Robinhood nasdaq Hood Stock Drops As Investors Assimilate Q1 Earnings Report

Robinhood (NASDAQ: HOOD) Stock Drops as Investors Assimilate Q1 Earnings Report

Robinhood Markets (NASDAQ: HOOD) stock fell 3% in intraday trading, as investors digested the first-quarter earnings report.

Robinhood (HOOD) recently announced record-breaking first-quarter profits and sales driven by surging demand for cryptocurrency trading and rising gold prices. Furthermore, net deposits reached an all-time high.

Robinhood reported earnings per share (EPS) of $0.18 for the quarter, triple the estimates compiled by Visible Alpha. Revenue soared by 40% year-over-year to reach $618 million, beating estimates.

Transaction-based revenue grew 59% to $329 million, with cryptocurrency revenue leading the charge with a staggering 232% surge to $126 million. The surge in demand for cryptocurrencies reflects a broader trend of retail investors flocking to digital assets amid market volatility and growing interest in alternative investment opportunities.

Additionally, Robinhood capitalized on record-setting prices for gold, with gold subscribers reaching a new high of 1.7 million, representing a 42% increase. Net deposits soared to a record $11.2 billion, with the company reporting “net positive transfers from every major incumbent brokerage firm.”

The platform’s user base also witnessed significant growth, with funded customers climbing by 810,000 to 23.9 million. Average revenue per user (ARPU) rose by 35% to $104.

Vlad Tenev, co-founder and CEO of Robinhood, expressed optimism for the current quarter, citing robust growth in net deposits and gold subscriber numbers in April. Tenev also highlighted Robinhood’s overwhelming response to its new gold credit card, with over 1 million customers joining the waitlist. The premium “gold” credit card offers 3% cash back and is tailored for Robinhood’s elite subscribers.

However, amidst its success, Robinhood faces potential challenges, including a Securities and Exchange Commission (SEC) investigation into its cryptocurrency business unveiled this week. The company’s chief attorney, Dan Gallagher, defended Robinhood, asserting that the SEC’s case is weak and that the company is not violating any laws.

Robinhood Markets (NASDAQ: HOOD) Stock Price Action

HOOD stock dropped 3.08% to close at $17.30 on Thursday. Its value decreased by 1.76% this week. The trading activity saw 51,207,408 (51.20 million) shares changing hands, well above the average daily volume of 16.99 million.