Robinhood Markets missed Wall Street’s first-quarter marks, reporting $1.07 billion in revenue and $0.38 in earnings per share, and said it would spend more to build infrastructure for Trump Accounts—moves that undercut the company’s recent streak of outperformance.
The numbers were stark: revenue of $1.07 billion versus $1.14 billion expected, and EPS of $0.38 against a $0.39 estimate, snapping a four-quarter beat streak for Robinhood. Cryptocurrency revenue plunged 47% year over year to $134 million in Q1 2026, and the company raised its adjusted operating expense guidance by $100 million to a range of $2.70 billion to $2.825 billion so it could fund the Trump Accounts infrastructure.
Those investments come as operating expenses grew 18% year over year while revenue rose 15%, a gap that helps explain why the stock has struggled—Robinhood was down 33.02% year to date—and why many traders label the name a classic hood stock: high volatility, high beta and a business still tied to speculative flows. The shares trade at a trailing P/E of 36 and a forward P/E of 38, and the company has a beta of 2.294; Robinhood pays no dividend.
Across the aisle, Charles Schwab delivered the kind of quarter that investors expect from a low-beta, cash-generative custodian. Schwab reported EPS of $1.43, beating the $1.3883 consensus, and GAAP net income rose 29.86% year over year to $2.479 billion. Net interest revenue increased 16% to $3.144 billion, helping pre-tax profit margin expand to 49.2% from 43.8% and net interest margin rise to 2.88% in Q1 2026.
The scale and stickiness of Schwab’s business showed up in client flows: the firm ended the quarter with $11.77 trillion in total client assets, 39.1 million active brokerage accounts, and $140 billion of core net new assets brought in during the period. Schwab opened 1.3 million new brokerage accounts and saw Managed Investing net flow growth rise 46% year over year. The bank side also grew—bank loans expanded 29% to $60.9 billion.
Rick Wurster summed up the momentum plainly: "Schwab's strong business momentum continued into 2026 as investors opened 1.3 million new brokerage accounts and brought $140 billion of core net new assets to the firm during the first quarter." Schwab also raised its quarterly dividend from $0.27 to $0.32 per share and repurchased 24.3 million shares, spending $2.4 billion on buybacks in Q1.
The contrast is business-model sharp. Robinhood’s prior growth was closely tied to cryptocurrency trading and speculative order flow; its Q1 results show how quickly that can ebb. Schwab, by contrast, trades at much lower multiples and a far lower beta—figures on file show Schwab near 15x forward earnings, an 18 trailing P/E, a price-to-book around 4 and a beta about 0.797—reflecting recurring net interest income, fee revenue and massive client balances.
The tension is obvious: Robinhood is spending into growth that investors have not signaled they will reward this quarter. The company increased its guidance for adjusted operating expenses even as it missed revenue and EPS estimates and saw crypto revenue decline sharply. That decision to fund Trump Accounts infrastructure—an explicit strategic bet—adds a political and product-development dimension to a margin story that was already showing strain.
For investors weighing risk, the mechanics are simple. Schwab’s quarter reinforced its ability to convert client asset flows into predictable profit, reward shareholders with a higher dividend and repurchase stock. Robinhood’s quarter exposed a fragility: operating costs are rising faster than sales, crypto—which once lifted growth—is shrinking, and the company still trades at a high multiple with a high beta.
The likely conclusion: until Robinhood proves it can translate new product initiatives and elevated spending into sustained revenue growth and margin improvement, capital will favor firms with steadier cash generation. That means Schwab’s model will probably keep attracting patient capital, while hood stock investors will demand either clear proof of durable growth from Robinhood or a reset in expectations and valuation.
