Robinhood posts mixed Q1 earnings report, announces 24-hour trading five days a week

Yahoo Finance's Diane King Hall breaks down Robinhood's stock rise after its Q1 earnings report and announcement of a new 24-hour trading service.

Video transcript

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- Shares of Robinhood are getting a boost today after its earnings showed a jump in interest income due to Fed rate hikes but still saw monthly active users slip. The online brokerage also announcing a new 24-hour trading platform five days a week. Yahoo Finance's Diane King Hall joins us now with the details. I think the shares were originally down, weren't they not? Now it looks like they've turned higher.

DIANE KING HALL: They turned higher. Yeah, indeed, Robinhood definitely one of the stocks we're focusing in on today. The company, it did report a net loss of $511 million, or $0.57 a share on an adjusted basis. Now, trading activity is down from a year ago, but revenue was better than expected, at $441 million. That beat the 422 million expected.

Robinhood is also working to reverse that trend of activity being down, as you mentioned, with a new 24-hour trading service, not 24/7. The new feature is dubbed 24-Hour Market and will operate 24/5, meaning it will allow for 24-hour trading five days a week. The service will allow for trading in 43 securities, including some popular names, like Apple, Amazon, and Tesla. The feature will start to roll out next week. And all of its customers are expected to be able to access it by June.

So you can see what Robinhood is doing here. I mean, of course, they were one of the beneficiaries of that meme stock frenzy. And they're trying to regain that volume that they lost with another new service.

- Yeah. I mean, they were also at the center of it because they had to halt trading in certain names until they had the necessary liquidity as well. Interesting to see, even in the uncertainty and the banking sector, too, that got a mention on the call. They're continuing to see strong net deposits and improving customer satisfaction, they said as well, within this.

DIANE KING HALL: Yeah. And the deposit also having to do with another feature they rolled out earlier this year, an IRA, people being able to invest in that service. So that is another way they've pulled in customers, by just offering new services and new features. I mean, Robinhood has certainly been doing a tightrope act in terms of the challenges that they've had to deal with.

- Yeah, one more thing on there, too. I always do kind of control F for crypto mentions within Robinhood. They talked about their new wallet that they've launched. There's 130 countries that had been kind of adopted in and users have seen some type of connection point with. But it's interesting that even in this period of time, where, there's been more of a push for cold storage right, where Robinhood might have a place within the crypto wallet transactions and actually functionality, at least in this interim period of time.

- And one more thing to mention that has nothing to do with earnings, and that's the SEC is looking into--

DIANE KING HALL: Yes. I saw that. You're right.

- --trade reporting related to its securities lending and fractional share trading. It seems like it might be linked to some of the fines that banks paid in recent years over unauthorized chats between employees, perhaps. But that's something we're going to continue to watch.

DIANE KING HALL: Yeah, so they're definitely under the microscope there, but it's not affecting the stock today.

- It is not. Diane, thank you so much. Appreciate it.

DIANE KING HALL: All right. You got it.