Robinhood's first-quarter earnings report fell short of expectations, with a significant decline in crypto trading revenue, although growth in other areas pushed overall revenue higher. The company reported adjusted earnings per share of $0.38, missing the estimated $0.39, and total revenue of $1.07 billion, which was below the anticipated $1.14 billion. As a result, shares dropped approximately 8% in post-market trading.
The decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by a record 8.8 billion contracts tied to prediction markets. The company's CEO, Vlad Tenev, emphasized the focus on using crypto technology as infrastructure for financial services, rather than relying on crypto price cycles. The results highlight a shift in customer engagement, with more consistent activity across asset classes. Robinhood is expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading.
The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.