Robinhood posts Q1 earnings beat, sees 224% increase in crypto trading volume
Quick Take
- Robinhood reported a top- and bottom-line Q1 earnings beat.
- Crypto notional trading volumes increased 224% year-over-year to $36 billion.
- The company’s Robinhood Crpyto unit was recently served a Wells Notice from the SEC.
Robinhood, the commission-free brokerage firm, reported a first-quarter earnings beat Wednesday afternoon. The company came under fire earlier this week after the company's cryptocurrency unit, Robinhood Crypto, was issued a Wells Notice from the U.S. Securities and Exchange Commission.
Robinhood said the SEC staff made a preliminary determination to recommend an enforcement action against the crypto unit, alleging securities violations. Last year, the company said it had received an investigative subpoena from the SEC related to cryptocurrency listings.
Robinhood rolled out its cryptocurrency wallet for Android users in March, about a year after Robinhood Wallet was launched to iOS users globally, The Block previously reported.
The rollout appears to have paid off for Robinhood's bottom line.
Transaction-based revenues increased 59% year-over-year to $329 million, which Robinhood said was primarily driven by cryptocurrencies revenue of $126 million, up 232%, and options revenue of $154 million, up 16%.
Robinhood said Assets Under Custody (AUC) increased 65% to $129.6 billion, primarily driven by higher equity and cryptocurrency valuations.
Notably, crypto notional trading volumes increased 224% year-over-year to $36 billion, a markedly increased rate compared to the rise in equity notional trading volumes (40%), though the latter was at a much larger sum of $225 billion.
"We delivered significant revenue growth and margin expansion in Q1 as we remain focused on driving another year of profitable growth in 2024,” said CFO Jason Warnick in a press release. “In Q1, we set records for quarterly revenues, net income, and EPS."
Net income rose to $157 million, compared to a net loss of $511 million in the same quarter last year. Earnings of 18 cents per share beat the 6=cent analyst consensus estimate, while revenue of $618 million beat the $549 million estimate.
Robinhood's stock traded higher by 6% after hours to $18.82 per share. The stock is up 44% year-to-date.
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