(Reuters) – Robinhood Markets Inc reported a 47% jump in its first-quarter revenue on Wednesday, as the U.S. Federal Reserve’s rapid rate hikes boosted the online brokerage’s interest income.
Higher interest income from lending has helped Robinhood partially offset a slump in its mainstay retail trading arm, which saw customer engagement dwindle over the past year amid market volatility.
Shares of the brokerage, which was at the center of 2021’s retail trading frenzy, rose 7% in extended trading. They fell 54% last year amid a sector-wide sell-off in the high-growth technology stocks triggered by geopolitical turmoil and rising interest rates.
Robinhood allows eligible customers to borrow money to purchase securities and charges an interest on the debt.
Net interest revenue came in at $208 million in the quarter ended March 31, compared with $55 million a year earlier.
The Menlo Park, California-based company reported revenue of $441 million, compared with $299 million a year earlier.
(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)
