COVER
COVER - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Feb. 18, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 001-40691 | |
Entity Registrant Name | Robinhood Markets, Inc. | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 46-4364776 | |
Entity Address, Street | 85 Willow Rd | |
Entity Address, City | Menlo Park | |
Entity Address, State | CA | |
Entity Address, Postal Zip Code | 94025 | |
City Area Code | 844 | |
Local Phone Number | 428-5411 | |
Title of each class | Class A Common Stock - $0.0001 par value per share | |
Trading Symbol(s) | HOOD | |
Security Exchange Name | NASDAQ | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
ICFR Auditor Attestation Flag | false | |
Entity Shell Company | false | |
Documents Incorporated by Reference | The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the Annual Meeting of Stockholders to be held in 2022, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. | |
Entity Central Index Key | 0001783879 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Entity Public Float | $ 0 | |
Common Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 740,034,469 | |
Common Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 127,955,246 |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | San Jose, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 6,253,477,000 | $ 1,402,629,000 |
Cash and securities segregated under federal and other regulations | 3,992,419,000 | 4,914,660,000 |
Receivables from brokers, dealers, and clearing organizations | 88,326,000 | 124,501,000 |
Receivables from users, net | 6,638,900,000 | 3,354,142,000 |
Deposits with clearing organizations | 327,917,000 | 225,514,000 |
User-held fractional shares | 1,834,479,000 | 802,483,000 |
Investments | 27,189,000 | 0 |
Other current assets | 120,835,000 | 48,655,000 |
Total current assets | 19,283,542,000 | 10,872,584,000 |
Property, software, and equipment, net | 146,419,000 | 45,834,000 |
Goodwill | 100,521,000 | 0 |
Intangible assets, net | 34,107,000 | 185,000 |
Restricted cash | 23,773,000 | 7,364,000 |
Other non-current assets | 180,817,000 | 62,507,000 |
Total assets | 19,769,179,000 | 10,988,474,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 252,313,000 | 104,649,000 |
Payables to users | 6,475,728,000 | 5,897,242,000 |
Securities loaned | 3,651,035,000 | 1,921,118,000 |
Fractional shares repurchase obligation | 1,834,479,000 | 802,483,000 |
Other current liabilities | 133,787,000 | 90,553,000 |
Total current liabilities | 12,347,342,000 | 8,816,045,000 |
Other non-current liabilities | 128,745,000 | 48,012,000 |
Total liabilities | 12,476,087,000 | 8,864,057,000 |
Commitments and contingencies (Note 16) | ||
Mezzanine equity | ||
Redeemable convertible preferred stock, $0.0001 par value. 414,033,220 shares authorized, 412,742,897 shares issued and outstanding with a liquidation preference of $2,191,086 as of December 31, 2020. No shares authorized, issued, and outstanding as of December 31, 2021. | 0 | 2,179,739,000 |
Stockholders’ (deficit) equity: | ||
Preferred stock, $0.0001 par value. No shares authorized, issued and outstanding as of December 31, 2020; 210,000,000 shares authorized and no shares issued and outstanding as of December 31, 2021. | 0 | 0 |
Common stock, value | 1,000 | |
Additional paid-in capital | 11,169,136,000 | 134,307,000 |
Accumulated other comprehensive income | 405,000 | 473,000 |
Accumulated deficit | (3,876,535,000) | (190,103,000) |
Total stockholders’ (deficit) equity | 7,293,092,000 | (55,322,000) |
Total liabilities, mezzanine equity and stockholders’ (deficit) equity | 19,769,179,000 | $ 10,988,474,000 |
Common Class A | ||
Stockholders’ (deficit) equity: | ||
Common stock, value | 73,000 | |
Common Class B | ||
Stockholders’ (deficit) equity: | ||
Common stock, value | 13,000 | |
Common Class C | ||
Stockholders’ (deficit) equity: | ||
Common stock, value | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, authorized (in shares) | 0 | 414,033,220 |
Redeemable convertible preferred stock, issued (in shares) | 0 | 412,742,897 |
Redeemable convertible preferred stock, outstanding (in shares) | 0 | 412,742,897 |
Redeemable convertible preferred stock, Liquidation preference | $ 2,191,086,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 210,000,000 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 0 | 777,354,000 |
Common stock, shares issued (in shares) | 0 | 229,031,546 |
Common stock, shares outstanding (in shares) | 0 | 229,031,546 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 21,000,000,000 | 0 |
Common stock, shares issued (in shares) | 735,957,367 | 0 |
Common stock, shares outstanding (in shares) | 735,957,367 | 0 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 700,000,000 | 0 |
Common stock, shares issued (in shares) | 127,955,246 | 0 |
Common stock, shares outstanding (in shares) | 127,955,246 | 0 |
Common Class C | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 7,000,000,000 | 0 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Net interest revenues | $ 256,962 | $ 177,437 | $ 70,639 |
