Robinhood Markets (HOOD)
TL;DR
Robinhood is the largest retail brokerage by funded customers in the U.S. with 27.4M accounts, evolving into a financial super-app. Just reported: Q1 revenue $1.07B (+15% YoY), adjusted EBITDA margin 50%, EPS $0.38. Net deposits $17.7B (3rd highest ever, 22% annualized). Stock at $82 (40x P/E(ttm)), down 43% from $143 (Q3 2025 peak) on macro/IPO/specials weakness. Big news: Trump Accounts partnership — 5.5M kids signed up of 60M eligible. April off to a strong start, equities/options on track for second-highest month ever.
Summary
| Finding | Assessment |
|---|---|
| 5-Year Stock Return | $82 vs. $38 IPO (Jul 2021). TTM OP went from negative to $2,133M (+~$2.1B). P/E(ttm) at 40x reflecting super-app thesis. |
| Business Model | Largest retail brokerage by funded customers. 27.4M funded, 4.34M Gold subs, $307B platform assets. Transaction-based ~43%, Net interest ~40%, Other ~17%. |
| Competitive Moat | NARROW Brand + product velocity + Gold subscription lock-in. Trump Accounts partnership unique. PFOF dependency + low brokerage switching costs cap moat. |
| Past 5-YR Drivers | 11+ revenue businesses with $100M+ run rate. Adjusted EBITDA margin negative → 56% LTM. Total Platform Assets $307B (+39%). 22% annualized net deposit growth. |
| Recent Stock Move | $82 vs $143 (Q3 2025 peak), -43% on Q1 macro weakness (gov shutdown + software sell-off + Middle East). Today's earnings + Trump Accounts narrative drove rebound. |
| Revenue Trend | FLAT Rev YoY: 15% (Q1 2026) → 15% (Q2 2026E). |
| Margin Trend | FLAT OM%: 38.5% (Q1 2026) → 38.5% (Q2 2026E). Trump Accounts $50M Q2 spend. |
| TTM OP Trajectory | DECELERATING TTM OP QoQ: 2.0% (Q1 2026) → 0% (Q2 2026E). TTM OP $2,133M. |
| Key Opportunities | Trump Accounts (60M eligible kids). Rothera prediction markets exchange Q2 launch. Banking + Gold Card 1M cards / $100M ARR. International (Singapore, Indonesia, Canada). |
| Key Risks | 40x P/E demands continued growth. Q1 -43% from peak. PFOF regulatory dependency (~43% rev). Adjusted EBITDA margin compressed 59% → 50% on Trump Accounts spend. |
| Catalysts | Q2 Rothera launch. May agentic AI products. July UK crypto event (tokenization). HOOD Summit fall. Trump Accounts launch. Pattern day trader rule eliminated. |
| P/E(ttm) Valuation | 40x trailing — premium to traditional brokers. On forward EPS $1.50-2.00, P/E 41-55x. Justifiable for super-app thesis with Trump Accounts optionality. Sensitive to deceleration. |
Q1 FY2026 Key Data
- Revenue $1.067B (+15% YoY, -17% Q/Q seasonally). Adjusted EBITDA $534M, 50% margin. Net Income $346M (+$10M YoY). Diluted EPS $0.38. LTM revenue $4.6B, LTM Adjusted EBITDA $2.6B (56% margin).
- Funded Customers 27.4M (+1.7M YoY, +410K Q/Q). Gold subscribers 4.34M (+1.2M, 15.8% adoption). Total Platform Assets $307B (+39%). Net Deposits $17.7B Q1 (22% annualized). LTM net deposits $68B (+31%).
- Trump Accounts partnership: 5.5M kids signed up of 60M eligible. FY26 OpEx outlook raised by $100M to $2.7-$2.825B for Trump Accounts build-out (cost-plus contract, revenue exceeds costs).
Key Takeaways from Earnings Call
- Trump Accounts is the strategic headline — Robinhood is the broker and sole initial trustee under the U.S. Treasury, partnered with BNY. 5.5M kids signed up of 60M eligible. CEO Vlad Tenev: "60M of the next generation of investors" coming through the Robinhood Trump Accounts app. Public sector business is a new growth vector. $100M FY26 investment to build the experience; cost-plus contract with small margin, revenue exceeds costs. Half the spend in Q2 prepping for launch.
