Robinhood (HOOD) fell short of its first-quarter earnings and revenue projections, primarily due to a significant decline in crypto trading revenue. However, growth in other areas of the business led to a 15% year-over-year increase in total revenue to $1.07 billion.
The company's adjusted earnings per share were $0.38, missing the Wall Street estimate of $0.39. As a result, shares dropped approximately 8% in post-market trading. The decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by record-breaking prediction market bets. CEO Vlad Tenev emphasized the company's focus on utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
The results indicate a shift in customer usage, with more consistent engagement across asset classes. Robinhood is expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds out a broader financial services platform.