Robinhood (HOOD) Shares Drop 9% as Crypto Revenue Plummets
Robinhood (NASDAQ: HOOD) shares sank 9.4% in after-hours trading after the company reported $1.07 billion in Q1 revenue, missing Wall Street expectations by 6.1%. The shortfall was driven in part by a sharp decline in crypto-related activity, with transaction revenue from cryptocurrencies falling 47% year-over-year to $134 million, according to the company's April 28 earnings report.
Crypto trading volumes also halved, dropping 48% to $24 billion compared to the same quarter in 2025. This marks the third consecutive quarter of declining crypto revenue for Robinhood, underscoring the ongoing challenges for platforms reliant on retail trading activity in a bearish digital asset market.
Despite the crypto slump, Robinhood managed to post a net income of $346 million, up 3% year-over-year, aided by growth in other revenue streams. CEO Vladimir Tenev noted that the company is shifting focus toward building long-term crypto infrastructure and integrating assets with "real-world utility." He highlighted what he called a "tokenization supercycle" on the horizon, signaling Robinhood's pivot toward blockchain-based products.
Prediction Markets Shine Amid Crypto Weakness
While crypto struggled, Robinhood's prediction market platform, Robinhood Predictions, delivered strong results. The platform saw record engagement in Q1, with 8.8 billion event contracts traded—an impressive 780% increase from its initial full quarter in Q2 2025. Revenue from the company's "other trading" category, which includes Robinhood Predictions, tripled year-over-year to $147 million, partially offsetting crypto-related losses.
April activity suggests continued momentum, with Robinhood Predictions on track for $3 billion in trading volume this month, potentially its second-best month since launch.
Stock Reaction Reflects Market Skepticism
Robinhood's Q1 miss highlights the challenges of navigating a crypto downturn while maintaining growth elsewhere. The after-hours decline leaves HOOD stock trading around $84.75 as of April 29, giving the company a market cap of $73.85 billion. While the stock is up 1.4% in the broader market session, the earnings miss dampens momentum.
Robinhood's reliance on crypto trading, once a core growth driver, has turned into a liability during the prolonged bear market. However, the company’s ability to diversify with products like prediction markets and interest revenue may help stabilize its financial performance.
What’s Next?
Investors will closely watch whether Robinhood can sustain the growth of its newer product lines while weathering crypto market volatility. The company's emphasis on tokenization and blockchain infrastructure signals a strategic bet on the long-term value of decentralized finance (DeFi) and digital assets. For now, though, declining crypto activity remains a headwind that’s hard to ignore.