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Robinhood Beats Estimates as Crypto Revenue More Than Triples
(Bloomberg) — Robinhood Markets Inc. reported its second straight quarterly profit on Wednesday as higher interest rates and cryptocurrency trading fueled revenue growth.
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First-quarter net income came in at $157 million, or 18 cents a share, beating the average estimate of 6 cents from analysts surveyed by Bloomberg. That compares with a loss of $511 million, or 57 cents, a year earlier.
“We achieved significant revenue growth and margin expansion,” Chief Financial Officer Jason Warnick said in a statement. “We set records for quarterly revenue, net income and earnings per share, even as we ramped up our investments in marketing and growth.”
According to the statement, net revenues rose 40% to $618 million, fueled by higher transaction-based revenue and higher short-term interest rates. Cryptocurrency revenue increased 232% to $126 million.
Robinhood shares rose 6.5% to $19.01 in extended trading as of 4:43 pm in New York. The stock is up 40% at the close of regular trading this year.
Earlier this week, Robinhood said it had received a so-called Wells Notice from the U.S. Securities and Exchange Commission, warning that the company faces enforcement action over its cryptocurrency business. The regulator argued that most tokens are subject to SEC rules and that the platforms on which they are traded should be registered with the agency. Robinhood said it was disappointed by the move and that it believes the assets listed on its platform are not securities.
Read more: The SEC warns Robinhood that its cryptocurrency business will face a lawsuit
More than 1 million Robinhood customers have joined a waitlist for a 3% cash-back credit card announced in March, the company said in the statement.
(Updates with additional CFO commentary in third paragraph, stock price in fifth, cash-back credit card in last.)
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