Short $HOOD Earnings Overview
Robinhood’s earnings did not go spectacularly.
A double miss.
While this wasn’t particularly surprising, given the weight crypto places on its revenue and bottom line, and since it is in a ‘crypto winter’, as some describe it, I wouldn’t say it was still disappointing.
However, does this convince me to overturn my faith in the company as one I still want to own in 10 years? Certainly not.
So let me break down my thoughts on the good, the bad and the ugly from this ER:
Highlights:
Revenue - Reached $1.07 billion which was a 15% increase YoY. This missed Wall St expectations.
EPS - Reported $0.38 which also missed the $0.39 expected by analysts.
Sequential Slowdown - Net revenues dropped 17% from the record $1.283 notched up in Q4 2025.
Platform Growth - Robinhood Gold subscribers reached a record 4.3 million, up 36% YoY, and assets grew 39% to $307 billion.
Profitability - Adjusted EBITDA rose 14% YoY to $534 million with a premium 50% margin.
My Thoughts:
The recent selloff in HOOD 0.00%↑ is due to the obvious double miss, which didn’t please investors, quite understandably. CapEx was also driven up to a range of $2.7 to $2.825 billion for full year, which increased due to extra funding for the new ‘Trump accounts’. The sequential drop in revenue is likely to make some investors worried that the explosive growth of the company was a one off and won’t be repeated through the coming years.
To conclude →
It’s undeniable the market didn’t enjoy those earnings, and why would it. They didn’t hit our expectations, and it feels like Robinhood has always done.
However, in these times you must step back and consider, are the fundamentals intact or has the business has completely broken your thesis. Either way is fine. Maybe you don’t believe in the prediction markets, maybe you think they are the latest train taking the business to a new level. Ultimately, the robust growth in subscriber base and high adjusted EBITDA margins prove to me that the core business is growing and operating well, but missed based of an over reliance on crypto, which is slowly being diversified and rising operating expenses.
I have bought more in the public portfolio and will be providing an update soon!!