Robinhood's first-quarter earnings report revealed a significant miss in both earnings and revenue estimates, largely attributed to a sharp decline in crypto trading revenue. However, the company's overall revenue saw a 15% year-over-year increase to $1.07 billion, driven by growth in other business areas. The trading platform reported adjusted earnings per share of $0.38, falling short of Wall Street's estimate of $0.39. 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 stronger activity in other areas, including a 320% year-over-year increase in 'other transaction revenue' to $147 million, driven by record-breaking prediction market bets. 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 engagement, with users trading a record 8.8 billion contracts tied to prediction markets during the quarter. As Robinhood expands into areas like derivatives and advisory tools, it aims to reduce its dependence on crypto trading and create a more stable revenue stream.