(Reuters) -Robinhood Markets Inc reported a 5% rise in fourth-quarter revenue on Wednesday, as interest income surged at the online brokerage in the wake of the U.S. Federal Reserve’s rapid rate hikes through most of last year.
Robinhood allows eligible customers to borrow money to purchase securities and charges an interest on the debt.
Analysts have said the feature, called “margin investing”, can also be used to drive greater subscriptions to its premium Robinhood Gold as members can borrow money more cheaply than the standard rate.
Net interest revenue soared 165% to $167 million in the quarter, benefiting from the U.S. central bank’s aggressive monetary policy tightening campaign to combat decades-high inflation.
The brokerage’s, which was at center of 2021’s retail trading frenzy, shares rose 3% in extended trading after results.
Net loss in the quarter narrowed to 19 cents per share, compared with 49 cents per share last year.
The Menlo Park, California-based company reported revenue of $380 million in the three months ended Dec. 31, compared with $363 million a year earlier.
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