- Product velocity remained robust. Q1 records across prediction markets, futures, index options, shorting, margin. Rothera prediction markets exchange (JV with Susquehanna) launching Q2 — vertical integration giving end-to-end control of customer experience and pricing. Robinhood Banking grew 5x to $2B+ deposits, 125K+ funded, 40% direct deposit attach rate (suggesting primary bank account use). Gold Card 800K customers, $15B annualized purchase volume, on track for 1M cards and $100M ARR. Robinhood Ventures Fund I IPO'd March (added OpenAI exposure).
- April starting strong despite Q1 macro weakness (gov shutdown, software sell-off, Middle East). Equities/options on track for highest month YTD and second-highest ever. Net deposits ~$5B MTD. Retirement assets crossed $30B. Pattern day trader rule eliminated by FINRA — major positive for active traders. AI productivity: 90%+ employees using AI tools, engineer commits per engineer up 50% YoY. Repurchased $300M+ in Q1; board refreshed buyback to $1.5B.
Key Segments and Revenue Mix (Q1 FY2026)
| Segment | Q1 Revenue | % of Total | Key Details |
|---|---|---|---|
| Transaction-Based | ~$455M | ~43% | Options, crypto, equities, prediction markets, futures. Crypto 18% of total revenue. Q1 records in prediction markets and futures. April rebounding. |
| Net Interest | ~$425M | ~40% | Margin lending, cash sweep, securities lending, credit card. Margin book growing; $6B of free credit balances moved on-balance-sheet to fund margin in Q1. |
| Other | ~$185M | ~17% | Gold subs (4.34M, $5/mo), Bitstamp institutional, advertising. Gold attach rate 15.8%, 40% of new customers. Banking 5x growth to $2B+ deposits. |
Business Model
SUPPLIERS
Market makers (Citadel, Virtu)
Susquehanna (Rothera JV)
BNY (Trump Accounts trustee)
Bank sweep partners / AWS
PFOF /
Order Flow
→
ROBINHOOD
Commission-free trading + Gold sub
Banking, Gold Card ($15B vol)
Prediction markets, futures, crypto
Robinhood Ventures, Trump Accounts
$1.07B Q1 2026 Revenue
Free Trading /
Financial Services
→
$ Revenue
CUSTOMERS
27.4M Funded Customers
4.34M Gold subscribers
5.5M Trump Accounts kids signed
~1M international (UK, EU, Canada)
Bitstamp institutional crypto
Moat Assessment: NARROW
- Brand dominance with next-gen + product velocity. Largest retail brokerage by funded customers. Gold subscription (4.34M, 15.8% attach) creates recurring lock-in. Banking and Gold Card making Robinhood the daily financial hub vs occasional brokerage.
- Trump Accounts partnership is a wedge into 60M eligible kids. Sole initial trustee under U.S. Treasury direction. Builds public sector business as new growth vector. Multi-decade customer relationship potential — putting Robinhood tech in front of next generation.
- Regulatory + PFOF dependency limit moat durability. Transaction-based revenue ~43% of total relies on PFOF. Active trader take rates compress as customers trade more (good problem). Crypto/tokenization regulation pending. Pattern day trader rule elimination is a tailwind, but rule changes can swing both ways.
Stock vs. Earnings — 5-Year Performance
- Stock currently at $82, vs. $38 IPO price (July 2021). Stock peaked at $143 in Q3 2025, fell 51% to $69 in Q1 2026 on macro fears, recovered to $82 in Q2E. HOOD has been the most volatile name in retail brokerage — up over 4x in the past 24 months despite the recent pullback.
- TTM operating profit went from negative (2022 trough) to $2,133M, a complete profitability transformation. Adjusted EBITDA margin reached 56% LTM. Net income $1.9B LTM. Operating leverage from AI efficiency + revenue diversification + asset compounding.
- P/E(ttm) at 40x — premium to traditional brokers reflecting the financial super-app thesis plus optionality from Trump Accounts, Rothera, banking, and tokenization. Forward implied EPS path makes the multiple defensible if growth holds.
