Robinhood fell short of its first-quarter earnings and revenue expectations due to a significant decline in cryptocurrency 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 decline in crypto-related revenue, a major driver of the company's transactions, was 47% to $134 million from $252 million in the previous year. However, the company saw growth in other areas, including a 15% year-over-year increase in total revenue and a 320% rise 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 results highlight a shift in customer usage, with more consistent engagement across asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.