Robinhood's first-quarter earnings report fell short of expectations, with the company reporting adjusted earnings per share of $0.38, below the estimated $0.39. Total revenue rose 15% year-over-year to $1.07 billion, but missed analysts' predictions of $1.14 billion.
The company's stock price subsequently dropped around 8% in post-market trading. A significant decline in cryptocurrency-related revenue, which decreased by 47% to $134 million, was a major contributor to the disappointing earnings report. However, the company saw growth in other areas, including transaction-based revenue, which increased to $623 million, and 'other transaction revenue', which jumped 320% year-over-year to $147 million.
This was largely driven by a record 8.8 billion contracts traded in prediction markets. CEO Vlad Tenev emphasized the company's focus on utilizing cryptocurrency technology as 'infrastructure' for financial services, rather than relying on cryptocurrency price cycles. The results highlight a shift in how customers are using the platform, with more consistent engagement across different asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on cryptocurrency trading.
The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it builds out a broader financial services platform.