Robinhood (HOOD) investors faced a reality check on Tuesday as shares tumbled nearly 8% in after-hours trading. Despite the company posting record-breaking annual revenues, the fourth-quarter results failed to hit the high bar set by Wall Street analysts. The primary culprit? A significant cooling in the cryptocurrency market that ate into the platform’s transaction-based income.
For the quarter, Robinhood reported net revenues of $1.28 billion. While that marks a healthy 27% increase year-on-year, it fell short of the $1.34 billion analysts were banking on. The market’s reaction was swift; Robinhood’s stock price dropped 7.66% to $79.04, continuing a downward trend that has seen the stock shed over 42% of its value since its October peak of $148.67.
Crypto Revenues Face a Steep Climb as Market Activity Cools
The most glaring weakness in the report was the performance of Robinhood’s crypto segment. Revenues from crypto trading tanked 38% compared to the previous year, landing at $221 million. This decline follows a volatile period for digital assets that began in October, leading to a “drawdown” period that sapped retail enthusiasm. Even with the integration of its Bitstamp exchange, crypto volume growth lagged behind other asset classes, showing only a modest 3% quarterly increase.
Net income also took a hit, falling 34% year-on-year to $605 million. However, it wasn’t all bad news for the bottom line—earnings per share (EPS) actually landed at 66 cents, slightly outperforming the 63 cents predicted by analysts. This suggests that while top-line revenue missed the mark, Robinhood is becoming more efficient at managing its internal costs.
Diversification Pays Off with Prediction Markets and Equities
While crypto struggled, Robinhood’s pivot toward a more diversified product suite showed signs of strength. Equity trading volumes jumped 10% to $710 billion, and options trading remained robust with 659 million contracts traded. The real standout, however, was the “Other” revenue category. This segment, which includes the recently launched prediction markets and futures, skyrocketed by 375% year-on-year to hit $147 million.
This surge in event-based trading—bolstered by the partnership with Kalshi—marked a historic milestone for the company: for the first time, these alternative products generated more revenue than traditional equity trades. Looking at the bigger picture, 2025 was still a banner year for the firm. Total annual revenue surged 52% to $4.5 billion, and annual net income climbed to $1.9 billion. Despite the short-term Q4 miss, the platform is successfully evolving beyond its “meme stock” roots into a multi-asset powerhouse.
