NEW YORK, July 28, 2026 — Robinhood Markets (NASDAQ:HOOD) saw its shares decline 2.6% in early trading Tuesday, settling at $93.17 by late morning after touching an intraday low of $88.22 — a 7.8% drop from the previous close. The stock, which carries a trailing price-to-earnings ratio near 45, is under pressure ahead of the company’s second-quarter earnings report due after the market closes Wednesday.
Investor attention has pivoted from robust customer trading activity to whether Robinhood’s burgeoning prediction-markets business can compensate for a sharp downturn in cryptocurrency revenue without eroding profit margins. The company is expected to post total revenue of $1.21 billion to $1.22 billion, representing year-over-year growth of 22% to 24%, according to projections from Zacks and Benzinga. However, diluted earnings per share are forecast to fall between $0.39 and $0.41, a decline of 2% to 7% from the $0.42 reported in the second quarter of 2025.
The divergence between top-line expansion and bottom-line contraction underscores a central challenge for Robinhood: translating surging transaction volumes into sustainable profitability. Transaction-based revenue is projected to climb 34% to $723.6 million, driven largely by equities and options activity. Yet crypto transaction revenue is expected to plummet 48% to $83.5 million, reflecting a broader slowdown in digital-asset trading.
“The market wants to see proof of margin expansion, not just another volume milestone,” said one analyst who tracks the brokerage sector. “Robinhood needs to demonstrate that its diversification into event contracts and other products can offset the volatility of crypto.”
Event contracts have emerged as a key offset. Combined volume for April, May, and early June reached approximately 12.3 billion contracts, nearly 40% above the entire first quarter of 2026. Zacks projects “other transaction revenue” — which includes event contracts — will surge to $171 million from $48 million a year earlier. In the first quarter, Robinhood separately reported $104 million in event-contract revenue. However, volume does not directly equate to revenue, as pricing, incentives, and product mix all influence the final figure.
Cost pressures remain a concern. Operating expenses rose 18% in the first quarter to $656 million, and the company expects a $28 million restructuring charge after eliminating roughly 290 positions. CEO Vlad Tenev has described the workforce reduction as part of a strategy to build a “lean, hyper-focused team,” even as he declared the company “had never been stronger.”
Robinhood’s platform activity data through June 25 reveals a dramatic shift in customer behavior. Equity volume totaled approximately $906.8 billion, already 75% higher than the entire second quarter of 2025. Options contracts reached 729.9 million, a 42% increase year-over-year. In contrast, crypto volume on the Robinhood app stood at $17.3 billion, down 38% from the same period last year. The final days of June are expected to partially close that gap, though the data remains unaudited and subject to revision.
The launch of Robinhood Chain on July 1, after the quarter ended, marks another strategic move to integrate traditional finance with decentralized finance, according to crypto head Johann Kerbrat. The rollout will not affect second-quarter revenue, but it signals the company’s long-term commitment to digital assets amid regulatory and market headwinds.
Key metrics to watch in Wednesday’s report include event-contract revenue, customer deposits, operating expenses, and margin balances. Investors will also scrutinize net interest revenue to gauge the quality of earnings diversification. Risks are evident: event contracts face lawsuits and state-level regulatory scrutiny, cryptocurrency remains highly volatile, and tokenization introduces additional legal and execution uncertainties. Surpassing revenue forecasts alone may not be enough — Robinhood must prove that faster trading leads to sustained profitability.
