Robinhood Markets, Inc.

🇺🇸NASDAQ Global Select
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Robinhood Markets, Inc. stock analysis HOOD overview
Somewhat Bearish -35

Why Is Robinhood Stock Falling After-Hours Despite Record Q4 Revenue? - Stocktwits

📉 HOOD shares dropped over 6% in after-hours trading following a Q4 revenue miss against analyst estimates of $1.32 billion.

💰 The company achieved record Q4 revenue of $1.28 billion, up 27% year-over-year, driven by strong transaction-based growth.

📊 Diluted earnings per share fell to $0.66 from $1.01 in the previous year due to lower crypto revenue and one-time tax benefits.

🪙 Cryptocurrency revenue declined sharply by 38% to $221 million, offsetting gains in options and equities trading.

🚀 Robinhood announced the launch of 'Robinhood Chain,' a Layer 2 network designed for trading real-world assets.

🤝 A new referral program connecting customers with Registered Investment Advisors powered by Tradepmr is going live this year.

🌍 The company continues to expand its footprint outside the U.S. and aims to exceed $1 trillion in platform assets.

💸 Management provided a forward-looking expense outlook for 2026, projecting adjusted operating expenses between $2.6B and $2.725B.

📈 Retail sentiment remains extremely bullish despite the stock decline, with shares rising nearly 40% over the past year.

Bullish Signals
  • Record Q4 revenue of $1.28 billion represents a 27% increase from the prior year, demonstrating strong top-line growth.
  • Transaction-based revenues grew 15% year-over-year to $776 million, driven by increased options and equities trading activity.
  • The company reached nearly $1 trillion in assets on its platform, signaling significant user adoption and trust.
  • Strategic expansion into prediction markets, tokenization, and international markets diversifies revenue streams beyond traditional trading.
  • Launch of the 'Robinhood Chain' positions the company as a leader in real-world asset trading infrastructure.
  • New referral program with Registered Investment Advisors opens high-margin advisory services to existing user base.
  • CFO Shiv Verma confirmed 2025 was a record year across all key metrics including net deposits and profits.
Risk Factors
  • Q4 revenue of $1.28 billion missed analyst estimates of $1.32 billion, triggering immediate negative market reaction.
  • Diluted earnings per share declined to $0.66 from $1.01 year-over-year, indicating profitability challenges despite revenue growth.
  • Cryptocurrency revenue dropped 38% to $221 million, highlighting vulnerability in the volatile digital asset sector.
  • No full-year 2026 revenue or profit guidance was provided, increasing uncertainty for investors regarding future performance.
  • Projected 2026 adjusted operating expenses are expected to grow 18% year-over-year, raising concerns about margin pressure.
Full Analysis
Robinhood Markets Inc. (HOOD) reported record fourth-quarter revenue of $1.28 billion, representing a 27% year-over-year increase. However, the stock fell more than 6% in after-hours trading because the company missed analysts' revenue estimates of $1.32 billion and reported diluted earnings per share of $0.66, down from $1.01 in the prior year. Revenue growth was driven by a 15% increase in transaction-based revenues to $776 million, fueled by options and equities trading. Conversely, cryptocurrency revenue declined significantly by 38% to $221 million. The reported earnings included a one-time benefit of $0.47 from tax accruals and regulatory reversals. During the earnings call, CFO Shiv Verma highlighted that 2025 was a record year with new highs in net deposits, subscribers, and trading volumes. Management noted assets on the platform reached nearly $1 trillion, positioning the company to capitalize on generational wealth transfers through expansion into prediction markets, tokenization, and international growth. Looking ahead, Robinhood announced plans to launch and scale its 'Robinhood Chain,' a Layer 2 solution for trading real-world assets. The company also introduced a new referral program connecting customers with Registered Investment Advisors. While no full-year 2026 revenue outlook was provided, the company guided on adjusted operating expenses and share-based compensation, projecting an 18% year-over-year increase to between $2.6 billion and $2.725 billion.