Robinhood (HOOD) shares fell about 8% in post-market trading after the company reported first-quarter earnings that missed both profit and revenue estimates. Adjusted EPS came in at $0.38 versus the $0.39 consensus, and total revenue of $1.07 billion fell short of the $1.14 billion analysts had expected, according to FactSet.
Crypto Revenue Halves, CEO Shifts Narrative
The biggest drag: crypto-related transaction revenue dropped 47% year-over-year to $134 million, down from $252 million a year ago. Robinhood has long relied on retail crypto trading, but CEO Vlad Tenev made clear on the earnings call that he wants to move away from that dependency. “I want to get away from talking about the price of bitcoin,” he said, describing crypto technology as “infrastructure” for financial services rather than a trading asset. The weakness was echoed at Coinbase (COIN), whose stock also slipped about 1% on Tuesday.
Event Contracts Explode: 8.8 Billion Trades
Other parts of Robinhood’s business filled the gap. Transaction-based revenue rose to $623 million from $583 million a year earlier, driven largely by event contracts. “Other transaction revenue” surged 320% to $147 million, as users placed a record 8.8 billion contracts on prediction markets during the quarter. Tenev pointed to product breadth as the key: “If you build great products… they’ll be there throughout the cycle.” The company is expanding into derivatives, advisory tools, and prediction markets to smooth out revenue swings tied to crypto cycles.
Tokenization Super Cycle and the Long View
Beyond quarterly numbers, Tenev pitched a longer-term thesis: “We’re at the very beginning of what’s going to be a tokenization super cycle,” referring to bringing traditional assets like stocks onto blockchain rails. Meanwhile, net interest income and subscription revenue (including Gold tier) also grew, signaling Robinhood’s evolution into a broader financial services platform. But with crypto revenue still in freefall, the market is waiting to see whether the new bets can offset the old reliance.