The stocks of Robinhood Markets Inc rose after the US financial company’s revenue beat estimates and executives said deposit growth was stronger than last year.
The net income for the fourth quarter jumped 24% from the same period a year earlier to 471 million USD, beating analysts’ expectations of 457 million USD, it said in a statement on Tuesday.
“2023 was a strong year as our product velocity continued to accelerate, our trading market share increased and we began to grow globally”, said the Robinhood CEO, Vlad Tenev. “And we’re off to an even better start in 2024, as we’ve already attracted more customers with funds and net deposits in the first half of the first quarter than in the entire fourth quarter of 2023.”, added he.
Shares of the company, which pioneered its commission-free stock trading app, rose about 9% in after-hours trading in New York.
Net deposits for the fourth quarter totaled 4.6 billion USD. Robinhood’s cryptocurrency revenue came in at 43 million USD for the quarter, beating estimates of 37 million USD.
In January, US regulators approved some bitcoin exchange-traded funds (ETFs), which Robinhood quickly rolled out to its customers. Although some of the enthusiasm surrounding this event has dissipated, Bitcoin, the oldest cryptocurrency, has reached its highest value in two years.
The company’s Chief Financial Officer, Jason Warnick, told analysts on a call Tuesday that declining interest rates typically support growth, an opportunity for Robinhood next year.
“We think 2024 is the year we’ll see interest rates turn from a headwind for our business growth to a tailwind”, he said.
