By Manya Saini
(Reuters) -Robinhood sailed past Wall Street expectations for second-quarter revenue and profit on Wednesday as more retail investors were drawn to meme stocks and cryptocurrencies.
The app, typically associated with mom-and-pop investors, saw a surge in trading volumes as meme-stock influencer Keith Gill returned to social media and reignited interest in the highly shorted shares of videogame retailer GameStop.
The crypto markets also logged a stellar first half of the year led by gains in bitcoin after the U.S. Securities and Exchange Commission approved exchange-traded funds to track spot prices of bitcoin and ether.
Those factors helped drive a 69% jump in Robinhood’s transaction-based revenue to $327 million in the quarter.
“Regardless of kind of how the market backdrop plays out through the rest of the year, we are pretty optimistic that we are well-positioned to perform well,” Chief Financial Officer Jason Warnick said on a call with reporters.
He also shrugged off worries that a potential economic slowdown or recession would weigh on growth.
After being at the heart of a meme-stock trading frenzy of 2021, Robinhood has struggled with uneven trading activity over the past two years and is seeking to counter the effects by building a suite of products for clients.
Robinhood’s quarterly net interest revenue, the bulk of which comes from margin investing, jumped 22% to $285 million.
It reported record revenue of $682 million in the second quarter ended June 30, beating estimates of $643.34 million, according to LSEG data.
Profit of 21 cents per share also topped expectations of 15 cents.
Robinhood shares were last up 0.4% in extended trading.
(Reporting by Manya Saini in Bengaluru; Editing by Anil D’Silva)
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