Robinhood Beats Estimates on Strong Trading, Crypto Slows

Robinhood Markets posted stronger-than-expected earnings for the second quarter, driven by robust trading activity across equities, options, and prediction markets.

The company's adjusted earnings came in at 48 cents per share, beating analysts' estimates of 44 cents. Transaction-based revenue jumped 44% year-over-year to $776 million, with gains in equities, options, and event contracts generating $156 million in revenue.

Shiv Verma, chief financial officer, highlighted the growth of prediction markets as a key driver of Robinhood's business, noting record transactions across these platforms.

The expansion of prediction markets has led to a shift away from cryptocurrency trading, with analysts expecting this segment to play an increasingly important role in Robinhood's revenue mix. Interest in prediction markets surged during the 2024 U.S. presidential election, boosting user engagement and trading activity.

Crypto transaction-based revenue fell 38% year-over-year to $100 million, weighed down by weaker digital asset prices, persistent market volatility, and a shift towards artificial intelligence-related assets.