Robinhood's first-quarter earnings report fell short of expectations, with the company missing its earnings and revenue estimates due to a significant decline in crypto trading revenue. However, growth in other areas of the business helped drive overall revenue up 15% to $1.07 billion. The trading platform reported adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue that fell short of the expected $1.14 billion. As a result, shares dropped approximately 8% in post-market trading.
Crypto-related revenue, a key driver of transactions for Robinhood, plummeted 47% to $134 million from $252 million in the previous year. In contrast, transaction-based revenue increased to $623 million from $583 million, driven by growth in newer products.
A notable contributor was event contracts, which led to a 320% year-over-year increase in 'other transaction revenue' to $147 million, with users trading a record 8.8 billion contracts tied to prediction markets during the quarter. The company's CEO, Vlad Tenev, emphasized the focus on utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles.
The results underscore a shift in customer usage of the platform, with more consistent engagement across asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading.
The company is also exploring tokenization and building a broader financial services platform, with gains in net interest revenue and subscriptions, including its Gold tier.