The US Federal Reserve (Fed) has been raising its interest rates for the tenth consecutive time since March 2022. According to Reuters, the rate hikes favor the US-based brokerage platform Robinhood.
Thanks to the Fed’s 75-basis point rate hike in 2023, Robinhood has already brought in more revenue than the estimates of Wall Street, per Reuters. According to the report, the brokerage’s net interest revenue has reached $208 million in the first quarter of the year, marking a quadruple rise since 2022.
According to Reuters, experts estimated Robinhood’s total revenue to stand at $424.53 million. Robinhood, however, reported a total revenue of $441 million in the first quarter.
“The current rising interest rate environment has been a significant tailwind.”
Andrew McGee, analyst at Third Bridge
Moreover, Robinhood’s shares also rose by 2%, according to Reuters, after announcing the launch of “24-hour trading for five days a week.”
Per the report, Robinhood is also trying to get its hands back on the 7.42% or around 55 million of the company shares that the former CEO of the FTX crypto exchange, Sam Bankman-Fried (SBF), acquired last year.
On the other hand, the number of Robinhood users in the first quarter of 2023 has declined by 4.1 million from a year earlier, per Reuters. The report adds that the company witnessed a 5% drop in its “transaction-based revenue.”