HOOD
Q4 2025 Earnings: Record Results Meet 40% Stock Decline — Expectations Reset to MODEST
FY2025 revenue hit $4.5B (+52%), EBITDA $2.5B (56% margin), and EPS $2.05 — all records. But a 40%+ stock decline compresses P/S from 17.7x to ~9.9x, below IBKR's ~13-15x despite 2.5-3x higher growth. EXPECTATIONS_PRICED downgraded from DEMANDING to MODEST. All other signals confirmed. Competitive confidence upgraded (HOOD now #1 in options, 8 straight quarters of positive net transfers from all competitors).
Read the full analysis"Robinhood delivered $4.5B revenue (+52%), 56% EBITDA margins, and #1 in options — but the stock fell 40%+, compressing P/S from 17.7x to ~9.9x. With expectations reset from DEMANDING to MODEST, does the risk/reward now favor Robinhood despite CONDITIONAL revenue and a CONTESTED moat untested through a bear market?"
Robinhood Markets is a fintech brokerage platform with 26M+ funded accounts and $324B in platform assets. The company delivered record FY2025 results: $4.5B revenue (+52% YoY), $2.5B adjusted EBITDA (56% margin), and $2.05 EPS. It now operates 11 product lines each exceeding $100M ARR, with new launches in banking, AI (Cortex), and private markets (Robinhood Ventures). Despite strong execution, the stock declined 40%+ from its peak, compressing the P/S multiple from 17.7x to ~9.9x — below IBKR's ~13-15x. Updated February 10, 2026 with Q4 2025 earnings data.
Executive Summary
Cross-lens roll-up assessment
Updated Feb 10, 2026: Robinhood delivered record FY2025 results ($4.5B revenue, 52% growth, 56% EBITDA margins, $2.05 EPS) while the stock declined 40%+, compressing the P/S from 17.7x to ~9.9x. This valuation reset changes the risk/reward profile materially: expectations are now MODEST rather than DEMANDING, and HOOD trades below IBKR (~13-15x) despite delivering 2.5-3x the growth. The fundamental risks remain -- CONDITIONAL revenue (57% transaction-based), ELEVATED regulatory exposure (~48-50% dependent), and a CONTESTED competitive position untested through a bear market -- but the price paid for those risks has declined substantially. The narrative-reality gap is DIVERGING but narrowing.
Updated Feb 10, 2026: The Q4 2025 earnings combined with a 40%+ stock decline shift the posture from HIGHER_SCRUTINY to PROCEED_WITH_CAUTION. The fundamental risks remain -- CONDITIONAL revenue (57% transaction-based), ELEVATED regulatory exposure (~48-50% dependent), CONTESTED moat (untested through bear market) -- but the price paid for those risks has declined substantially. At ~9.9x P/S (below IBKR's ~13-15x) with 52% demonstrated growth and 56% margins, the expectations are now MODEST rather than DEMANDING. The business is genuinely executing at a high level across all metrics. De-escalation triggers: durable revenue reaches 25-30%, competitive position survives bear market, growth sustains above 25%. Escalation triggers: growth decelerates below 25%, crypto winter materializes, regulatory headwinds emerge, stock recovers pushing expectations back to DEMANDING.
Key Takeaways
- •REVENUE_DURABILITY is CONDITIONAL (2 lenses agree) -- 57% transaction-based revenue with crypto (21%, +339% YoY) the most fragile component (70%+ historical decline potential in crypto winters). Gold subscriptions (~$234M ARR) provide the strongest durable floor but represent only ~6% of total revenue. Compound stress scenario (crypto winter + bear market + rate cuts) could reduce revenue 19-23% to ~$3.8-4.0B.
- •REGULATORY_EXPOSURE is ELEVATED (2 lenses agree, highest-conviction finding) -- ~52-57% of revenue depends on novel, unsettled regulatory frameworks (PFOF 24%, crypto 21%, prediction markets 5-7%). Current political environment is the most favorable in company history (SEC withdrew PFOF reform, dropped crypto investigation; CFTC supports prediction markets), but these are cyclical tailwinds. Correlated adverse scenario of -$1.5-2.2B is survivable.
