Robinhood Markets (NASDAQ: HOOD) delivered a second quarter that was hard to find fault with. Revenue of $1.31 billion beat the $1.29 billion consensus by about 2%. The real story is the composition. Transaction-based revenue surged 44% year over year to $776 million. Diluted EPS of $0.62 beat estimates by a staggering 46%. Net income rose 48% to $573 million.
The beat was broad-based. Options revenue rose 29% to $342 million. Equities revenue nearly doubled to $129 million. Then there were event contracts — the prediction markets business that has become a political and cultural lightning rod. They generated $156 million, up more than 10x from a year ago. Cryptocurrencies revenue fell 38% to $100 million, a drag more than offset by strength elsewhere. Net interest revenue grew a more modest 9% to $389 million, held back by lower short-term rates and securities lending activity.
A $0.14 per share gain from the deconsolidation of Robinhood Ventures Fund I boosted EPS. Even stripping that out, operating momentum was strong. Adjusted EBITDA rose 35% to $741 million, and the adjusted EBITDA margin expanded to 57% from 56% a year ago. The company now has 13 business lines generating $100 million or more in annualized revenue, up from 11 last quarter. Robinhood Legend and the Credit Card business crossed that threshold.
Customer growth was equally impressive. Funded customers reached 28.4 million, up 7% year over year. Gold subscribers hit a record 4.8 million, up 39%. Net deposits were a record $21.7 billion, representing a 28% annualized growth rate relative to platform assets. Total platform assets rose 32% to $369 billion. The Trump Account program, launched on July 4, has already attracted over 7 million sign-ups and nearly $1.5 billion in deposits. A data point that will be closely watched in Q3.
Management lowered and tightened its full-year 2026 outlook for adjusted operating expenses and SBC to a range of $2.675 billion to $2.775 billion, down from $2.7 billion to $2.825 billion. The revision reflects captured efficiencies being partly redeployed to fund new ventures like Rothera (the CFTC-licensed prediction markets exchange) and WonderFi (the Canadian crypto acquisition). This is a signal worth parsing: the company is finding operating leverage even as it invests aggressively in new products and geographic expansion.
Share repurchases totaled $414 million in Q2, including $290 million tied to a convertible notes offering. Since the program's inception in Q3 2024, Robinhood has bought back $1.3 billion worth of stock at an average price of approximately $47 per share. That's a fraction of the current market price. The buyback pace is aggressive, but with $5.4 billion in cash and equivalents on the balance sheet, the company has ample room to continue.
The question for the second half is whether the event contracts revenue stream is sustainable. The 10x growth from a small base is eye-catching, but prediction markets are inherently event-driven and lumpy. Robinhood's diversification into 13 revenue lines over $100 million each provides a buffer. Still, the crypto revenue decline and the drag from lower interest rates are pressures that won't disappear. For now, the machine is firing on all cylinders.