Robinhood reported a disappointing first-quarter earnings result, missing Wall Street estimates due to a substantial decline in cryptocurrency trading revenue. However, growth in other areas of the business helped drive overall revenue up by 15% to $1.07 billion.
The company's adjusted earnings per share stood at $0.38, falling short of the expected $0.39. Following the report, shares dropped approximately 8% in post-market trading. The significant decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by stronger activity in other sectors. Transaction-based revenue increased to $623 million, driven by growth in newer products.
A notable contributor was the event contracts sector, which experienced a 320% year-over-year surge to $147 million, with users trading a record 8.8 billion contracts tied to prediction markets during the quarter. The results underscore a shift in how customers are utilizing the platform, with CEO Vlad Tenev emphasizing the focus on using crypto technology as infrastructure for financial services.
The company is working to reduce its dependence on crypto trading by expanding into areas such as prediction markets, derivatives, and advisory tools. This strategic move is also being undertaken by Coinbase, which is set to report its earnings on May 7. Tenev views crypto as a long-term investment opportunity beyond trading, referencing the tokenization super cycle and efforts to bring assets like stocks onto blockchain rails. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.