A jump in shares of Robinhood was seen in extended trading on Wednesday afternoon after the retail brokerage announced stronger-than-expected Q1 earnings results. Robinhood reported net income of $157 million, or 18 cents per share, for the first quarter. The rise in net income 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.
Robinhood’s earnings
Here is how Robinhood’s results compared to Wall Street estimates, according to analysts surveyed by LSEG:
Robinhood earnings per share: 18 cents vs. 6 cents expected
Robinhood revenue: $618 million vs. $549 million expected
As per the company said the earnings per share and revenue numbers were both records for the firm. Robinhood shares jump was more than 5% in after-hours trading.
Robinhood’s popularity
Robinhood surged in popularity during the Covid-19 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.
Notice by SEC
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 U.S. 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.
Rise in customer base
Robinhood said 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.
Robinhood stock
Shares of Robinhood were up nearly 40% year to date before Wednesday’s earnings announcement. Shares of the zero-commission trading app shot up 6.3%, to 18.97, in extended Wednesday trading. They eased 0.8% to 17.85 in the regular on the stock market today. Robinhood stock retested the 50-day moving average Wednesday after regaining that support level last week.
Year to date, Robinhood stock has shot up 40%. Shares have nearly doubled in the past year, up 99.5%, but remain far below their post-IPO high, set in August 2021.
Bitcoin and Robinhood
The price of bitcoin can be a driver for Robinhood stock, with cryptocurrency moves key for the brokerage’s crypto trading. Bitcoin fell modestly Wednesday around $62,000, pulling back from record highs in March.
