Robinhood has announced a 3% increase in quarterly profit, attributed to growth in prediction markets and subscription services, however, its stock dipped roughly 6% in after-hours trading as earnings fell short of Wall Street projections.
Net income grew to $346 million, or 38 cents per share, compared to $336 million, or 37 cents, from the previous year. This figure did not meet the analysts’ expectation of 39 cents per share.
Total revenue surged by 15% to $1.07 billion, fueled by a remarkable increase in event-based trading alongside rising subscription income. Event contracts traded reached a staggering 8.8 billion during the quarter, with revenue from the Robinhood Gold program climbing 32%.
Transaction-based revenue rose 7% year-over-year to $623 million, despite a 20% drop since the prior quarter. Crypto trading proved to be a downside, as revenue dropped 47% to $134 million amid a slump in digital asset values.
Net interest revenue saw a 24% increase to $359 million, while other revenue skyrocketed 57% to $85 million, bolstered primarily by subscriptions. Operating expenses increased by 18% to $656 million due to escalated marketing and growth investments, and adjusted EBITDA climbed 14% to $534 million.
The company maintained an upward trajectory in its user base and platform activity, with funded customers climbing 6% to 27.4 million and investment accounts growing 8% to 29.1 million. Total platform assets surged by 39% to $307 billion, with net deposits hitting $17.7 billion this quarter.
Robinhood Gold subscribers soared by 36% to 4.3 million, and average revenue per user witnessed an 8% uptick to $157.
Chief Financial Officer Shiv Verma remarked that the company’s diversified business model has improved its resilience. “Our structure is far more robust compared to 2022,” he stated.
Robinhood is broadening its horizons beyond core trading to include domains like prediction markets, credit cards, venture capital, and banking as part of its strategy to diversify its revenue channels.
Nonetheless, activity in prediction markets has been erratic, with trading volumes declining by 29% month-over-month following the conclusion of the football season, and analysts worry about diminishing retail investor participation amidst economic uncertainty.
Chief Executive Officer Vlad Tenev indicated the company’s focus on long-term expansion. “Fueled by our commitment to product innovation, Robinhood is becoming increasingly central to our clients’ financial experiences, especially as we navigate the early phases of the Great Wealth Transfer,” he added.
“In Q1, customer engagement remained robust with significant adoption of new products, resulting in a net deposit growth rate exceeding 20% on an annualized basis, alongside double-digit growth in equities and options, alongside record volumes in prediction markets, futures, and index options,” Verma supplemented.
“April is showing promise for Q2, with equity and option trading volumes poised to be the highest of the year, and despite tax season, net deposits are around $5 billion so far this month.
Robinhood is committed to investing in new projects, which include artificial intelligence tools, tokenization frameworks, and enhanced account offerings, and has revised its adjusted operating expense projection for 2026 to a range of $2.7 billion to $2.825 billion.