Robinhood Gain as Retail Trading Rebound Powers Record Quarter

Robinhood shares ( HOOD ) rose after the retail brokerage reported stronger-than-expected first-quarter results, with net income of $157 million, or 18 cents per share, and record revenue of $618 million. Cryptocurrency transactions accounted for $126 million in revenue in the quarter. The company's earnings per share and revenue numbers were both records for the firm, and the stock jumped more than 5% in after-hours trading. Robinhood ( HOOD ) surged in popularity during the Covid-19 pandemic in 2020 and 2021, but has since seen user activity and revenue mirroring market action.

Regulatory uncertainty has clouded the future of the company's cryptocurrency business, with the U.S. Securities and Exchange Commission issuing a Wells Notice to the company, signaling potential legal enforcement action over the company's cryptocurrency business.

Robinhood's chief legal, compliance and corporate affairs officer, Dan Gallagher, expressed disappointment in the SEC's decision and believes that the crypto assets on its platform are not legally securities. The company reported a year-over-year increase in funded customers to 23.9 million and assets under custody to $129.6 billion.