Robinhood's first-quarter earnings report fell short of expectations, with the company posting adjusted earnings per share of $0.38, missing the estimated $0.39, and total revenue of $1.07 billion, lower than the anticipated $1.14 billion. The company's stock price dropped approximately 8% in post-market trading following the announcement. The decline in cryptocurrency-related revenue, which decreased by 47% to $134 million from $252 million in the previous year, was a significant factor. However, the company's efforts to diversify its business led to growth in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by a record 8.8 billion contracts traded 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 usage, with more consistent engagement across asset classes.
Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on cryptocurrency trading. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.
Tenev expressed optimism about the long-term potential of cryptocurrency, citing the beginning of a 'tokenization super cycle' that will bring assets like stocks onto blockchain rails.