The stock price of trading platform Robinhood (HOOD) fell sharply following its Q4 2025 earnings report, despite the company posting its best financial year on record. The primary driver of the sell-off was a significant 38% year-over-year decline in cryptocurrency transaction revenue, which fell to $221 million for the quarter and missed analyst estimates.
For the full year 2025, Robinhood's revenue reached a record $4.5 billion, up more than 50% year-over-year, with net income hitting nearly $1.9 billion. Fourth-quarter revenue was $1.28 billion, a 27% annual increase, and earnings per share of $0.66 beat expectations. However, total Q4 revenue missed Wall Street estimates by roughly $50 million, largely due to the crypto weakness linked to Bitcoin's pullback and weaker overall trading volumes.
The market reaction was severe. Robinhood shares fell 11.5% to $75.83 in the trading session following the report, after having already dropped around 7% in extended trading post-earnings. This underscores investor sensitivity to crypto-driven volatility, which remains a meaningful part of Robinhood's transaction revenue.
Analysts reacted by trimming price targets. JPMorgan lowered its target to $113 from $130, Barclays cut its to $124 from $159, and Piper Sandler reduced its to $135 from $155, though most maintained constructive long-term ratings. Technical analysis cited in reports suggests the stock rebound from a February 5 low near $71 appears fragile, with indicators like negative Chaikin Money Flow and a potential "death cross" formation signaling fading institutional confidence. Some charts point to a risk of a further 40% downside if key support levels break.
While crypto revenue slumped, other business segments showed strength, highlighting Robinhood's ongoing diversification. Robinhood Gold subscriptions grew 58% to a record 4.2 million users, net interest revenue rose 39% to $411 million, and prediction markets saw 8.5 billion contracts traded in Q4. The company also recently launched the public testnet for Robinhood Chain, an Ethereum Layer 2 network built on Arbitrum, aimed at supporting tokenized stocks and DeFi tools.
