Robinhood Markets, Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Strategy Focus: Focus on three-part strategy: number one in active traders, number one in wallet share for the next generation, and number one global financial ecosystem.
• 2025 Results: 2025 was a record year with strong growth and profitability. Revenues reached $4.5 billion (up 52% YOY), adjusted EBITDA was $2.5 billion (up 76%), and adjusted EBITDA margin was 56%. Q4 2025 revenues were $1.3 billion (up 27%), net deposits were $16 billion (eighth straight quarter over $10 billion), and Robinhood Gold subscribers were 4.2 million (up 58%).
• 2026 Roadmap: Plan to accelerate product velocity, aim for 20%+ net deposit growth, and deliver profitable growth. Investments include further development in prediction markets, Cortex AI, Robinhood Social, family investing, private markets, tokenization, and international expansion.

Segment Performance

• Active Traders: In Q4 2025, prediction market volumes doubled, with over 12 billion contracts traded in 2025 (first full year of prediction markets), and over 4 billion traded so far in 2026. Equities offering expanded with shorting, achieving over 11 billion of equity notional volume in the first couple of months since shorting launched.
• Wallet Share: Over 40% of total assets are across ETFs, advisory, retirement, and cash. Robinhood Gold Card saw over five times growth in 2025 to 600,000 customers, reaching over 10 billion in annualized spend. Robinhood banking launched with over 25,000 funded customers and over 400 million in balances, with over 50% of funded customers using direct deposit.
• Global Financial Ecosystem: Bitstamp volumes scaled up two times since acquisition in June. Over three-quarters of a million customers outside the US. Launched ISAs in the UK in 2025, the top request from UK customers.

Guidance

• 2026 outlook: Adjusted OPEX and SBC are expected to be in the range of $2.6 to $2.725 billion, representing an 18% year-over-year expense growth at the midpoint. Revenue growth is expected to outpace expenses, with a focus on profitable growth. Early 2026 momentum includes January trading volumes up over 50% YOY, options volumes up 20%, and Q1 net deposits exceeding $7 billion.

Risks

• Regulatory developments that could materially differ from current expectations.
• Market volatility impacting the company's stock price.
• Crypto market fluctuations and short-term impacts on prediction markets.

Question and Answer

Q: Any additional updates on Robinhood Social?

A: Robinhood Social is being tested internally, with prediction markets recently added. It is marching towards public launch in the coming months.

Q: What could be the reasons for the more than 40% drop in Hood's share price? And how is leadership addressing the downslope?

A: Leadership focuses on customer inputs and business performance. They also have a over a billion-dollar share repurchase program to address market volatility.

Q: How can we see Robinhood Markets, Inc. extend its roots to not be so heavily affected by crypto downturn and end of football season?

A: Crypto is seen as foundational technology, and prediction markets are diversifying beyond sports. The company is also diversifying its business lines with over 11 lines of businesses doing over $100 million in annualized revenue.