Total net revenues | 1,815,143 | 958,833 | 277,533 |
Operating expenses: | |||
Brokerage and transaction | 152,343 | 111,083 | 45,459 |
Technology and development | 1,232,787 | 215,630 | 94,932 |
Operations | 373,129 | 137,905 | 33,869 |
Marketing | 327,369 | 185,741 | 124,699 |
General and administrative | 1,370,520 | 294,694 | 85,504 |
Total operating expenses | 3,456,148 | 945,053 | 384,463 |
Change in fair value of convertible notes and warrant liability | 2,045,657 | 0 | 0 |
Other expense (income), net | (2,230) | (50) | 657 |
Income (loss) before income tax | (3,684,432) | 13,830 | (107,587) |
Provision for (benefit from) income taxes | 2,000 | 6,381 | (1,018) |
Net income (loss) | (3,686,432) | 7,449 | (106,569) |
Net income (loss) attributable to common stockholders: | |||
Basic | (3,686,432) | 2,848 | (106,569) |
Diluted | $ (3,686,432) | $ 2,848 | $ (106,569) |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ (7.49) | $ 0.01 | $ (0.48) |
Diluted (in dollars per share) | $ (7.49) | $ 0.01 | $ (0.48) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||
Basic (in shares) | 492,381,190 | 225,748,355 | 221,664,610 |
Diluted (in shares) | 492,381,190 | 244,997,388 | 221,664,610 |
Transaction-based revenues | |||
Revenues: | |||
Revenues | $ 1,402,350 | $ 720,133 | $ 170,831 |
Other revenues | |||
Revenues: | |||
Revenues | $ 155,831 | $ 61,263 | $ 36,063 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (3,686,432) | $ 7,449 | $ (106,569) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation | (68) | 284 | 179 |
Total other comprehensive income (loss), net of tax | (68) | 284 | 179 |
Total comprehensive income (loss) | $ (3,686,500) | $ 7,733 | $ (106,390) |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | |||
Net income (loss) | $ (3,686,432) | $ 7,449 | $ (106,569) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 25,495 | 9,938 | 5,444 |
Provision for credit losses | 78,337 | 59,134 | 11,109 |
Share-based compensation | 1,570,386 | 24,330 | 26,667 |
Change in fair value of convertible notes and warrant liability | 2,045,657 | 0 | 0 |
Other | (109) | 2,139 | 169 |
Changes in operating assets and liabilities: | |||
Segregated securities under federal and other regulations | 134,994 | (134,994) | 0 |
Receivables from brokers, dealers, and clearing organizations | 36,175 | (103,787) | (9,081) |
Receivables from users, net | (3,361,872) | (2,771,967) | (64,711) |
Deposits with clearing organizations | (102,403) | (103,037) | (85,547) |
Other current and non-current assets | (189,004) | (46,055) | (47,758) |
Accounts payable and accrued expenses | 134,090 | 67,117 | 13,895 |
Payables to users | 578,486 | 3,532,091 | 802,817 |
Securities loaned | 1,729,917 | 1,247,089 | 674,029 |
Other current and non-current liabilities | 121,510 | 86,807 | 39,621 |
Net cash provided by (used in) operating activities | (884,773) | 1,876,254 | 1,260,085 |
Investing activities: | |||
Purchase of property, software, and equipment | (63,182) | (24,443) | (7,255) |
Capitalization of internally developed software | (20,471) | (7,887) | (5,198) |
Acquisitions of a business, net of cash acquired | (125,426) | 0 | 0 |
Purchase of investments | (27,203) | 0 | 0 |
Other | (1,598) | 0 | 141 |
Net cash used in investing activities | (237,880) | (32,330) | (12,312) |
Financing activities: | |||
Proceeds from issuance of common stock in connection with initial public offering, net of offering costs | 2,052,382 | 0 | 0 |
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | 7,344 | 0 | 0 |
Taxes paid related to net share settlement of equity awards | (422,076) | 0 | 0 |
Proceeds from issuance of convertible notes and warrants | 3,551,975 | 0 | 0 |
Draws on credit facilities | 1,968,276 | 937,700 | 137,000 |
Repayments on credit facilities | (1,968,276) | (937,700) | (137,000) |
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | 0 | 1,267,328 | 372,733 |
Proceeds from exercise of stock options, net of repurchases | 13,796 | 8,555 | 2,617 |
Net cash provided by financing activities | 5,203,421 | 1,275,883 | 375,350 |
Effect of foreign exchange rate changes on cash and cash equivalents | (68) | 284 | 179 |
Net increase in cash, cash equivalents, segregated cash and restricted cash | 4,080,700 | 3,120,091 | 1,623,302 |
Cash, cash equivalents, segregated cash and restricted cash, beginning of the period | 6,189,659 | 3,069,568 | 1,446,266 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,270,359 | 6,189,659 | 3,069,568 |
Cash and cash equivalents, end of the period | 6,253,477 | 1,402,629 | 644,050 |
Segregated cash, end of the period | 3,992,419 | 4,779,666 | 2,420,354 |
Restricted cash, end of the period | 24,463 | 7,364 | 5,164 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,270,359 | 6,189,659 | 3,069,568 |
Supplemental disclosures: | |||
Cash paid for interest | 11,902 | 3,207 | 621 |
Cash paid for income taxes, net of refund received | $ 6,111 | $ 5,689 | $ 1,396 |
CONSOLIDATED STATEMENTS OF MEZZ
