why it fell 8%?

Hi everyone,

I wanted to share a quick breakdown of the Robinhood (HOOD) Q4 and Full Year 2025 earnings that just dropped. It was a mixed bag that provides some interesting insight into where the retail market is headed.

Robinhood Q4 2025: Profit Beat, Revenue Miss

Robinhood reported record results for the full year, but the market’s reaction to the Q4 specifics was a bit more cautious:

• Earnings: They delivered a solid beat with an EPS of $0.66, surpassing the analyst estimate of $0.60.

• Revenue: Total revenue came in at $1.28 billion. While this is a record for the company, it slightly missed the $1.34 billion Wall Street was looking for.

• The Crypto Factor: The revenue miss was largely driven by a 38% year over year decline in crypto trading revenue, showing that high volatility in digital assets continues to be a double edged sword for brokerage platforms.

• Gold Growth: On a positive note, Robinhood Gold subscribers hit a record 4.2 million, up 58% from last year. This suggests that users are moving toward more "sticky" subscription models rather than just speculative trading.

The stock took a hit of roughly 8% in after hours trading following the announcement. It is a reminder that even when a company is highly profitable, the market is currently very sensitive to any growth slowdown in specific sectors like crypto.

Overall, I think Robinhood is still doing well and growing their AUM and customers nicely. I am definitely looking to invest in it now as the valuation is quite attractive now.

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The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.