Robinhood's first-quarter earnings report fell short of expectations, with the company posting adjusted earnings per share of $0.38, below Wall Street's estimate of $0.39. Total revenue rose 15% year-over-year to $1.07 billion, but missed analysts' forecasts of $1.14 billion. The company's shares dropped approximately 8% in post-market trading. A significant decline in crypto-related revenue, which decreased 47% to $134 million from $252 million in the previous year, contributed to the disappointing results.
However, growth in other areas, such as transaction-based revenue and 'other transaction revenue', which soared 320% year-over-year to $147 million, helped offset the decline. The company's CEO, Vlad Tenev, emphasized the shift in focus towards utilizing crypto technology as 'infrastructure' for financial services, rather than relying on crypto price cycles. The results highlight a change in customer behavior, with users increasingly engaging with the platform's newer products, such as event contracts and prediction markets. Robinhood is working to expand its offerings, including derivatives and advisory tools, to reduce its dependence on crypto trading revenue.
The company's net interest revenue and subscriptions also saw gains, as it builds out a more comprehensive financial services platform.