Robinhood Markets Inc. has reported strong second-quarter earnings, with revenue driven by increased trading in meme stocks and cryptocurrencies, leading to a rise in shares by over 3%.

The company is projected to report approximately $643.34 million in revenue for the second quarter, marking a 32% increase, with transaction-based revenues expected to rise by 51%.

Transaction-based revenues surged 69% year-over-year to $327 million, with significant increases across various sectors: options revenue rose 43% to $182 million, cryptocurrency revenue jumped 161% to $81 million, and equities revenue increased 60% to $40 million.

Robinhood's GAAP earnings per share reached 21 cents, exceeding the estimate of 15 cents and showing a significant rise from negative earnings in the same quarter last year.

The average revenue per user was $113, surpassing the estimate of $106.34 and reflecting a 35% year-over-year increase.

Adjusted EBITDA for the quarter was $301 million, up from $247 million in the previous quarter and $151 million in the same quarter last year.

Net interest revenue increased by 22% to $285 million, primarily driven by margin investing, while other revenue, including subscription services, rose 19% to $70 million.

The company is actively working to stabilize trading activity by expanding its range of products for clients.

Despite the current trading frenzy, analysts caution that this level of activity may not be sustainable in the long term.

Assets under custody rose 57% year-over-year to $139.7 billion, attributed to higher net deposits and increased valuations in equity and cryptocurrency markets.

As of the end of June, Robinhood had 24.2 million funded customers, an increase of 1 million year-over-year, with investment accounts growing by 1.4 million to reach 24.8 million.