Robinhood Beats Estimates on Strong Trading Activity

Retail trading remained robust during the second quarter on Robinhood Markets, with heightened market volatility driven in part by the U.S.-Iran conflict and its impact on inflation expectations and the Federal Reserve's interest-rate outlook keeping investors active. The company beat Wall Street estimates for quarterly profit, with adjusted earnings coming in at 48 cents per share.

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, generating $156 million in revenue during the quarter. The rapid expansion of prediction markets has shifted investor focus away from cryptocurrency, with analysts expecting it to play an increasingly important role in Robinhood's revenue mix.

Crypto trading remained subdued due to weaker digital asset prices and persistent market volatility. Transaction-based crypto revenue fell 38% from a year earlier to $100 million. The company's stock has dropped 20.6% this year, with some analysts citing elevated expectations as a concern.