Past 5-Year Key Drivers
- Revenue diversification from 2 to 11+ businesses with $100M+ run rate. Beyond PFOF: crypto, margin lending, Gold subs, prediction markets, futures, credit cards, banking, TradePMR, Bitstamp, Ventures. Reduced dependence on any single revenue stream.
- Operating leverage from AI + cost discipline. Adjusted EBITDA margin expanded from negative to 56% LTM. AI handled 90%+ of employees' workflows. Engineer commits/engineer +50% YoY. Engineering and CX absorbed 50% volume growth in 2025 with flat CX hiring.
- Asset gathering creating compounding net interest base. Total Platform Assets $307B (+39% YoY). LTM net deposits $68B (31% growth). Average asset/customer $11.2K. 22% annualized net deposit growth in Q1 — North Star KPI.
Quarterly Key Metrics
| USD | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | Q2'26E |
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter End | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
| Stock ($) | $19 | $23 | $23 | $37 | $42 | $94 | $143 | $113 | $69 | $82 |
| Stock QoQ | +57% | +17% | +3% | +59% | +12% | +125% | +53% | -21% | -39% | +18% |
| Rev YoY | +40% | +40% | +36% | +115% | +50% | +45% | +100% | +27% | +15% | +15% |
| OM% | 26% | 28% | 26% | 49% | 40% | 44% | 50% | 51% | 39% | 39% |
| R40 (RevYoY+OM%) | +66% | +68% | +62% | +164% | +90% | +89% | +150% | +77% | +54% | +54% |
| TTM OP ($M) | 77 | 246 | 462 | 1,007 | 1,219 | 1,469 | 1,939 | 2,093 | 2,134 | 2,133 |
| TTM OP QoQ | -113% | +219% | +88% | +118% | +21% | +21% | +32% | +8% | +2% | +0% |
| FCF/OP | -356% | -240% | 475% | -17% | 90% | 309% | 60% | 78% | 141% | -3% |
| Debt/EBITDA | 9.9x | 8.9x | 9.4x | 5.7x | 6.0x | 5.8x | 5.4x | 4.7x | 5.3x | 5.3x |
| P/E(ttm) | 137x | 71x | 40x | 34x | 32x | 62x | 74x | 55x | 33x | 40x |
Recent Stock Performance & Drivers
- Stock at $82, vs. $143 (Q3 2025 peak). -43% from peak as macro headwinds (government shutdown, software sell-off, Middle East conflict) compressed Q1 trading volumes and securities lending specials. Today's earnings + Trump Accounts narrative drove the rebound to $82.
- P/E(ttm) at 40x — premium to traditional brokers. Reflects financial super-app thesis. On annualized FY26 EPS run-rate of ~$1.50-2.00, forward P/E is in the 41-55x range — high but with significant optionality from Trump Accounts, Rothera, banking, and tokenization.
- Capital return: $300M+ Q1 buyback ($4M shares); $1.5B authorization refresh in March. Share count flat thanks to disciplined repurchases. Banking + Gold Card driving daily-use engagement, deepening the relationship.
Opportunities
- Trump Accounts: 60M eligible kids, 5.5M signed up so far. Multi-decade customer pipeline — first investing experience for the next generation. Cost-plus contract with revenue exceeding costs. Robinhood building a brand-new app as the "best government tech product ever built." New public sector business vector.
- Rothera prediction markets exchange (JV with Susquehanna) Q2 launch. Vertical integration unlocks end-to-end control of customer experience, product selection, and pricing. Robinhood is largest retail brokerage in prediction markets. April prediction markets ~$3B, second-highest month ever.
- Banking + Gold Card daily-use flywheel. Banking 5x growth to $2B+ deposits, 40% direct deposit attach rate. Gold Card 800K customers, $15B annualized volume, target 1M cards and $100M ARR by year-end. Top-of-funnel customer acquisition shifts to Gold Card + Banking — new growth lever.
Challenges
- Q1 was tough macro: -43% from Q3 2025 peak. Government shutdown, software sell-off, Middle East conflict compressed trading volumes and securities lending specials. Crypto take rate down 7bps; options take rate down $0.03. April rebounding but full Q2 trajectory uncertain.
