Robinhood experienced a disappointing first quarter, missing earnings and revenue estimates due to a substantial decline in cryptocurrency trading revenue. However, growth in other areas of the business contributed to a 15% increase in overall revenue to $1.07 billion. The company reported adjusted earnings per share of $0.38, falling short of Wall Street's estimate of $0.39. As a result, shares dropped approximately 8% in post-market trading.
The decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by record-breaking prediction market bets. 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 usage, with more consistent engagement across asset classes. Robinhood is expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading and smooth out revenue fluctuations.
The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.