to $157
• Operating expense projections for 2026 were increased to a range of $2.7B–$2.825B, representing an 18% annual increase
• The Predictions platform achieved unprecedented success with 8.8 billion event contracts traded during Q1, marking a 780% surge since its initial quarter

The financial markets reacted negatively to Robinhood’s first-quarter 2026 earnings report released Tuesday, sending shares down over 9% in extended trading hours after the platform disappointed on multiple key metrics.

Robinhood Markets, Inc., HOOD

The brokerage reported earnings of $0.38 per share, falling a penny short of analyst expectations at $0.39. Total revenue reached $1.07 billion, trailing the anticipated $1.14 billion by approximately 6%.

Despite the shortfall, the company maintained profitability. Net earnings increased 3% from the year-ago period to $346 million, while customer engagement metrics showed strength with an all-time high of 4.3 million Gold membership subscriptions and $18 billion in net customer deposits.

However, market participants zeroed in on concerning trends.

Cryptocurrency operations emerged as the primary weakness. Transactions involving digital assets generated $134 million in revenue, representing a steep 47% decline from the $252 million recorded in the comparable quarter last year. Overall crypto trading activity contracted 48% to $24 billion. This marked the third straight quarter showing deterioration in cryptocurrency-related revenue.

These cryptocurrency figures don’t account for Bitstamp, the exchange Robinhood acquired in June 2025. Bitstamp reported $42 billion in quarterly trading activity, representing a 13% sequential decline from the fourth quarter of 2025.

The platform also experienced pressure on per-user economics, with average revenue per customer sliding to $157 from $191 in the preceding quarter. This metric suggests that while Robinhood continues expanding its user base, monetization efficiency is weakening.

Expense Growth Concerns Emerge

Operating costs climbed 18% to reach $656 million during the quarter, propelled by increased marketing expenditures and product development initiatives, including the rollout of specialized “Trump Accounts.”

Management elevated full-year 2026 expense guidance to a range of $2.7 billion to $2.825 billion. This forecast has become a focal point for investors concerned about near-term margin compression.

The elevated spending reflects the company’s strategic expansion into additional business verticals, though market participants appear uncertain about the timing and potential returns from these investments.

Event Trading Platform Shows Momentum

Amid the challenges, the Predictions platform provided a notable success story. The event-contracts marketplace, developed through the Kalshi partnership, delivered exceptional performance.

Traders executed a record 8.8 billion event contracts on the platform throughout Q1 — representing a massive 780% increase compared to Q2 2025, when the platform completed its first full operational quarter. According to Tenev, April appears positioned to generate approximately $3 billion in trading activity, which would rank as the platform’s second-strongest month on record.

This momentum drove the “other” revenue segment up 320% year-over-year to $147 million, providing some offset to the cryptocurrency-related headwinds.

Analyst sentiment toward HOOD remains constructive despite the quarterly disappointment. The stock maintains a Strong Buy consensus rating supported by 14 Buy recommendations, 3 Hold ratings, and no Sell ratings compiled over the previous three months. The consensus price target of $106 suggests approximately 29% appreciation potential from current trading levels.

The company plans to release April trading volume data for Robinhood Predictions in the upcoming weeks.

The post Robinhood (HOOD) Shares Plunge 9% as Q1 Results Disappoint on Crypto Weakness appeared first on Blockonomi.