April 28 (Reuters) – Online trading platform Robinhood Markets missed Wall Street expectations for first-quarter profit on Tuesday, hurt by a fall in transaction-based revenue from cryptocurrency trading.
Shares of the Menlo Park, California-based company fell 6% in extended trading. The stock has slipped more than 27% this year, as of last close.
Crypto volumes remained weak at Robinhood, offsetting gains from stronger trading volumes in options and equities.
The crypto sector has been in a rut since a record crash last October, as optimism following President Donald Trump’s return to the White House faded. Bitcoin, the world largest cryptocurrency, has shed roughly 13% this year.
Transaction-based revenue from cryptocurrencies at Robinhood plunged 47% to $134 million from a year earlier.
Despite a tougher macroeconomic backdrop in the first quarter, customers are really healthy and remain engaged in the platform, chief financial officer Shiv Verma told journalists on a media call.
Analysts were closely watching the results to see how retail traders navigated volatile markets.
Verma said in a statement that Robinhood saw record volumes for prediction markets, futures and index options.
Robinhood’s transaction-based revenue was $623 million in the quarter, compared with estimates of $728.2 million, according to data compiled by LSEG.
Profit was $346 million, or 38 cents per share, in the three months ended March 31. Analysts were expecting a profit of 44 cents per share.
Robinhood also said it expects to invest an additional $100 million to build and support the user interface of the new Trump Accounts, the government-supported investment accounts for babies.
The firm was earlier this month tapped as the brokerage for the program.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)
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