Robinhood (HOOD) fell short of its first-quarter earnings and revenue projections, primarily due to a substantial decline in cryptocurrency trading revenue. However, growth in other areas of the business contributed to a 15% year-over-year increase in total revenue, reaching $1.07 billion. The company's adjusted earnings per share were $0.38, below the expected $0.39.
As a result, shares declined by approximately 8% in post-market trading. Cryptocurrency-related revenue, a significant driver of transactions for Robinhood, decreased by 47% to $134 million from $252 million in the previous year.
This decline occurred as the company attempts to shift its focus away from cryptocurrency price fluctuations. CEO Vlad Tenev expressed his desire to move beyond discussing bitcoin prices, emphasizing the company's focus on utilizing cryptocurrency technology as 'infrastructure' for financial services. The decrease in cryptocurrency trading revenue was offset by increased activity in other areas, with transaction-based revenue rising to $623 million from $583 million in the previous year.
A key contributor to this growth was the rise of event contracts, which led to a 320% year-over-year increase in 'other transaction revenue' to $147 million. Robinhood reported that users traded a record 8.8 billion contracts tied to prediction markets during the quarter.
These results highlight a shift in how customers are utilizing the platform, with Tenev noting that 'if you build great products... they'll be there throughout the cycle.' The company is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on cryptocurrency trading. Similar to Coinbase, which will report earnings on May 7, Robinhood is working to smooth out revenue fluctuations.
Tenev also views cryptocurrency as a long-term investment opportunity beyond trading, stating that 'we're at the very beginning of what's going to be a tokenization super cycle.' The company saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a more comprehensive financial services platform.