Robinhood's first-quarter earnings report fell short of expectations, with the company missing its estimated earnings and revenue targets due to a sharp decline in cryptocurrency trading revenue. The trading platform reported adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue of $1.07 billion, which was 15% higher than the previous year but short of the expected $1.14 billion.
As a result, shares dropped by 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 crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
The results highlight a shift in customer usage, with more consistent engagement across various asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading and create a more diversified financial services platform.