Robinhood Markets reports higher fourth quarter revenue, shares up 5%

Robinhood Markets Inc reported higher fourth-quarter revenue on Wednesday, as interest income surged at the online brokerage and announced plans to repurchase shares from Sam Bankman- Fried's Emergent Fidelity Technologies.

The brokerage's shares were up nearly 5 per cent in extended trading after the results.

Jason Warnick, Chief Financial Officer, said that our Board authorized us to purchase most or all of our shares that Emergent Fidelity Technologies bought in May 2022.

The ownership of the stock is still in flux due to a number of legal hurdles.

In January, a U.S. attorney told a judge that prosecutors were in the process of seizing shares tied to Bankman- Fried, who was charged with fraud in the collapse of the major criptocurrency exchange FTX.

According to a call with journalists, Robinhood will work with the U.S. Department of Justice to make sure we get these shares free and clear of any claims.

In the fourth quarter, net interest revenue soared by 165 per cent to $167 million, as the brokerage's margin investing business benefited from the U.S. central bank's monetary policy tightening campaign to combat decades-high inflation.

Retail traders, who had used Robinhood's platform to pump money into meme stocks, have pulled back due to volatile market conditions, because of gains from higher rates. Transaction-based revenue decreased by 30 per cent in the quarter.

Thomas Hayes, chairman and managing member of Great Hill Capital said that retail investors sold all the stocks they bought in aggregate in 2020 -- 2021 during the downturn in 2022.

The company reported revenue of $380 million in the three months ended December 31, compared to $363 million a year ago.