Robinhood Markets (NASDAQ:HOOD) saw its shares plunge more than 12% in Wednesday trading, as a significant miss on fourth-quarter revenue overshadowed record annual profits and an earnings-per-share beat.
The Menlo Park-based brokerage reported record full-year revenue of $4.5 billion for 2025, but the market focused on a cooling finish to the year.
Fourth-quarter revenue of $1.28 billion missed Wall Street’s $1.35 billion target, largely due to a sharp pullback in digital asset trading.
Crypto revenue tumbled 38% year-over-year to $221 million, as retail investors retreated following a 50% correction in Bitcoin from its October highs.
Options revenue also fell short of expectations, signaling a broader slowdown in the "gunslinger" retail activity that typically fuels Robinhood’s margins.
While CEO Vlad Tenev highlighted the "incredible velocity" of new product launches—including a surging prediction market that saw over $12 billion in contracts traded in 2025—analysts remain wary.
High operating expenses and decelerating net deposits in January suggest that the "crypto winter" is biting harder than expected, putting the stock's premium valuation under intense scrutiny.