Why Robinhood Stock Is Plummeting Today
Key Points
Robinhood's Q1 sales and earnings results came in below the market's expectations.
In addition to the Q1 misses, the company guided for higher adjusted operating expenses and stock-based compensation this year.
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Robinhood (NASDAQ: HOOD) stock is getting hit with big sell-offs Wednesday following the company's latest quarterly report. The company's share price was down 14.3% as of 1:15 p.m. ET. At the same point in the daily session, the S&P 500 was down 0.3%, and the Nasdaq Composite was down 0.4%.
Robinhood published its first-quarter results after the market closed yesterday, posting sales and earnings that fell short of the market's expectations. As of this writing, the stock is now down roughly 38% in 2026.
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Robinhood's Q1 results missed the mark
Robinhood notched a profit of $0.38 per share on revenue of $1.07 billion in the first quarter, coming in below the average Wall Street analyst estimate's call for a per-share profit of $0.39 on sales of $1.14 billion. Net interest revenue jumped 24% higher year over year to reach $359 million, and transaction-based revenue rose 7% year over year to hit $623 million. With overall revenue still up 15.4% year over year, Robinhood's Q1 performance was far from terrible -- but investors are focusing on indicators that could point to growth deceleration and margin pressures for the business.
What's next for Robinhood?
With its Q1 report, Robinhood raised its outlook for annual adjusted operating expenses and stock-based compensation by roughly $100 million -- bringing the total projected combined category range to between $2.7 billion and $2.825 billion. On the heels of results last quarter that missed the average Wall Street targets, some investors appear to be bristling at the guidance for increased expenses this year.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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