tl;dr
Robinhood (HOOD) experienced a significant increase in first-quarter notional crypto trading volume, reaching $36 billion, up 224% from the previous year. This led to a 232% rise in crypto-related revenue, totaling $126 million, contributing to a 59% year-over-year increase in overall first-quarter ...
Robinhood's Strong First Quarter in Crypto and Legal Challenges Robinhood's first-quarter notional crypto trading volume reached $36 billion, driving overall transaction-based revenue up by 59% year-over-year to $329 million.
Legal expert suggests Robinhood is unlikely to win in a 'full-on battle' with the SEC, following the company's receipt of a Wells Notice.
Robinhood's custody of user's crypto saw a 78% increase, contributing to the company's beat of first-quarter sales and earnings estimates.
Despite the Wells Notice from the SEC, Robinhood's CFO emphasizes "business as usual" for the company's crypto arm and expresses disappointment in increased regulation by enforcement.
Robinhood (HOOD) experienced a significant increase in first-quarter notional crypto trading volume, reaching $36 billion, up 224% from the previous year. This led to a 232% rise in crypto-related revenue, totaling $126 million, contributing to a 59% year-over-year increase in overall first-quarter transaction-based revenue, amounting to $329 million.
The company also reported a substantial growth in user's crypto in custody, which stood at $26.2 billion as of March 31, marking a 78% increase from the end of 2023.
Despite facing a Wells Notice from the SEC for its crypto unit, Robinhood surpassed first-quarter sales and earnings estimates, generating $618 million in revenue, and earnings of $0.18 per share.
The CFO emphasized that the notice has no impact on customer accounts and asserted the company's commitment to conservative and highly regulated operations in the crypto space.
Robinhood's stock rose about 7% in post-market trading, while Coinbase (COIN) shares experienced a slight decline.
Robinhood (HOOD) saw a first-quarter notional crypto trading volume of $36 billion, up 224% from year-ago levels. That led to a 232% increase in crypto-related revenue to $126 million, a primary factor, said the company, in driving overall first quarter transaction-based revenue up 59% year-over-year to $329 million.
Robinhood had $26.2 billion in user's crypto in custody as of March 31, a 78% jump from the end of 2023. The larger transaction revenue due to crypto trading isn't surprising as another publicly traded crypto peer, Coinbase (COIN), also reported "blowout" first quarter numbers due to improving crypto market conditions.
Robinhood also handily beat its first-quarter sales and earnings estimates. The company reported $618 million in revenue in the quarter, ahead of analyst estimates of $552.7 million, according to FactSet data.
Shares of Robinhood were up about 7% in post-market trading on Wednesday, while Coinbase shares were down slightly. HOOD stock has risen about 40% for the year, while COIN has gained 22%.
The company last week disclosed receipt of a Wells Notice from the U.S. Securities and Exchange commission for its crypto unit.
Robinhood's CFO Jason Warnick said during an earnings conference call that "we're, of course, disappointed to have received the notice." However, he noted that the Well Notice has no impact on the customer accounts and that it is "business as usual" for the company's crypto arm.
"We've been very conservative in our approach in terms of points listed and services offered. And we're a highly regulated company and have applied the same legal and compliance standards we use for our brokerage to the way we run our crypto. So it's disappointing to see more regulation by enforcement," Warnick added.
Disclaimer: The opinions expressed by the writers at Grow My Bag are their own and do not reflect the official stance of Grow My Bag. The content provided on our site is not intended as investment advice, and Grow My Bag is not an investment advisor. We do not endorse buying or selling any cryptocurrencies or digital assets mentioned in our articles. High-risk investments in Bitcoin, cryptocurrencies, and digital assets require thorough due diligence, and all transfers and trades made are at your own risk. Grow My Bag is not responsible for any potential losses and participates in affiliate marketing.