Robinhood Markets (NASDAQ: HOOD) shares plunged more than 12% Wednesday after the trading platform reported mixed fourth-quarter results that highlighted a deepening crypto winter's impact on its business. The company beat earnings expectations but missed revenue forecasts as cryptocurrency trading revenue fell 38% year-over-year, sparking concerns about its growth trajectory amid digital asset market weakness.
How the Earnings Report Unfolded: Inside Robinhood's Q4 Results
According to Robinhood's official earnings release, the company reported diluted earnings per share (EPS) of $0.66 for the fourth quarter of 2025, compared to $1.01 in the same period last year. However, the previous year's results included a $0.47 benefit from a tax benefit and regulatory accrual reversal. Total net revenues increased 27% year-over-year to $1.28 billion, marking a record for any quarter in the company's history.
The revenue story was more nuanced when broken down by segment. Transaction-based revenues grew 15% to $776 million, driven by strong performance in options trading (up 41% to $314 million) and equities trading (up 54% to $94 million). Other transaction revenue surged over 300% to $147 million, reflecting growth in newer product areas. However, cryptocurrencies revenue declined 38% to $221 million, down from $358 million a year earlier.
Net interest revenues showed robust growth, increasing 39% to $411 million, while other revenues—primarily from Robinhood Gold subscriptions—jumped 109% to $96 million. The company also reported record net deposits of $68 billion for the full year 2025, including $16 billion in the fourth quarter alone, and reached 4.2 million Robinhood Gold subscribers, representing 58% year-over-year growth.
Timeline: How the Crypto Decline Hammered Robinhood's Quarter
The deterioration in Robinhood's crypto business followed a predictable pattern that began in early October 2025, when digital asset prices peaked and began a sustained decline. According to CoinDesk's analysis, the crypto revenue drop of 38% mirrored broader market weakness that saw Bitcoin and other major cryptocurrencies lose significant value during the quarter.
Here's how the quarter unfolded: In October, crypto prices began their descent, affecting trading volumes across retail platforms. By November, Robinhood had expanded its crypto offerings significantly, adding new token listings and transfer capabilities, but these enhancements couldn't offset the market-wide decline in trading activity. December saw continued pressure as the "crypto winter" narrative gained traction, culminating in the disappointing revenue numbers reported in February 2026.
The earnings release after market close on February 10 triggered immediate selling pressure, with shares dropping 7.7% in after-hours trading. The decline accelerated during regular trading on February 11, with HOOD stock falling as much as 12.5% by mid-morning.
Why This Earnings Miss Matters: Expert Analysis and Market Impact
Financial analysts point to several concerning trends in Robinhood's results. While the company successfully diversified beyond its original commission-free trading model, its continued reliance on crypto trading revenue leaves it vulnerable to digital asset market cycles. "Robinhood's results mirror broader crypto-market weakness, which is also expected to weigh on rival Coinbase," noted CoinDesk in its coverage of the earnings.
The crypto revenue decline of 38% was significantly steeper than the overall transaction revenue growth of 15%, highlighting how digital assets remain a disproportionate driver of Robinhood's trading business. Even as the company expands into prediction markets, retirement accounts, and banking services, crypto still represents a substantial portion of transaction-based revenue.
Market reaction extended beyond Robinhood's own stock. Competitor Coinbase (COIN) saw its shares decline 1.6% in after-hours trading following Robinhood's report, as investors anticipated similar challenges when Coinbase reports its own quarterly results later this week. This contagion effect underscores how closely tied trading platform valuations remain to crypto market conditions.
Where Things Stand Now: Latest Analyst Reactions and Price Targets
In response to the earnings report, several major financial institutions adjusted their outlooks on Robinhood stock. Barclays lowered its price target on HOOD from $160 to $124, while maintaining an overweight rating. Goldman Sachs reduced its target from $152 to $130, keeping a buy rating on the shares. These adjustments reflect moderated expectations for near-term growth while acknowledging the company's longer-term potential.
According to Investing.com's coverage of the analyst moves, Barclays cited "softer Q4 results" as the primary reason for its target reduction. The firm noted that while Robinhood's earnings beat was positive, the revenue miss and crypto weakness warranted a more cautious near-term outlook.
Despite these reductions, the maintained buy ratings suggest analysts see the current price decline as potentially overdone. With shares trading around $79 after the earnings drop—nearly 50% below their October 2025 high—some investors may view the selloff as creating buying opportunities for those with longer time horizons.
What Happens Next: The Road Ahead for Robinhood and Crypto Trading
Robinhood's management emphasized their strategic progress during the earnings call, particularly highlighting the growth of prediction markets as a new revenue stream. With over 12 billion event contracts traded in 2025 and the recent establishment of a joint venture to build a CFTC-licensed exchange, prediction markets represent a significant diversification effort that could reduce reliance on crypto volatility.
The company also continues to expand internationally, with recent acquisitions in Indonesia and strengthened offerings in the United Kingdom. Its Robinhood Gold subscription service now reaches 4.2 million paying customers, demonstrating success in monetizing its user base beyond transaction fees.
Looking ahead, the key question for investors is whether Robinhood can sustain its growth trajectory amid challenging crypto market conditions. The company's 2026 expense plan calls for continued investment in product development and international expansion, with adjusted operating expenses expected to grow 18% year-over-year at the midpoint of guidance.
The Bottom Line: Key Points to Remember
- Robinhood beat earnings estimates ($0.66 vs. $0.63 expected) but missed revenue forecasts ($1.28B vs. $1.33B expected).
- Crypto revenue declined 38% year-over-year to $221 million, reflecting broader digital asset market weakness.
- The stock fell 12.5% following the earnings release, continuing a decline that has seen HOOD drop nearly 50% from its 2025 high.
- Analysts at Barclays and Goldman Sachs lowered price targets but maintained buy ratings, suggesting the selloff may be overdone.
- Prediction markets and international expansion represent key growth drivers that could reduce reliance on crypto volatility.
As Robinhood navigates the current crypto winter, its ability to diversify revenue streams while maintaining user growth will be critical for investor confidence. The company's strong net deposit flows and expanding subscription business provide reasons for optimism, but the shadow of crypto market volatility continues to loom large over its near-term prospects.
