Robinhood's first-quarter earnings report fell short of expectations, with the company missing its estimated earnings and revenue targets due to a significant 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 lower than the anticipated $1.14 billion. As a result, the company's shares dropped 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 a record 8.8 billion contracts traded 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 engagement, with users increasingly utilizing the platform for various financial services, including prediction markets, derivatives, and advisory tools.
The company is working to reduce its dependence on crypto trading revenue, with Tenev noting that 'if you build great products, they'll be there throughout the cycle.'