Key Takeaways
- Earnings per share of $0.38 fell short of the $0.39 Wall Street consensus; revenue of $1.07B missed the $1.14B forecast
- Cryptocurrency transaction revenue declined 47% from the previous year to $134 million; trading volume in crypto dropped 48% to $24 billion
- Revenue per user decreased to $157 from the previous quarter’s $191
- Operating expense outlook for 2026 increased to $2.7B–$2.825B, representing an 18% year-over-year increase
- The Predictions platform achieved a milestone with 8.8 billion event contracts traded during Q1, marking a 780% surge since its initial quarter
The brokerage platform released its first quarter 2026 financial results on Tuesday, triggering a sharp selloff. Shares of HOOD dropped over 9% during extended trading hours after the company failed to meet expectations on key financial metrics.
The company reported earnings per share of $0.38, narrowly missing analyst estimates of $0.39. Total revenue reached $1.07 billion, falling approximately 6% below the projected $1.14 billion.
Despite the miss, the company maintained profitability. Net income increased 3% compared to the same period last year, reaching $346 million. Customer metrics showed strength with an all-time high of 4.3 million Gold subscribers and $18 billion in net customer deposits.
However, market participants zeroed in on problem areas.
Cryptocurrency performance dominated concerns. Digital asset transaction revenue plummeted 47% year-over-year, dropping from $252 million to $134 million. Overall crypto trading volume decreased 48% to $24 billion. This marked the third straight quarter of declining cryptocurrency transaction revenue.
Chief Executive Vladimir Tenev attributed the decline to market volatility but emphasized the company’s long-term vision for crypto infrastructure development rather than pursuing near-term volume targets. “Price moves up and down, but what I can tell you is crypto as technology infrastructure is going to be big,” he stated.
These cryptocurrency numbers excluded Bitstamp, which was purchased in June 2025. The acquired exchange recorded $42 billion in trading volume during the quarter, representing a 13% decline from Q4 2025.
Revenue per user also experienced contraction, dropping to $157 from $191 in the preceding quarter. This metric suggests that while Robinhood continues expanding its user base, monetization per customer is weakening.
Rising Operational Expenditures
Operating expenses jumped 18% to $656 million, fueled by increased marketing expenditures and investment in emerging products, including the newly introduced “Trump Accounts.”
The company raised its full-year 2026 operating expense forecast to $2.7 billion–$2.825 billion. This guidance has become a focal point for investors, as it signals potential near-term margin compression.
The elevated spending reflects the company’s expansion into additional business verticals, though market participants remain unconvinced about the timing and potential returns from these investments.
Event Contracts Platform Shows Momentum
A notable highlight emerged from Robinhood Predictions, the company’s event-contracts offering developed through its Kalshi partnership.
The platform processed a record 8.8 billion event contracts during Q1 — representing a 780% increase from Q2 2025, when it completed its first full operating quarter. Tenev indicated that April is projected to generate approximately $3 billion in trading volume, which would make it the platform’s second-strongest month.
This performance contributed to a 320% year-over-year surge in the “other” revenue segment to $147 million, providing some balance against the cryptocurrency headwinds.
Analyst sentiment remains constructive on the stock overall. HOOD maintains a Strong Buy rating based on 14 Buy recommendations, 3 Hold ratings, and no Sell ratings over the last three months. The consensus price target stands at $106, suggesting approximately 29% upside potential from current price levels.
The company is expected to release April trading volume data for Robinhood Predictions in the upcoming weeks.
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