News
Robinhood (HOOD) Q1 Crypto Trading Volume Increases as SEC Action Approaches
Robinhood (HOOD) reported first-quarter notional cryptocurrency trading volume of $36 billion, up 224% from year-ago levels.
This led to a 232% increase in cryptocurrency-related revenue to $126 million, a primary factor, the company saidcausing first quarter overall transaction-based revenue to increase 59% year-over-year to $329 million.
As of March 31, Robinhood had $26.2 billion in user cryptocurrencies under custody, a 78% increase from the end of 2023.
Higher transaction revenues from cryptocurrency trading are not surprising as another publicly traded cryptocurrency peer, Coinbase (COIN), also reported “explosive” numbers in the first quarter due to improving cryptocurrency market conditions.
Robinhood also easily beat first-quarter sales and earnings estimates. According to FactSet data, the company posted revenue of $618 million for the quarter, beating analysts’ estimates of $552.7 million. First-quarter earnings came in at $0.18 per share, beating analysts’ average expectations of $0.06.
Robinhood shares rose about 7% in after-market trading on Wednesday, while Coinbase shares fell slightly. HOOD stock is up about 40% for the year, while COIN has gained 22%.
The company revealed this last week receipt of a Wells notice by the U.S. Securities and Exchange Commission for its crypto unit.
Robinhood CFO Jason Warnick said on an earnings conference call that “we are, obviously, disappointed to have received the notice.” However, he noted that the Well Notice has no impact on customer accounts and that it is “business as usual” for the company’s crypto arm.
“We have been very conservative in our approach in terms of the items listed and the services offered. We are also a highly regulated company and have applied the same legal and compliance standards that we use for our brokerage to the way we manage our cryptocurrencies. So it is disappointing to see more regulation from enforcement,” Warnick added.
UPDATE (May 8, 9.27pm UTC): Updates to add CFO comments from earnings conference call.