Robinhood (HOOD) Q4 FY25 earnings call: guidance and Q&A

What are the latest updates on Robinhood Social and its rollout?

Robinhood Social is currently in internal testing, with Prediction Markets recently integrated to enhance discovery and engagement. The company is building confidence in its potential due to the diversity of content from its large customer base and asset offerings. A public launch is expected in the coming months.

“I think we're building increasing confidence that this is going to be a great tool for discovery and engagement. So marching towards public launch, I think you'll see that in the coming months, but we're pretty close.”

asked by Matt S · answered by Vladimir Tenev

What are the reasons for the more than 40% drop in Robinhood's share price, and how is leadership addressing it?

Management focuses on business inputs, which show strong market share gains and record net deposits, indicating customers' increasing trust. They believe business performance leads stock price in the long run. The company also has a $1 billion share repurchase program to lean into during market volatility.

“We're really focused on the inputs of our business, and we love the inputs that we're seeing. You saw -- you heard from me and Shiv, last quarter and really last year was a year of continued market share gains across pretty much everything.”

asked by Rohit P · answered by Vladimir Tenev

How will Robinhood navigate the crypto downturn and the end of football season for prediction markets to reduce dependency on these factors?

For crypto, Robinhood is long-term bullish, viewing it as a foundational technology for all assets, and is not distracted by short-term fluctuations. Crypto revenue was 18% of total revenue last year. For prediction markets, non-sports contracts and other sports (like NBA) are gaining traction, diversifying beyond NFL. The company expects continued diversification of contracts and improved customer experience.

“So my belief is that in the future, you'll see crypto and traditional financial services increasingly merge. And of course, people will talk about and trade Bitcoin and other assets, and we continue to be long-term bullish on those.”

asked by Luke D · answered by Vladimir Tenev

With the close of the Rothera JV, what product developments can be expected in prediction markets beyond more contracts?

The focus is on refining the trading experience, adding tools like combos and player contracts, and leveraging Robinhood's super-app advantage to show prediction markets contextually across the app. The Rothera JV provides vertical control over the experience, pricing, and economics, aiming for optimal customer outcomes and potentially attracting other firms to the marketplace.

“And Rothera is particularly interesting because it gives us vertical control over the entire experience. We have control over what contracts we can list and also greater control over the pricing and economics.”

asked by Alexander Markgraff · answered by Vladimir Tenev

Given recent news about AI's impact on competitors, why isn't AI a huge tailwind for Robinhood, which seems well-positioned?

AI is a significant tailwind. Robinhood is making bets with Cortex for active traders and Cortex Assistant in the main app, rolling out in weeks. They are also exploring AI in advisory, aiming to transform wealth management through self-serve tools and streamlined advisor workflows, engaging with regulators to ensure safe rollout.

“Cortex Assistant, which is the AI assistant that's integrated into Robinhood is rolling out in the coming weeks. So we're refining it internally, and that's like going to roll out to customers very soon.”

asked by Dan Dolev · answered by Vladimir Tenev

What can be inferred about budgeted revenue growth from the expense plan, and how much flexibility does Robinhood have given its commitment to profitable growth and AI efficiencies?

Robinhood's mantra is profitable growth, meaning revenue is expected to grow faster than expenses. Investments are underwritten to strong ROIs, focusing on long-term IRR and scalability for new products. The company's technology-driven nature provides flexibility, with 85% to 90% of costs being fixed, allowing for nimble adjustments while continuing to invest for growth.

“First, our mantra is still profitable growth. We are a growth company. We're going to continue to invest for growth. We're seeing great things from our customers. So we're going to keep doing it profitably. So I think you can infer that from us, that means very simply, we expect revenue to grow faster than expenses, and that's how we build our plan.”

asked by Steven Chubak · answered by Shiv Verma

Can you elaborate on the economics of Rothera and why not migrate all prediction market volume to this JV, given the potential bump in economics?

Rothera allows Robinhood to control the full unit economics and product stack, offering levers to improve customer value and monetization. While a significant portion of volume is expected to move, the primary goal is the best product experience and execution quality for customers. Robinhood also aims to build Rothera into a compelling market for other firms to connect to.

“But the nice part is, as Vlad said, we'll control the full product stack and we'll control the full monetization. So there's a lot of levers you can do with that. You can give more value to customers. You can improve the unit economics.”

asked by Patrick Moley · answered by Shiv Verma

Can you expand on international expansion, comparing Europe vs. Asia, and the go-to-market strategy?

In the U.K. and EU, Robinhood is deepening product suites, adding market-specific functionality like ISAs in the U.K. The EU is a test case for crypto-native financial services, pushing tokenization to offer 24/7 trading and self-custody. In Southeast Asia and other new markets, core features will ramp up faster due to prior regulatory work. The goal is to reach millions of international customers quickly.

“The EU is a test case for what Robinhood could look like if it was built entirely on crypto technology, on crypto rails. So we don't have traditional stocks there, but we have stock tokens. So that's where we're really pushing hard on tokenization.”

asked by James Yaro · answered by Vladimir Tenev

How do tokenization and AI, particularly Agentic AI, come together, and what does this mean for Robinhood?

Tokenization, especially outside the U.S., combined with DeFi, makes it easier for AI agents to integrate with offerings due to robust blockchain developer ecosystems. While it's early to say if a specific chain will become the standard for AI agent communication, Robinhood's tokenized stock offerings and stablecoin partnership position it well to compete in a world where AI agents transact on-chain.

“I mean what I'll tell you, one of the compelling reasons why we're interested in tokenization outside the U.S. and actually unlocking access to DeFi for our stock tokens is that it makes it easier and more interoperable to write agents and have software that integrates with these offerings because there is a robust ecosystem of developers that are integrating with these blockchain protocols.”

asked by Devin Ryan · answered by Vladimir Tenev

How will banking expand this year, and how does the flywheel effect work with more assets on the platform?

Banking has seen a strong start with over $400 million in assets and a high direct deposit attach rate. The 3.5% APY and seamless experience for customers with $100,000+ across Robinhood products are key. The flywheel is simple: more net deposits and assets lead to a better customer experience, which in turn attracts more assets, creating a continuous cycle of value and engagement.

“The more net deposits you have on Robinhood, the more assets, the better your experience is. So as Vlad said, if you have the $100,000 tier, that's across all of your different assets, you get even more value. Customers bring even more assets. We continue to give them even more value.”

asked by Amit · answered by Shiv Verma