(Reuters) – Robinhood Markets posted a rise in fourth-quarter revenue on Tuesday as the online brokerage earned higher interest off customers on loan repayments.
The Menlo Park, California-based company reported net interest revenue of $236 million in the quarter, up from $167 million a year earlier.
A higher-for-longer interest rate environment has benefited lenders across the financial spectrum, including Robinhood, with the industry capitalizing on interest payments.
Shares of the company rose 8% in extended trading after the results.
The financial services platform allows eligible customers to borrow money to purchase securities and charges interest on the debt. This feature, known as ‘margin investing,’ has provided sanctuary to the retail investor-focused firm in recent quarters amid a deceleration in retail trading.
Robinhood was at the center of the 2021 retail trading frenzy, driven by mom-and-pop investors who used the company’s commission-free platform to pump money into so-called “meme stocks” during the pandemic-era lockdowns.
The company’s revenue rose to $471 million in the three months ended Dec. 31, compared with $380 million a year earlier.
(Reporting by Manya Saini in Bengaluru; Editing by Tasim Zahid)
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