Robinhood Q1 2026 Earnings: Prediction Markets Just Overtook Crypto — and the Stock Got Punished Anyway

On April 28, 2026, Robinhood Markets reported first-quarter revenue of $1.07 billion, up 15% year-over-year, and net income of $350 million attributable to shareholders — both records for a first quarter. The stock fell anyway, because crypto trading revenue collapsed 47% to $134 million while the company's two-year-old prediction-markets business, "event contracts," surged 320% to $147 million. For the first time in Robinhood's history, betting on outcomes generated more revenue than trading crypto. Wall Street couldn't decide whether that crossover was the story or the miss was.

The Headline Numbers​

Q1 2026 revenue came in at $1,067 million against a Wall Street consensus near $1.14 billion — a roughly 6% miss that snapped Robinhood's four-quarter streak of beating estimates. Diluted EPS of $0.38 also trailed the $0.39 consensus. The stock dropped sharply on the print despite genuine year-over-year growth across nearly every line.

The gap between the top line's 15% growth and the bottom line's roughly 3% growth is the quarter in one sentence: revenue grew, but expenses (+18%) and the tax bill (+86%, off a low base) grew faster, and margin compressed as a result. A new item also shows up in the equity section for the first time this quarter: $(4) million of net income (loss) attributable to non-controlling interests, tied to Robinhood's Rothera LLC joint venture with Susquehanna — small today, but the first sign of a consolidated entity that isn't 100% Robinhood's own economics.

Revenue Deep Dive: The Crypto-to-Prediction-Markets Handoff​

Transaction-based revenue only grew 7% at the headline level, but that number hides the most important shift in Robinhood's business mix since it added crypto trading in 2018.

Event contracts revenue ($147M, +320%) is Robinhood's prediction-markets product — letting users trade on the outcome of sports, economic, and political events through CFTC-regulated exchanges. Two years ago this was a rounding error. This quarter it became Robinhood's second-largest transaction revenue line, ahead of crypto for the first time. That crossover, not the headline miss, is the structurally important fact in this earnings report.

Cryptocurrencies revenue ($134M, −47%) is the mirror image. Crypto had been Robinhood's fastest-growing segment through most of 2024 and 2025, riding a bull market and the post-election trading boom. Management confirmed on the call that crypto trading volumes were running roughly half of year-ago levels, a hangover from an unusually euphoric January 2025 rather than a structural retreat from the asset class. Crypto revenue is inherently the most volatile line on Robinhood's income statement, and this is the second time in three years it has swung more than 40% in a single year (it also more than doubled in Q1 2025).

Equities revenue ($82M, +46%) and options revenue ($260M, +8%) both grew, evidence that the core trading business is healthy even as crypto cooled. Net interest revenue ($359M, +24%) — margin lending, securities lending, and Gold subscriber cash sweep — continues to compound quietly in the background, now Robinhood's second-largest revenue category outright. Other revenue ($85M, +57%) grew fastest of all, powered by Robinhood Gold, which crossed 4.3 million subscribers, up 36% year-over-year.

The Margin Story: A Streak Snapped​

Layering in the four quarters of FY2025 shows a company whose margins expanded steadily for a year and then gave some of it back in Q1 2026:

* (Revenue − Operating Expenses) / Revenue, before other income and tax.

Operating margin climbed from 40% to nearly 51% across FY2025 as revenue outran costs quarter after quarter. Q1 2026 broke that pattern, falling back below where it started a year ago. The mechanics are straightforward: revenue grew 15% but operating expenses grew 18%, led by a 31% jump in general and administrative costs and a 50% jump in the provision for credit losses ($36M, up from $24M, tracking the growing margin-lending book). Net margin compressed further still because the tax provision nearly doubled — the effective tax rate rose from 9.4% in Q1 2025 to 15.8% in Q1 2026 as last year's unusually low comparison base normalized. None of this is alarming in isolation, but it is the first quarter in over a year where Robinhood's operating leverage ran in reverse, and it's exactly the kind of quarter that gets punished when a stock has been priced for a margin-expansion story.

