While equities, options, and newer products like prediction markets showed strong growth, weaker digital asset activity dented investor sentiment. At the same time, Robinhood unveiled a public testnet for Robinhood Chain, which is an Ethereum layer-2 network built on Arbitrum. This forms part of Robinhood’s strategic shift toward tokenized real-world assets and on-chain infrastructure as part of its expansion beyond traditional crypto brokerage services.
Robinhood Revenue Miss Sends Shares Lower
Shares of Robinhood fell sharply in after-hours trading Tuesday after it reported fourth-quarter earnings that missed Wall Street revenue expectations, even though the company posted record annual results for 2025. The stock dropped 7.66% to $79.04 in extended trading after closing the regular session down 1.1% at $85.60. Robinhood shares are now more than 42% below their Oct. 3 peak of $148.67.
Robinhood share price over the past 24 hours (Source: CoinCodex)
For the fourth quarter, Robinhood generated net revenues of $1.28 billion, up 27% year-on-year but below analyst forecasts of $1.34 billion. The shortfall came during a sharp slowdown in crypto-related activity during the final months of the year. Crypto revenues declined 38% from a year earlier to $221 million, thanks to weaker market conditions after digital asset prices entered an extended drawdown beginning in October.
Despite softer crypto performance, Robinhood still delivered solid profitability metrics. Net income for the quarter fell 34% year-on-year to $605 million, while earnings per share came in at 66 cents, slightly ahead of analyst estimates of 63 cents. For the full year, the company reported record net revenues of $4.5 billion, which was a 52% increase compared with 2024, and annual net income of $1.9 billion, up 35% year-on-year.
Trading activity showed mixed trends across asset classes. Notional crypto volumes across Robinhood’s core app and its wholly owned exchange, Bitstamp, rose 3% quarter-on-quarter to a record $82.4 billion in the fourth quarter. However, growth in traditional markets outpaced digital assets. Equity trading volumes increased 10% over the quarter to $710 billion, while options contracts traded climbed 8% to $659 million.
The company also saw a lot of growth in newer product lines. Transaction-based revenues categorized as “other,” which include offerings like futures and prediction markets launched in partnership with Kalshi, surged 375% from the same period a year earlier to a record $147 million. This was the first time these revenues surpassed those generated from equity trading.
While Robinhood’s diversified product suite and record annual revenues were still impressive, the steep decline in crypto income weighed on quarterly performance and investor sentiment.
Robinhood Unveils Robinhood Chain Testnet
Robinhood also launched a public testnet for Robinhood Chain, a new Ethereum layer-2 network built using Arbitrum technology. The testnet is now live for developers and is designed to support tokenized real-world and digital assets directly on blockchain rails.
According to details shared in a company release, the testnet provides developers with network access points, documentation hosted at docs.chain.robinhood.com, compatibility with standard Ethereum development tools, and early integrations from infrastructure partners. The goal of the network is to serve what Robinhood describes as “financial-grade” use cases, including 24/7 trading, seamless bridging between chains, self-custody features, and decentralized applications like tokenized asset platforms, lending markets, and perpetual futures exchanges.
A mainnet launch is planned for later this year. In the meantime, the testnet will include experimental features like stock-style tokens and tighter integration with Robinhood Wallet.
Johann Kerbrat, senior vice president and general manager of Crypto and International at Robinhood, said the testnet lays the foundation for an ecosystem centered on tokenized real-world assets and enables developers to tap into decentralized finance liquidity in the Ethereum ecosystem.
By launching its own layer-2 chain, the company is positioning itself to control both the user interface and the underlying blockchain rails that power trading and settlement.
Robinhood’s strategy is similar to a growing trend among major exchanges. Coinbase operates its regulated exchange while developing Base, its own layer-2 network, and has begun rolling out tokenized equities. Meanwhile, Kraken is building Ink, an Optimism-based layer-2 network, alongside its tokenized equity platform.
Despite its expansion, Robinhood faced some criticism in the past over trading outages during periods of market volatility and its reliance on payment for order flow in equities. CEO Vlad Tenev said earlier this year that tokenized stocks and blockchain-based settlement could help reduce the risk of trading freezes by enabling real-time settlement and greater transparency.
With Robinhood Chain now in public testing, the company is ready to become a key infrastructure provider in the market for tokenized assets.
Source: https://coinpaper.com/14478/robinhood-shares-slide-after-crypto-revenue-miss
