Robinhood reported a shortfall in its first-quarter earnings and revenue estimates, primarily due to a substantial decline in cryptocurrency trading revenue. The company's adjusted earnings per share were $0.38, falling short of the estimated $0.39, while total revenue increased by 15% year-over-year to $1.07 billion, missing the expected $1.14 billion. As a result, the company's shares dropped by approximately 8% in post-market trading.
The significant decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by growth in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by a record 8.8 billion contracts traded in prediction markets. CEO Vlad Tenev emphasized the company's focus on utilizing crypto technology as 'infrastructure' for financial services, rather than being dependent on cryptocurrency price cycles. The results highlight a shift in customer usage, with more consistent engagement across asset classes.
Robinhood is expanding its services to areas such as prediction markets, derivatives, and advisory tools to reduce its reliance on crypto trading. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds a broader financial services platform.