Robinhood reported a disappointing first-quarter earnings result, missing estimates due to a sharp decline in cryptocurrency trading revenue. However, growth in other areas of the business helped drive overall revenue up by 15% to $1.07 billion. The company's adjusted earnings per share of $0.38 fell short of Wall Street's estimate of $0.39.
As a result, shares dropped approximately 8% in post-market trading. The significant decline in crypto-related revenue, a major driver of transactions for Robinhood, was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by record-breaking prediction market bets. The company's CEO, Vlad Tenev, emphasized the focus on utilizing crypto technology as infrastructure for financial services, rather than relying on crypto price cycles. The results underscore a shift in customer usage of the platform, with more consistent engagement 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 saw gains in net interest revenue and subscription services, including its Gold tier, as it builds a more comprehensive financial services platform.