Robinhood's earnings for the first quarter exceed expectations, leading to a rise in stock price.

• Robinhood shares rose after the retail brokerage announced stronger-than-expected first-quarter results.
• The company's net income increased to $157 million, or 18 cents per share, on a record revenue of $618 million.
• In the quarter, the company reported that cryptocurrency transactions generated $126 million in revenue.

The retail brokerage's first-quarter results were stronger-than-expected, causing shares of to rise in extended trading Wednesday afternoon.

Robinhood's net income for the first quarter was $157 million, or 18 cents per share, representing a significant improvement from the previous year's net loss of $511 million, or 57 cents per share.

Analysts surveyed by LSEG compared Robinhood's results to Wall Street estimates.

• Earnings per share: 18 cents vs. 6 cents expected
• Revenue: $618 million vs. $549 million expected

The company reported record earnings per share and revenue numbers, causing the stock to surge more than 5% in after-hours trading.

During the Covid-19 pandemic in 2020 and 2021, Robinhood experienced a surge in popularity. However, its user activity and revenue have since mirrored the broader market's actions. The first quarter saw an increase in the prices of both stocks and cryptocurrencies, which likely contributed to Robinhood's positive results.

The cryptocurrency business of Robinhood has been under regulatory scrutiny, with the U.S. Securities and Exchange Commission issuing a Wells Notice to the company on Monday, signaling potential legal enforcement action. As a result, the company's cryptocurrency transactions accounted for $126 million in revenue in the quarter, according to the company's statement.

Robinhood's chief legal, compliance and corporate affairs officer, Dan Gallagher, expressed disappointment in the SEC's decision regarding the crypto assets on the platform and maintains that they are not legally securities.

According to a press release, Robinhood's number of funded customers increased by 810,000 year over year to 23.9 million, while assets under custody rose 65% year over year to $129.6 billion.

Before Wednesday's earnings announcement, Robinhood's shares had increased by almost 40% year to date.

The previous version of the story contained an error regarding the date of Robinhood's quarterly report.