Robinhood’s Unexpected Earnings Growth Amid Trading Slowdown Could Signal Optimism for Coinbase
Robinhood (HOOD) surpassed Wall Street’s earnings expectations for Q1 2025, posting adjusted earnings per share (EPS) of $0.37, above the forecast of $0.33. The company’s total revenue came in at $927 million, slightly exceeding the anticipated $920.1 million. A key driver of this performance was the remarkable 100% year-over-year growth in crypto trading revenue, which reached $252 million. However, Robinhood’s traditional equity and options transaction revenue saw a dip of 13%, falling from $672 million in Q4 to $583 million.
Despite a slowdown in trading volumes that began after the post-election market rally in Q4, Robinhood’s ability to exceed earnings expectations surprised analysts. The company also increased its share repurchase program by $500 million, bringing the total buyback amount to $1.5 billion, with $667 million already repurchased.
The strength in Robinhood’s crypto trading, even amid a more cautious trading environment, could bode well for Coinbase (COIN), which is expected to report its Q1 results on May 8. Analysts predict Coinbase’s revenue will drop slightly to $2.1 billion, down from $2.27 billion in Q4, primarily due to declining crypto trading volumes.
Given the close correlation between the performance of Robinhood and Coinbase in the crypto space, Robinhood’s strong results may suggest a more resilient crypto market than previously expected. This could potentially indicate a more optimistic outlook for Coinbase’s upcoming earnings, especially if crypto trading volumes are not as weak as anticipated across the industry.