The One Big Question: Can Prediction Markets Actually Replace Crypto?​

Robinhood now has two revenue lines pulling in opposite directions at similar magnitude — crypto down $118 million year-over-year, event contracts up $112 million — and the market's verdict on whether that's a fair trade will define the stock for the next several quarters.

The bull case for event contracts is structural, not seasonal. Prediction markets are a regulated, exchange-traded product (via Robinhood's CFTC-registered designated contract market), meaning the revenue doesn't carry the same regulatory overhang as crypto, and the total addressable market — anything with a binary or range-bound outcome, from Fed rate decisions to sports championships — is arguably larger than crypto trading itself. Robinhood has iterated quickly here, expanding contract types every quarter since launch. If the 320% growth rate decelerates to even a fraction of its current pace, event contracts alone could be a $500M+ annualized revenue line within a year.

The bear case is that event contracts are new enough that nobody has seen them through a full cycle. Crypto revenue also grew explosively for several quarters before collapsing 47% in a single year — there's no evidence yet that prediction-markets revenue is less cyclical than crypto revenue, just that it's earlier in its adoption curve. Regulatory risk hasn't disappeared either; it has simply moved from the SEC/CFTC crypto debate to state-level gambling regulators, several of whom have already challenged the legality of sports-outcome contracts in their jurisdictions.

What's not in question: Robinhood's transaction revenue is no longer a crypto bet with an options side business attached. It's now four roughly-comparable-sized engines (options, event contracts, crypto, equities) plus a fast-growing net interest business, which is a fundamentally more diversified — and more analyzable — company than the one that went public in 2021.

What Wall Street Thinks​

The Q1 2026 report split analysts roughly along the same line as the results themselves — those focused on the revenue miss cut targets, those focused on the event-contracts crossover raised them:

• Barclays (Benjamin Budish) cut its price target to $82 from $89, citing the crypto revenue shortfall against consensus.
• JPMorgan cut its target to $92 and Needham cut to $90, both flagging the broader fintech-sector reassessment following the miss.
• Mizuho (Dan Dolev) raised its target to $115 from $105 while maintaining Outperform, pointing to event contracts and Gold subscriber growth as the more durable drivers.
• Cantor Fitzgerald (Ramsey El-Assal) raised its target to $110 from $95, maintaining Overweight on the same thesis.

The net result: sell-side sentiment remains constructive on balance — 18 of 25 covering analysts rate the stock Buy, with an average 12-month price target near $111 — but the spread between the most bearish and most bullish targets ($82 to $115+) is unusually wide for a company this size, a sign that Q1 2026 genuinely divided opinion on which trend (crypto normalization or event-contracts growth) will dominate the next four quarters.

Tracking a Broker-Dealer in Plain Text​

Modeling a brokerage in Beancount, the open-source double-entry accounting system, looks different from modeling a product company — there's no inventory or cost of goods sold, but there is a balance sheet dominated by customer money: receivables from users (the margin book), payables to users (customer cash), and securities borrowed and loaned. Double-entry discipline still applies with full force: every dollar of margin lending has to reconcile against the deposits and borrowings that fund it.

Here is Q1 2026's income statement as a single zero-sum Beancount transaction — note the convention: Income accounts carry negative (credit) balances, Expenses carry positive (debit) balances:

; Q1 2026 Income Statement — three months ended March 31, 2026
; 1 MUSD = USD 1,000,000 | All figures in millions USD
; Check: −1,067 + 60 + 241 + 38 + 36 + 107 + 174 + 65 + 346 = 0 ✓
 
2026-03-31 * "Robinhood Markets Inc" "Q1 2026 Income Statement"
  Income:TransactionBasedRevenue          -623 MUSD
  Income:NetInterestRevenue               -359 MUSD
  Income:OtherRevenue                      -85 MUSD
  Expenses:BrokerageAndTransaction          60 MUSD
  Expenses:TechnologyAndDevelopment        241 MUSD
  Expenses:Operations                       38 MUSD
  Expenses:ProvisionForCreditLosses         36 MUSD
  Expenses:Marketing                       107 MUSD
  Expenses:GeneralAndAdministrative        174 MUSD
  Expenses:IncomeTax                        65 MUSD
  Equity:Adjustments                       346 MUSD  ; net income offset (RE set by balance assertion)

