A Clean, Strong Year On the Numbers - and the First Real Legal Loss
The Q3 2025 post closed on the tension between Robinhood's best-ever operating quarter and its most serious legal exposure yet, with every court ruling to that point either favoring Robinhood or still pending. FY2025 changes that balance modestly but concretely: total net revenues grew 52% to $4.47 billion, up from $2.95 billion, and net income grew 33% to $1.88 billion - a cleaner comparison than FY2024's headline number, since FY2025 doesn't carry an equivalent one-time tax benefit (the effective tax rate this year, ~10.7%, is a normal operating rate, not distorted by a valuation-allowance release). Adjusted EBITDA» grew 76% to $2.52 billion from $1.43 billion.
On the legal front: in Nevada, the federal court denied Robinhood's motion for a preliminary injunction against the state's gaming regulators - the first outright loss in the multi-state legal fight this series has tracked since Q3 2024. Rather than fight on in Nevada while appealing, Robinhood agreed to stop offering new sports-related event contracts in the state as of December 1, 2025, and to explore unwinding existing longer-duration contracts there, in exchange for Nevada agreeing not to enforce its gaming laws while Robinhood's appeal to the Ninth Circuit proceeds. Separately, the Blue Lake tribal plaintiffs' preliminary-injunction motion was also denied (a win for Robinhood on that front, though under appeal by the plaintiffs), and Massachusetts's case took a procedural back-and-forth (initially dismissed as unripe, then reinstated). The pattern this year is genuinely mixed - not the one-sided "everything's pending or favorable" picture of the prior three quarters.
The Prescription
Robinhood should keep pursuing the diversification moves it made this year rather than leaning back on event contracts as the primary growth story. The Indonesia brokerage and crypto-trading acquisitions and the Rothera exchange-infrastructure joint venture with Susquehanna are the first real evidence the company is building revenue lines - and, with Rothera, owning actual exchange infrastructure - that don't depend on the outcome of a single contested product line. Operating expenses grew 25% against 52% revenue growth, so the cost discipline that's held for two straight years is funding this expansion without diluting margin, and 2026 should keep pointing new capital at Indonesia and Rothera rather than only doubling down on event contracts in the states that still allow them.
What it should stop doing: treating every contested state as worth fighting to the end rather than negotiating early. Nevada is the concrete lesson this year: a federal court denied Robinhood's injunction request, and rather than fight on, the company agreed to stop offering new sports event contracts there and to explore unwinding existing ones - a real, disclosed retreat, not a pending motion. That outcome came after months of litigation costs and a legal posture built around suing regulators directly. With the Ninth Circuit appeal and the Third Circuit's New Jersey ruling still pending, Robinhood should use Nevada as the template for negotiating a managed wind-down or compromise in other skeptical states before a court forces the same outcome again - continuing to litigate every jurisdiction to a loss is a worse outcome than negotiating the terms of retreat proactively.
Key Financial Metrics
Year ended December 31, 2025 vs. year ended December 31, 2024 - consolidated, reported in USD.
| Metric | FY2025 | FY2024 | YoY |
|---|---|---|---|
| Total net revenues | $4,473M | $2,951M | ✅ +52% |
| Adjusted EBITDA» | $2,520M | $1,430M | ✅ +76% |
| Operating income (loss) (GAAP) | $2,094M | $1,054M | ✅ +99% |
| Net income (loss) | $1,883M | $1,411M | ✅ +33% |
| Cash and cash equivalents (period-end) | $4,261M | $4,332M | ⚠️ roughly flat |
Transaction-based revenue grew 60% to $2.63 billion, now clearly the largest single revenue category (59% of total), ahead of net interest revenue's $1.51 billion - a further extension of the shift back toward trading-driven revenue that began in FY2024. Operating expenses grew 25% to $2.38 billion, well behind the 52% revenue growth rate, real operating leverage for a second straight year. Net income's growth rate (33%) lagged both revenue and Adjusted EBITDA growth mainly because FY2024's comparison base was inflated by the one-time $369 million tax benefit - on a normalized basis (excluding FY2024's one-time items, per the FY2024 post), net income growth was closer to 91%, a more accurate read of the underlying acceleration.
