Crypto and stock trading platform Robinhood has just released its quarterly earnings report amid ongoing enforcement action by U.S. regulators.
The popular millennial trading platform released its earnings report on May 8, beating analyst estimates.
According to its first-quarter results, Robinhood reported record revenues of $618 million, up 40% year-over-year.
Additionally, revenue from cryptocurrencies surged 232% to $126 million.
“Transaction-based revenues increased 59% year-over-year to $329 million, primarily driven by cryptocurrencies,” the firm stated.
Robinhood’s crypto revenue tripled in Q1 pic.twitter.com/Z6UtTWvz4C
— Jeff Roberts (@jeffjohnroberts) May 8, 2024
Robinhood Record Revenue
Net income for the first quarter totaled $157 million, or 18 cents a share. This eclipsed the 6-cent average estimate from analysts and compared to a loss of $511 million, or 57 cents, a year earlier.
The firm also did very well out of gold-based products, with gold subscribers increasing to a record high of 1.7 million in Q1.
Vlad Tenev, CEO and co-founder of Robinhood said, “We continued to aggressively execute on our product roadmap in Q1, leading to all-time highs for Net Deposits and Gold Subscribers.”
Robinhood is the latest target in the US Securities and Exchange Commission’s crypto crackdown. On May 4 it received a Wells notice from the regulator warning the firm that it is likely to face enforcement action regarding its crypto business.
The regulator made the same argument it has with most enforcement actions, namely that most tokens traded on Robinhood are securities and subject to SEC rules and registration requirements.
Tenev described the SEC action as a “disappointing development,” while chief financial officer Jason Warnick said, “So it’s disappointing to see more regulation by enforcement here.”
“We’ve run our crypto business very carefully. We’ve been very selective about the coins we offer, and we’ve not offered services that have been criticized by the SEC,” continued Warnick.
“The Wells Notice clouds the future of this income stream,” said Lauren Ashcraft, financial services analyst at Emarketer, according to Reuters.
Robinhood stock (HOOD) gained 5.2% in after-hours trading to reach $18.60. It is up 50% so far this year, according to MarketWatch.