Robinhood reported a disappointing first-quarter earnings performance, missing both earnings and revenue estimates due to a substantial decline in cryptocurrency trading revenue. The company's adjusted earnings per share stood at $0.38, falling short of the expected $0.39, with total revenue increasing by 15% year-over-year to $1.07 billion, yet still below the anticipated $1.14 billion. As a result, shares declined by approximately 8% in post-market trading.
The slump in crypto-related revenue, which dropped 47% to $134 million from $252 million in the previous year, was offset by growth in other areas, including a 320% increase in 'other transaction revenue' to $147 million, driven by record-breaking activity in prediction markets. CEO Vlad Tenev emphasized the company's focus on utilizing crypto technology as infrastructure for financial services, rather than relying on cryptocurrency price fluctuations. The results underscore Robinhood's efforts to diversify its revenue streams by expanding into areas such as prediction markets, derivatives, and advisory tools, aiming to reduce its dependence on crypto trading.
The company also witnessed gains in net interest revenue and subscription services, including its Gold tier, as it continues to build a comprehensive financial services platform.