Robinhood Q4 Earnings Beat, Stock Slides 8.3% on Crypto Weakness

Robinhood Markets Inc.’s HOOD fourth-quarter 2025 earnings per share of 66 cents surpassed the Zacks Consensus Estimate of 63 cents. The bottom line compared favorably with adjusted earnings of 54 cents in the prior-year quarter.

HOOD stock, however, plunged 8.3% in after-hours because of subdued trading in cryptocurrencies during the quarter. A decline in Monthly Active Users (MAU) and higher expenses were the other undermining factors.
 
The results benefited primarily from solid trading activity across all asset classes except cryptocurrencies amid heightened volatility, which led to a jump in transaction-based revenues. Further, higher net interest revenues (NIR) and a surge in Gold subscribers were tailwinds.
 
After considering the one-time benefit of the prior-year period, net income was $605 million, down 34%.

For 2025, earnings were $2.05 per share, which outpaced the Zacks Consensus Estimate of $2.03. The figure represented a rise of 88.1% from the previous year’s adjusted earnings. Net income was $1.88 billion, up 33.5% year over year.

HOOD’s Revenues Rise, Expenses Up

Quarterly total net revenues rose 26.5% year over year to $1.28 billion. However, the top line missed the Zacks Consensus Estimate of $1.34 billion.

For 2025, total net revenues were $4.47 billion, up 51.6% year over year. However, the top line missed the Zacks Consensus Estimate of $4.53 billion.

During the quarter, average revenue per user (ARPU) increased 16% year over year to $191.

Transaction-based revenues of $776 million grew 15.5% from the prior-year quarter. This was primarily driven by an improvement in other transaction revenues, options revenues and equities revenues, which jumped 300%, 41% and 54% respectively.  These were partially offset by lower cryptocurrency revenues.

NIR rose 39% to $411 million. This was mainly attributable to a higher interest-earning assets balance and securities lending activity, partly offset by lower short-term interest rates.

Other revenues jumped significantly to $96 million, primarily due to a rise in Robinhood Gold subscription revenues. During the reported quarter, Robinhood Gold subscribers surged 58% year over year to 4.2 million.
 
Total operating expenses were $633 million, up 38.2%. The increase was primarily due to a rise in all the components. Adjusted operating expenses increased 20.9% to $521 million.

During the reported quarter, adjusted EBITDA was $761 million, up 24.1% on a year-over-year basis.

Robinhood’s Other Business Activities

As of Dec. 31, 2025, total platform assets increased 68% year over year to $324 billion. The rise was driven by continued net deposits, acquired assets and higher equity valuations.

During the reported quarter, Equity Notional Trading Volumes were up 68% year over year to a record $710 billion. Options Contracts Traded rose 38% to 659 million, while Crypto Notional Trading Volumes (which includes Robinhood App and Bitstamp Exchange) were $82 billion, up 16% year over year.

In this quarter, the company reported MAU of 13 million, down 12.8% year over year.

Robinhood’s Share Repurchase Update

In the reported quarter, the company repurchased nearly 0.8 million shares for $100 million.

HOOD’s Updated Outlook for 2026

Robinhood anticipates combined adjusted operating expenses and share-based compensation (SBC) for 2026 to be in the range of $2.60-$2.73 billion, including Bitstamp-related costs.

Our View on Robinhood

Robinhood’s solid transaction-based revenues, product expansion efforts and higher interest-earning assets, alongside a solid balance sheet, will aid its financials. Further, the company’s initiatives to expand globally will drive growth. However, rising expenses and excessive regulatory risks are major headwinds.

Robinhood Markets, Inc. Price, Consensus and EPS Surprise

Robinhood Markets, Inc. price-consensus-eps-surprise-chart | Robinhood Markets, Inc. Quote

Currently, Robinhood carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of HOOD’s Peers

Interactive Brokers’s IBKR fourth-quarter 2025 adjusted earnings per share of 65 cents surpassed the Zacks Consensus Estimate of 52 cents. The bottom line reflected a rise of 27.5% from the prior-year quarter.

IBKR’s results were primarily aided by an increase in revenues and a decline in expenses. Growth in customer accounts and a rise in daily average revenue trades acted as other tailwinds. 
 
Charles Schwab’s SCHW fourth-quarter 2025 adjusted earnings of $1.39 per share beat the Zacks Consensus Estimate of $1.37. The bottom line soared 38% year over year.

SCHW’s quarterly results benefited from the robust performance of the asset management business and an increase in trading revenues. Higher NIR and solid brokerage account numbers were other positives. However, an increase in expenses was an undermining factor.


 

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This article originally published on Zacks Investment Research (zacks.com).

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