Robinhood’s earnings report missed expectations, and its stock plummeted after hours.

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Robinhood Markets’ first-quarter earnings report missed Wall Street expectations, with a sharp decline in cryptocurrency trading revenue dragging down overall performance and declining trading activity exacerbating pressure.

The company reported earnings per share of 38 cents and revenue of $1.07 billion in the first quarter, both below analysts’ expectations of 39 cents and $1.14 billion, respectively. Following the earnings release, Robinhood’s shares fell as much as 9% in after-hours trading on Tuesday.

This performance has raised market doubts about the company’s growth prospects. The persistent slump in the cryptocurrency market has caused Robinhood’s stock to fall 27% so far this year, and this earnings report has further intensified investors’ concerns.

Crypto income slashed, transaction revenue drops sharply quarter-on-quarter

The cryptocurrency business was the main source of pressure for this quarter’s performance. Robinhood’s first-quarter crypto revenue plunged 47% year-on-year to $134 million, as continued declines in bitcoin and other crypto asset prices directly eroded this revenue stream.

Overall transaction-related revenue was also under pressure. First-quarter transaction-based revenue was $623 million, up 6% year-over-year, but down 20% quarter-on-quarter compared to the fourth quarter of 2025, reflecting a significant cooling in investor trading activity.

For comparison, Robinhood reported earnings per share of 37 cents and revenue of $927 million in the same period last year; the performance baseline was already relatively low, but this quarter still failed to exceed analyst expectations.

Prediction market emerges, contributes unexpected growth

While the crypto business dragged down overall performance, Robinhood’s prediction market business became a highlight of this quarter. The company disclosed that other trading revenues—mainly from event contract income—soared 320% year-on-year to $147 million, with robust demand generated by the Super Bowl event as a key driver.

CEO Vlad Tenev expressed optimism about the prospects for the prediction market during the earnings call. “I believe this asset class will continue to grow, and we are beginning to see diversification beyond just sports events,” he said.

Currently, Robinhood relies on prediction market exchange Kalshi to support its related products, but the company has announced plans to partner with Susquehanna International Group to independently develop a prediction market exchange. Management stated that this initiative will allow Robinhood to better control the economic benefits and user experience of the business. Tenev also expects some degree of consolidation within the prediction market sector.

Diversification continues, membership subscriptions reach historical high

Despite pressures on the core trading business, Robinhood has made progress toward business diversification. The company’s Gold membership subscription service reached a record 4.3 million users, up 36% year-on-year; Gold membership subscription revenue in the first quarter grew 32% year-on-year to $50 million.

Robinhood Strategies, the company’s robo-advisor product, had accumulated over 285,000 funded customer accounts by the end of the quarter, with assets under management exceeding $1.6 billion.

Chief Financial Officer Shiv Verma said during the earnings call: “Product advancement continues to accelerate, and we are making long-term investments while actively applying AI across our entire business.”

Under Tenev’s leadership, Robinhood continues to advance its “one-stop financial services” strategy, having launched credit cards, investment advice, and banking services in succession, striving to reduce dependence on single-source trading revenue. However, trading-related income still constitutes the main portion of company revenue, and the transmission effect of market volatility on its performance remains significant.

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