Robinhood Markets (NASDAQ: HOOD) tumbled more than 10% in premarket trading on Wednesday after the fintech platform missed Wall Street’s first-quarter expectations due to a sharp drop in cryptocurrency trading revenue.
Total net revenue came in at $1.07 billion, up 15% year-on-year but well below the $1.14 billion analysts had expected.
Crypto transaction-based revenue fell 47% to $134 million as Bitcoin and Ethereum prices retreated sharply during the quarter, reducing retail trading volumes across the app.
Diluted earnings per share came in at $0.38, just one cent below the consensus estimate, while net income rose only 3% to $346 million despite the 15% revenue gain.
Offsetting the crypto decline was a surge in event contracts, where users traded a record 8.8 billion contracts tied to prediction markets during the quarter.
“Other transaction revenue,” which captures event contracts, jumped 320% year-on-year to $147 million, emerging as a meaningful new revenue stream for the Business.
Options revenue grew 8% to $260 million and equities revenue rose 46% to $82 million, with equity notional trading volumes surging 54% to $638 billion.
CEO Vlad Tenev addressed the crypto shortfall directly, signalling a deliberate pivot away from dependence on Bitcoin price movements.
Gold subscribers grew 36% to a record 4.3 million and total platform assets rose 39% year-on-year to $307 billion, providing some comfort for longer-term bulls.
Net deposits reached $17.7 billion in the quarter, representing a 22% annualised growth rate, while the company maintained 27.4 million funded accounts.