Will Robinhood disclose annualized prediction market/event contract revenue exceeding $500M by Q2 2026 earnings?

The Q4 2025 data is directionally positive -- volumes doubled post-election and diversified beyond politics into sports and economics. However, $500M annualized requires ~67% growth from the confirmed ~$300M run rate, and this must be both achieved AND disclosed by Q2 2026 earnings (August 2026). The Rothera JV own-exchange launch targeting mid-2026 introduces a revenue recognition transition that could actually suppress reported figures during the switchover from Kalshi routing. The compound requirement -- hit the threshold AND disclose it -- makes this harder than pure growth math suggests. Strong execution plus favorable disclosure is possible but not the base case.

The growth trajectory is more compelling than the prior 12% estimate suggested. Q4 volumes doubled Q3, and early 2026 already has 4B contracts (vs 12B for all of FY2025). If the doubling trend continued through Q1 2026, annualized Q1 revenue could approach $400-450M by the time Q2 2026 earnings are reported. NBA overtaking NFL and government shutdown volume demonstrate non-political category expansion that reduces cyclicality risk. The Rothera JV gives Robinhood full-stack economics (no longer sharing with Kalshi), which improves revenue per contract. However, $500M remains a stretch -- it requires everything to go right: sustained volume growth, successful exchange launch, favorable take rate on own exchange, and management choosing to disclose the figure. The 4B contracts in early 2026 (annualizing to potentially 16-20B) against 12B for FY2025 suggests genuine acceleration.

I am anchoring to the structural barriers rather than the growth momentum. First, revenue is embedded in 'Other transaction' category -- management has never disclosed prediction market revenue as a standalone figure, only in qualitative terms ($100M+ ARR). The resolution requires $500M to be 'disclosed or calculable from quarterly data.' Even if prediction markets hit $500M annualized internally, management may not provide sufficient granularity in Q2 2026 earnings to confirm it. Second, the Rothera JV launching mid-2026 means the own-exchange economics won't contribute a full quarter until Q3 2026 at earliest -- well after this market's resolution window. Third, CFTC rulemaking remains unfinished; any restrictive interim guidance could constrain new contract launches. The prior committee estimate of 12% was well-calibrated given sibling market results, and while Q4 data is directionally positive, the magnitude of required growth plus disclosure hurdles keep this below 15%.

The post-election data resolves the biggest prior uncertainty favorably -- volumes are durable and diversifying. But the math is demanding: $300M to $500M requires 67% growth in ~2 quarters. The 4B contracts in early 2026 represent genuine acceleration, but translating volume to revenue depends on take rates that may shift during the Kalshi-to-Rothera transition. Revenue disclosure risk remains the primary downside -- even if the run rate approaches $500M, management may not provide granular enough data. Upgrading from 12% prior to ~18% reflects the positive Q4 data while respecting the high threshold.

Weighting the early 2026 contract volume data heavily. With 4B contracts already traded in early 2026 compared to 12B for all FY2025, the annualization math suggests 16-24B contracts possible for FY2026. If revenue scales roughly linearly with contracts, that implies $400-600M annualized revenue is within the realm of possibility by mid-2026. The Rothera JV improves unit economics by eliminating the Kalshi intermediary. Additionally, CFTC withdrawing the sports contract ban (Jan 2026) expands the addressable market. However, I discount for: (1) early 2026 may include Super Bowl spike that doesn't sustain, (2) revenue recognition during exchange transition is uncertain, (3) management may tout metrics without giving enough data to calculate $500M precisely. The probability sits around 20-22%, meaningfully above the prior 12% but still reflecting that this outcome requires both favorable execution and favorable disclosure.

The committee's prior 12% prediction and strong sibling calibration provide a well-anchored starting point. Q4 2025 data warrants an upward revision: volumes doubled, categories diversified, and the post-election concern was resolved favorably. However, three structural barriers cap the upward revision: (1) $500M is approximately 11% of projected total revenue -- a very large share for a product launched March 2025, (2) revenue recognition during the Kalshi-to-Rothera transition creates uncertainty about what gets reported when, and (3) the resolution mechanism requires disclosure, not just achievement. A moderate upward revision from 12% to 16% captures the positive signal without overweighting momentum in what remains a low-probability outcome.

The $500M threshold is very demanding -- 67% above confirmed $300M run rate. Post-election volume durability is positive but insufficient to bridge this gap in ~6 months. Revenue disclosure risk adds another barrier. Upgrading modestly from prior 12% to reflect Q4 data.

Two decisive factors: (1) the 67% growth bar is extremely high for a 6-month window, and (2) prediction market revenue has never been separately disclosed. Even with strong momentum, both conditions must be met. The prior 12% was well-calibrated; a small upward adjustment to 14% reflects the new data without overreacting.

Giving more weight to the acceleration signal: 4B contracts in early 2026 already vs 12B for all FY2025. If this pace holds through sports seasons (March Madness, NBA playoffs), $500M annualized is plausible. Own-exchange economics improve take rate. But disclosure risk keeps this below 25%.