Trailing Comparison
Full-year total net revenues and Adjusted EBITDA, FY2023-FY2025.
| Year | Total Net Revenues | Adjusted EBITDA | Net Income (Loss) |
|---|---|---|---|
| FY2023 | $1,865M | $536M | $(541)M |
| FY2024 | $2,951M | $1,430M | $1,411M |
| FY2025 | $4,473M | $2,520M | $1,883M |
Three straight years of accelerating revenue growth (37%, 58%, 52%) and even faster Adjusted EBITDA growth - FY2025's Adjusted EBITDA alone is roughly 4.7x FY2023's full-year figure. This is now a genuinely large, profitable business by any measure this series has tracked, a world away from the near-cash-shell valuation the FY2022 post described three years earlier.
Key Operational Metrics
Year ended December 31, 2025 vs. year ended December 31, 2024.
| Metric | FY2025 | FY2024 | YoY |
|---|---|---|---|
| Funded Customers | 27.0M | 25.2M | ✅ +7% |
| Total Platform Assets | $322.1B | $192.9B | ✅ +67% |
| Average Revenue Per User (ARPU) | $171 | $122 | ✅ +40% |
| Robinhood Gold Subscribers | 4.18M | 2.64M | ✅ +58% |
Total Platform Assets ended the year at $322.1 billion, actually below the $332.7 billion reported at the end of Q3 2025 - a sequential decline in Q4, the first this series has recorded for this metric since it was introduced. The filing attributes full-year growth to Net Deposits, acquired assets (Bitstamp), and equity valuations, but doesn't specifically explain the Q4 sequential dip; it's worth watching in Q1 2026 whether this is a one-quarter blip (year-end market volatility, seasonal deposit patterns) or the start of a genuine deceleration in platform-asset growth.
Beyond the Usual
Robinhood lost its first sports-contracts court fight and agreed to stop offering new sports event contracts in Nevada
This is a material, concrete setback in a legal fight this series has tracked since Q3 2024 as mostly favorable or unresolved for Robinhood. The Nevada federal court denied RHD's motion for a preliminary injunction against the state's gaming regulators, and rather than continue litigating in a posture where the state could actively enforce against it, Robinhood agreed to stop offering new sports-related event contracts in Nevada as of December 1, 2025 and to explore unwinding existing longer-duration open contracts there - in exchange for Nevada holding off enforcement while RHD's appeal to the Ninth Circuit proceeds. This is the first jurisdiction where Robinhood has actually pulled back the product rather than continuing to offer it pending a legal resolution. If the Ninth Circuit doesn't reverse, Nevada becomes a template other skeptical states could point to, regardless of how the Third Circuit rules on the separate New Jersey preemption question.
Robinhood entered Indonesia through two December 2025 acquisition agreements
In December 2025, Robinhood entered agreements to acquire PT Buana Capital Sekuritas, an Indonesian brokerage, and PT Pedagang Aset Kripto, a licensed Indonesian digital financial asset trader - both still pending as of this filing. This follows the pattern of Robinhood's Bitstamp (EU/UK/Asia crypto) and WonderFi (Canada, still pending as of this filing, more than six months past its originally expected second-half-2025 close) acquisitions: building out regulated local entities in target international markets rather than trying to operate cross-border without local licensing. Indonesia is a notably different market than Robinhood's prior international moves - a large, retail-investor-heavy emerging market rather than a developed-market extension - and this is the first disclosed step into Southeast Asia for a company that has, until now, been almost entirely a US-domestic retail brokerage with recent forays into Europe and Canada.
A joint venture with Susquehanna (SIG) acquired a derivatives exchange, giving Robinhood its own exchange infrastructure
In November 2025, Robinhood established a joint venture called Rothera, in partnership with SIG (Susquehanna International Group), which acquired 90% of MIAXdx (subsequently renamed Rothera E&C) in a transaction that closed in January 2026, just after this fiscal year-end. MIAXdx/Rothera E&C is a designated contract market - exchange infrastructure - a structurally different kind of asset than any prior Robinhood acquisition tracked in this series (all of which were customer-facing businesses: a credit card issuer, an RIA custodian, crypto exchanges). Owning a stake in the exchange itself, rather than just being a participant on someone else's exchange, is a notable vertical move, particularly relevant given the event-contracts business depends entirely on exchange infrastructure and market-access relationships.
