Robinhood Markets Inc. (HOOD) reported first-quarter 2026 earnings that showed resilient overall growth despite a sharp decline in cryptocurrency trading activity. The popular trading platform posted total revenue of $1.07 billion, up 15% year-over-year, while net income edged up 3% to $346 million, resulting in diluted earnings per share of $0.38.
Crypto Revenue Crashes as Retail Traders Shift Focus
The most striking figure in the quarter was the 47% plunge in cryptocurrency transaction revenue, which fell to $134 million. This decline reflects a prolonged slump in digital asset prices and waning retail interest during the period. Robinhood, which once rode the crypto boom to record growth, now sees its legacy crypto business contracting significantly. The company's fiat-to-crypto notional volumes on its core app dropped sharply, contributing to the revenue shortfall.
Equities, Options, and Event Contracts Drive Transaction Revenue
Total transaction-based revenue rose 7% to $623 million, powered by strong gains in traditional securities. Equity trading revenue surged 46% to $82 million, while options revenue increased 8% to $260 million. A new product category—event contracts—generated $147 million in revenue, quickly becoming a meaningful contributor.
Non-Transaction Income Grows as Subscription Deepens
Net interest income jumped 24% to $359 million, driven by an expanding interest-earning asset base. Subscription revenue from Robinhood Gold climbed 32% to $50 million, and other revenues rose 57%. The company views its subscription and asset management services as key to building stable recurring revenue.
Assets, Users, and Deposits Show Broad Strength
Despite the crypto headwind, total assets under custody (AUC) soared 39% to $307 billion. Net deposits reached $17.7 billion, representing a 22% annualized growth rate. Funded accounts grew 6% to 27.4 million, and total investment accounts reached 29.1 million. Average revenue per user (ARPU) increased 8% to $157.
Operating expenses rose 18% year-over-year to $656 million, reflecting higher marketing and product development costs. However, adjusted EBITDA still improved 14% to $534 million, signaling better operating leverage.
Strategic Expansion: AI, Layer 2, and International
Robinhood is aggressively diversifying beyond trading. The company launched a testnet for an Ethereum-based Layer 2 blockchain designed to support tokenized assets. Its Cortex AI platform now includes social trading features, and the firm is expanding banking and wealth management services. Internationally, Robinhood received preliminary regulatory approval in Singapore. Additionally, the Robinhood investment fund deployed $75 million into OpenAI, giving retail investors indirect exposure to private markets.
Capital Returns and Outlook
During the quarter, Robinhood repurchased $250 million of its own stock and boosted its buyback authorization to $1.5 billion. CEO Vlad Tenev stated that the company is positioning itself at the center of customers' financial lives amid the early stages of the “Great Wealth Transfer.” CFO Shiv Verma emphasized long-term investment and product velocity, expressing confidence in the massive opportunity ahead.
Robinhood’s Q1 results illustrate a platform in transition: crypto revenue is fading, but equities, interest income, subscriptions, and new products are picking up the slack. Whether these new engines can fully offset crypto volatility will be a key theme for investors in coming quarters.