Robinhood's first-quarter earnings report fell short of expectations, with the company missing its earnings and revenue targets due to a sharp decline in crypto 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, short of the projected $1.14 billion. As a result, 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% year-over-year increase in 'other transaction revenue' to $147 million, driven by a record-breaking 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 highlight 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 diversified revenue stream.