Robinhood climbs after reporting record earnings for first quarter
Shares of the brokerage firm rose after first-quarter results topped Wall Street expectations
Shares of Robinhood rose in extended trading Wednesday afternoon after the retail brokerage announced stronger-than-expected first-quarter results.
Robinhood reported net income of $157 million, or 18 cents per share, for the first quarter. That is a positive swing from the same period last year, when the company had a net loss of $511 million, or 57 cents per share.
Here's how Robinhood's results compared with Wall Street estimates, according to analysts surveyed by LSEG:
- Earnings per share: 18 cents vs. 6 cents expected
- Revenue: $618 million vs. $549 million expected
The company said the earnings per share and revenue numbers were both records for the firm. The stock jumped more than 5% in after hours trading.
Robinhood surged in popularity during the Covid pandemic in 2020 and 2021, but has since seen user activity and revenue that mirrors action in the broader market. Stocks and cryptocurrencies rose during the first quarter, which likely helped the company's results.
Cryptocurrency transactions accounted for $126 million in revenue in the quarter, the company said.
Regulatory uncertainty has clouded the future of that business. Robinhood disclosed on Monday that the Securities and Exchange Commission had issued a Wells Notice to the company, signaling potential legal enforcement action over the company's cryptocurrency business.
Dan Gallagher, Robinhood's chief legal, compliance and corporate affairs officer, said in a blog post that the company was "disappointed" in the SEC's decision and still believes that the crypto assets on its platform are not legally securities.
Robinhood said that its number of funded customers rose by 810,000 year over year to 23.9 million. Assets under custody rose 65% year over year to $129.6 billion, according to the press release.
Shares of Robinhood were up nearly 40% year to date before Wednesday's earnings announcement.
Read the full earnings release here.
Correction: A previous version of the story misstated the date of Robinhood's quarterly report.
This story originally appeared on: CNBC - Author:Jesse Pound
