Trading app Robinhood Markets launched its first-ever share buyback plan on Tuesday, saying it would repurchase $1 billion worth of stocks as it looks to grow beyond its startup phase.

The company, best known for being the go-to app for retail traders, has been rolling out a series of new features to cater to its customers' demand for sophisticated products.

The buyback underscores that Robinhood is adopting a similar approach to win over investors who might be looking for signs of maturity before backing the 11-year-old company. Buybacks are typically associated with older companies.

The repurchases would be executed over a two to three year period starting from the third quarter, Robinhood said. Shares rose 4.3% to $21.34 after the bell and were set to open at their highest since Dec. 2021 if current gains hold.

Companies often buy back stock when they believe they are undervalued. Robinhood's shares have gained nearly 61% so far this year up to Tuesday's close, but were still 58% lower than the peak they touched in August 2021.

Since then, the company has bulked up its offerings. Earlier this month, it said over 1 million customers had joined the waitlist for a credit card it launched for its premium Gold subscribers in March.

It also rolled out a retirement account in late 2022 and is expected to launch trading in futures and index options later this year.

Its core business of trading has also seen a recovery in recent quarters, as hopes of a soft landing for the U.S. economy encourage customers to dip back into risky assets like equities and crypto.

The company's earnings have exceeded market expectations for eight successive quarters, according to LSEG data. (Reporting by Niket Nishant in Bengaluru; Editing by Arun Koyyur)