Robinhood's Prediction-Market Revenue Running Above $200 Million Annualized In September - Robinhood Markets (NASDAQ:HOOD)

Core Insights - Robinhood Markets, Inc.'s event-contracts business is experiencing significant growth, with September revenue projected to exceed a $200 million annualized rate due to increased volumes from partner Kalshi, particularly in NFL and NCAAF markets [1][2]. Group 1: Revenue and Growth Projections - The prediction markets (event contracts) are identified as a major growth driver for Robinhood, with Kalshi's volumes expected to reach a record $2.6 billion in September, more than double the previous monthly high [2]. - Robinhood users are estimated to account for 25%–35% of Kalshi's daily volume, with the company's event-contract revenue running at an annualized rate above $200 million for September [2][4]. - The analyst projects that if Kalshi's volume reaches 8.5 billion contracts by Q3 2025, Robinhood could generate approximately $25.5 million in revenue, indicating a quarterly run rate exceeding $100 million [5]. Group 2: User Engagement and Market Activity - During the first week of NCAAF, Robinhood users traded over 100 million contracts, representing about 34% of Kalshi's NCAAF volume for that weekend [4]. - The analyst notes that most of the trading activity is occurring on Kalshi, which shares a fee of 2 cents per contract with Robinhood [4]. Group 3: Analyst Ratings and Price Forecast - Piper Sandler analyst Patrick Moley has reiterated an Overweight rating on Robinhood, increasing the price target from $120 to $140 [1]. - The analyst has raised the FY25 EPS estimate for Robinhood to $1.87, up from a previous estimate of $1.50 [5].