Shares of Robinhood Markets fell approximately 5.6% to $73.61 during Thursday's trading session, extending losses following the release of the company's fourth-quarter financial results. The decline reflects ongoing investor apprehension after the trading platform reported revenue that fell short of analyst projections.
Earnings Overview
For the fourth quarter, Robinhood posted revenue of $1.28 billion, below the consensus estimate of $1.34 billion. However, the company delivered a profit of 66 cents per share, which exceeded forecasts. A significant factor in the revenue miss was a 38% year-over-year decline in cryptocurrency trading revenue, which totaled $221 million. Transaction-based revenue rose 15% to $776 million, supported by growth in options and equities, but this was insufficient to offset the crypto weakness.
The company provided guidance for 2026, projecting adjusted operating expenses plus share-based compensation in the range of $2.6 billion to $2.725 billion. It also reported January net deposits of $4.5 billion and crypto notional trading volumes of $22.9 billion for the month.
Analyst and Market Reaction
Following the report, several analysts adopted a more cautious stance. JPMorgan reduced its price target on Robinhood shares to $113 from $130. The stock had fallen as much as 13% on Wednesday after the earnings release. Analysts highlighted the company's continued sensitivity to fluctuations in trading activity, particularly in the volatile cryptocurrency market.
In a separate regulatory filing, it was disclosed that former Chief Financial Officer Jason Warnick sold 125,000 shares on February 9 at an average price of $85.0882, pursuant to a pre-arranged trading plan. Following the sale, he retains ownership of 402,370 shares.
Strategic Focus and Forward Look
Management emphasized its ongoing expansion into new product areas, including subscription services and event contracts. CEO Vlad Tenev described prediction markets as being at the start of a potential "supercycle," positioning the company against competitors like Kalshi and Polymarket. Investors are now looking ahead to the company's "Take Flight" event scheduled for March 4, where further product details are expected to be unveiled.
The broader brokerage sector saw mixed performance, with Coinbase shares down about 3.8%, Charles Schwab declining 1.7%, and Interactive Brokers edging up 0.5%.
