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

Core Insights - Robinhood Markets Inc. reported fourth-quarter 2025 earnings per share of 66 cents, exceeding the Zacks Consensus Estimate of 63 cents, and up from adjusted earnings of 54 cents in the prior-year quarter [1] - Despite the earnings beat, HOOD stock fell 8.3% in after-hours trading due to weak cryptocurrency trading, a decline in Monthly Active Users (MAU), and increased expenses [1][8] Financial Performance - The company's net income for the fourth quarter was $605 million, a decrease of 34% year over year, influenced by a one-time benefit in the prior year [2] - Total net revenues for the fourth quarter rose 26.5% year over year to $1.28 billion, although it fell short of the Zacks Consensus Estimate of $1.34 billion [4] - For the full year 2025, earnings were $2.05 per share, surpassing the Zacks Consensus Estimate of $2.03, and represented an 88.1% increase from the previous year's adjusted earnings [3] Revenue Breakdown - Transaction-based revenues increased by 15.5% year over year to $776 million, driven by significant growth in options revenues (41%) and equities revenues (54%), despite lower cryptocurrency revenues [5] - Net interest revenues rose 39% to $411 million, attributed to a higher balance of interest-earning assets and securities lending activity [5] - Other revenues surged to $96 million, primarily due to a 58% increase in Robinhood Gold subscription revenues, with subscribers reaching 4.2 million [6] Operating Expenses - Total operating expenses for the quarter were $633 million, up 38.2% year over year, with adjusted operating expenses increasing by 20.9% to $521 million [6] - Adjusted EBITDA for the quarter was $761 million, reflecting a year-over-year increase of 24.1% [6] Business Metrics - As of December 31, 2025, total platform assets increased by 68% year over year to $324 billion, driven by net deposits and higher equity valuations [7] - Equity Notional Trading Volumes reached a record $710 billion, up 68% year over year, while options contracts traded rose by 38% to 659 million [8] Share Repurchase - In the reported quarter, the company repurchased nearly 0.8 million shares for $100 million [9] Outlook - For 2026, Robinhood anticipates combined adjusted operating expenses and share-based compensation to be in the range of $2.60-$2.73 billion, including costs related to Bitstamp [10]