HOOD Stock: What to Expect from Robinhood’s Q1 Earnings

Investment platform Robinhood Markets [HOOD] made waves when it floated on the Nasdaq back in July 2021, shooting up 123.68% within its first week. But it then went the way of many hotly anticipated IPOs and sank into relative obscurity: it was 70% down on its first close for most of 2022 and 2023.

It began to regain traction last year, however, and peaked 76.08% above its IPO price on February 13 this year.

What is behind this renewed interest? Will Q1 results, announced on April 30, dampen investors’ spirits when it comes to HOOD stock?

The Latest from Robinhood 

Robinhood reported key operating data for February 2025 on March 11, including a circa 150,000 increase in funded customers from January 2025, and annual deposit growth rate of 45% from February 2024. 

That said, assets under custody (AUC) were down 8% in the past month, although still up a healthy 58% year-over-year.

Q4 and FY 2024 results, announced on February 12, were more straightforwardly positive, with record quarterly revenues topping $1bn — representing 115% growth year-over-year — and adjusted EBITDA up 167% for FY25.

Crypto led the charge in Q4, with an impressive jump from $61m in crypto revenue in Q3 to $358m in Q4.

Given the firm’s necessary exposure to the broader macroeconomic picture, the stock has been impacted by the broader market selloff instigated by tariff-related tensions and rising treasury yields. 

How Has HOOD Reacted?

Up 31.32% for the year to date, it has nonetheless been a rocky period for the investment and crypto trading platform.

Despite a 24.09% run between April 21 and 24, HOOD remains down 26.87% from the all-time high reached following Q4 and FY 2024 results.

Despite the dip in AUC from January, HOOD rose 7.04% in a day on February’s operating data.

HOOD rose 4.82% in the 24 hours prior to Q4 and FY25 results in anticipation of good news, and rose a further 16.76% in the 48 hours following the announcement.

How Does Hood Measure Up to the Competition?

With a market cap of $43.33bn, Robinhood Markets is a midweight retail investment platform, which arguably makes its projected growth rate of 23.82% even more impressive — especially when compared to Interactive Brokers’ [IBKR] 3.01%.

IBKR announced Q1 2025 results on April 15, with record net total revenues and quarterly commission revenue, which topped $500m for the first time. Despite this, the stock dropped 8.95% in the 24 hours following the results announcement, with a $0.05 EPS miss and 32% increase in other fees and services — partly driven by a $9m increase in risk exposure fees — likely contributing to this dip.

Source: Yahoo Finance

By contrast, Blackstone [BX] announced strong Q1 2025 earnings on April 17. With profits beating estimates and a strong performance in the private equity and credit segments of the business, the picture should have been brighter for investors.

The stock remains down 21.32% in the year to date, however, with fears over the wider investment landscape holding down the potential of both competitors.

While these earnings cannot be used as a model for Robinhood’s upcoming announcement, it is likely that some of the macro factors affecting both BX and IBKR will also impact HOOD.

HOOD Stock: The Investment Case

The macroeconomic picture for financial services platforms — particularly those with a significant focus on the US — looks uncertain in the year ahead. 

The Bull Case for Robinhood

Robinhood Markets has been an anomaly before — here are some potential reasons for optimism when considering the stock.

Institutional Interest

While Cathie Wood may have sold 26.9% of her HOOD stake in Q2 2024, the firm still makes up 5.97% of her overall portfolio, as reported by Stockcircle. 

Ray Dalio and Ken Griffin also increased their shares in Robinhood by 2.14m and 3.89m shares, respectively, in Q4. 

Diversification

Another point to consider is Robinhood’s sustained focus on diversification of income.

What began as a simple trading app has consolidated into a comprehensive fintech platform, with diverse income streams including subscription costs and interest.

While there has been uncertainty surrounding investment and crypto so far in 2025, this diversification offers alternative revenue sources and could be a comfort to investors.

The Bear Case for Robinhood

Nevertheless, the macroeconomic environment cannot be overlooked, Robinhood’s investing platform is still a significant source of income for the company.

Diminishing Estimates

It is worth noting that the Zacks Consensus Estimate for 2025 has declined a notable 14.6% throughout April, with analysts’ growing increasingly pessimistic about the company’s earnings prospects.

The stock’s P/S ratio of 15.03 goes some way to validate these concerns.

Wider Market Fluctuations

Robinhood’s very nature makes it vulnerable to wider market movements, and with tariffs and recessions mentioned in the news almost daily, there could be a tricky spell ahead.

In short, as consumers have less disposable income, they could also have less money they are willing to allocate to investments or savings via Robinhood.

Conclusion

Robinhood Markets’ prospects are strong, but the macroeconomic picture could spell trouble for the financial services platform.

Tomorrow’s earnings call ought to shed some light on exactly how risky of a play HOOD stock might be.