Robinhood's first-quarter earnings report fell short of expectations, with the company reporting adjusted earnings per share of $0.38, below the estimated $0.39, and total revenue of $1.07 billion, missing the predicted $1.14 billion. The stock price subsequently dropped 8% in post-market trading. A significant decline in crypto-related revenue, which decreased by 47% to $134 million, was a major contributor to the disappointing results.
However, the company saw 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 relying on crypto price cycles. The results reflect a shift in customer usage, with more consistent engagement across asset classes.
Robinhood is expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading and create a more stable revenue stream. 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 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.