Robinhood reported a significant decline in cryptocurrency trading revenue, resulting in a missed earnings estimate, although growth in other business areas led to a 15% increase in overall revenue. The company posted adjusted earnings per share of $0.38, falling short of the estimated $0.39. Total revenue reached $1.07 billion, a 15% year-over-year increase, but below the expected $1.14 billion.
Shares declined by approximately 8% in post-market trading. Cryptocurrency-related revenue dropped 47% to $134 million, down from $252 million in the previous year. In an effort to shift focus away from cryptocurrency price fluctuations, CEO Vlad Tenev emphasized the company's focus on utilizing cryptocurrency technology as infrastructure for financial services.
The decline in cryptocurrency trading revenue was offset by stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by growth in event contracts and a record 8.8 billion contracts traded in prediction markets. The company is expanding into areas such as prediction markets, derivatives, and advisory tools to reduce its dependence on cryptocurrency trading.
Tenev views cryptocurrency as a long-term investment opportunity beyond trading, citing the potential for a 'tokenization super cycle' that could bring assets like stocks onto blockchain platforms. The company also saw gains in net interest revenue and subscriptions, including its Gold tier, as it builds out a broader financial services platform.