Robinhood Market Inc.’s largest source of revenue more than tripled in the first quarter as the trading app became immensely popular with young investors amid the meme-stock frenzy.
Revenue from “Payment for order flow,” a system where market makers like Citadel Securities pay retail brokers including Robinhood for routing orders to them, reached about $331 million in the first quarter, up from $91 million a year ago, according to an analysis of a securities filing.
Within the first quarter, revenue from payments for order flow peaked in February at about $121 million, before dropping 20% to $96.7 million in March.
The app popularized the zero-commission brokerage and introduced millions of millennials and Gen Zers to the market.
Critics including U.S. lawmakers and a state securities regulator have said Robinhood makes investing real money feel too much like a game.
In response to critics, Robinhood has said its platform doesn’t encourage excessive trading and fills a crucial role in financial markets by helping a young and diverse group of traders to invest.
At Berkshire Hathaway’s annual meeting Saturday, Warren Buffett weighed in on the Robinhood phenomenon, saying the app has become a big part of the “Casino aspect” of the stock market recently.