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Redeemable convertible preferred stock | Series E | Series F | Series G | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | ||
Balance at beginning of period, redeemable convertible preferred stock (in shares) at Dec. 31, 2018 | 291,739,421 | ||||||||||
Balance at beginning of period, redeemable convertible preferred stock at Dec. 31, 2018 | $ 539,678 | ||||||||||
Increase (decrease) in mezzanine equity | |||||||||||
Issuance of convertible preferred stock, net of issuance costs (in shares) | 29,887,357 | ||||||||||
Issuance of convertible preferred stock, net of issuance costs | $ 372,733 | ||||||||||
Balance at end of period, redeemable convertible preferred stock (in shares) at Dec. 31, 2019 | 321,626,778 | ||||||||||
Balance at end of period, redeemable convertible preferred stock at Dec. 31, 2019 | $ 912,411 | ||||||||||
Balance at beginning of period, common stock (in shares) at Dec. 31, 2018 | 220,339,931 | ||||||||||
Balance at beginning of period at Dec. 31, 2018 | $ (21,482) | $ 1 | $ 68,615 | $ 10 | $ (90,108) | ||||||
Increase (decrease) in stockholder's equity | |||||||||||
Net income (loss) | (106,569) | (106,569) | |||||||||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | 4,462,614 | ||||||||||
Shares issued in connection with stock option exercise, net of repurchases | 2,291 | 2,291 | |||||||||
Vesting of early-exercised stock options | 1,205 | 1,205 | |||||||||
Change in other comprehensive income | 179 | 179 | |||||||||
Share-based compensation | 27,328 | 27,328 | |||||||||
Balance at end of period, common stock (in shares) at Dec. 31, 2019 | 224,802,545 | ||||||||||
Balance at end of period at Dec. 31, 2019 | $ (97,048) | $ 1 | 99,439 | 189 | (196,677) | ||||||
Increase (decrease) in mezzanine equity | |||||||||||
Issuance of convertible preferred stock, net of issuance costs (in shares) | 48,000,000 | 43,116,119 | |||||||||
Issuance of convertible preferred stock, net of issuance costs | $ 599,284 | $ 668,044 | |||||||||
Balance at end of period, redeemable convertible preferred stock (in shares) at Dec. 31, 2020 | 412,742,897 | 412,742,897 | 29,887,357 | 48,000,000 | 43,116,119 | ||||||
Balance at end of period, redeemable convertible preferred stock at Dec. 31, 2020 | $ 2,179,739 | $ 2,179,739 | $ 372,733 | $ 599,284 | $ 668,044 | ||||||
Increase (decrease) in stockholder's equity | |||||||||||
Net income (loss) | 7,449 | 7,449 | |||||||||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | 4,229,001 | ||||||||||
Shares issued in connection with stock option exercise, net of repurchases | 8,540 | 9,415 | (875) | ||||||||
Vesting of early-exercised stock options | 527 | 527 | |||||||||
Change in other comprehensive income | 284 | 284 | |||||||||
Share-based compensation | $ 24,926 | 24,926 | |||||||||
Balance at end of period, common stock (in shares) at Dec. 31, 2020 | 229,031,546 | 229,031,546 | [1] | ||||||||
Balance at end of period at Dec. 31, 2020 | $ (55,322) | $ 1 | [1] | 134,307 | 473 | (190,103) | |||||
Balance at end of period, redeemable convertible preferred stock (in shares) at Dec. 31, 2021 | 0 | 0 | |||||||||
Balance at end of period, redeemable convertible preferred stock at Dec. 31, 2021 | $ 0 | $ 0 | |||||||||
Increase (decrease) in stockholder's equity | |||||||||||
Net income (loss) | (3,686,432) | 0 | (3,686,432) | ||||||||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | [1] | 6,832,725 | |||||||||
Shares issued in connection with stock option exercise, net of repurchases | 13,681 | $ 24 | [1] | 13,657 | |||||||
Shares issued in connection with employee stock plans (in shares) | [1] | 298,031 | |||||||||
Issuance of common stock in connection with Employee Stock Purchase Plan | 7,344 | 7,344 | |||||||||
Issuance of common stock in connection with initial public offering, net of issuance costs (in shares) | [1] | 56,729,194 | |||||||||
Issuance of common stock in connection with initial public offering, net of issuance costs | 2,052,331 | $ 6 | [1] | 2,052,325 | |||||||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld (in shares) | [1] | 32,133,589 | |||||||||
Shares withheld related to net share settlement (in shares) | (11,160,525) | ||||||||||
Shares withheld related to net share settlement | (422,076) | (422,076) | |||||||||
Conversion of preferred stock to common stock (in shares) | (412,742,897) | 412,742,897 | |||||||||
Conversion of preferred stock to common stock | 2,179,739 | $ (2,179,739) | $ 41 | 2,179,698 | |||||||
Conversion of convertible notes to common stock (in shares) | 137,305,156 | ||||||||||
Conversion of convertible notes to common stock | 5,217,597 | $ 14 | 5,217,583 | ||||||||
Reclassification of warrant liability to stockholders' equity | 380,036 | 380,036 | |||||||||
Vesting of replacement awards issued in connection with acquisition of a business | 639 | 639 | |||||||||
Vesting of early-exercised stock options | 406 | 406 | |||||||||
Change in other comprehensive income | (68) | (68) | |||||||||
Share-based compensation | $ 1,605,217 | 1,605,217 | |||||||||
