Robinhood shares tumbled 5.11% in after-hours trading, erasing initial gains that followed the release of its second-quarter earnings report. The decline came despite results that handily beat Wall Street expectations, with the company reporting earnings of $0.62 per share on revenue of $1.31 billion, compared to consensus estimates of $0.42 and $1.28 billion.

The post-market reversal appears linked to a combination of factors. Although the broader earnings beat was driven by a 44% surge in transaction-based revenue to $776 million, fueled by a more-than-tenfold increase in event contracts revenue to $156 million, the crypto segment continued to weigh on sentiment. Cryptocurrency revenue fell 38% year-over-year to $100 million, reflecting a sustained downturn in digital asset trading activity. Additionally, the stock had already declined 3.15% during the regular session, pressured by Ark Invest’s continued selling and lingering security concerns after CEO Vlad Tenev’s X account was compromised.

The initial after-hours pop of over 1% quickly faded into a sharp 5.11% drop, indicating that the market had largely priced in the top-line beat and was instead focusing on the structural headwinds. The crypto revenue slump, combined with a lowered and tightened outlook for adjusted operating expenses and SBC to a range of $2.675 to $2.775 billion, may have raised concerns about the sustainability of growth outside of the volatile prediction markets business.