Robinhood reported a disappointing first-quarter earnings result, missing Wall Street's estimates due to a sharp decline in cryptocurrency trading revenue. The company's adjusted earnings per share stood at $0.38, falling short of the expected $0.39.
Total revenue increased by 15% year-over-year to $1.07 billion but failed to meet analysts' expectations of $1.14 billion, leading to an 8% decline in the company's shares in post-market trading. The significant drop in crypto-related revenue, which decreased by 47% to $134 million from $252 million in the previous year, was offset by growth in other areas, including a 320% year-over-year rise 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 stronger engagement across various asset classes. Robinhood is expanding its services to include areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading. The company also witnessed gains in net interest revenue and subscriptions, as it builds a more comprehensive financial services platform.
Tenev expressed his optimism about the potential of tokenization, stating that the company is at the beginning of a 'tokenization super cycle' that will bring assets like stocks onto blockchain rails.