Balance at end of period, common stock (in shares) at Dec. 31, 2021 | 0 | 863,912,613 | [1] | ||||||||
Balance at end of period at Dec. 31, 2021 | $ 7,293,092 | $ 86 | [1] | $ 11,169,136 | $ 405 | $ (3,876,535) | |||||
[1] | The share amounts listed above combine common stock, Class A common stock and Class B common stock. In connection with the completion of our initial public offering, all previously outstanding shares of common stock were reclassified into Class A common stock and Class B common stock. See Note 1 for further information. |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood Markets, Inc. (“RHM”, together with its subsidiaries, “Robinhood,” the “Company,” “we,” or “us”) was incorporated in the State of Delaware on November 22, 2013. Our most significant, wholly-owned subsidiaries are: • RHF, a registered introducing broker-dealer; • RHS, a registered clearing broker-dealer; and • RHC, which provides users the ability to buy and sell cryptocurrencies. Acting as the agent of the user, we facilitate the purchase and sale of options, cryptocurrencies, and equities through our platform by routing transactions through market makers, who are responsible for trade execution. Upon execution of a trade, users are legally required to purchase options, cryptocurrencies, or equities for cash from the transaction counterparty or to sell options, cryptocurrencies, or equities for cash to the transaction counterparty, depending on the transaction. Acting as agent, we facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade. Our users have ownership of the securities, including those that collateralize margin loans, and cryptocurrencies transacted on our platform and, as a result, any such securities or cryptocurrencies owned by users are not presented in our consolidated balance sheets. We do not allow users to purchase cryptocurrency on margin. We hold cryptocurrency in custody for our users’ accounts in one or more omnibus cryptocurrency wallets. Initial Public Offering On August 2, 2021, we closed our IPO of 55.0 million shares of Class A common stock, including 2.6 million shares sold by selling shareholders, at a public offering price of $38.00 per share. On August 31, 2021, we sold an additional 4.4 million shares of Class A common stock pursuant to the option granted to the underwriters to purchase additional shares. The total net proceeds we received in the IPO were approximately $2.05 billion after deducting underwriting discounts and commissions of $90.8 million and offering expenses of $12.6 million. In connection with the completion of the IPO: 1) the Company filed its Amended and Restated Certificate of Incorporation (the “Charter”), which authorizes a total of 21 billion shares of Class A common stock, 700 million shares of Class B common stock, 7 billion shares of Class C common stock, and 210 million shares of preferred stock, 2) all shares of our outstanding redeemable convertible preferred stock automatically converted into a total of 412.7 million shares of our common stock, 3) all 233.3 million previously outstanding shares of the Company’s common stock, along with the 412.7 million shares of common stock mentioned above, were automatically reclassified into an equivalent number of shares of the Company’s Class A common stock (the “Reclassification”), 4) a total of 130.2 million shares of Class A common stock held by our founders and their related entities were exchanged for an equivalent number of shares of Class B common stock pursuant to the terms of certain exchange agreements, 5) all of our outstanding convertible notes automatically converted into 137.3 million shares of Class A common stock and 6) all warrants became exercisable at a strike price of $26.60 per share for an aggregate of 14.3 million shares of Class A common stock. As a result, following the completion of the IPO, we have three classes of authorized common stock: Class A common stock, Class B common stock, and Class C common stock, of which only Class A common stock and Class B common stock were outstanding as of December 31, 2021. See Note 12 for further information about the terms of our various classes of common stock. Upon completion of the IPO, approximately $12.6 million of capitalized deferred offering costs were reclassified into stockholders’ equity as a reduction of the IPO proceeds. Additionally, upon our IPO, we recogni zed $1.01 billion of share-bas ed compensation expense related to restricted stock units (“RSUs”) for which the time-based vesting condition was satisfied or partially satisfied as the performance condition, a liquidity event, was satisfied. Upon the IPO, 24.6 million RSUs vested and 10.8 million shares of Class A common stock were withheld to meet the related tax withholding requirements. