As the crypto market recovers from a historic rout, Robinhood, the online brokerage that offers digital assets, stocks and other investments, is planning to lean into its other offerings, despite becoming increasingly reliant on crypto trading volume in recent years.
“It’s going to go up and down in terms of trading volumes,” Robinhood CEO Vlad Tenev said in an earnings call with shareholders on Wednesday, acknowledging crypto’s trademark volatility. “We’re diversifying the business outside of the crypto business, which will make us less reliant on crypto transaction volumes.”
Robinhood reported $927 million in Q1 revenue on Wednesday, a slight pullback from the end of last year when revenue surged to a record $1 billion. The dip is due, in part, to the company’s crypto-related revenue falling 30% from $358 million in last quarter to $252 million. Crypto trading volume on the platform dove from $71 billion in Q4 to $46 billion in Q1.
Since introducing crypto in 2018, the asset class has grown to drive substantial portion Robinhood’s revenue, which comes primarily from sending their customers’ trading orders to outside companies called market makers. That crypto revenue, though, has often come in unpredictable waves—including in 2021, when revenue from the novelty token Dogecoin helped fuel Robinhood to a record quarter, but then dried up months later.
In its latest ride on the crypto roller-coaster, Robinhood reaped a surge of revenue last quarter following exuberance at the election of President Trump, which sent Bitcoin surging to a record high of $109,000 in early January. Since then, though, it has tumbled as low as $84,000 amid broader market fallout from Trump’s trade war.
While crypto revenue fell since last quarter, Robinhood’s earnings report beat analyst’s predictions who expected lower trading volume to have a larger impact on the company’s revenue. Robinhood reported an earnings per share of 37 cents, surging past analyst’s expectations of 33 cents, according to data from the Wall Street Journal. The company’s revenue has also increased 50% since the same period last year.
In after hours trading, Robinhood’s stock price has risen nearly 2% on the earnings news.
