Robinhood's first-quarter earnings report fell short of expectations, with the company missing its revenue and earnings estimates due to a significant decline in crypto trading revenue. The trading platform reported adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue of $1.07 billion, which was lower than the anticipated $1.14 billion. As a result, shares dropped approximately 8% in post-market trading. The company's crypto-related revenue, a major driver of transactions, decreased by 47% to $134 million from $252 million in the previous year.
This decline occurred as Robinhood attempts to shift its focus away from crypto price fluctuations. Instead, the company is emphasizing the use of crypto technology as the foundation for its financial services. CEO Vlad Tenev stated that the company is moving away from discussing bitcoin prices and is concentrating on utilizing crypto technology as infrastructure. The decrease in crypto trading revenue was offset by stronger activity in other areas, with transaction-based revenue increasing to $623 million from $583 million in the previous year.
This growth was driven by the expansion of newer products, including event contracts, which led to a 320% year-over-year increase in other transaction revenue to $147 million. During the quarter, users traded a record 8.8 billion contracts tied to prediction markets. The results indicate a change in how customers are using the platform, with Tenev noting that if great products are built, they will be used throughout the cycle.
Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading and smooth out revenue fluctuations. The company is also working to bring assets like stocks onto blockchain rails, which Tenev referred to as the beginning of a tokenization super cycle. Additionally, Robinhood saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds out a broader financial services platform.