Robinhood (HOOD) failed to meet 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 led to a 15% year-over-year increase in total revenue, reaching $1.07 billion.
The company reported adjusted earnings per share of $0.38, falling short of the expected $0.39. As a result, shares declined by approximately 8% in post-market trading.
The significant drop 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 growth in event contracts and prediction markets. 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 behavior, with users engaging more consistently across various asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading. The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it develops a broader financial services platform.
Tenev expressed his optimism about the long-term potential of crypto, citing the beginning of a 'tokenization super cycle' that will bring assets like stocks onto blockchain rails.