Robinhood’s revenue of $618 million exceeded Q1 forecasts

Robinhood Markets Inc. posted a strong performance in the first quarter of 2024. It has moved from last year's record losses to posting a second straight quarterly profit.

The company announced Wednesday that its net income reached $157 million. This achievement represents a significant turnaround from a net loss of $511 million in the same quarter last year.

Robinhood's performance in Q1 exceeded expectations

In its latest quarterly report, Robinhood reported a 40 percent increase in net income, to $618 million. Transaction-based revenues increased by 59%, driven by crypto transactions. In particular, revenue from crypto transactions rose by 232 percent, reaching $126 million.

Robinhood also reported a significant increase in crypto assets in custody, reaching $26 billion at the end of March. This represents a growth of 78% by the end of 2023.

Read more: How to Buy and Sell Crypto at Robinhood: A Step-by-Step Guide

Robinhood achieved all-time highs in both net deposits and gold subscribers. Additionally, the quarter saw Robinhood make significant strides in user engagement and product offerings. Robinhood's Chief Financial Officer (CFO) Jason Warnick said they were pleased with the results.

“We delivered strong revenue growth and margin expansion in Q1, focusing on another year of profitable growth in 2024,” Warnick said.

The results far exceeded Wall Street's expectations. Earnings per share were 18 cents, beating expectations by 6 cents. Meanwhile, net income beat forecasts of $549 million.

Following the company's growth and strong financial performance, Robinhood ( HOOD ) shares have seen a significant increase. In after-hours trading, the shares rose 6.3 percent to $19.01.

Read more: Coinbase vs. Robinhood: Which is the Best Crypto Platform?

However, Robinhood now faces intense scrutiny from the US Securities and Exchange Commission (SEC). The SEC recently issued a notice of possible violations regarding Robinhood's crypto practices.

The concerns include the platform's crypto specifications, security, and operating procedures. This can lead to various enforcement actions.

Robinhood CEO Vlad Tenev expressed his dismay at the SEC's action on his X (Twitter) account. Tenev has criticized the regulatory body for what it considers an excessive and harmful focus on crypto. He said he has a strong commitment to protecting Robinhood's business.

While we strive to maintain positive and productive relationships with our regulators, if necessary we will use our resources to contest this matter in court, both with the goal of protecting our crypto businesses and regulatory transparency in the US for the benefit of our clients,” said Tenev.

This tension between Robinhood and the SEC is part of a broader regulatory tightening in the crypto sector. SEC Chairman – Gary Gensler has made clear his intention to enforce stricter regulations to protect investors and ensure comprehensive disclosures by crypto platforms.

As the industry faces potential regulatory adjustments, the results could have a significant impact on both Robinhood's operations and the broader market.