Robinhood's Prediction-Market Revenue Running Above $200 Million Annualized In September

Robinhood's event-contracts business is accelerating, with September revenue pacing above a $200 million annualized rate, driven by surging volumes on partner Kalshi's platform, particularly from new NFL and NCAAF markets. Piper Sandler analyst Patrick Moley reiterated an Overweight rating and raised Robinhood's price target from $120 to $140, while increasing the FY25 EPS estimate to $1.87, citing prediction markets as a major growth driver given Robinhood users comprise 25-35% of Kalshi's record $2.6 billion September volume.

Analysis

Robinhood's event-contracts business is emerging as a significant growth catalyst, with September revenue running at an annualized pace exceeding $200 million. This acceleration is directly attributed to its partnership with the prediction market exchange Kalshi, whose volumes are on track for a record $2.6 billion in September—more than double the previous monthly high—fueled by the introduction of NFL and NCAAF football markets. Robinhood's user base is a key driver of this surge, accounting for an estimated 25-35% of Kalshi's daily volume, with that share increasing to approximately one-third since the football season began. This positive development prompted Piper Sandler to reiterate its Overweight rating, raising its price target on HOOD to $140 from $120. The analyst's bullish outlook is underpinned by a revised FY25 EPS estimate, which was increased to $1.87 from $1.50, reflecting the direct financial impact of this high-volume, fee-based revenue stream where Robinhood earns one cent per contract traded.

Key Decisions for Investors

• The accelerating event-contracts business represents a material new revenue stream, supporting the analyst's increased FY25 EPS estimate of $1.87 and a more bullish fundamental outlook for Robinhood.
• Investors should closely monitor future volume data from partner Kalshi and any company disclosures on contract trading, particularly outside of the peak US football season, to gauge the durability of this growth.
• With the stock trading at $124.35, below the new analyst price target of $140, the market may not have fully priced in the long-term potential of this business, suggesting a re-evaluation of valuation models is warranted.