Robinhood Tops Estimates as Crypto Revenue More Than Triples

Robinhood Tops Estimates as Crypto Revenue More Than Triples

(Bloomberg) — Robinhood Markets Inc. posted its second straight quarterly profit Wednesday as higher interest rates and cryptocurrency trading fueled revenue growth.

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Net income for the first quarter totaled $157 million, or 18 cents a share, beating the 6-cent average estimate of analysts surveyed by Bloomberg. That compares with a loss of $511 million, or 57 cents, a year earlier.

“We delivered significant revenue growth and margin expansion,” Chief Financial Officer Jason Warnick said in a statement. “We set records for quarterly revenues, net income, and earnings per share, even as we stepped up our marketing and growth investments.”

Net revenue climbed 40% to $618 million, fueled by increased transaction-based revenue and higher short-term interest rates, according to the statement. Revenue from cryptocurrencies surged 232% to $126 million.

Shares of Robinhood advanced 6.5% to $19.01 in extended trading at 4:43 p.m. in New York. The stock had surged 40% this year through the close of regular trading.

Earlier this week, Robinhood said it received a so-called Wells notice from the US Securities and Exchange Commission, warning that the firm faces an enforcement action over its crypto business. The regulator has argued that most tokens are subject to SEC rules and that platforms where they trade should be registered with the agency. Robinhood said it was disappointed with the move and that it believes the assets listed on its platform aren’t securities.

Read More: SEC Warns Robinhood That Its Crypto Business Faces Lawsuit

More than 1 million Robinhood customers have joined a wait list for a 3% cash-back credit card that was announced in March, the company said in the statement.

(Updates with additional CFO comment in third paragraph, share price in fifth, cash-back credit card in last.)

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