The Robinhood story

What drives the business

• Robinhood has expanded from commission-free stock trading into active trading tools, retirement accounts, wealth management and Gold subscriptions, with Coastal Bank providing banking services and supporting the Gold Card through a program agreement.
• Payment for order flow and trading fees remain central to the business, with options revenue rising 29% and event contract revenue rising over 10x in the quarter to June 2026.
• Customer borrowing also drives earnings, with the margin book rising 127% to $21.6 billion and net interest revenue rising 9% to $389 million in the quarter to June 2026 despite lower short-term interest rates.
• Gold connects subscriptions with benefits across cash, retirement, margin and credit products, while the Credit Card business and Robinhood Legend each surpassed $100 million in annualized revenues by the July 2026 release.
• Robinhood's prediction market expansion includes Rothera, its joint venture with Susquehanna International Group, which acquired 90% of MIAXdx in January 2026 and launched a CFTC-licensed exchange and clearinghouse in June 2026.

What the price assumes

The growth implied by Robinhood's price is not measured because TenQ does not run a reverse DCF for finance industry classifications, where free cash flow may not measure earnings.

At $116.46, Robinhood trades at 51.6x earnings and 21.2x revenue, against revenue growth of 38.3% over the last twelve months and annual revenue growth of 48.8% over the last three years.

TenQ's earnings-yield check compares 1.9% with the 10-year Treasury's 5.2%, while its cash-yield check compares 0.2% with a 3.0% threshold.

What could change the story

• Trading activity can shift sharply across products, as cryptocurrency revenue fell 38% to $100 million in the quarter to June 2026, and payment for order flow remains exposed to regulatory restrictions.
• Revenue growth of 38.3% over the last twelve months trails the 48.8% annual pace over the last three years, failing TenQ's growth acceleration check.
• The gains primarily related to Robinhood Ventures Fund I contributed $0.14 to diluted earnings per share of $0.62 in the quarter to June 2026, separating part of reported profit growth from ongoing operations.
• Free cash flow of $219 million over the last twelve months was below stock-based pay of $351 million, and TenQ's profit-to-cash check registered 0.12 against a 0.80 threshold, although brokerage cash movements complicate that comparison.
• Robinhood raised $2.2 billion through convertible notes due 2029 in June 2026, while its near-term liquidity ratio of 1.22 falls below TenQ's 1.50 threshold despite cash and short-term investments of $5.4 billion.

What to watch next

• Robinhood lowered its 2026 outlook for Adjusted Operating Expenses and Share-Based Compensation to $2.675 to $2.775 billion, including Rothera and WonderFi, making spending against that range a key measure of expansion costs.
• The outlook excludes credit-loss provisions and several potentially significant expenses, so subsequent releases will need to distinguish that measure from total operating expenses and show whether credit-loss provisions stabilize after reaching $56 million in the quarter to June 2026.
• Net deposits, Gold adoption and revenue per user will show whether broader customer relationships are developing beyond trading, with revenue per user reaching $187 in the quarter to June 2026.

Sources

• Robinhood's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The HOOD stock report, for every figure and check