By Andrew Welsch

A surge in trading during the first quarter lifted profits for Robinhood Markets beyond Wall Street's expectations. The brokerage reported diluted earnings per share of 37 cents, a 106% year over year increase. Revenue came in at $927 million, up 50% thanks to a jump in transaction-based revenue.

Analysts had expected the brokerage firm to report first-quarter earnings of 33 cents per share on revenue of $920 million, according to FactSet. For the same period a year ago, Robinhood reported earnings of 18 cents on revenue of $618 million.

"Trading volumes and net deposits were incredibly strong for the quarter and in April," CFO Jason Warnick said during a call with reporters.

The company's board of directors authorized an additional $500 million in share repurchases. That follows a $1 billion share repurchase program announced in May 2024.

Robinhood's stock rose about 3% during Wednesday evening trading. Shares are up 32% this year compared with a 5.1% decline for the S&P 500.

Despite recent market volatility, Robinhood continued to bring in new money and sign up more customers. Net deposits reached a record $18 billion. Subscribers to the company's Gold service, which gives clients discounts and perks, reached a record 3.2 million. Total funded customer accounts increased by 1.9 million, or 8% year over year, to 25.8 million.

"Customers aren't just trading more with us, they are trusting us with more of their assets," CEO Vlad Tenev said on the company's earnings call Wednesday.

Market volatility spiked in April and the stock market sold off sharply in response to concerns about tariffs and weakening economic growth. Other brokerage firms, such as Interactive Brokers, have reported surges in investor activity -- but also said investors dialed back risk as global markets sold off following the president's April 2 "liberation day" tariff announcement.

Robinhood customers remain engaged, according to Warnick. He also expects the company to fare well even if volatility persists and economic growth weakens this year. He said Robinhood offers customers far more products and services than it previously did.

"We have diversified the business," Warnick said. "If you go back to 2022, we had a much narrower scope of products to offer customers."

Over the past year, Robinhood has added more tools for active traders, a robo-advisor, a custodian for registered investment advisory firms, and a new banking app. It also launched an event contracts platform that enables customers to place bets on the outcome of events such as sporting events or whether the Federal Reserve will cut rates. The company said that over the last six months customers have traded more than 1 billion event contracts, about half of which were sports-related. The company earns about a penny per contract.

"A lot customers like to follow news and sports," Tenev said.

The company's nascent robo-advisor has picked up more than 40,000 customers and $100 million in assets, Tenev said during the earnings call. He also pointed to Robinhood's acquisition of TradePMR, saying the company is working hard to integrate the custodian and hopes to win over more independent financial advisors who rely on TradePMR for technology and asset management services as well as to safeguard client assets.

The TradePMR acquisition helped lift Robinhood's total platform assets to $221 billion, a 70% year over year increase.

The acquisition also prompted Robinhood to adjusted its guidance for full year adjusted operating expenses from $2.085 billion to $2.185 billion to include anticipated costs related to TradePMR. That's up from $2 billion to $2.1 billion. First-quarter operating expenses rose 21% to $557 million because of higher marketing costs.

Robinhood has been winning over clients by offering matching bonuses to move accounts to the company. Warnick said the average customer transfer was about $90,000, and double that figure for taxable accounts. "We love these promotions and the customers we are getting," he said.

Write to Andrew Welsch at andrew.welsch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 30, 2025 18:13 ET (22:13 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.