Financial services company Robinhood (NASDAQ:HOOD) fell short of the market’s revenue expectations in Q4 CY2025, but sales rose 26.5% year on year to $1.28 billion. Its non-GAAP profit of $0.73 per share was 6.3% above analysts’ consensus estimates.
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Robinhood (HOOD) Q4 CY2025 Highlights:
- Revenue: $1.28 billion vs analyst estimates of $1.34 billion (26.5% year-on-year growth, 3.9% miss)
- Adjusted EPS: $0.73 vs analyst estimates of $0.68 (6.3% beat)
- Adjusted EBITDA: $761 million vs analyst estimates of $832.3 million (59.3% margin, 8.6% miss)
- Operating Margin: 50.7%, down from 54.8% in the same quarter last year
- Market Capitalization: $76.97 billion
StockStory’s Take
Robinhood’s fourth quarter results drew a negative market reaction, as the company missed Wall Street’s revenue expectations despite strong year-on-year growth. Management attributed this outcome to robust adoption in its active trading features, including surging prediction market and shorting volumes, as well as ongoing product launches. CEO Vladimir Tenev highlighted that “prediction market volumes doubled, more than doubled yet again” during the quarter, while new offerings like the Gold Card and expanded equities tools gained traction. However, management acknowledged that operating margins compressed from last year as the company invested aggressively in new business lines and international expansion.
Looking ahead, Robinhood’s forward strategy centers on accelerating product introductions, expanding into new markets, and broadening its financial super app capabilities. Management is focused on leveraging AI-driven personalization, launching new verticals such as family investing and private markets, and deepening its global reach through tokenization and localized offerings. CEO Tenev stated, “This year should see [personalization] accelerate with more cross-asset linking between equities, crypto, and prediction markets.” The company expects these initiatives to support continued growth while maintaining disciplined operational efficiency.
Key Insights from Management’s Remarks
Management cited rapid growth in new business lines and continued product development as the main drivers of the quarter’s performance. Investments in technology and global expansion contributed to both revenue growth and margin pressure.
- Active trading momentum: Management emphasized significant growth in prediction markets, with contract volumes more than doubling and over 12 billion contracts traded in 2025. The introduction of shorting in equities also saw over $11 billion in notional volume within the first months of launch.
- Product diversification: The company noted that over 40% of total assets on the platform are now spread across ETFs, advisory, retirement, and cash products, highlighting increased customer trust in Robinhood as a primary financial services provider.
- Gold Card expansion: Robinhood's Gold Card user base increased fivefold during the year, reaching 600,000 customers. The company plans to more than double this number by year-end, citing strong customer engagement with features like 3% rewards and family tools.
- International scaling: Robinhood reported growth in its international customer base, driven by product launches like ISAs in the UK and tokenized stock offerings in the EU. The Bitstamp acquisition has already doubled volumes since June, and the company now serves three-quarters of a million customers outside the US.
- Margin compression due to investment: Operating margin declined versus last year as Robinhood continued to invest heavily in new initiatives—including AI-driven Cortex, Robinhood Social, and expansion into private markets—while keeping disciplined expense management as a core focus.
Drivers of Future Performance
Robinhood’s outlook for the coming quarters is shaped by accelerated product launches, continued expansion into new markets, and disciplined investment in technology and customer experience.
- Accelerated product rollout: Management plans to speed up launches of features like AI-powered Cortex Assistant, Robinhood Social, and expansion of prediction markets, aiming to boost engagement and cross-sell new asset classes.
- International and private markets expansion: The company is prioritizing deeper penetration in Europe and Asia, leveraging tokenization (the conversion of assets into digital tokens on a blockchain) and launching private market offerings through Robinhood Ventures, subject to regulatory approval.
- Efficiency and margin focus: While investing in product and market growth, management aims for revenue growth to outpace expenses. CFO Shiv Verma highlighted ongoing efforts to maintain profitability, stating that 85–90% of costs are fixed, providing flexibility to adapt spending as needed.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) adoption and engagement in new products like Cortex Assistant and Robinhood Social, (2) the pace of international expansion and traction in newly entered markets, and (3) the rollout and customer response to private market and tokenization initiatives. Execution on these fronts and continued efficiency gains from AI integration will be key indicators of Robinhood’s ability to scale profitably.
Robinhood currently trades at $78.71, down from $85.91 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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