Robinhood's first-quarter earnings report revealed a significant shortfall in expected earnings and revenue, primarily due to a sharp decline in cryptocurrency trading revenue. The company reported adjusted earnings per share of $0.38, falling short of Wall Street's estimate of $0.39.
Total revenue increased by 15% year-over-year to $1.07 billion, but missed analysts' expectations of $1.14 billion. As a result, shares dropped approximately 8% in post-market trading. The decline in crypto-related revenue, which decreased by 47% to $134 million, 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 cryptocurrency technology as infrastructure for financial services, rather than relying on crypto price cycles. The results highlight a shift in customer engagement, with users trading a record 8.8 billion contracts tied to prediction markets during the quarter. Robinhood is expanding its offerings to include areas such as prediction markets, derivatives, and advisory tools, aiming to reduce its dependence on cryptocurrency trading and create a more stable revenue stream. The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it continues to build a comprehensive financial services platform.