HOOD 4Q25 First Take: With monthly disclosures, Nov. cash equity and options volumes fell notably, and crypto activity was weak in both Nov. and Dec. The market had already trimmed expectations.

In 4Q, the focus shifted to monetization rates across asset classes and net interest yields. Actual revenue came in at $1.28bn vs. the market’s ~$1.35bn, a ~5% miss. Given HOOD’s granular operating disclosures, the shortfall likely stemmed from the Street linearly overestimating securities lending, by nearly $50mn on that line alone.

The prior quarter’s spike in securities lending was driven by intense trading in liquidity-dependent retail favorites, which pushed borrow costs higher. In 4Q, liquidity tightened, a headwind for such flows. As a result, securities lending revenue dropped sharply to under $30mn from roughly $90mn.

Crypto, a key pillar of HOOD’s valuation premium, also softened. Trading revenue slipped to $220mn, below the ~$250mn the market was looking for.

By Feb., after the next Fed chair pick, the 'Warsh shock'—a path of rate cuts alongside tighter money supply—raised liquidity-tightening fears. For HOOD, which is highly leveraged to market liquidity across crypto, meme stocks and its retail platform, the impact is front-loaded. Its premium valuation adds to the sensitivity.

After such a pullback, is it an opportunity or a risk? Dolphin Research will share its take in the full note, stay tuned. $Robinhood(HOOD.US) $T-Rex 2X Long HOOD Daily Target ETF(ROBN.US)