Robinhood's Q1 Earnings Beat Expectations Despite Crypto Trading Dip

Robinhood Markets (HOOD) reported better-than-expected earnings for the first quarter of 2025, fueled by a surge in equity and options trading, as well as higher net interest revenue and a jump in Gold subscribers. Despite a 30% sequential decline in cryptocurrency trading revenue from the previous quarter, the company's overall financial performance exceeded analyst estimates, sending its stock up in after-hours trading.

Robinhood's Q1 2025 earnings per share reached 37 cents, surpassing the consensus estimate of 31 cents and significantly higher than the 18 cents reported in the same period last year. Net income soared to $336 million, a substantial increase from $157 million year-over-year.

Total net revenues jumped 50% year-over-year to $927 million, largely driven by a 77.2% increase in transaction-based revenues, with significant contributions from options (up 56%), equities (up 44%), and cryptocurrencies (up 100% year-over-year, despite the quarterly dip). Net interest revenue also saw a 14.2% increase.

Crypto Trading Dips

Robinhood's cryptocurrency trading revenue in Q1 2025 was $252 million, a 30% decrease from the previous quarter's $360 million. This decline tracked a broader downturn in the cryptocurrency market during the first three months of the year. Crypto trading volume on the platform also fell to $46 billion from $71 billion in Q4 2024.

Despite this sequential slump in crypto trading, CEO Vlad Tenev stated during the earnings call that the company is focused on diversifying its revenue streams to become less reliant on the volatile crypto market. While crypto trading still accounted for over 25% of Robinhood's total net revenue in Q1, the company is actively expanding its offerings and services beyond digital assets.

Robinhood's Q1 also saw a 5.1% year-over-year increase in Monthly Active Users (MAU) to 14.4 million and a 90% jump in Gold subscribers to 3.2 million. Total assets under custody (AUC) surged 70% year-over-year to $221 billion, driven by net deposits and the acquisition of TradePMR.

Looking ahead, Robinhood increased its share repurchase authorization by $500 million to $1.5 billion, signaling confidence in its financial position. The company anticipates combined adjusted operating expenses and share-based compensation for 2025 to be in the range of $2.085-$2.185 billion, including costs related to the TradePMR acquisition.

HOOD stock is currently trading after-hours at $45.86 (-1.63%), after closing Thursday's session at $46.62, or -5.07%.