Robinhood (HOOD) fell short of its first-quarter earnings and revenue expectations, primarily due to a significant decline in crypto trading revenue, although growth in other areas propelled overall revenue higher. The company reported adjusted earnings per share of $0.38, missing the Wall Street estimate of $0.39, according to FactSet data. Total revenue increased 15% year-over-year to $1.07 billion but failed to meet analysts' expectations of $1.14 billion.

As a result, shares declined approximately 8% in post-market trading. Crypto-related revenue, a substantial driver of transactions for Robinhood, dropped 47% to $134 million from $252 million in the previous year. This decline occurs as the company attempts to shift focus away from crypto price cycles.

CEO Vlad Tenev expressed his desire to move beyond discussing bitcoin prices, emphasizing Robinhood's focus on utilizing crypto technology as 'infrastructure' for financial services. The decrease in crypto trading revenue was offset by stronger activity in other areas, with transaction-based revenue rising to $623 million from $583 million in the previous year, driven by growth in newer products. A key contributor was event contracts, which led to a 320% year-over-year increase in 'other transaction revenue' to $147 million.

Robinhood reported that users traded a record 8.8 billion contracts tied to prediction markets during the quarter. The results indicate a shift in how customers are using the platform, with Tenev stating, 'If you build great products... they'll be there throughout the cycle,' highlighting more consistent engagement across asset classes.

Robinhood has been expanding into areas like prediction markets, derivatives, and advisory tools to reduce its dependence on crypto trading. Like Coinbase, which reports earnings on May 7, the company is working to diversify its revenue streams. Tenev also views crypto as a long-term investment beyond trading, stating, 'We're at the very beginning of what's going to be a tokenization super cycle,' referring to efforts to bring assets like stocks onto blockchain platforms.

The company saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a broader financial services platform.