Robinhood (HOOD) stock slid around 10% in premarket trading on Wednesday as the company said its Q1 profit and revenue fell short of Wall Street estimates.<\/p>\n
The financial app provider said on Tuesday that profits rose 3% from the prior year to $346 million, or $0.38 per share, while net revenue rose 15% from the first quarter of last year to $1.07 billion.<\/p>\n
Analysts were expecting $382 million, or $0.42 per share, and net revenue of $1.14 billion, according to data compiled by Bloomberg.<\/p>\n
A big source of revenue for Robinhood, fees from crypto trades, fell 47% from the first quarter of last year, driven by a slump across the digital asset world that kicked off late last year and worsened through early February. The figure was slightly lighter than analysts expected.<\/p>\n
\u201cI can’t tell you what the price is going to be in three months. You know, [the] price moves up and down, but what I can tell you is crypto as technology infrastructure is going to be big and we’re investing,\u201d Tenev said during the Tuesday earnings call when asked for the outlook for digital assets.<\/p>\n
He also reiterated the company\u2019s long-term ambition of\u00a0 becoming a \u201cfinancial super app.\u201d<\/p>\n
Fees from options trades rose 8%. The figure was still lighter than what analysts hoped for in the activity.<\/p>\n
The app\u2019s net interest revenue from customers’ cash balances, margin loans and securities lending rose 27% but also came in lighter than what the Street forecast.<\/p>\n
Driven by a retail trading frenzy in its online brokerage business, Robinhood\u2019s stock reached lofty heights last year. Thus far in 2026, it hasn\u2019t regained that momentum. Ahead of its first quarter earnings report, Robinhood\u2019s stock was down 27% year to date as of Tuesday\u2019s close.<\/p>\n
The company, which historically made most its revenue from crypto and options trading, has also been on a major push to diversify its revenue streams into other financial services businesses, such as banking, wealth management, and prediction markets.<\/p>\n
Robinhood launched a platinum credit card earlier this year in a bid to chase wealthy spenders. Earlier this month the company also got tapped to help the Treasury Department implement its Trump Accounts program.<\/p>\n
\u201cBy developing and managing the new Trump accounts app, we’re getting Robinhood technology in front of the next generation of investors, 60 million of them,\u201d Tenev said.<\/p>\n
Robinhood reported an 18% rise in expenses on Tuesday, also disclosing it plans to invest another $100 million in building the Trump Accounts app. However, the firm added that it expects ultimately for \u201crevenues to exceed cost\u201d from the endeavor.<\/p>\n<\/p><\/div>\n
Robinhood on Tuesday reported a continued surge in its \u201cother revenue,\u201d seen in the previous quarter. That segment includes transaction fees from customers placing prediction market wagers along with those from credit card and futures contract trading.<\/p>\n
Other revenue rose to $147 million, which was $101 million more than the company reported a year ago when it had only just launched its prediction markets platform.<\/p>\n
During the quarter, \u201ccustomers remained engaged and rapidly adopted new products,\u201d Robinhood CFO Shiv Verma said in a statement with the release.<\/p>\n
\u201cDespite the macro backdrop, we really held engagement on the platform,\u201d Verma later said in a press call, highlighting that the report still represented Robinhood\u2019s third best in total net revenue.<\/p>\n
David Hollerith covers the financial sector<\/em>, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.<\/em><\/p>\n