In the first quarter of 2025, Robinhood (HOOD) topped tempered analyst estimates, reporting adjusted earnings per share of $0.37, surpassing forecasts that anticipated $0.33. This solid performance, albeit modest, reflects the trading platform’s ongoing efforts to navigate a fluctuating market environment.
Despite the beat on earnings, Robinhood’s overall financial metrics displayed signs of contraction. The company reported total revenue of $927 million, a decrease from $1 billion in the previous fourth quarter, but still managing to exceed street expectations of $920.1 million. Notably, Robinhood’s revenue from cryptocurrencies soared to $252 million, marking a dramatic 100% increase from levels recorded a year earlier.
However, the picture was not entirely rosy, as transaction-based revenue fell to $583 million, representing a 13% decline from the $672 million reported in the fourth quarter. Such a decrease in trading volumes underscores the volatility in both crypto and traditional markets, a sentiment echoed by industry analysts.
In the fourth quarter of 2024, Robinhood experienced explosive growth, largely fueled by a surge in crypto trading resulting from the fervor surrounding U.S. President Donald Trump’s election victory. Unfortunately, the optimism did not persist into the new administration, leading to a stark turnaround in trading volumes.
In a proactive move to enhance shareholder value, Robinhood has added $500 million to its existing $1 billion share repurchase program. To date, the company has repurchased $667 million of its own stock, leaving an additional $833 million under the current authorization. This strategy indicates a commitment to bolstering its stock performance amid fluctuating market conditions.
Interestingly, historical data indicates that Robinhood’s monthly crypto trading volumes show a high correlation with those of Coinbase (COIN). However, Barclays analyst Benjamin Buddish suggests that Coinbase may experience a less pronounced decline in trading volumes during the same quarter. Coinbase is set to report its earnings on May 8, and analysts expect a slight revenue drop to $2.1 billion from $2.27 billion in the previous quarter, with exchange volumes anticipated to fall from $439 billion to $403.8 billion.
As the market reacts to these developments, HOOD shares are down 2.2% in after-hours trading. The landscape remains dynamic, and stakeholders will be closely monitoring both Robinhood and Coinbase’s upcoming performance as indicators of the broader market trends.
