Financial technology firm Robinhood Markets Inc. (NASDAQ: HOOD) disclosed its financial outcomes for the fourth quarter post-market close on Tuesday, unveiling new highs alongside certain challenges in meeting Street revenue forecasts.
The quarterly revenue attained $1.28 billion, marking a 27% increase compared to the same period last year. However, this figure slightly trailed the consensus estimate of $1.34 billion compiled by Benzinga Pro data. Despite this, the company surpassed expectations on profitability metrics, registering earnings per share (EPS) of 66 cents, outpacing the anticipated 62 cents.
Transaction-based income constituted a significant portion of revenue, totaling $776 million for the quarter. A breakdown indicates a diverse performance across segments:
- Other transactional revenue surged dramatically, rising over 300% to reach $147 million.
- Options-related revenue grew by 41% year over year to $314 million.
- Equities revenue saw a 54% annual increase, amounting to $94 million.
- Conversely, cryptocurrency revenue contracted by 38%, settling at $221 million.
Supplementing transaction revenue, Robinhood reported net interest income of $411 million for the quarter, representing a 39% year-over-year rise. Additionally, other revenues advanced substantially by 109% to $96 million, driven largely by Robinhood Gold subscriptions, which contributed roughly $50 million.
Customer engagement indicators remained strong, with the number of Robinhood Gold subscribers reaching 4.2 million by quarter's end. The company’s funded customer base expanded by 1.8 million over the period to a total of 27.0 million. Average revenue per user (ARPU) also increased by 16% year over year, reaching $191 in the quarter.
Robinhood completed the full year with a record $4.5 billion in revenue, a 52% increase over the previous year. Diluted earnings per share for the full year were reported at $2.05. The firm also recorded unparalleled net deposit inflows totaling $68 billion and reported total platform assets escalating 68% year over year to $324 billion. The fourth quarter alone saw net deposits of $15.9 billion.
Chief Executive Officer Vlad Tenev reaffirmed the company’s strategic commitment toward building what he terms the "Financial SuperApp." Complementing this, Chief Financial Officer Shiv Verma highlighted several record-setting achievements in his prepared remarks, emphasizing net deposits, subscriber counts, trading volumes, revenues, and profitability all reaching new peaks during the 2025 fiscal year. He also noted the company's strong finish in the last quarter.
Robinhood pointed to its broadening product suite, notably the expansion into Prediction Markets. In 2025, the company reported an extraordinary 12 billion event contracts traded, with a quarterly record of 8.5 billion contracts during Q4. January 2026 also saw significant activity with 3.4 billion event contracts traded, a monthly record.
Additional January metrics revealed a 20% year-over-year increase in options contracts traded, totaling 200 million. Equity notional trading volumes soared 57% year over year, reaching $227 billion.
Looking ahead, Robinhood outlined its expense and stock-based compensation forecast for 2026, targeting a range of $2.6 billion to $2.725 billion. This allocation aims to accelerate product development initiatives, foster net deposit growth, and drive revenue expansion.
Preliminary figures for January 2026 indicate net deposits of $4.5 billion, an increase of 17% compared to the previous year, signaling a promising start to the year. CFO Verma expressed optimism about the company’s trajectory, citing strong momentum and a commitment to delivering valuable products while pursuing profitable expansion.
Following the earnings release, Robinhood’s stock experienced a decline of 7.6% in after-hours trading, settling at $79.10 per share. This compares to the company’s 52-week trading range between $29.66 and $153.86, reflecting notable volatility throughout the last year.
| Key Highlights |
|---|
| Record fourth-quarter revenue of $1.28 billion, up 27% year-over-year, despite missing consensus expectations |
| EPS of 66 cents beats estimate, underscoring improved profitability |
| Subscription and net interest income contribute significant growth, with Robinhood Gold subscriptions at 4.2 million |
| Achievement of 8.5 billion event contracts traded during Q4, supporting expanded product adoption |
| Full-year revenue hits $4.5 billion, a 52% increase, alongside record net deposits and platform assets |
| Risks and Uncertainties |
|---|
| Cryptocurrency revenue declined 38% year-over-year, indicating volatility in this segment |
| Q4 revenue missed Wall Street consensus, reflecting potential pressures in sustaining momentum |
| Forecasted 2026 operating expenses and stock-based compensation are substantial, which may affect near-term margins |
| Stock share price dropped 7.6% post earnings announcement, suggesting investor concerns despite operational gains |