JP Morgan analyst Kenneth B. Worthington said Robinhood Markets, Inc.’s (NASDAQ:HOOD) first-quarter results fell short of expectations due to weaker revenue trends, while he lowered forecasts and trimmed his price forecast amid concerns about the durability of certain income streams.
Earnings Miss Driven By Revenue Weakness
Worthington noted that Robinhood reported first-quarter 2026 EPS of 38 cents, below the 43 cents consensus, as total revenue of $1.07 billion missed expectations of $1.14 billion. He attributed the shortfall to weaker transaction revenue and net interest revenue.
He highlighted pressure on transaction revenue, which came in at $623 million versus expectations of $661 million, as take rates declined across options and crypto.
He said options revenue fell short due to lower per-contract pricing, while crypto take rates also declined amid competitive pressure. Net interest revenue of $359 million also missed estimates, reflecting weaker securities lending activity in a softer IPO environment.
Costs, Deposits And Growth Trends
Worthington said Robinhood kept expenses well under control in the quarter, with adjusted operating expenses below prior guidance. However, the company raised its full-year expense outlook to account for investments tied to new initiatives, such as Trump Accounts.
He pointed to net deposits as a bright spot, with inflows of $17.7 billion exceeding expectations and tracking near the company’s 20% annual growth target. He added that April trends improved, with …