ROBINHOOD Markets posted a shock revenue within the fourth quarter on Tuesday (Feb 13), pushed by increased curiosity earnings from prospects paying again loans and a rebound in buying and selling, sending shares of the net brokerage up 10 per cent after the bell.
A better-for-longer rate of interest setting has benefited lenders throughout the monetary spectrum, together with Robinhood, with the business capitalising on curiosity funds.
“Looking at revenues, with the current macro backdrop, we’re finding for strong growth in 2024, driven by continued 20-plus per cent net deposit growth, increasing gold adoption, double-digit gains and trading market share,” stated chief monetary officer Jason Warnick in post-earnings name.
Warnick added Robinhood is aiming to ship margin growth and expects headcount to be roughly flat to barely up this yr.
The retail-investor targeted agency reported a shock revenue of three US cents per share within the quarter, in contrast with analysts’ expectations of a lack of 1 US cent, in keeping with LSEG knowledge.
The monetary companies platform permits eligible prospects to borrow cash to buy securities and fees curiosity on the debt. This ‘margin investing’, has been a shiny spot for retail investor-focused agency.
The Menlo Park, California-based firm’s web curiosity income got here in at US$236 million versus US$167 million a yr earlier.
Transaction-based revenues additionally outperformed Wall Street expectations, rising 8 per cent year-over-year to US$200 million within the quarter, primarily pushed by cryptocurrencies.
CEO Vlad Tenev in a post-earnings name with analysts stated Robinhood’s buying and selling market share climbed 14 per cent for equities and 19 per cent for choices, in contrast with a yr earlier.
Robinhood was on the centre of the 2021 retail buying and selling frenzy, pushed by mom-and-pop buyers who used the corporate’s commission-free platform to pump cash into so-called “meme stocks” throughout the pandemic-era lockdowns.
Average income per person elevated 23 per cent, whereas month-to-month energetic customers declined 4 per cent within the reported quarter versus a yr earlier.
The firm’s income rose to US$471 million, crusing previous expectations of US$456.81 million. REUTERS
Source: www.businesstimes.com.sg”