Robinhood's first-quarter earnings report fell short of expectations, with the company missing its revenue and earnings estimates due to a significant decline in cryptocurrency trading revenue. The trading platform reported adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue of $1.07 billion, which was lower than the expected $1.14 billion.
As a result, the company's shares dropped approximately 8% in post-market trading. The decline in crypto-related revenue, which decreased by 47% to $134 million, was offset by growth in other areas, including a 320% increase in 'other transaction revenue' to $147 million, driven by record-breaking activity in prediction markets.
According to CEO Vlad Tenev, the company is shifting its focus towards using cryptocurrency technology as infrastructure for financial services, rather than relying on crypto price cycles. The results highlight a change in how customers are using the platform, with more consistent engagement across asset classes. Robinhood is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on cryptocurrency trading.
The company also reported gains in net interest revenue and subscriptions, including its Gold tier, as it builds out a broader financial services platform.