(Bloomberg) – Robinhood Markets Inc. posted its second consecutive quarterly profit on Wednesday, as rising 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 average estimate of 6 cents a share from analysts surveyed by Bloomberg. By comparison, he lost $511 million (57 cents) in the same period last year.
“We achieved significant revenue and profit growth,” Chief Financial Officer Jason Wernick said in a statement. “We set records for quarterly revenue, net income and earnings per share while increasing our investment in marketing and growth.”
Net revenue increased 40% to $618 million due to higher transaction-based revenue and higher short-term interest rates, the statement said. Revenue from cryptocurrencies increased 232% to $126 million.
Robinhood stock rose 6.5% to $19.01 in after-hours trading at 4:43 p.m. New York time. The stock was up 40% this year through the close of regular trading.
Robinhood announced earlier this week that it had received a so-called Wells Notice from the U.S. Securities and Exchange Commission, warning that the company could face enforcement action regarding its crypto business. Regulators argue that most tokens are subject to SEC rules and that the platforms on which they are traded should be registered with the SEC. Robinhood said it was disappointed with the move and believes the assets listed on its platform are not securities.
Read more: SEC warns Robinhood crypto business faces lawsuit
More than 1 million Robinhood customers have joined the waiting list for the 3% cash back credit card announced in March, the company said in a statement.
(Updates with CFO comment in 3rd paragraph, stock price in 5th paragraph, and cashback credit card at the end.)
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