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The great crypto and fintech comeback of 2024 continues apace. On Wednesday, Robinhood pulled off its second consecutive earnings surprise, posting quarterly records for revenue and net income while handily beating analyst expectations. The biggest surprise, though, may have been the company’s crypto revenue, which went from $43 million in Q4 to $126 million in Q1—nearly a 3x jump.

I poked into Robinhood’s Q1 financials to see if I could learn a little more about where all that crypto revenue is coming from and came across a few interesting nuggets. One is that crypto made up 20% of transaction revenue (which counted for 53% of Robinhood’s overall revenue), compared to 9% a year ago. Another tidbit is that 10% of the firm’s overall revenue came via rebates from the crypto market-making giant Wintermute—just under the 12% Robinhood pulled in from longtime partner Citadel.

The other thing that jumped out at me from Robinhood’s financials was the pages and pages of legal disclosures concerning crypto. Companies include these disclosures in hopes of staving off class action suits when something goes wrong and their share price drops. In the past, there might have been a paragraph or two of crypto-related disclosures—now it feels like Robinhood’s crypto disclaimers are the full-time job of a room of over-caffeinated lawyers.

This isn’t surprising given the recent regulatory assault on crypto. It also underscores how a good chunk of Robinhood’s crypto income will get sucked up by legal costs, which could include a hefty settlement with the SEC, which is set to sue the company for listing unlicensed securities. The regulatory uncertainty surrounding crypto has let the agency go on a litigation spree that will get cleared up eventually by Congress or the courts. But for now, Robinhood is going to have to keep paying those lawyers.

There’s also the question of how robust Robinhood’s crypto business can be going forward. The company’s overall trading business is already very cyclical, and this is especially the case for crypto. In its financials, Robinhood explicitly mentions the “Dogecoin surge of 2021”—when the meme token accounted for an insane 62% of revenue one quarter—as an example of crypto volatility. The filing also points out that “as a result of the 2022 Bear Markets…our daily revenue trades for options, equities, and crypto declined by 33%, 49%, and 75%.”

It’s hard to build a business around that kind of volatility, and the current surge in crypto revenue may well prove to be another short-term sugar high. Fortunately for Robinhood, its quarterly financials also tell a much bigger story of a company that is rapidly building a full-service operation that already includes credit cards and retirement accounts. In this context, a surge in crypto revenues will certainly be welcome for Robinhood but hardly a make-or-break factor for its success.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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