A cautious stance on cryptocurrency trading weighed on Robinhood's fourth-quarter revenue, putting pressure on the company's stock price on Tuesday. However, executives at the trading app downplayed the impact and enthusiastically discussed the prospect of a "super cycle" for prediction markets, which allow users to place bets on events such as sports and politics.
Robinhood reported quarterly sales of $1.28 billion, a 27% increase compared to the same period last year. However, this figure fell short of the $1.35 billion expected by FactSet. Revenue from cryptocurrency trading declined by 38% during the quarter, as investor interest in volatile assets like Bitcoin and overall risk appetite diminished amid broader economic concerns. This pressure from the crypto business was offset by significant growth in demand for options, stocks, prediction markets, and Robinhood Gold subscription services.
The company, which has long been popular with retail investors, achieved earnings per share of 66 cents in the fourth fiscal quarter. This result surpassed expectations of 63 cents per share. Robinhood indicated it anticipates operational expenses and stock-based compensation for the year to be between $2.6 billion and $2.725 billion, an increase of 18% compared to the previous year. The company's stock declined 7.2% in after-hours trading on Tuesday. Nonetheless, the stock has risen 53% over the past 12 months.
Robinhood CEO Vlad Tenev stated during the company's earnings call, "We are not going to be distracted by short-term volatility and the price action of Bitcoin or any other asset." He expressed his belief that the technology underlying Bitcoin will ultimately serve as a foundation for more transactions and other services. Tenev said he views the current period as the beginning of a "prediction markets super cycle." A derivatives-related division at Robinhood launched a prediction markets hub last year. Prediction market trading volume at Robinhood more than doubled in the fourth fiscal quarter, with over 12 billion contracts traded for 2025. Tenev noted that even with the NFL season concluded, interest in this business segment has been driven by other events ranging from U.S. politics to the Olympics and the World Cup.