Robinhood, the US-based cryptocurrency and stock trading app, has reported a 30% year-on-year revenue decline for its cryptocurrency trading business in Q1 2023. The company disclosed its earnings on May 10th, revealing that it earned $38 million in cryptocurrency trading revenues during the period, down from $54 million in Q1 2022.
Robinhood’s crypto venture faces challenges
Despite the decline in cryptocurrency trading revenue, Robinhood’s total net revenues increased year-on-year, with Q1 2023 generating $441 million compared to $299 million in 2022, an increase of approximately 47.5%. The first quarter of 2023’s revenues were also up 16% from the previous quarter.
At present, the trading app has custody over approximately $12 billion worth of cryptocurrencies, which represents a 50% increase over the quarter. However, it is down 40% compared to the same period in 2022.
Robinhood’s CEO, Vlad Tenev, attributed the decline in cryptocurrency trading revenue to a decrease in market volatility. He also emphasized that the company’s core stock trading business continued to be a key driver of growth, accounting for the bulk of its revenue.
The firm filed for an IPO on May 10th
Robinhood’s earnings report came on the same day that the company filed for an initial public offering (IPO). The firm filed a confidential draft registration statement with the US Securities and Exchange Commission (SEC), which means it can keep its financials confidential until closer to the time of its public listing.
Robinhood has been the subject of much scrutiny in recent months due to its involvement in the GameStop short squeeze saga. The company was accused of protecting Wall Street hedge funds by limiting trading in GameStop and other stocks, sparking a public backlash.
Despite the controversy, Robinhood has seen significant growth in its user base, particularly among younger investors. The platform has become a popular choice for people looking to invest in cryptocurrencies, stocks, and other assets, thanks to its user-friendly interface and commission-free trading model.
Overall, Robinhood’s Q1 earnings report highlights the company’s continued growth, even as the cryptocurrency market experiences a period of consolidation. The firm’s IPO filing suggests that it is looking to capitalize on its popularity among retail investors and continue expanding its business in the coming months.