- •COMPETITIVE_POSITION is CONTESTED -- execution-dependent position with meaningful scale (26M accounts, $330B AUC, 11 $100M businesses) but lacking structural moats (low switching costs, no network effects). Gold subscription ecosystem (3.9M subscribers) and MIAXdx exchange license are real assets, but the position requires continuous above-average execution and is unproven through a bear market. Minority position: DEFENSIBLE in a fintech-adjusted framework.
- •NARRATIVE_REALITY_GAP is DIVERGING -- market narrative is directionally correct but quantitatively aggressive. Headline 100% revenue growth is cyclically inflated by crypto (+339%) and prediction markets (from zero base); underlying growth is ~30-45%. Product breadth (11 $100M businesses) is real but diversification across conditional/fragile streams differs from durable diversification.
- •EXPECTATIONS_PRICED is MODEST (updated Feb 10, 2026 from DEMANDING) -- a 40%+ stock decline compressed P/S from 17.7x to ~9.9x, below IBKR's ~13-15x despite 2.5-3x higher growth and superior margins. At current valuation, no improvement from demonstrated performance is required. The company could decelerate to 25-30% growth and still appear reasonably valued relative to peers.
Key Tensions
- •Revenue is growing rapidly and genuinely diversifying, but the fastest-growing segments (crypto, prediction markets) are also the most volatile and regulatory-exposed -- diversification across fragile streams does not create durable revenue
- •The current regulatory environment is the most favorable in Robinhood's history, but all four lenses independently classify it as a cyclical tailwind rather than a structural risk reduction -- future political cycles could reverse multiple tailwinds simultaneously
- •Valuation has reset materially (~9.9x P/S, below IBKR) while fundamentals strengthen (#1 in options, record margins) -- the stock price decline may reflect macro/crypto cycle concerns rather than competitive deterioration, creating a potential disconnect between price and operational reality
Gravy Gauge
Is this revenue durable?
Key Metrics
Key FindingsClick to expand details
Signal AssessmentsClick for full context
| Signal | Scale | Assessment | Evidence |
|---|---|---|---|
Revenue Durability | — | CONDITIONAL | 2Corroborated |
Regulatory Exposure | — | ELEVATED | 2Corroborated |
Model Debates
Cross-Lens Insights
Where Lenses Agree
- Revenue is conditional on cyclical and regulatory factors -- 3 lenses independently converge
- Regulatory exposure is elevated but not existential -- highest-conviction finding across the analysis
- Crypto is the highest-volatility revenue component -- 3 lenses flag independently
- Prediction markets are genuine innovation with unresolved risks -- all 4 lenses address
- Current favorable environment is cyclical, not structural -- 3 lenses converge independently
Where Lenses Differ
Bear Market Revenue Downside
The difference is methodological: Gravy Gauge stress-tests revenue decline with partial hedges; Moat Mapper stress-tests competitive position degradation including second-order effects.
Product Diversification Value
Both are correct. Product breadth is a competitive advantage (harder to replicate) but not a durability advantage (diversifying across fragile streams does not create durable revenue).
The following publicly available documents were collected and extracted into a structured fact dossier that powered this analysis.
SEC Filing
- Annual Report (10-K) — FY2024
- Quarterly Report (10-Q) — Q3 2024
- Quarterly Report (10-Q) — Q1 2025
- Quarterly Report (10-Q) — Q2 2025
- Quarterly Report (10-Q) — Q3 2025
- Current Report (8-K) — Q3 2025 Earnings
- Current Report (8-K) — Q2 2025 Earnings
- Current Report (8-K) — Q1 2025 Earnings
- Current Report (8-K) — Q4 2024 Earnings
- Current Report (8-K) — Q4 2025 Earnings
- Proxy Statement (DEFA14A) — 2025
Earnings Transcript
- Q1 2025 Earnings Call Transcript
- Q2 2025 Earnings Call Transcript
- Q3 2025 Earnings Call Transcript