Robinhood Q2 profit surges as prediction markets eclipse crypto

Robinhood’s net income rose 48% year-over-year to $573 million in the second quarter, driven by a surprising surge in prediction market revenue that outpaced both its cryptocurrency and equities trading divisions.

The brokerage generated $156 million from event contracts during the period. By comparison, equities trading brought in $129 million, while cryptocurrency trading revenue plummeted 38% from the prior year to just $100 million. This shift helped push total transaction-based revenue up 44% to $776 million, while overall net revenue reached $1.31 billion, a 32% increase.

Despite the earnings beat, Robinhood shares declined roughly 3% in after-hours trading to $86.89. Chief Financial Officer Shiv Verma attributed the quarterly performance to record volumes, noting the company continues to win market share across equities, options, and event contracts.

The dominance of prediction markets highlights a significant strategic evolution for Robinhood since it first entered the space with presidential-election contracts in October 2024. It has since built a dedicated hub sourcing contracts from Kalshi and Interactive Brokers’ ForecastEx. In June, the firm took further control of this vertical by launching Rothera, a CFTC-licensed exchange and clearinghouse operated through a joint venture with Susquehanna International Group.

While crypto trading revenue contracted, the company’s underlying crypto volumes remained substantial at $40 billion. However, more than half of that figure—$22 billion—came from Bitstamp, the international exchange Robinhood acquired last year.

Blockchain expansion

Rather than relying solely on centralized crypto trading, Robinhood is pushing deeper into decentralized infrastructure. Earlier this month, it launched Robinhood Chain, a Layer 2 network built on Arbitrum’s technology stack. Chief Executive Officer Vlad Tenev said the network has processed more than $12 billion in decentralized exchange trading volume.

“It was also the fastest chain to get 100 million transactions. I think we’re well north of 150 million transactions at this point,” Tenev said on an earnings call. As of Tuesday, the network held approximately $325 million in total value locked, with decentralized protocols like Uniswap operational from the outset.

For investors, the quarter underscores a fundamental repositioning. Robinhood is no longer just a retail equities and crypto app, but an active derivatives and infrastructure operator betting that regulated event contracts and proprietary blockchain networks offer higher margins than traditional spot crypto trading.