Robinhood's first-quarter earnings report fell short of expectations, with the company posting adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue of $1.07 billion, missing the projected $1.14 billion. The company's stock price subsequently dropped around 8% in post-market trading.
A significant decline in crypto-related revenue, which decreased by 47% to $134 million, was a major contributor to the disappointing earnings report. However, the company saw notable growth in other areas, including transaction-based revenue, which rose to $623 million, and 'other transaction revenue', which increased by 320% year-over-year to $147 million, driven by a record 8.8 billion contracts traded in prediction markets. CEO Vlad Tenev emphasized the company's shift in focus towards utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
The results underscore Robinhood's efforts to diversify its revenue streams, including expanding into prediction markets, derivatives, and advisory tools, in an attempt to reduce its dependence on crypto trading revenue.