Robinhood (HOOD) missed its first-quarter earnings and income estimates after reporting a pointy decline in crypto buying and selling income, whilst progress in different elements of its enterprise pushed total income larger.
The favored buying and selling platform reported first-quarter adjusted earnings per share of $0.38, lacking Wall Avenue’s $0.39 estimate, in response to FactSet information. Whereas the corporate posted a 15% year-over-year enhance in complete income to $1.07 billion, it fell wanting analysts’ expectations of $1.14 billion.
Shares fell about 8% in post-market buying and selling following the report.
Crypto-related income, one in all Robinhood’s largest transaction drivers, dropped 47% to $134 million from $252 million a yr earlier. The decline comes as the corporate tries to shift the narrative away from crypto worth cycles.
“I want to get away from talking about the price of bitcoin,” CEO Vlad Tenev stated on the earnings name, including that Robinhood is targeted on utilizing crypto expertise as “infrastructure” for monetary providers.
The drop in crypto buying and selling income coincided with stronger exercise in different areas. Transaction-based income rose to $623 million from $583 million a yr earlier, helped by progress in newer merchandise.
A key driver was occasion contracts, which pushed “other transaction revenue” up 320% yr over yr to $147 million. Robinhood stated customers traded a file 8.8 billion contracts tied to prediction markets throughout the quarter.
The outcomes spotlight a shift in how prospects are utilizing the platform. “If you build great products… they’ll be there throughout the cycle,” Tenev stated, pointing to extra constant engagement throughout asset courses.
Robinhood has been increasing into areas like prediction markets, derivatives and advisory instruments as it really works to clean out income swings. Like Coinbase, which stories earnings Might 7, the corporate is making an attempt to scale back its dependence on crypto buying and selling. Coinbase (COIN) inventory additionally fell about 1% on Tuesday, reflecting how the 2 corporations usually commerce in tandem given their shared reliance on retail buying and selling exercise, particularly in crypto.
Tenev additionally framed crypto as a longer-term guess past buying and selling. “We’re at the very beginning of what’s going to be a tokenization super cycle,” he stated, referring to efforts to deliver belongings like shares onto blockchain rails.
The corporate additionally noticed beneficial properties in web curiosity income and subscriptions, together with its Gold tier, because it builds out a broader monetary providers platform.
UPDATE (April 28, 22:10 UTC): Provides extra context all through the story on the miss, updates share worth drop.
UPDATE (April 28, 22:43 UTC): Provides quotes from earnings name.
