Robinhood Markets Inc. (NASDAQ: HOOD) dropped more than 12 percent in Wednesday’s trading after reporting first-quarter results that missed Wall Street estimates on both revenue and earnings per share, with the company’s crypto transaction revenue collapsing 47 percent year-on-year to $134 million, from $252 million in the same quarter a year earlier, as the digital asset slump that began late in 2025 extended into the opening months of 2026 and removed the single largest driver of Robinhood’s recent financial momentum.
Total net revenue of $1.07 billion represented 15 percent year-on-year growth and was not the disaster that the headline decline in crypto revenue might suggest, but it fell short of the $1.14 billion analyst consensus by approximately 6 percent and the adjusted EPS of $0.38 missed the $0.39 expectation narrowly enough that the overall picture was one of genuine underperformance rather than a temporary mix shift that investors could easily look through.
CFO Shiv Verma did not dispute the miss but moved immediately to challenge what it means for the business’s forward trajectory, saying: “In Q1, customers remained engaged and rapidly adopted new products, leading to a 20 percent-plus annualized net deposit growth rate, double digit growth across equities and options, and record volumes for prediction markets, futures, and index options.”
CEO Vlad Tenev used the earnings call to signal a deliberate strategic pivot, saying: “I want to get away from talking about the price of bitcoin,” a statement that reflects the company’s growing awareness that its current revenue correlation with crypto market sentiment creates the kind of earnings volatility that institutional investors find structurally unappealing regardless of how strong the underlying user engagement metrics appear.
The specific category that is replacing crypto as a revenue driver within the transaction business is striking: event contracts and prediction market revenue surged 320 percent year-on-year to $147 million, actually exceeding the $134 million generated by crypto trading and establishing Robinhood Predictions as the company’s fastest-growing and most commercially relevant new product category.
Verma added detail that made Thursday’s trading environment look materially better than Q1’s headline miss might suggest, revealing that prediction markets are on track to hit $3 billion in trading volume for April alone and that equity and options volumes in April are tracking to make it the second-best month in company history, a forward data point that Bernstein cited when it maintained its $130 price target, implying more than 58 percent upside from Tuesday’s close.
Net deposits of $17.7 billion in Q1, representing 22 percent annualised growth, and Robinhood Gold subscribers reaching a record 4.3 million at 36 percent year-on-year growth represent the two metrics that most directly answer the question of whether the underlying platform is gaining or losing commercial relevance regardless of which specific trading categories are generating fee revenue in any given quarter.
The crypto volume numbers require careful reading, with Robinhood’s acquired Bitstamp exchange generating $42 billion in Q1 trading volume that does not appear in the headline crypto transaction revenue figures, meaning the company’s actual crypto market footprint is considerably larger than the reported $24 billion in Robinhood app notional volumes suggests.
Barclays cut its target from $89 to $82 while maintaining an Overweight rating, and Keefe Bruyette lowered from $75 to $65 at Market Perform, with both target reductions reflecting the revenue miss rather than any fundamental reassessment of Robinhood’s competitive position in the retail brokerage and fintech landscape.
The 12 percent intraday drop wiped out most of HOOD’s April monthly gain, with shares trading near $82 on Wednesday versus Tuesday’s close around $93, creating a technical setup that several retail-focused analysts described as representing an overreaction given the forward trading data Verma and Tenev disclosed during the earnings call.
