HOOD Announces 10% Workforce Reduction; See Potential MSD % Lift to WR 2026 / 2027 EPS

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HOOD Announces 10% Workforce Reduction; See Potential MSD % Lift to WR 2026 / 2027 EPS

Brokers, Asset Managers & Exchanges

FLASH

FLASH: ROBINHOOD MARKETS, INC. (HOOD) June 16, 2026

HOOD Announces 10% Workforce Reduction; See Rating:

Potential MSD % Lift to WR 2026 / 2027 EPS Outperform

Price:

10% Headcount Reduction Implies MSD % Lift to WR 2026 / 2027 EPS. This $98.12

morning, HOOD announced a ~10% workforce reduction, with the firm expected Price Target:

$81to incur ~$20mn of restructuring charges and ~$8mn of stock-based comp ("SBC") % Upside:

accrual in 2Q. Following our callback with management, we believe this decision is (17.4)%

less about the operating environment as the business continues to perform well (June

Source: FactSet, Wolfe Research

is on pace for record volumes across equities / options / prediction markets) but rather Priced as of 06/15/26

reflects management’s commitment to maintaining a lean workforce and protecting

margins while investing for growth. These cuts were applied broadly across the firm

impacting employees of all levels – we make the simplifying assumption that a 10%

reduction in force should yield a commensurate reduction in comp expense. Per 1Q

10-Q, annualized comp baseline is run-rating at ~$1.2B (10% savings = $120mn, or

~6% / ~4% of WR 2026E / 2027E pretax income, respectively; Ex. 2). Steven Chubak, CFA schubak@wolferesearch.com

EPS Lift Should Boost Shares in Today's Session. HOOD has been a standout (646) 582-9315 View Steven’s Research

performer these last couple of months (+42% QTD versus S&P Fins. +8%) and the View HOOD Model

stock is trading up another ~2% pre-market. Given the magnitude of earnings uplift View Comp Table

and (likely) limited revenue attrition, we would expect pre-market gains to hold. It's

Sharon Leung