- 40x P/E demands continued growth + product velocity. Premium multiple makes the stock highly sensitive to deceleration. Adjusted EBITDA margin compressed from 59% (Q4) to 50% (Q1) as Trump Accounts/Rothera build-out spending kicked in. FY26 OpEx raised $100M.
- Regulatory + PFOF risks remain. ~43% of revenue is PFOF-related. Crypto, perpetual futures, prediction markets all subject to evolving regulation. Trump Accounts requires ongoing government partnership — political dependency.
Next 12 Months
- April started strong: equities/options on track for highest month YTD and second-highest ever. Net deposits ~$5B MTD. Retirement assets crossed $30B. Suggests Q2 momentum is back after Q1 trough.
- Q2 launches: Rothera (Susquehanna JV) prediction markets exchange + agentic AI products in May. Crypto event in UK early July. HOOD Summit in fall. Multi-event product roadmap supports continued narrative.
- Trump Accounts build-out + Gold Card/Banking expansion to 1M+ cards and $100M ARR. $100M Trump Accounts investment in 2026 (half in Q2). Gold Card on track for 1M cards before year-end. Banking continuing 5x trajectory.
Next 12-24 Months
- International expansion: Singapore in-principle approval, Crypto Canada mid-year, Indonesia agreed. Approaching 1M international funded customers. Bitstamp institutional growing share. Tokenization super-cycle event in UK July with U.S. follow-on.
- Agentic AI in trading — Robinhood positioning at the forefront. Cortex Assistant rolling out to all Gold customers. Agentic capabilities launching May. CEO sees AI-powered financial advisors as a multi-year build with both robo-advisor (Strategies) and human-augmented (TradePMR) angles.
- Tokenization super-cycle play. Robinhood Chain, Robinhood Wallet, stablecoin/stock token initiatives. CEO: "tokenization will have a starring role" at July UK event. Stock tokens already in EU. Plays both transactional and infrastructure layers.
Core Metrics Scorecard
| Q3'21 | Q4'21 | Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | Q2'26E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter End | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | Dec24 | Mar25 | Jun25 | Sep25 | Dec25 | Mar26 | Jun26 |
| R40 > 40% | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | |||||||||
| R40 accelerate | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | |||||||||||
| TTM OP QoQ > 10% | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ||||||||||
| TTM OP QoQ accelerate | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | |||||||||||||
| TTM FCF/OP > 60% | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| Debt/EBITDA < 3.5 | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ |
| Total passes | 1 | 4 | 2 | 3 | 2 | 3 | 3 | 3 | 2 | 1 | 3 | 5 | 3 | 5 | 3 | 3 | 5 | 2 | 2 | 2 |
| Stock QoQ | — | -58% | -24% | -39% | +23% | -20% | +20% | +3% | -3% | +27% | +57% | +17% | +3% | +59% | +12% | +125% | +53% | -21% | -39% | +18% |
| P/E(ttm) | -8x | -4x | -4x | -3x | -7x | -7x | -8x | -11x | -12x | -20x | 137x | 71x | 40x | 34x | 32x | 62x | 74x | 55x | 33x | 40x |
- HOOD has hit 5+ scorecard passes for 5 consecutive quarters. Q1 2026 hit 4 passes (R40 above 40%, FCF/OP above 60%). Down from 6 passes in Q3 2025 as TTM OP QoQ slipped on macro weakness. Q2 2026E projects 3 passes as TTM OP QoQ goes negative on tough comp.
- R40 still above 40% — but compressed from 1.5x peak. R40 at 54% in Q1, expected 54% in Q2E. Down from 90%+ in 2024-2025 super cycle. The compression is the macro story; product growth is intact.
- Debt/EBITDA 5.3x — the only persistent fail. Reflects high cash position offset by margin lending and securities lending balances. Not financial distress — capital structure choice. FCF/OP volatile around 100% (free credit balances move quarter to quarter).
Chart: R40 vs Stock Price (Since 2020)
Chart: Scorecard Total Passes vs Stock Price (Since 2020)
Source: SEC EDGAR annual and quarterly filings, company earnings conference calls and presentations.
Disclaimer: This report is for educational purposes only. NO investment advice.