Robinhood's first-quarter earnings report revealed a significant shortfall in crypto trading revenue, which plummeted 47% to $134 million, yet the company's overall revenue rose 15% year-over-year to $1.07 billion, driven by growth in other areas of its business. The trading platform reported adjusted earnings per share of $0.38, falling short of Wall Street's estimate of $0.39.
The company's shares dropped approximately 8% in post-market trading following the report. Crypto-related revenue, a major driver of transactions for Robinhood, declined sharply from $252 million in the previous year.
CEO Vlad Tenev emphasized the company's focus on utilizing crypto technology as 'infrastructure' for financial services, rather than being reliant on crypto price cycles. In contrast, transaction-based revenue increased to $623 million, supported by growth in newer products, including a 320% year-over-year surge in 'other transaction revenue' to $147 million, driven by record-breaking activity in prediction markets.
The results underscore a shift in how customers are using the platform, with Tenev highlighting the importance of building great products that can weather market fluctuations. As Robinhood expands into areas such as prediction markets, derivatives, and advisory tools, it aims to reduce its dependence on crypto trading, a strategy also being pursued by Coinbase.
The company is positioning itself for a 'tokenization super cycle,' where assets like stocks are brought onto blockchain rails, and is seeing gains in net interest revenue and subscriptions as it builds out a broader financial services platform.