The balance sheet line that tells this quarter's real story isn't revenue at all — it's Assets:Current:ReceivablesFromUsers, Robinhood's margin-lending book: $3,495M at the end of FY2023, $8,239M at the end of FY2024, $17,994M at the end of FY2025, and $18,115M as of March 31, 2026. That's a 5.2x increase in a little over two years, funded on the other side of the balance sheet by Liabilities:Current:PayablesToUsers (customer cash, now $16,780M) and Liabilities:Current:SecuritiesLoaned (now $13,387M). Robinhood's balance sheet has grown up: it now looks like a real broker-dealer's, not a trading app's.

The complete FY2023–Q1 2026 ledger — every balance sheet and income statement, sourced line-by-line from SEC filings — is open and auditable:

The Multi-Year Arc: From Meme-Stock Punchline to Diversified Broker​

The four-year arc is one of the sharpest turnarounds in fintech: a $1.03 billion loss in FY2022 (a 76-cent loss for every revenue dollar) to $1.88 billion in profit in FY2025 — a swing of nearly $3 billion in three years, without a change of business model, just a change in execution and a market that eventually cooperated. Revenue has more than tripled over the same span. The margin-lending book has grown more than 5x since FY2023 alone, evidence that Robinhood's customers are using the platform for more than occasional trades — they're borrowing against their portfolios at meaningfully larger scale every year. Q1 2026's margin compression doesn't undo that trajectory; it's the first data point suggesting the easiest gains in operating leverage may already be behind the company.

The Verdict: Bull vs. Bear​

The Bull Case:

• Event contracts revenue crossed crypto revenue for the first time ($147M vs. $134M), and if the growth rate holds even partially, prediction markets could become Robinhood's largest transaction-revenue line within a year
• Net interest revenue (+24% YoY) and the margin-lending book (5.2x since FY2023) show the "boring" annuity businesses are compounding regardless of what crypto or equities markets do
• Robinhood Gold hit 4.3 million subscribers (+36% YoY), a high-margin recurring base that funds customer acquisition without relying on trading volume
• The four-year turnaround from a $1.03B loss to $1.88B in annual profit is a proven execution track record, not a one-time event
• Mizuho and Cantor Fitzgerald both raised targets post-earnings (to $115 and $110) on the diversification thesis, arguing the market overreacted to the crypto miss

The Bear Case:

• Q1 2026 missed consensus on both revenue ($1.07B vs. $1.14B) and EPS ($0.38 vs. $0.39), snapping a four-quarter beat streak
• Crypto revenue fell 47% YoY — the second time in three years crypto has swung more than 40%, underscoring how volatile a large piece of the transaction-revenue base still is
• Operating margin fell from 50.7% in Q4 2025 to 38.5% in Q1 2026 as G&A (+31%) and credit-loss provisions (+50%) outgrew revenue
• Event contracts are unproven through a full cycle and face an emerging patchwork of state-level gambling-regulator challenges that crypto never had to contend with
• Analyst targets range from $82 to $115+ post-earnings — an unusually wide spread that signals genuine disagreement, not just noise, about which trend wins

Our Take: The stock's post-earnings drop reflects a market that had priced in another beat-and-raise quarter and got a normal one instead — crypto reverting from an unsustainable 2025 pace was always the likeliest single-quarter risk to the diversification story, and it arrived on schedule. The more important fact buried under the miss is that event contracts, a two-year-old product, now generate more quarterly revenue than crypto, a business Robinhood has run since 2018 — that crossover is the leading indicator that determines whether the next four quarters look like FY2025's margin expansion resuming or Q1 2026's margin compression continuing. Robinhood's own numbers, not sentiment, will settle the debate one 10-Q at a time — which is exactly why the ledger, not the stock chart, is the right place to keep watching.