Prediction Markets, Not Crypto, Dominated Robinhood Earnings Call, HOOD Falls 8%

Robinhood’s This fall 2025 earnings report triggered a pointy market response, with the corporate’s inventory falling roughly 8% after income got here in under expectations.

Yet probably the most placing takeaway from the decision was not the drop in crypto buying and selling income, however the rising prominence of prediction markets and automation as pillars of the platform’s future technique.

Robinhood Earnings Show Prediction Markets Overtaking Crypto as Key Growth Driver

Nearly one-third of analyst questions through the earnings name targeted on prediction markets, reflecting how shortly the sector is transferring from experimental characteristic to potential core enterprise line.

“30% of $HOOD Q&A (6 of 20 questions) involved prediction markets, by far the #1 subject,” stated Matthew Sigel, Head of Digital Assets Research at VanEck.

According to Sigel, the eye displays fast-paced progress throughout the trade, with volumes now above $10 billion monthly (roughly $300–400 million per day), roughly akin to the common each day US sports activities betting deal with.

Revenue Miss and Crypto Slowdown

Robinhood reported This fall web income of $1.28 billion, under expectations of about $1.35 billion. Transaction-based income and crypto buying and selling additionally missed forecasts, with crypto income coming in at roughly $221 million versus expectations nearer to $248 million.

Analysts see the market response as largely tied to high expectations and slowing progress in key metrics moderately than structural weakness within the enterprise.

Christian Bolu, senior analyst at Autonomous Research, described the outcomes as disappointing on the floor however constructive in outlook.

“I might say have a look at an costly inventory, and you already know a topline miss just isn’t useful in any respect,” Bolu said, noting that some key metrics, together with deposit progress, additionally slowed.

However, he emphasised that the longer-term outlook stays optimistic:

“The commentary from the administration crew is fairly constructive by way of the pipeline for 2026 by way of new enterprise progress, and really, transaction volumes have been very robust in January as effectively. So, the outlook right here is definitely fairly respectable.”

Prediction Markets Move to Center Stage

While crypto stays an essential phase, analysts more and more see prediction markets and event contracts turning into a bigger share of the enterprise over time.

“Over time, we expect issues like occasion contracts and prediction markets will probably be an even bigger a part of the enterprise than crypto,” Bolu added within the interview with Yahoo Finance.

The alternative is substantial. Despite rising competitors from platforms like Kalshi and Polymarket, Robinhood’s distribution benefit might show decisive.

“The advantage of Robinhood is their worth prop from a enterprise perspective is the distribution,” Bolu stated. “There aren’t many people that may distribute or have the distribution that they do.”

Regulation Remains the Key Constraint

Even as curiosity grows, regulatory uncertainty stays the largest barrier to growth. Sigel highlighted that the difficulty was instantly addressed through the earnings name.

“Binary sure/no contracts … can match beneath CFTC occasion contract authority… But contracts with steady or formula-based payouts tied to a single issuer’s monetary efficiency could possibly be handled as SEC ‘security-based swaps’ beneath Dodd-Frank.”

However, the Van Eck government acknowledged that the shortage of readability is slowing progress:

“There’s no formal framework clarifying that boundary but, which is why administration referenced needing ‘regulatory aid.’”

AI Automation Quietly Reshaping the Business

Beyond new buying and selling merchandise, Robinhood can also be remodeling its inner operations by automation and artificial intelligence. Against this backdrop, Sigel shared one of the crucial placing disclosures from the decision:

“AI assist is absolutely cranking. Now over 75% of our circumstances are solved by AI, together with the complicated circumstances that beforehand required licensed brokerage professionals,” he shared.

The firm can also be automating its engineering workflow, optimizing your complete engineering pipeline from code writing by code assessment to deployment and testing.

Reportedly, that is already turning into actual financial savings and effectivity positive aspects, estimated at over $100 million in 2025 alone.

These price reductions might assist offset cyclical income swings in areas like crypto and choices buying and selling.

A More Diversified Robinhood

Analysts say Robinhood at the moment appears very totally different from the trading app that rose to prominence throughout earlier crypto and meme-stock cycles.

Bolu described the corporate as “a way more mature firm a way more diversified firm,” pointing to:

• Growing web curiosity earnings
• Retirement accounts
• Banking merchandise, and
• Credit playing cards as further income streams.

This diversification is one purpose many analysts stay bullish regardless of short-term volatility. More than 80% of analysts nonetheless fee the inventory a purchase, in response to market commentary following the outcomes.

Robinhood’s newest earnings bolstered a key shift: crypto might not be the dominant narrative driving the platform.

Instead, the subsequent part of progress seems to be forming round prediction markets, options trading, subscriptions, and AI-driven effectivity. These segments might scale back reliance on extremely cyclical crypto buying and selling volumes.

If these developments proceed, the earnings name might finally be remembered much less for a income miss and extra for revealing the place the platform is heading subsequent.

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