Robinhood falls on Q1 miss, expenses boost

Kim Khan· Host0:00

[upbeat music] Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Wednesday, April twenty-ninth, and I'm your host, Kim Khan. Our top story so far: Robinhood is tumbling after Q1 earnings and revenue both missed estimates, and the company lifted its expense outlook due to the impact of Trump accounts. GAAP EPS came in at thirty-eight cents, just below the thirty-nine consensus. Revenue of one point zero seven billion trailed expectations of one point one four billion. Average revenue per user fell to one fifty-seven from one ninety-one in the prior quarter. Transaction-based revenue declined to six hundred and twenty-three million from seven seventy-six in Q4. Crypto revenue dropped forty-seven percent on the year to one hundred and thirty-four million, while options revenue rose eight percent to two hundred and fifty million and equities revenue jumped forty-six percent to eighty-two million. Robinhood also raised its twenty-twenty six combined adjusted operating expense and share-based compensation guidance to two point seven billion to two point eight two five billion above prior guidance and consensus. "Our work for Trump accounts is contracted on a cost-plus basis with a small margin, so we expect revenues to exceed costs," the company said. Investment manager Ross Gerber of Gerber Kawasaki said Robinhood only makes money when you gamble and lose on stock options, crypto, and betting. "This is a gambling app, nothing more. They make money when you lose." Among other active stocks, Seagate Technology and NXP Semiconductors are surging