- Robinhood is expected to report faster revenue growth from prediction markets than from transaction processing.
- Prediction market revenue likely doubled to about $20 million in the third quarter.
- Robinhood launched NFL and college football betting markets in August through Kalshi partnership.
- Fourth-quarter revenue could reach $50 million during the full NFL season.
- Shares rose over 5% recently, with a price target increased to $161, setting the potential for a new high.
Robinhood plans to announce third-quarter earnings showing strong growth in its prediction market segment alongside its core transaction revenue. The company’s expansion into sports wagering is contributing to the rise in revenue from prediction markets, which allow customers to place bets on future events.
Forecasts indicate that prediction market revenue doubled to approximately $20 million for the quarter ending September 30. Transaction revenue also grew but at a slower pace of about 35%. The recent introduction of NFL and college football wagering through a partnership with the prediction market platform Kalshi, starting in August, is a driving factor.
“In the three months ended Sept. 30, prediction market revenue likely increased 100% quarter-over-quarter to around $20 million,” analysts said, while transaction revenue rose 35%. With the NFL season ongoing, Robinhood expects to generate about $50 million in revenue in the fourth quarter.
Despite offering commission-free trading on stocks and cryptocurrencies, the company charges a one-cent fee on trades involving event contracts. This revenue stream is becoming increasingly important as seasonal sports betting grows, particularly in the U.S. where autumn marks the start of major professional sports seasons.
Prediction markets gained momentum last year during the U.S. presidential election, following a legal victory by Kalshi against the Commodity Futures Trading Commission. The regulatory decision cleared the way for contracts on political events, broadening the markets available to bettors.
The boundaries between financial services and sports betting are blurring, as shown by industry moves such as DraftKings’ recent acquisition of prediction market exchange Railbird. Meanwhile, Robinhood is also in talks with UK regulators about expanding prediction markets internationally.
On the stock market, Robinhood shares recently climbed more than 5% to nearly $146. Analysts anticipate earnings per share of $0.54 on $1.2 billion in revenue when the company reports on Nov. 5. The price target has been raised to $161, which would surpass the previous high of $153 recorded earlier this month.
For more on Robinhood’s sports betting launch, see the company’s official announcement on their site.
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