Target Valuation Range
Rich at the $113.10 year-end close, though down from October's $146.78 peak - the stock pulled back roughly 23% in the final two months of the year, coinciding with the Nevada legal loss and the sequential decline in Total Platform Assets. This is the first year-end in this series where the stock price actually moved down relative to a prior high within the same fiscal year for a reason plausibly tied to the company's own disclosed events, rather than broader market sentiment.
HOOD peaked at $146.78 in October 2025 before falling to $128.49 in November and $113.10 at year-end - a meaningful pullback that roughly coincides with both the Nevada legal setback (agreed December 1) and the Q4 sequential dip in Total Platform Assets, though this series can't establish a precise causal link between either event and the specific timing of the stock's decline. There has been no stock split, so this is the actual nominal price quoted at the time.
| Market cap → enterprise value | FY2025 (period-end) |
|---|---|
| Share price (period-end, December 31, 2025 close) | $113.10 |
| Shares outstanding (Class A + B) | 901.3 million |
| Market capitalization | ~$101.9 billion |
| Less: cash and cash equivalents | $4.26 billion |
| Interest-bearing debt | none |
| Enterprise value | ~$97.6 billion |
| Peer-multiple sanity check | FY2025 (actual) |
|---|---|
| Revenue basis | full-year actual ($4.47B) |
| Enterprise value | ~$97.6 billion |
| EV/Revenue | ~21.8x |
| Adjusted EBITDA basis | full-year actual ($2.52B) |
| EV/Adjusted EBITDA | ~38.7x |
| P/E (GAAP) | $1.88B net income |
Every multiple eased modestly from Q3 2025's peak levels (~24.4x revenue, ~41.9x Adjusted EBITDA, ~57.9x P/E), consistent with the Q4 stock pullback, but all remain far above anything this series recorded before 2025 - the market continues to price Robinhood at a substantial growth premium even after a real legal setback and a sequential platform-assets decline.
A simplified reverse DCF: at a ~10% discount rate, 3% terminal growth, and a 20% mature FCF margin, sustaining today's ~$97.6 billion enterprise value requires roughly $6.83 billion of steady-state annual free cash flow, implying roughly $34.15 billion in steady-state annual revenue - about 7.6x FY2025's actual $4.47 billion, still an extremely demanding bar, though modestly less extreme than Q3 2025's implied figure.
| Scenario | Key assumption | Implied EV | Implied cash | Implied market cap | Implied price |
|---|---|---|---|---|---|
| Current (Dec 31, 2025 close) | actual market price, for reference | ~$97.6 billion | $4.26 billion | ~$101.9 billion | $113.10 |
| Bear | The Ninth Circuit affirms Nevada's position, other states follow suit and force further pullbacks, Total Platform Assets growth continues decelerating, multiple compresses toward ~10x revenue | ~$44.7 billion | $4.26 billion | ~$49.0 billion | ~$54.4 |
| Base | The legal fight stabilizes with Robinhood operating in most states but not Nevada, growth moderates from FY2025's exceptional pace, multiple compresses somewhat further | ~$67.1 billion (~15x revenue) | $4.26 billion | ~$71.3 billion | ~$79.2 |
| Bull | The Ninth Circuit reverses Nevada's ruling, Third Circuit affirms federal preemption, Indonesia and the Rothera exchange stake both open real new growth avenues, multiple recovers toward the October 2025 peak levels | ~$97.6 billion (unchanged) | $4.26 billion | ~$101.9 billion | ~$113.1 |
FY2025 is the year the event-contracts legal fight stopped being one-sidedly favorable to Robinhood - Nevada is a real, disclosed retreat, not a rumor or a pending motion. The underlying operating business had its best year yet by every financial measure this series tracks, and two genuinely new growth avenues opened (Indonesia, the Rothera exchange stake) - but a reader evaluating this stock at a ~22x revenue multiple needs to weigh the Nevada precedent seriously: it's the first concrete evidence that the legal risk this series has flagged since Q3 2024 can actually cost Robinhood market access, not just legal fees.
Robinhood Markets, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC. Historical share price data reflects month-end closing prices for the periods shown.