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, the valuation and estimated useful lives of acquired intangible assets, uncertain tax positions, accrued liabilities, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. Segment Information We operate and report financial information in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. All our revenues and substantially all of our assets are attributed to or located in the United States. Revenue Recognition Transaction-Based Revenues We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. Net Interest Revenues Net interest revenues consist of interest revenues less interest expenses. We earn and incur interest revenues and expense on securities lending transactions. We also earn interest on margin loans to users, which constitute the majority of receivables from users, net in the consolidated balance sheets, and on our segregated cash, cash and cash equivalents, and deposits with clearing organizations. We incur interest expenses in connection with our revolving credit facilities. Other Revenues Other revenues primarily consists of Robinhood Gold subscription fees. Our contract with users are for a term of 30 days and renew automatically each month. Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied. Other revenues also consist of proxy rebates and ACATS fees charged to users. Proxy rebates are revenues earned through our partnership with a third-party investor communications company. We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms. We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied. ACATS fees are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer. We recognize revenue when our performance obligation of administering the transfer is satisfied. Concentrations of Revenue and Credit Concentrations of Revenue We derived transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Year ended December 31, 2019 2020 2021 Market maker: Citadel Securities, LLC 29 % 34 % 22 % Tai Mo Shan Limited (1) — % — % 15 % Entities affiliated with Susquehanna International Group, LLP (2) 13 % 18 % 12 % Entities affiliated with Wolverine Holdings, L.P. (3) 12 % 10 % 10 % All others individually less than 10% 8 % 13 % 18 % Total as percentage of total revenue: 62 % 75 % 77 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC Concentrations of Credit We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. Default of a counterparty in equities and options trades, which are facilitated through clearinghouses, would generally be spread among the clearinghouse's members rather than falling entirely on us. It is our policy to review, as necessary, the credit standing of each counterparty. Operating Expenses Brokerage and Transaction Brokerage and transaction costs primarily consist of broker-dealer transaction expenses (such as fees paid to centralized clearinghouses and regulatory fees), market data expenses, cash and share- based compensation and benefits as well as allocated overhead for employees engaged in clearing and brokerage functions, and cash management transactions expenses (such as network fees and card processing fees). Technology and Development Technology and development costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for engineering, data science, and design personnel who support and improve our platform and develop new products, costs for cloud infrastructure services, and costs associated with computer hardware and software, including amortization of internally developed software. Operations Operations costs consist of customer service related expenses, including cash and share-based compensation and benefits as well as allocated overhead for employees engaged in customer support, and costs incurred to support and improve customer experience (such as third-party customer service vendors). Operations costs also include our provision for credit losses and fraud in connection with unrecoverable receivables due to Fraudulent Deposit Transactions and chargebacks for unauthorized debit card use. Marketing Marketing costs primarily consist of marketing incentive expenses associated with the Robinhood Referral Program , as well as digital marketing, brand marketing, and creative services costs for creation, production, and placement of advertisements and marketing content. Other marketing costs include cash credits we offer to users, which primarily relate to remediation for losses experienced by our users due to service interruptions on our platform and reimbursement of direct losses incurred by our users from allegedly unauthorized account activity. Marketing costs also include cash and share-based compensation and benefits as well as allocated overhead for employees engaged in the marketing function. Advertising costs are expensed as incurred and were $90.9 million, $78.2 million and $100.5 million in the years ended December 31, 2019, 2020, and 2021. General and Administrative General and administrative costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for certain executives and employees engaged in legal, finance, human resources, risk, and compliance. General and administrative costs also include legal expenses, settlements and penalties, business insurance, and other professional fees. Employee Retirement Benefits We offer a defined contribution 401(k) plan to full-time employees. Employees may elect to contribute to a traditional 401(k) plan, which qualifies as a deferred compensation arrangement under Section 401 of the Code. In this case, participating employees defer a portion of their pre-tax earnings. Employees may also contribute to a Roth 401(k) plan using post-tax dollars. We match employee contributions up to 3%, and have incurred $1.0 million, $3.5 million, and $9.5 million of expense related to matching for the years ended December 31, 2019, 2020, and 2021. Research and Development Costs Research and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred. Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation. Research and development costs recorded in operating expenses under ASC 730 were $27.7 million, $52.2 million, and $437.6 million for the years ended December 31, 2019, 2020, and 2021. Share-based Compensation Common Stock Fair Value The fair value of our common stock is determined on the grant date using the closing price of our common stock, which is traded on the Nasdaq Global Select Market. Prior to our IPO, the absence of an active market for our common stock required our board of directors to determine the fair value of our common stock for each grant date with respect to which awards were approved. Our board of directors considered numerous objective and subjective factors to determine the fair value of our common stock including: contemporaneous third-party valuations of our common stock, sales of our common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our operating and financial performance, the valuation of comparable companies, the lack of marketability, and general and industry specific economic outlook, amongst other factors. Stock Options We estimate the fair value of stock options granted to employees using the Black-Scholes option-pricing model. The fair value of stock options is recognized as compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for when they occur. The Black-Scholes option-pricing model incorporates various assumptions in estimating the fair value of stock-based awards. In addition to the fair value of our common stock, these variables include: Expected volatility —As we do not have sufficient trading history of our common stock, we estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies over a period equal to the expected term of the award. Expected term —We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-free interest rate —Based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Expected dividend yield —We utilize a dividend yield of 0% as we have not paid, and do not anticipate paying, dividends on our common stock. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life. Time-Based RSUs We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition. Prior to our IPO, our Time-Based RSUs vested based upon the satisfaction of both a time-based service condition and a performance-based condition, namely the occurrence of a liquidity event such as the IPO. The fair value of our RSUs is estimated based on the fair value of our common stock on the date of grant. The time-based service condition for our awards is generally satisfied over four years. We record share-based compensation expense for Time-Based RSUs on an accelerated attribution method over the requisite service period. The performance-based condition for our pre-IPO grants was satisfied upon the occurrence of the IPO in 2021, at which point we recorded a cumulative one-time share-based compensation expense determined using the awards’ grant-date fair value. Share-based compensation related to the remaining time-based service after the IPO is recorded over the remaining requisite service period. As of December 31, 2019 and 2020, we had not recognized share-based compensation for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. No performance-based conditions exist for our post-IPO grants. Market-Based RSUs We have granted RSUs that vest upon the satisfaction of all the following conditions: time-based service conditions, performance-based conditions, and market-based conditions. The time-based service condition for these awards generally is satisfied over six years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, as described above. The market-based conditions are satisfied upon our achievement of specified share prices. For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected capital raise percentage. We estimate the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of a qualifying event based on our expectation at the time of measurement of the award’s value. We record share-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. We determine the requisite service period by comparing the derived service period to achieve the market-based condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period. Upon the occurrence of our IPO in 2021, we recorded a cumulative one-time share-based compensation expense determined using the grant-date fair values. Share-based compensation related to remaining time-based service and market-based conditions to be met will be recorded over the remaining derived requisite service period. Net Income (Loss) per Share Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. Our participating securities consist of all series of our redeemable convertible preferred stock. Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses. Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Cash and Cash Equivalents Cash and cash equivalents include deposits with banks and money market funds or highly liquid financial instruments with maturities of three months or less at the time of purchase. We maintain cash in bank accounts at financial institutions that exceed federally insured limits. We also maintain cash in money market funds which are not FDIC insured. We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf. As we have not experienced any losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements. Cash and Securities Segregated Under Federal and Other Regulations We are required to segregate cash and/or qualified securities for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Exchange Act. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Restricted Cash We are required to maintain restricted cash deposits to back letters of credit for certain property leases. We have no ability to draw on such funds as long as they remain restricted under the applicable agreements. Cash subject to restrictions that expire within one year is included in other current assets in our consolidated balance sheets. For the year ended December 31, 2020 and 2021, current restricted cash balances were nil and $0.7 million. Investments We invest in marketable debt securities which are classified as available-for-sale and are initially recorded at fair value. These securities are comprised of asset-backed securities, commercial paper, corporate bonds and government bonds. We have elected the fair value option for our debt securities as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics. We elected to present interest earned on the debt securities as interest income. Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, our own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: Level 1 Inputs: unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by us Level 2 Inputs: quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly Level 3 Inputs: unobservable inputs that are significant to the fair value of the assets or liabilities A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts of certain financial instruments approximate their fair value due to the short-term nature, which include cash, cash and securities segregated under federal and other regulations, receivables from brokers, dealers, and clearing organizations, receivables from users, net, deposits with clearing organizations, other current assets, accounts payable and accrued expenses, payable to users, securities loaned, and other current liabilities. Receivables From Brokers, Dealers, and Clearing Organizations Receivables from brokers, dealers, and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers. These receivables are short term and settle within 30 days. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Receivables From Users, Net Receivable from users, net is primarily made up of margin receivables. Margin receivables are adequately collateralized by users’ securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses. We monitor margin levels and require users to deposit additional collateral, or reduce margin positions, to meet minimum collateral requirements and avoid automatic liquidation of their positions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for receivables from users. We have no expectation of credit losses for receivables from users that are fully secured, where the fair value of the collateral securing the balance is equal to or in excess of the receivable amount. This is based on our assessment of the nature of the collateral, potential future changes in collateral values, and historical credit loss information relating to fully secured receivables. In cases where the fair value of the collateral is less than the outstanding receivable balance from a user, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately. The provision for credit losses is recorded as operations expense on the consolidated statement of operations. We write-off unsecured balances when the balance becomes outstanding for over 180 days or when we otherwise deem the balance to be uncollectible. Deposits With Clearing Organizations We are required to maintain collateral deposits with clearing organizations such as Depository Trust & Clearing Corporation and Options Clearing Corporation which allow us to use their security transactions services for trade comparison, clearance, and settlement. The clearing organizations establish financial requirements, including deposit