Robinhood's first-quarter earnings report fell short of expectations, with the company posting adjusted earnings per share of $0.38, below the estimated $0.39. While total revenue increased by 15% to $1.07 billion, it was lower than the anticipated $1.14 billion.
As a result, shares dropped approximately 8% in post-market trading. The significant decline in crypto-related revenue, which decreased by 47% to $134 million from $252 million in the previous year, was a major contributor to the disappointing earnings. However, the company saw growth in other areas, including a 320% year-over-year 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 Tenev stating that 'if you build great products... they'll be there throughout the cycle.' Robinhood is expanding into areas such as 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 out a broader financial services platform.
Tenev expressed his optimism about the potential for a 'tokenization super cycle,' where assets like stocks are brought onto blockchain rails.