Robinhood's first-quarter earnings report fell short of expectations, with the company reporting a decline in crypto trading revenue, although growth in other areas led to a 15% year-over-year increase in total revenue to $1.07 billion, missing analyst estimates of $1.14 billion. The company's adjusted earnings per share of $0.38 also missed Wall Street's estimate of $0.39, according to FactSet data.
Following the report, shares dropped approximately 8% in post-market trading. The decline in crypto-related revenue, a significant driver of the company's transactions, was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by growth in event contracts and a record 8.8 billion contracts traded in prediction markets.
The results reflect a shift in customer usage, with the company focusing on developing its financial services platform, including expansion into areas like prediction markets, derivatives, and advisory tools, to reduce its dependence on crypto trading. CEO Vlad Tenev emphasized the company's focus on using crypto technology as infrastructure for financial services, stating, 'We're at the very beginning of what's going to be a tokenization super cycle.' The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it builds out its financial services platform.