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.