Robinhood's first-quarter earnings and revenue fell short of expectations, primarily due to a significant decline in cryptocurrency trading revenue, despite growth in other areas of its business driving overall revenue higher. The company 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 $1.14 billion forecast.
As a result, shares declined by approximately 8% in post-market trading. The 47% drop in crypto-related revenue to $134 million was offset by a 320% increase in 'other transaction revenue' to $147 million, driven by a record 8.8 billion contracts traded in prediction markets. The company's CEO, Vlad Tenev, emphasized the focus on utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
The shift in customer engagement and the expansion into areas like prediction markets, derivatives, and advisory tools aim to reduce the company's dependence on crypto trading revenue.