Robinhood's first-quarter earnings and revenue fell short of expectations due to a significant decline in crypto trading revenue. The company reported adjusted earnings per share of $0.38, missing the estimated $0.39, and total revenue of $1.07 billion, which was below the anticipated $1.14 billion.
As a result, shares dropped approximately 8% in post-market trading. The 47% decline in crypto-related revenue to $134 million was offset by growth in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by a record 8.8 billion contracts traded in prediction markets. 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 shift in customer engagement and the company's expansion into areas like prediction markets, derivatives, and advisory tools aim to reduce its dependence on crypto trading and provide a more stable revenue stream.