Robinhood Beats Estimates as Prediction Markets Surge

Retail trading remained robust at Robinhood Markets during the second quarter, driven by heightened market volatility and investor interest in prediction markets. The company beat Wall Street estimates for adjusted earnings, reporting 48 cents per share, which topped analysts' average estimate of 44 cents. Transaction-based revenue jumped 44% from a year earlier to $776 million, driven by gains in equities, options, and event contracts.

Prediction markets emerged as a growth driver for Robinhood, with transaction revenue reaching $156 million. This surge was partly due to increased interest during the 2024 U.S. presidential election, which boosted user engagement and trading activity. Analysts expect prediction markets to play an increasingly important role in Robinhood's revenue mix.

However, cryptocurrency trading remained subdued, with transaction-based crypto revenue falling 38% from a year earlier to $100 million. Weaker digital asset prices, persistent market volatility, and a shift in investor interest toward artificial intelligence-related assets weighed on trading.