Shares of Robinhood saw a boost in after-hours trading on Wednesday following the announcement of its first-quarter results, which exceeded expectations. The retail brokerage reported a net income of $157 million, or 18 cents per share, a significant improvement from the same period last year when it incurred a net loss of $511 million, or 57 cents per share.
Robinhood’s performance outpaced Wall Street estimates, with earnings per share of 18 cents compared to the expected 6 cents, and revenue of $618 million compared to the anticipated $549 million. Both figures marked record highs for the company.
The surge in Robinhood’s popularity during the Covid-19 pandemic continued to drive its results, albeit reflecting broader market trends. Increased activity in stocks and cryptocurrencies, particularly during the first quarter, contributed to the company’s revenue growth.
Notably, cryptocurrency transactions generated $126 million in revenue for Robinhood in the quarter, despite regulatory uncertainty surrounding this aspect of its business. The company disclosed that the U.S. Securities and Exchange Commission had issued a Wells Notice, signaling potential legal action related to its cryptocurrency operations.
In response, Robinhood’s chief legal, compliance, and corporate affairs officer expressed disappointment in the SEC’s decision, maintaining the stance that the crypto assets on its platform are not securities.
Despite regulatory challenges, Robinhood saw positive growth metrics, including an 810,000 increase in funded customers year over year, totaling 23.9 million, and a 65% rise in assets under custody to $129.6 billion.
Prior to the earnings announcement, Robinhood’s shares had already risen nearly 40% year to date, reflecting investor optimism about its performance and future prospects.
