Robinhood posted its best-ever annual results on February 10 after the bell: full-year revenue of $4.5 billion, up 52% YoY, and diluted EPS of $2.05. Yet the stock dropped 7% after-hours and has now been cut in half from its October 2025 peak.
The culprit? Cryptocurrency transaction revenue — just $221 million for the full year, down 38% from $357 million in 2024. Q4 crypto trading volume halved to $34 billion. Bitcoin slid from $126K to $65K, killing retail FOMO and sending users away.
Revenue Mix Shift: Crypto Share Falls from 35% to 17%
Q4 transaction-based revenue hit $776 million (+15% YoY), with options contributing $314M (+41%) and equities $94M (+54%). Crypto was the only laggard. Net interest income reached $411M (+39%), and Gold subscription revenue $50M (+56%). Crypto's share of total revenue dropped from ~35% in Q4 2024 to just 17% in Q4 2025.
Robinhood has aggressively diversified: prediction markets booked 12 billion contracts in the first year; futures now cover indices, energy, metals, and crypto. CEO Vlad Tenev boasted "11 business lines generating over $100 million in annualized revenue." But Wall Street fixates on crypto.
Bitcoin's Shadow: Retail Sentiment Rules All
Robinhood differs from Strategy — which lives on Bitcoin's price — but both depend on retail crypto sentiment. Strategy's MSTR fell 76% (1.6x Bitcoin's drop), while Robinhood's stock fell ~50%, nearly matching Bitcoin's 48% decline. When Bitcoin volatility vanishes, so does Robinhood's fee income.
The "Record" Trap: 1.9 Million Monthly Users Lost
The earnings release used "record" repeatedly: record revenue, record adjusted EBITDA, record net deposits, record Gold subscribers. But monthly active users dropped from 14.9 million to 13.0 million — down 1.9 million. Assets under custody rose 68% driven by price appreciation, while the annualized net deposit growth slowed from 30%+ to 19% in Q4. Users are leaving; money inflow is decelerating.
De-Crypto Bet: Diversify While Doubling Down on Crypto Infrastructure
Robinhood's strategy: diversify revenue (prediction markets, futures, Gold Card, banking, retirement) while deepening crypto infrastructure (acquired Bitstamp — trading volume doubled, launched 2,000 tokenized stocks in Europe, signed acquisition deals in Indonesia). It's learning from Coinbase's 2022 near-death experience. But 2026 operating expense budget of $2.6–$2.725 billion (+18%) puts pressure on margins if crypto winter persists and traditional growth lags. With ~$4.3 billion cash, Robinhood can survive but not necessarily thrive.
The firm resembles a casino owner who just quit gambling: aware of the problem and acting, but bull-market tailwinds have become bear-market debts. The real test is not records in a bull run, but the floor in a bear market — and no one knows where that floor is.