Robinhood (HOOD) fell short of its first-quarter earnings and revenue projections, primarily due to a substantial decline in crypto trading revenue. However, growth in other areas of the business led to a 15% year-over-year increase in total revenue to $1.07 billion. The company reported adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue fell short of the expected $1.14 billion. As a result, shares declined by approximately 8% in post-market trading.
The significant drop in crypto-related revenue, which decreased by 47% to $134 million, was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by record-breaking prediction market bets. 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 shift in customer engagement and the company's expansion into areas like prediction markets, derivatives, and advisory tools aim to reduce its dependence on crypto trading.
Robinhood also saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a more comprehensive financial services platform. Tenev expressed his optimism about the potential of tokenization, stating that the company is at the beginning of a 'tokenization super cycle,' which involves bringing assets like stocks onto blockchain rails.