While Kalshi, followed by Polymarket, still dominates the prediction market sector, the number of serious competitors and new entrants continues to grow and will likely lead to increasing coverage of PolyPunter over time.
Robinhood delivered a standout second quarter of 2026 as event contracts generated $156 million in revenue, climbing more than tenfold from the year-earlier period and surpassing both crypto and equities trading. Total net revenue reached a record $1.31 billion, up 32% year-over-year, while transaction-based revenue rose 44% to $776 million. One product line, prediction markets, is rapidly rewriting the company’s financial story.
CFO Shiv Verma pointed to new highs in equity, options, and event-contract volumes as Robinhood continued to gain market share. Crypto revenue fell 38% to $100 million, and equities contributed $129 million, leaving event contracts second only to options at $342 million. Contract volume hit a record 13.6 billion, also up more than ten times. Nearly two million traders have now used the markets, up from about 1.5 million previously, and these users show stronger engagement with other products including retirement accounts.
Robinhood first offered event contracts in late 2024 and launched a dedicated hub in March 2025. By mid-2026, the category had become the fastest-growing line in company history. Customer deposits reached a record $22 billion, and Robinhood Gold subscriptions grew 39% to 4.8 million members, showing how event-contract activity is deepening overall relationships.
The one constant of prediction markets in 2026 — everybody wants in.
Rothera Exchange Strengthens Economics and Scales Volume
Rothera, the CFTC-licensed exchange and clearinghouse formed with Robinhood and Susquehanna International Group, has processed more than 3.5 billion contracts since launching in late May. World Cup markets covering matches, winners, spreads, totals, and combinations drove a large share of early volume. Routing more event market activity through its own platform gives Robinhood tighter control over pricing and product design.
Verma noted that owning the full stack of licenses lets the company manage the product, engineering, and superior economics. Management expects a growing share of market flow to shift to Rothera while continuing to distribute third-party contracts. The venue already ranks among the larger designated contract markets and opens future opportunities to serve other brokers and institutions.
Bernstein research, led by Gautam Chhugani, raised its HOOD price target to $160 from $130 and maintained an Outperform rating for Robinhood. The firm projects 64% compound annual growth through 2028, taking the category to roughly $1.7 billion. Earlier modeling pointed to about $586 million for full-year 2026. With $260 million already booked in the first half, those forecasts look increasingly realistic.
July average daily volumes held near the Q2 peaks. Short-duration crypto contracts and macro-linked markets continue drawing active traders, while efforts to narrow spreads on thinner contracts help sustain engagement.
Revenue Mix Transformation and Competitive Positioning
Event contracts on Robinhood now account for about 12% of total net revenue and roughly 20% of transaction-based revenue, a sharp rise from roughly $10 million and a minor contribution a year earlier. Options remain the largest line, yet the rapid climb has diversified the mix and reduced dependence on crypto amid softer industry-wide digital-asset volumes.
CEO Vlad Tenev called the prediction markets category the fastest-growing business Robinhood has ever launched and said the steady strength since March should continue. The company is investing in product velocity while keeping expenses disciplined, thereby maintaining healthy free cash flow. Lower spreads on less-popular contracts should attract even more volume without a proportional increase in costs.
Sector competition remains intense; Kalshi leadership has publicly identified Robinhood as a leading rival. Yet the combination of a large existing customer base, proprietary exchange capacity, and ongoing product iteration creates clear differentiation. Bernstein sees a broader opportunity across event contracts and related products that could exceed $70 billion over time, with Robinhood well-positioned to capture a meaningful share.
Investors reacted to the earnings with mixed share-price movement, balancing the strong results against questions about durability in quieter periods. Still, record overall revenue, expanding margins on the new product, and a clear migration path onto Rothera keep attention focused on the upside case.
Sustaining Momentum Beyond the Peak Period
The tenfold revenue jump and record volume demonstrate solid demand from traders seeking liquid ways to trade outcomes across sports, macro data, and short-term price moves. Maintaining the growth pace will require adding relevant markets and keeping pricing competitive. July data showing volumes near peak levels offers early evidence that interest has not faded after the high-activity stretch related to the World Cup markets.
Transaction-based revenue now represents 59% of Robinhood’s total net revenue, with event contracts accounting for a major share of both sequential and year-over-year gains. Equity and options volumes also set fresh highs, confirming the core franchise remains robust even as newer products accelerate.
Robinhood’s second-quarter results make one point clear: event contracts have moved from early exploratory offering to core growth engine in a short time. With volume, revenue, and trader counts all rising sharply and proprietary infrastructure in place, the company is advancing its trading story at high speed.
References
- The Block – Robinhood’s prediction markets top crypto and equities revenue in Q2
- Yahoo Finance – Robinhood CFO details surging prediction market business
- The Block – Bernstein lifts Robinhood target to $160
- The Motley Fool – Robinhood’s Event Contracts Went From $10 Million to $156 Million
- TechTimes – Prediction Markets Outpace Crypto as Robinhood Hits Record $1.31B Revenue
- TipRanks – Robinhood Says Prediction Markets Are Its Fastest-Growing Business Ever
- Robinhood Q2 2026 Earnings Presentation
- AD HOC NEWS – Robinhood Markets stock leans on prediction markets
- Covers – Robinhood’s Prediction Markets Outpace Crypto Trading Revenue in Q2
- Yahoo Finance – Robinhood shares edge lower after record quarter
- The Block – Bernstein sees 78% upside for Robinhood
- FX News Group – Prediction Markets trading drives Robinhood revenues
- The Defiant – Bernstein Lifts Robinhood Target to $160 on Prediction Markets
- Robinhood Investor Relations
- The Block – Bernstein on World Cup volumes
The PolyPunter staff works tirelessly to bring you the latest and most insightful news, information, and tips on the fast-growing economic, financial, and social phenomenon that is prediction markets.
