Robinhood Markets (HOOD), the commission-free trading platform, saw its stock fall more than 9% after it reported weaker-than-expected Q1 2026 results. The drop came despite strong user growth, including a record 4.3 million Gold subscribers and $18 billion in net deposits, as investors focused on weaker earnings, a slowdown in crypto trading, and higher costs.
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A Rare Miss on Both Revenue and Earnings
For most of 2025, Robinhood consistently beat expectations and raised guidance. That streak ended this quarter, as the company missed Wall Street estimates on both revenue and earnings.
The company reported EPS of $0.38, below estimates of $0.39, while revenue came in at $1.07 billion, missing the $1.14 billion forecast.
At the same time, average revenue per user dropped to $157 from $191 in the prior quarter, showing that even as the user base grows, spending per user is slowing. Also, operating expenses rose 18% to $656 million, driven by higher spending on marketing and new products.
What Spooked Investors the Most
Beyond the headline miss, two key issues drove the negative reaction.
First, crypto revenue fell sharply, down 47% year-over-year to $134 million and also lower than the prior quarter, pointing to weaker trading activity.
Second, spending is rising, with the company lifting its 2026 expense outlook to $2.7 billion–$2.825 billion, partly due to new initiatives like “Trump Accounts.” While this may support long-term growth, investors are concerned about the near-term hit to margins.
What Investors Will Watch Next
The focus now is on whether Robinhood can turn strong deposit growth into steady profits.
Investors will watch if average revenue per user recovers after falling to $157 from $191 last quarter. Moreover, with 2026 expense guidance raised to as high as $2.8 billion, analysts will be looking for signs that these growth investments are actually starting to pay off by the second half of the year.
Is HOOD a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HOOD stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average HOOD price target of $106 per share implies 29.16% upside potential.
