Robinhood's first-quarter earnings report revealed a notable shortfall in both earnings and revenue, primarily due to a substantial decline in cryptocurrency trading revenue. However, growth in other areas of the business helped drive overall revenue higher.
The company reported adjusted earnings per share of $0.38, falling short of Wall Street's estimate of $0.39. Total revenue increased by 15% year-over-year to $1.07 billion, but missed analysts' expectations of $1.14 billion. As a result, shares dropped approximately 8% in post-market trading. The 47% decline in crypto-related revenue to $134 million from $252 million in the previous year reflects the company's efforts to shift its focus away from cryptocurrency price cycles.
In contrast, transaction-based revenue rose to $623 million, supported by growth in newer products, while 'other transaction revenue' increased by 320% year-over-year to $147 million, driven by a record 8.8 billion contracts traded in prediction markets. The company's expansion into areas such as prediction markets, derivatives, and advisory tools aims to reduce its dependence on cryptocurrency trading.
CEO Vlad Tenev emphasized the potential of cryptocurrency technology as 'infrastructure' for financial services, framing it as a long-term investment beyond trading. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a broader financial services platform.