Robinhood reported a disappointing first-quarter earnings performance, missing both earnings and revenue estimates due to a sharp decline in cryptocurrency trading revenue. The company's adjusted earnings per share were $0.38, falling short of the expected $0.39. Total revenue increased by 15% year-over-year to $1.07 billion but failed to meet analysts' expectations of $1.14 billion, prompting an 8% drop in shares during post-market trading.
The significant decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by growth in other areas such as transaction-based revenue and event contracts. According to CEO Vlad Tenev, the company is focusing on utilizing cryptocurrency technology as infrastructure for financial services rather than relying on crypto price cycles. The results highlight a shift in customer usage, with a record 8.8 billion contracts tied to prediction markets traded during the quarter. Robinhood is expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading.
The company also saw gains in net interest revenue and subscriptions as it builds a broader financial services platform.