Robinhood's first-quarter earnings and revenue fell short of expectations due to a significant decline in crypto trading revenue, even as growth in other areas of the business pushed overall revenue higher. The company reported adjusted earnings per share of $0.38, missing Wall Street's estimate of $0.39.
Total revenue increased 15% year-over-year to $1.07 billion, but fell short of analysts' expectations of $1.14 billion, resulting in an 8% decline in shares during post-market trading. The 47% drop in crypto-related revenue to $134 million was offset by stronger activity in other areas, including a 320% increase in 'other transaction revenue' to $147 million, driven by record-breaking growth in event contracts and prediction market bets. CEO Vlad Tenev emphasized the company's focus on using crypto technology as 'infrastructure' for financial services, highlighting a shift in customer engagement across asset classes. As Robinhood expands into areas like prediction markets, derivatives, and advisory tools, it aims to reduce its dependence on crypto trading and smooth out revenue fluctuations.