Robinhood's Q1 crypto revenue drops 30% from the previous year

The money coming in for the trading app’s crypto business reached $38 million over the first quarter of 2023, down from $54 million in Q1 2022.

First quarter results are in for cryptocurrency and stock trading app Robinhood, with the company reporting a 30% year-on-year revenue drop for its crypto trading business.

Released May 10, Robinhood’s Q1 2023 earnings revealed $38 million in crypto trading revenues over the period, dropping from $54 million in Q1 2022.

Robinhood’s total net revenues, however, increased year-on-year with Q1 2023 bringing in $441 million compared to 2022’s first quarter net revenues of $299 million — an increase of around 47.5%.

*Crypto transaction revenues (dark green) for Robinhood Source: Robinhood*

Its Q1 2023 revenues were also a 16% gain since last quarter. Interest revenues were the company’s biggest earner due to the United States Federal Reserve’s recent and rapid rate hikes.

Around $12 billion worth of crypto is currently under the custody of the trading app, a 50% increase over the quarter, though it is down 40% compared to the same time last year.

*Robinhood’s crypto under custody (light green) saw a quarterly gain and sits at $12 billion, the same figure from two years ago. Source: Robinhood*

The trading app’s drop in crypto revenue aligns with the 40% fall in market capitalization for digital assets over the same period. The global market cap for crypto stood at $2.1 trillion on March 31, 2022, compared to $1.2 trillion on the same date this year, as per CoinGecko data.

Monthly active users on Robinhood also feel year-over-year from nearly 16 million in 2022’s first quarter to just under 12 million in the most recent earnings, an increase of 400,000 from last quarter, however.

*Monthly active users saw a slight increase over the quarter, but the figure is down from the same time last year. Source: Robinhood*

Overall Robinhood recorded a net loss of $511 million, impacted by “a one-time $485 million share-based compensation expense” due to its co-founders “canceling their 2021 market-based restricted stock unit awards in February 2023,” it explained in an accompanying press release.

The loss was the largest since Q3 2021 and was a 30% increase in losses year-over-year.

The firm also said it “continues to pursue purchasing most or all” of the 55 million shares from Emergent Fidelity Technologies — the offshore investment vehicle used by FTX founder Sam Bankman-Fried to purchase a nearly 8% stake in Robinhood.

“Discussions are ongoing with the related parties,” it added. “We cannot predict when, or if, the share purchase will take place.”

The same day, Robinhood said it’s starting to roll out 24-hour trading to 43 of its most popular exchange-traded funds (ETFs) and stocks such as Apple, Tesla and Amazon.

The rollout will begin May 16 with availability to all users slated for June.

Robinhood shares closed slightly down on the day, but are up 3% in after-hours trading according to Google Finance.

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Update (May 11, 1:00 am UTC): This article has been updated to include more information from the earnings report and accompanying statements.