Robinhood's Best Prediction Markets Quarter Couldn't Save the Stock

Keypoints:

• • Prediction markets brought in $156 million in fees, up more than 50% from the prior quarter
  • Total revenue climbed 32% year over year to $1.31 billion, beating estimates
  • Crypto revenue sank 38% during the same period
  • Shares still fell nearly 3% after the report
  • CEO Vlad Tenev is betting big on AI agents that trade like humans do

Prediction markets have gone from a side project to one of Robinhood's biggest businesses in less than a year. The numbers explain why. 

During the quarter, the company generated $156 million in prediction market fees, up more than 50% from the previous quarter. Trading activity exploded too, with event contracts surging more than tenfold to a record 13.6 billion. Prediction markets now sit behind only options trading in Robinhood's business, generating more revenue than both stock trading and crypto.

The rest of the earnings report looked equally healthy. Total revenue climbed 32% year over year to $1.31 billion, while adjusted earnings reached 48 cents per share, comfortably ahead of analysts' expectations of 44 cents. 

Net income rose 48% to $573 million. Robinhood also crossed another milestone, ending the quarter with 13 separate businesses producing at least $100 million in annualised revenue. Its Legend trading platform and credit card business both joined that list for the first time.

One business, however, moved in the opposite direction. Crypto revenue dropped 38% from a year earlier to $100 million, a reminder that what was once Robinhood's biggest growth story has started losing momentum. Even after beating Wall Street's expectations, the stock slipped nearly 3% following the results, extending a decline of roughly 20% since the start of the year.

CEO Vlad Tenev spent less time talking about crypto and more time outlining what comes next. His focus is agentic trading - AI agents capable of handling the research, analysis, execution, and portfolio management that investors currently do themselves. The ambition is to bring institutional-style automated investing to everyday retail traders. Robinhood may have found its next growth engine. Investors just aren't convinced it's enough yet.