Robinhood's first-quarter earnings report fell short of expectations, with a notable decline in crypto trading revenue, although growth in other areas boosted overall 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 significant decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by a 15% year-over-year increase in total revenue.
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 drop in crypto trading revenue was accompanied by increased activity in other areas, including a 320% year-over-year surge in 'other transaction revenue' to $147 million, driven by growth in event contracts and a record 8.8 billion contracts traded in prediction markets. The results highlight a shift in customer usage, with Tenev noting that 'if you build great products... they'll be there throughout the cycle.' Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading.
The company is also exploring the potential of tokenization, with Tenev stating that 'we're at the very beginning of what's going to be a tokenization super cycle.' Additionally, Robinhood saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a broader financial services platform.