Robinhood reported fourth-quarter net revenue of $1.28 billion — below the anticipated $1.35 billion — yet the most consequential signal from the company's earnings call was not the crypto trading shortfall but the rapid ascent of prediction markets as analysts' primary area of interest, with roughly 30% of questions during the session devoted to the topic.
What Happened: Revenue Miss, New Focus
The Q4 results showed crypto trading revenue of approximately $221 million, falling short of the expected $248 million, while the stock dropped about 8% on the miss. But the earnings call itself told a different story.
Matthew Sigel, Head of Digital Assets Research at VanEck, noted that six of 20 analyst questions concerned prediction markets — "by far the #1 topic."
He pointed to industrywide volumes now exceeding $10 billion per month, roughly comparable to the average daily U.S. sports betting handle.
Christian Bolu, senior analyst at Autonomous Research, called the results disappointing on the surface but constructive in outlook. "The commentary from the management team is pretty constructive in terms of the pipeline for 2026 in terms of new business growth, and actually, transaction volumes have been very strong in January as well," Bolu told Yahoo Finance.
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Why It Matters: Strategic Pivot Ahead
Bolu was direct about where the platform is heading. "Over time, we think things like event contracts and prediction markets will be a bigger part of the business than crypto," he said, adding that Robinhood's distribution reach gives it a competitive edge over rivals like Kalshi and Polymarket.
Regulatory uncertainty remains the largest constraint.
Sigel noted that binary yes/no contracts may fall under CFTC event contract authority, but contracts with continuous payouts tied to a single issuer's financial performance could be treated as SEC "security-based swaps" under Dodd-Frank. "There's no formal framework clarifying that boundary yet, which is why management referenced needing 'regulatory relief,'" he said.
Meanwhile, Robinhood disclosed that AI now resolves more than 75% of customer support cases, including complex ones that previously required licensed brokerage professionals.
The company is also automating its engineering pipeline, with estimated savings exceeding $100 million in 2025 alone. More than 80% of analysts still rate the stock a buy, according to market commentary following the results.
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