Robinhood Earnings Miss Sends $HOOD Down

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•  11 Feb 2026
 

•   HOOD  
   
  +3.17%

When a growth stock trades at a premium, the market rarely forgives a revenue miss. That is the reality $HOOD investors are facing after Robinhood reported fourth-quarter results that fell short of expectations, sending the stock down roughly 12% in after-hours trading.

On the surface, the numbers do not look weak. Robinhood closed 2025 with record annual revenue of $4.5 billion, the highest in its history. Fourth-quarter revenue also reached a record $1.28 billion. The problem is not absolute performance. It is the gap between expectations and delivery. Analysts were looking for about $1.35 billion for the quarter, and in a stock priced for continued acceleration, that difference matters.

The softness was most visible in crypto and options, two key revenue engines for the platform. Crypto trading revenue came in at $221 million, below expectations of roughly $248 million and sharply lower than prior quarters. This aligns with broader weakness in digital assets, with Bitcoin down more than 45% from its October peak. Retail participation typically contracts in such environments, and Robinhood’s transaction-based model feels that shift quickly.

Options revenue also missed forecasts, coming in at $314 million versus estimates near $331 million. Together, these figures reinforce a concern that overall trading activity on the platform is slowing. Autonomous Research pointed to decelerating net deposits in the 4th quarter, with signs the trend extended into January. For a company whose valuation reflects growth, moderation in core operating metrics can reset sentiment fast.

Yet the picture is not entirely negative. Robinhood exceeded earnings-per-share expectations, showing stronger profitability than anticipated. This is not trivial. It suggests management is exercising cost discipline even as revenue momentum cools. Still, in high-multiple stocks, investors tend to prioritize top-line expansion over margin surprises.

Analyst reactions reflect this balance. Autonomous maintains a "buy" rating with a $128 price target, arguing that Robinhood is more diversified and conservatively managed than in previous cycles. Compass Point also keeps a positive stance, though it reduced its target to $127, citing potential near-term pressure. Meanwhile, JPMorgan lowered its target to $113 and reiterated a neutral view, warning that the extraordinary growth of 2025 is unlikely to repeat in the current market environment.

Another point of friction is guidance. Management expects operating expenses to rise about 18% next year, driven by international expansion, new product development, and initiatives such as prediction markets and derivatives. Strategically, investing during a slowdown can build long-term competitive advantage. Tactically, it pressures margins in the near term and tests investor patience.

Robinhood is clearly trying to reduce its dependence on cyclical trading flows. Subscription services, banking features, and wealth management products are designed to create steadier revenue streams. If executed well, this transition could smooth earnings across market cycles. But the transition phase carries execution risk, especially if trading volumes remain muted.

At a market capitalization near $68 billion, with the stock down 32% year to date but still up 43% over the past 12 months, $HOOD sits at a crossroads. The business is stronger and more diversified than in previous cycles. At the same time, its revenue remains sensitive to retail sentiment and crypto volatility.

The question is whether this pullback is a valuation reset or an early signal of deeper deceleration. For longer-term the focus shifts to whether Robinhood can convert product expansion and international growth into durable, less cyclical cash flow. The next few quarters will likely provide that clarity.

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