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Robinhood posts Q4 revenue miss as crypto trading softens
Robinhood reported fourth-quarter revenue of about $1.28 billion, up year‑over‑year but below Wall Street expectations. The top‑line shortfall sent the stock lower in after‑hours trade, reflecting investor sensitivity to any cracks in the company’s growth story. Crypto trading revenue took the biggest hit, falling roughly 38% to around $221 million, shrinking the digital‑asset contribution from north of 20% of total sales toward an expected long‑term mix closer to 10%.
The results underscore how a richly valued retail broker can see rapid price swings when core transaction revenues underperform. Management emphasized that while crypto volumes have reset, other product areas — notably options trading and prediction markets — are expanding and should help stabilize revenue as retail trading behavior shifts.
Earnings miss and market reaction
Robinhood’s headline $1.28 billion in Q4 revenue represented a 27% annual increase, but it came in under the roughly $1.32–$1.35 billion analysts had anticipated. The disappointment was concentrated in transaction revenue: crypto trading revenue landed near $221 million versus estimates around $248 million, and options revenue was approximately $314 million against consensus near $331 million. Those misses were enough to trigger a 7–8% decline in after‑hours trading as investors digested the data.
Analysts noted the company’s premium valuation leaves little room for misses. Observers described the reaction as an expected repricing for a high‑beta retail broker that must deliver consistent growth to justify earlier multiples.
How the crypto revenue contraction plays out
The company’s exposure to crypto has fallen substantially as a share of revenue. Management and analysts expect digital‑asset revenue to normalize around 10% of total sales, a meaningful step down from prior periods when crypto comprised over one‑fifth of revenue. Even if trading volumes experienced a 50% decline similar to the 2022–2023 crypto winter, that would likely shave roughly 10% off consolidated earnings — a noticeable but manageable headwind given Robinhood’s broader product mix.
This evolving revenue mix means Robinhood is less tied to day‑to‑day crypto volatility and increasingly driven by options flow, subscription services, banking deposits, and newer product verticals.
Prediction markets and options cushion weaker crypto flows
Management highlighted record options activity and a growing prediction‑market business as counterweights to soft crypto trading. Options trading remains the firm’s largest transaction business by revenue, and volumes showed strength into early 2026, underpinning much of the firm’s optimistic guidance for ongoing growth.
Robinhood Markets (HOOD) recorded a surge in its “other” transaction-based revenue in 2025, as prediction-market activity accelerated, climbing from only a few tens of millions in 2024 to the mid-nine-figure annual run-rate range by the end of 2025, with a notable boost around Super Bowl-related contracts.
Robinhood Markets (HOOD) saw a surge in its “Other Trading Revenue” (mainly from prediction markets) in 2025. The revenue jumped from $31 million at the end of 2024 to $147 million in December 2025. Robinhood’s prediction markets are powered by Kalahi. The increase in trading…
— Wu Blockchain (@WuBlockchain) February 11, 2026
That jump in the “other” line shows how event‑driven markets — sports, politics, and macro data contracts — can scale quickly when retail engagement is high. Management has framed this shift as the start of a “prediction‑market super cycle,” where event contracts meaningfully supplement transaction revenue as crypto cycles ebb and flow.
Options: the steady revenue engine
Options continue to be the platform’s most consistent revenue driver. Executives pointed to record or near‑record options volumes at the start of 2026, reinforcing the idea that derivatives flow from retail traders will remain a durable income source. For investors watching the company’s long‑term profitability, a robust options franchise reduces dependence on more volatile crypto trading revenue.
Analyst perspectives and the outlook for Robinhood
Despite the Q4 miss, many analysts maintain constructive stances on Robinhood, arguing the firm is more diversified and better managed than in earlier cycles. Some research firms kept Buy ratings and still see upside, suggesting that the company’s broader product footprint — options, subscriptions, banking, and prediction markets — positions it to weather longer risk‑off periods in digital assets.
Other firms cautioned that the stock’s prior run left limited margin for error, which helps explain the immediate market reaction. Still, key platform metrics show underlying engagement: funded accounts, premium subscribers, and other user signals remained healthy, and new offerings such as Robinhood Banking are beginning to contribute meaningful deposit balances.
One bull case centers on the idea that a lower crypto share of revenue actually makes earnings more predictable. In that scenario, even substantial declines in crypto trading volumes produce only modest hits to consolidated revenue while options and subscription businesses continue to grow.
Digital assets snapshot and market context
The broader crypto market environment also helps explain the Q4 softness. At the time of reporting, Bitcoin traded near $66,700 with about $42 billion in 24‑hour volume as liquidity pulled back from October peaks. Ethereum hovered around $1,980 with roughly $20–21 billion in daily turnover, while Solana traded near $133 with about $5 billion of 24‑hour volume. These figures reflect a market where high‑beta layer‑1 tokens lead risk adjustments and retail volumes fluctuate with sentiment.
What this means for investors
For investors, Robinhood’s Q4 results are a reminder that exposure to crypto remains a volatility amplifier but no longer dominates the company’s revenue profile. The firm’s strategy to broaden revenue through options, prediction markets, and financial services aims to smooth earnings through crypto cycles. That diversification makes Robinhood a barometer of retail risk appetite — and a high‑beta play that will continue to attract active traders and thematic investors who watch derivatives flow and event‑driven markets closely.
In short, the near‑term picture shows pressure on crypto revenue, but a clearer path to steadier earnings as Robinhood shifts toward a more balanced product mix.
Source: crypto
Comments
DaNix
Feels overhyped, premium valuation leaves zero room for slip ups. Prediction markets look fun, but kinda event driven not steady income
coinpilot
Crypto down 38%? ok but is HOOD really that tied to crypto now... or can options + prediction markets actually carry it? curious, skeptical
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