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Robinhood reported it beat on earnings for Q4 2024 but missed on revenue, sending the stock lower after hours. But on the earnings call, it was prediction markets that were the star of the show, thanks to the online brokerage’s tie-up with Kalshi and progress with its new Rothera platform.

Analyst consensus EPS was forecast at 62 cents but was a beat at 66 cents, while net revenues surged to a record $1.28 billion in Q4 from $1.27 billion in Q3; net income improved on Q3’s $556 million to come in at $605 million but is down from $919 million in Q4 2024.

However, revenue missed analyst forecasts of $1.32 million. Analysts expected quarterly revenue to increase 32% year on year to $1.34 billion.

Crypto revenue cratered 38% to $221 million, worse than the 28% decline predicted. In the core options part of the business, revenue soared 41% to $314 million, although that was shy of the 50% growth expected. Growth in equities was stronger at 54% ($94 million), but , again, that was slightly below the consensus forecast of $96 million.

In comments accompanying the earnings announcement, Robinhood CFO Shiv Verma, said: “2025 was a record year where we set new highs for net deposits, gold subscribers, trading volumes, revenues, and profits, and we closed the year with a strong Q4.”

Nevertheless, the shares dropped 7.45% even before the earnings call had started, to trade at $80.17 in choppy price action. This comes on the back of a 40% drop in its share price since October last year.

Adjusted EBITDA increased 24% to $761 million on a year-on-year basis. Still, adjusted operating expenses and stock-based compensation (SBC) outlook is $2.6 billion to $2.73 billion, representing 18% year-over-year rise.

In Q3 2025, net deposits were a record $20.4 billion. The Q4 results show that net deposit performance proved unsustainable, declining to $15.9 billion, which was likely due in large part to the start of the crypto bear market on 10 October.

Prediction Markets are not Enough to Offset the Crypto Bleeding

Late last year, lucky cola casino co-founder and CEO Vlad Tenev declared that prediction markets were “the fastest-growing business we’ve ever had”. On this performance, he is not kidding.

Key factors driving the acceleration in prediction market volume were the NFL and college football seasons. Funded customers increase 1.8 million to 27 million, a year-over-year increase of 7%.

The Robinhood Gold premium service take-up is an important metric to watch because of its valuable recurring revenue stream. Forecast at 3.9 million accounts, the company bettered that by blasting past 4.2 million. There was a year-on-year addition of 1.5 million Gold accounts, a 58% increase. Average revenue per user was also higher, up 16% year-over-year at $191 million

Legal betting on Super Bowl LX was forecast at $1.71 billion. Although there was a buzz around the premier sporting event of the year, it was not at the stratospheric celeb-fuelled levels generated by the Taylor Swift interest last year.

Ok, so Bad Bunny didn’t plug the gap, but it won’t matter much for Robinhood because it is riding the wave of prediction markets that may be more fun to use than traditional bookies like DraftKings and FanDuel, where markets are much more limited.

Additionally, Robinhood has entered into a joint venture and partnership with Susquehanna to operate a CFTC-licensed exchange (MIAXdx) and clearinghouse, which it will use to begin offering futures derivatives products.

Theoretically, owning its own CFTC-licensed firm could see Robinhood break free from Kalshi by developing its own prediction markets platform.

Forget Kneejerk Earnings Reactions, Robinhood has First-Mover Advantage in Prediction Markets

There was no mention of prediction market performance in the 8-K SEC filing, but Tenev was gushing on the call. He spoke about social and private markets and the “massive” tokenization opportunity there. He also talked about the  Robinhood Cortex AI assistant product. But he started with prediction markets, which is indicative of its importance.

“Prediction markets are the fastest growing business in our history, with a $300 million-plus run rate in its first year. I think we’re just at the beginning of a prediction market supercycle that could drive trillions in annual volume over time. This year is gonna be a big year. The Olympics are going on right now. The World Cup is coming in the summer.”

Tenev added: “Continued growth in the non-sports categories, and, of course, our Rothera [MIAXdx], which is our JB with Susquehanna coming online. The growth of prediction markets has also led to a greater focus on our app design and personalization.

“We’ve been adding so many new products, so many account types, lots more capabilities, that is becoming increasingly important to personalization, and continue to chisel the user interface, making sure we’re putting the right things in front of the right customers.”

Asked by analysts why most of the prediction market business was still running through Kalshi, Tenev said, “A significant portion of our volume will move over to Rothera, but that’s not sort of our North Star – it is giving customers the best pricing, the best experience.”

Although the legacy sportsbook companies will have taken a slice of the NFL handle, it looks increasingly likely that the real winners are the prediction markets.

Where the latter are concerned, the odds are better, the available markets are unrivalled, and you can now do parlays (introduced by Robinhood in December 2025) as well, an offering that was until recently a USP of the legacy sportsbooks.

And, controversially perhaps, prediction markets don’t have to abide by the same strict betting regulations as the old stagers. This is all manna from heaven for Robinhood earnings.

Robinhood has a 50/50 revenue split with Kalshi and, in Q3, pulled in contract volume of 2.3 billion. It charges a $0.02 commission per contract, for an implied monthly revenue of approximately $25 million.

Since the US Supreme Court decision in 2018 to legalize sports betting, 39 states have joined Nevada, providing the legacy sportsbooks with a growth story where the sky’s the limit. Today, the narrative is not quite so sun-drenched. There are two key states of demographic significance yet to join the gold rush: California and Texas, the country’s two biggest in population, and prediction markets are staking claims in both.

The Kalshi (and Rothera) Effect Will Keep Robinhood Growing

Meanwhile, betting on events outside of sports, such as the economy and business, is an opportunity that threatens to pass by the likes of DraftKings and Flutter’s FanDuel. Although both have launched prediction market products, they have been slow to expand beyond sports.

Kalshi (and crypto-first rival Polymarket), on the other hand, have abandoned all reticence about entering sports, taking their cue from the new-broom Trump administration that signalled a permissive regulatory approach from the Commodity Futures Trading Commission (CFTC).

It was only last year that Kalshi allowed its customers to bet on the Super Bowl. For its part, Robinhood has a first-mover advantage over its peers. There’s a rush, of sorts, of companies entering the prediction markets or planning to do so soon.

Citizens estimates prediction market revenues at around $2 billion, projected to rise to $10 billion by 2030. Robinhood is estimated to account for around half of Kalshi’s contract volume since it started offering event contracts in March 2025.

Asked about how Robinhood deals with the end of the NFL season, Tenev noted that “non-sports markets were government shutdown contract driving significant volume. Prediction markets are more than sports.”

He also underscored that Robinhood saw crypto as a foundational technology and that the firm is “long-term bullish… only 20% of the business is crypto. Predictions are a growing but small part of our business.”

None of that soothing reassurance was enough to turn the stock price chart green. Still, there are plenty of bullish reasons to hold HOOD.