Robinhood's Crypto Woes Offset by 27% Revenue Surge 26th in $3.26B Trading Volume

Market Snapshot

Robinhood Markets (HOOD) experienced a decline of 1.11% in its stock price on February 10, 2026, as trading activity reflected mixed momentum. The stock recorded a trading volume of $3.26 billion, ranking 26th in daily trading activity across the market. Despite a 27% year-over-year revenue increase to $1.28 billion, the stock’s post-earnings performance was pressured by a significant drop in crypto-related revenue, which fell 38% to $221 million in the fourth quarter. This decline offset gains in other segments, including a 41% rise in options trading revenue and a 54% increase in equities trading revenue.

Key Drivers

Robinhood’s fourth-quarter results were marked by a sharp contraction in crypto revenue, a critical factor influencing investor sentiment. The company’s crypto-related income plummeted 38% year-over-year to $221 million, driven by broader market weakness in digital assets. This decline mirrored industry trends, with rival platforms like Coinbase (COIN) also expected to face similar headwinds. Analysts attributed the drop to lower retail trading activity, as falling crypto prices reduced transaction volumes and user engagement. Robinhood’s efforts to expand crypto offerings—such as enabling cross-region asset transfers and adding new tokens—failed to shield the segment from market volatility, underscoring the sector’s sensitivity to price swings.

The earnings report highlighted a strategic shift in Robinhood’s business model, with non-crypto segments contributing to growth. Transaction-based revenue rose 15% to $776 million, bolstered by robust performance in options and equities trading. Subscription services, including Robinhood Gold, also saw momentum, with subscriber numbers reaching 4.2 million—a 58% year-over-year increase. These gains partially offset the crypto downturn, but the overall revenue miss against Wall Street’s $1.35 billion estimate underscored lingering concerns about the platform’s reliance on volatile crypto trading.

Operating expenses surged 38% to $633 million, reflecting higher marketing costs and integration expenses from recent acquisitions, including Bitstamp. Robinhood attributed the increase to aggressive investments in user acquisition and product expansion. While the company reported a 39% rise in net interest revenue to $411 million—driven by securities lending and higher asset valuations—management signaled further spending pressures in 2026, forecasting operating expenses of $2.6 billion to $2.725 billion. This outlook raised questions about profit sustainability amid rising costs and crypto-driven revenue volatility.

Despite the crypto slump, Robinhood’s user base and asset base continued to grow. Funded customer accounts increased 7% year-over-year to 27 million, while total platform assets climbed 68% to $324 billion. These metrics reflected sustained demand for the platform’s core services, including stock trading and retirement accounts. However, the decline in crypto trading volume—down 52% year-over-year on the Robinhood app—highlighted a shift in user behavior away from speculative trading toward more diversified financial services. The company’s emphasis on expanding into prediction markets, tokenized equities, and 24/7 blockchain-based settlement signaled a long-term strategy to reduce crypto dependence.

Investor reactions were mixed, with the stock falling approximately 7-8% in after-hours trading following the earnings release. Analysts noted that while Robinhood’s earnings per share (EPS) of $0.66 exceeded estimates, the revenue shortfall and crypto-related weakness overshadowed positives. Traders priced in an 11.76% potential swing in either direction ahead of the report, reflecting uncertainty about the company’s ability to navigate crypto market turbulence. Despite a 60.5% gain over the past 12 months, the stock’s year-to-date decline of 27% underscored the challenges of balancing high-growth strategies with exposure to volatile asset classes.

The earnings report also revealed a broader industry trend: waning retail enthusiasm for risk assets. As crypto prices and broader market risk appetite declined, Robinhood’s results aligned with weaker performance across consumer internet stocks. Peers like Electronic Arts and Reddit reported mixed outcomes in their Q4 earnings, reflecting a challenging macroeconomic environment. For Robinhood, the path forward will hinge on its ability to diversify revenue streams while managing costs and user expectations in a market increasingly defined by cautious trading behavior.