Robinhood reported a first-quarter earnings miss, with adjusted earnings per share of $0.38 falling short of Wall Street's estimate of $0.39. Total revenue rose 15% year-over-year to $1.07 billion but was below analysts' expectations of $1.14 billion, leading to an 8% decline in shares during post-market trading. The company experienced a sharp 47% drop in crypto-related revenue to $134 million from $252 million in the previous year. However, CEO Vlad Tenev emphasized the company's focus on utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
Transaction-based revenue increased to $623 million, driven by growth in newer products, including a 320% year-over-year rise in 'other transaction revenue' to $147 million, primarily due to event contracts and prediction markets. The platform saw a record 8.8 billion contracts traded during the quarter, highlighting a shift in customer usage. Tenev noted that building great products leads to consistent engagement across asset classes. As Robinhood expands into areas like prediction markets, derivatives, and advisory tools, it aims to reduce its dependence on crypto trading, similar to Coinbase.
The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it develops a broader financial services platform. Furthermore, Tenev expressed his optimism about the potential for a 'tokenization super cycle,' where assets like stocks are brought onto blockchain rails, positioning crypto as a long-term investment beyond trading.