Robinhood Q1 Earnings Show Prediction Markets Holding Strong as Rothera Exchange Nears Launch

Robinhood reported first-quarter outcomes Tuesday displaying regular progress regardless of a pointy decline in crypto buying and selling, as surging exercise in prediction markets helped offset the slowdown.

Robinhood Markets posted $1.07 billion in income, up 15% year-over-year, with internet revenue of $346 million and earnings per share of $0.38, each modestly larger from a 12 months earlier. The outcomes come as buying and selling exercise shifts throughout the platform, with crypto volumes falling considerably whereas newer merchandise, together with occasion contracts, proceed to scale.

Crypto income dropped 47% year-over-year to $134 million, reflecting decrease buying and selling exercise on the platform. In distinction, “different transaction income,” which incorporates occasion contracts, futures, and index choices, surged 320% to $147 million, highlighting the rising contribution of newer buying and selling merchandise.

Robinhood additionally reported a report 8.8 billion occasion contracts traded through the quarter, reinforcing the continued enlargement of its prediction markets enterprise following sturdy momentum in late 2025.

Despite sturdy progress in prediction markets and different areas, based on Barron’s, shares of Robinhood fell about 9% in after-hours buying and selling following the discharge, as traders targeted on rising prices and the crypto slowdown. The firm additionally mentioned it expects to speculate roughly $100 million tied to its function within the “Trump Accounts” program, a part of an expense outlook that appeared to weigh on sentiment, based on Bloomberg.

Robinhood prediction markets stay resilient 

Following the earnings launch, Robinhood CEO Vlad Tenev and CFO Shiv Verma participated in a particular earnings name offered on the patio of the corporate’s headquarters in Menlo Park, Calif., which Tenev mentioned “could be the first ever outside earnings name in historical past.” 

“As we continued transport nice merchandise for our clients, in Q1, we noticed report ranges throughout prediction markets, futures, index choices, shorting, and margin,” Tenev mentioned throughout his opening remarks. “So our lively merchants had been very lively.”

Robinhood’s prediction markets enterprise remained close to peak ranges within the first quarter, with 8.8 billion occasion contracts traded in contrast with 8.5 billion in This fall 2025.

Monthly knowledge exhibits event-driven fluctuations throughout the Q1 exercise. Event contract quantity peaked at 3.4 billion in January, coinciding with the Super Bowl, earlier than dipping to 2.4 billion in February and rebounding to 3.0 billion in March, across the time of the NCAA males’s basketball match. The sample signifies that whereas huge sporting occasions proceed to drive spikes in exercise, general quantity has remained resilient outdoors of peak moments.

During the earnings name occasion, Verma mentioned that resiliency is continuous into Q2, with April occasion contract buying and selling quantity displaying promising indicators. 

“It’s on observe to be round 3 billion [contracts traded], and doubtless our second highest month ever,” Verma mentioned. “So actually sturdy engagement there.”

Rothera alternate anticipated to launch in subsequent two months

Currently, Robinhood presents prediction markets primarily by means of Kalshi, whereas additionally routing a smaller share of contracts by means of ForecastEx.

That setup may start to shift later this 12 months as the corporate prepares to launch Rothera, its three way partnership alternate with world buying and selling and market-making agency Susquehanna International Group. The platform is being constructed through the acquisition of an existing CFTC-regulated exchange that holds each Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) registrations, permitting Robinhood to checklist and clear occasion contracts instantly moderately than counting on Kalshi or different exchanges.

“Today, Robinhood is the most important retail brokerage agency in prediction markets, and we’ve been one of many first to undertake the brand new asset class,” Tenev mentioned. “Susquehanna is likely one of the largest market makers. And up to now, up till now, we’ve been counting on third-party exchanges.”

Robinhood mentioned it’s making ready Rothera for a Q2 launch and has already begun incurring prices tied to the buildout, with roughly $14 million in Q1 bills associated to Rothera and different initiatives. The platform is anticipated to present the corporate larger management over its occasion contract choices over time.

“With the launch of Rothera,” the CEO mentioned, “this vertical integration provides us a pair issues. It actually provides us end-to-end management of the client expertise, together with product choice and pricing. So we’ll have extra management over what merchandise and what pricing we will supply to clients, which I feel goes to be very, very good.”

Robinhood is positioning itself to compete throughout a number of layers of the prediction market business, combining its retail brokerage attain with alternate infrastructure and institutional liquidity by means of its partnership with Susquehanna. The firm has greater than 27 million funded accounts within the U.S., which Tenev pointed to as a key benefit as competitors shifts towards distribution and pricing energy.

“We consider that we not solely have a bonus with retail, but in addition institutional as effectively,” Tenev mentioned, referring to the Rothera three way partnership. He added that the asset class stays “very, very early,” with rising diversification past sports activities contracts, suggesting continued enlargement even as the variety of exchanges might in the end shrink.

State actions escalate as federal regulators push again

Robinhood’s enlargement in prediction markets can also be unfolding in opposition to a quickly intensifying authorized battle between state and federal regulators over how the merchandise needs to be categorized and overseen.

Last week, Wisconsin filed lawsuits in opposition to a number of platforms, together with Robinhood, Kalshi, Coinbase, Polymarket, and Crypto.com, alleging that sports activities occasion contracts represent unlawful playing underneath state legislation and in search of to dam the businesses from providing them to residents. That dispute escalated additional Tuesday, when the CFTC sued Wisconsin in response, arguing that prediction markets fall underneath federal derivatives legislation and that states can’t apply playing statutes to merchandise regulated on the federal stage. 

The Wisconsin circumstances are the newest in a sequence of state and federal clashes that might assist decide whether or not sports activities contracts, a major share of prediction market buying and selling quantity, can proceed to be supplied nationwide.

In response to an analyst query on the difficulty, Tenev confirmed some sympathy for the states’ trigger, saying “it’s not irrational” for them to attempt to defend their sports activities betting frameworks. But, describing the scenario as a “jurisdictional dispute,” he mentioned that the corporate aligns with the view that prediction markets are solely overseen by the CFTC underneath federal commodities legislation. He mentioned the result is prone to take time to resolve, noting, “that is one thing that’ll play out within the coming years.”

Robinhood additionally warned in its earnings supplies that regulatory actions “may instantly or subsequently stop us from providing, or persevering with to supply, occasion contracts,” underscoring the uncertainty surrounding how broadly the merchandise could be supplied throughout the U.S. 

The put up Robinhood Q1 Earnings Show Prediction Markets Holding Strong as Rothera Exchange Nears Launch appeared first on DeFi Rate.