Robinhood experienced a decline in its first-quarter earnings and revenue, missing estimates, largely due to a significant drop in crypto trading revenue. However, growth in other areas pushed overall revenue higher.
The company reported adjusted earnings per share of $0.38, falling short of the expected $0.39. Total revenue increased by 15% year-over-year to $1.07 billion, but was below the anticipated $1.14 billion.
As a result, shares decreased by approximately 8% in post-market trading. Crypto-related revenue plummeted 47% to $134 million from $252 million in the previous year.
In an effort to shift focus away from crypto price fluctuations, CEO Vlad Tenev emphasized the use of crypto technology as infrastructure for financial services. Meanwhile, transaction-based revenue rose to $623 million, driven by growth in newer products, and 'other transaction revenue' increased by 320% year-over-year to $147 million, largely due to a record 8.8 billion contracts traded in prediction markets.
The results indicate a change in how customers utilize the platform, with more consistent engagement across various asset classes. As Robinhood expands into areas like prediction markets, derivatives, and advisory tools, it aims to reduce its dependence on crypto trading.
The company is also exploring the tokenization of assets, with Tenev stating that it is at the beginning of a 'tokenization super cycle.' Additionally, Robinhood saw gains in net interest revenue and subscriptions, including its Gold tier, as it develops a more comprehensive financial services platform.