MENLO PARK, California, August 13, 2026, 06:02 EDT — U.S. premarket activity is underway, with the standard trading session set to open at 09:30 EDT.
- Robinhood ended Wednesday up 0.56% and rose an additional 0.77% in after-hours trade.
- Event contracts accounted for $156 million, making up 11.9% of revenue in the second quarter.
- A recent Kalshi search trend emerges as prediction-market marketing faces renewed scrutiny.
Robinhood Markets, Inc. NASDAQ:HOOD faces increased legal scrutiny on its highest-growth revenue stream as trading begins Thursday. The stock finished at $94.91 on Wednesday, gaining 0.56%, before climbing to $95.64 in after-hours trade.
The risk is now central. Event contracts generated $156 million in revenue during the second quarter, accounting for 11.9% of Robinhood’s total and surpassing crypto trading revenue by 56%.
“Kalshi” began trending as a Google search in the U.S. early Thursday, recording over 200 queries starting roughly two hours prior. The spike continued for about 50 minutes. While the search count remained limited, the timing coincided with a new cycle of regulatory news. Google Trends
Robinhood market overview
| Measure | Value | Investor comparison |
|---|---|---|
| Wednesday’s closing price | $94.91 | Up 0.56% |
| After-hours price | $95.64 | Increase of 0.77% |
| Market capitalization | $85.33 billion | 137x Q2 event revenue annualized |
| Price-to-earnings ratio (trailing) | 41.8x | EPS stands at $2.27 |
| 2026 projected return | Up 16.1% | S&P 500 at plus 13.2% |
| Gap to 52-week peak | 38.3% lower | Peak: $153.86 |
New York City legislators are investigating advertising practices by prediction platforms. The probe focuses on suspected misleading marketing and potential access for minors. Kalshi is one of the companies identified in the review, but no wrongdoing has been established.
A data dispute was resolved on Tuesday as FlightAware dropped its lawsuit against Kalshi just a day after filing it regarding flight-cancellation markets. The parties did not provide a reason. While the case itself is no longer active, the larger debate on data rights continues.
Revenue breakdown for the second quarter
| Revenue line | Q2 revenue | Share of total | Year-over-year change |
|---|---|---|---|
| Options | $342 million | 26.1% | up 29% |
| Event contracts | $156 million | 11.9% | more than tenfold |
| Equities | $129 million | 9.9% | soared 95% |
| Crypto | $100 million | 7.6% | down 38% |
| Total net revenue | $1.31 billion | 100% | up 32% |
Chief Financial Officer Shiv Verma stated the businesses were “firing across all cylinders.” Robinhood surpassed forecasts for adjusted profit, with increased activity in options and events compensating for softness in cryptocurrency. The platform processed an unprecedented 13.6 billion event contracts. Reuters
The jump in volume conceals weaker unit economics. Early estimates indicate Q2 event revenue was around 1.15 cents per contract. By comparison, a Q1 proxy stood at approximately 1.67 cents. The proxy relies on Robinhood’s “other transaction revenue,” largely driven by event contracts.
Expansion and returns in prediction markets
| Measure | Q1 2026 | Q2 2026 | Sequential change |
|---|---|---|---|
| Event contracts traded | 8.8 billion | 13.6 billion | +54.5% |
| Event-related revenue | $147 million proxy | $156 million | +6.1% |
| Revenue per contract | 1.67 cents proxy | 1.15 cents | -31.2% |
| Event revenue as share of total revenue | 13.8% proxy | 11.9% | -1.9 points |
The spread serves as a gauge for investors. Trading volume rose sharply, but projected yields declined. Robinhood faces the challenge of maintaining low expenses and sustaining trading activity as it transitions contracts to Rothera, its own exchange project.
Controlling infrastructure may enhance economics and lessen dependence on Kalshi. However, this will not resolve the ongoing state-versus-federal dispute affecting the category. Restrictions on marketing or outright bans on products could impede customer growth on all platforms.
Analyst outlooks
| Analyst | Firm | Rating | Target |
|---|---|---|---|
| Gautam Chhugani | Bernstein | Outperform | $160 |
| James Yaro | Goldman Sachs | Buy | $137 |
| Alex Markgraff | KeyBanc | Overweight | $125 |
| Michael Cyprys | Morgan Stanley | Equal-weight | $124 |
| John Todaro | Needham | Buy | $123 |
| Ramsey El-Assal | Cantor Fitzgerald | Overweight | $115 |
A poll of 28 analysts shows a consensus rating of Buy, with an average price target of $121.40. This suggests potential gains of roughly 28% from the close on Wednesday. Price targets vary from $52 to $160, highlighting significant differences in views on growth prospects and regulatory risks.
Risks: The investigations might result in no substantial measures. Margins at Rothera might rise more rapidly than anticipated. On the other hand, government constraints, a reduced rate of contract returns, litigation expenses, or diminished consumer demand may decrease the value investors attribute to event-generated revenue.
Robinhood has made prediction markets a genuine source of earnings. The challenge ahead is greater. Investors must see evidence that growing scale can sustain returns as regulatory pressure increases.
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