requirements, to reduce their risk. The required level of deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility. We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations. As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements. Fractional Share Program We operate our fractional share program for the benefit of our users and maintain an inventory of securities held exclusively for the fractional share program. This proprietary inventory is recorded within other current assets on our consolidated balance sheets. When a user purchases a fractional share, we record the cash received for the user-held fractional share as pledged collateral and an offsetting liability to repurchase the shares as we concluded that we did not meet the criteria for derecognition under the accounting guidance. We measure our inventory of securities, user-held fractional shares and our repurchase obligation at fair value at each reporting period via the election of the fair value option, with realized and unrealized gains and losses, which totaled $3.0 million and $11.5 million for the years ended December 31, 2020 and 2021, recorded in brokerage and transaction expenses in our consolidated statement of operations. We do not earn revenue from our users when they purchase or sell fractional shares from us. We earn transaction-based revenue when shares are purchased from market makers to fulfill fractional share transactions. Other Current Assets Other current assets primarily includes prepaid expenses, securities owned by us for the Robinhood Referral Program and fractional share program, and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. These prepaid expenses include items such as prepayments on insurance, cloud infrastructure service costs, and software subscriptions. As of December 31, 2020 and 2021, prepaid expenses included in other current assets were $28.6 million and $92.0 million. Robinhood Referral Program The stock rewarded under this program is a share or shares, selected randomly from our previously purchased inventory of settled shares held exclusively for this program, which are included in other current assets in our consolidated balance sheets. Each stock reward is assigned at the time the reward is earned and each share cannot be associated with more than one reward at a time. Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period. As the inventory of shares are held specifically for the referral program and not as investments of the Company, gains and losses from changes in the fair market value of the shares are recorded within marketing expense in our consolidated statement of operations until the reward is claimed. Shares are derecognized when they are claimed by the user and delivered to the users’ account. We record an accrued liability within other current liabilities in our consolidated balance sheets at the time the bank account is linked with the expense recorded within marketing expense in our consolidated statement of operations. The liability is initially recorded at the fair market value of the assigned share or shares upon the reward being earned by the referred user (i.e., upon bank linkage) and marked to fair market value until claimed or reversed, with gains and losses also recorded within marketing expense. The liability is derecognized when the share is claimed by the user and delivered to the users’ account. If a user does not claim the stock reward within 60 days of being notified, such reward expires and the liability is reversed. We estimate the amount of unclaimed rewards expected at each reporting period, using historical trends and data, and adjust the accrued liability and marketing expense accordingly. Property, Software, and Equipment Property, software, and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Fixture and furniture 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Repairs and maintenance that do not enhance or extend the asset’s function and/or useful life are charged to expenses as incurred. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Internally developed software is capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Capitalized costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts. Capitalized costs are amortized over the estimated useful life of the software on a straight-line basis and included in technology and dev |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share, Debt—Modifications and Extinguishments, Compensation—Stock Compensation, and Derivatives and Hedging—Contracts in Entity’s Own Equity . The guidance clarifies modifications or exchanges of freestanding equity-classified written call options (e.g. warrants). The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective July 1, 2021. The adoption of the guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations . This guidance requires contract assets and contract liabilities from contracts with customers that are acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract. The guidance is effective for fiscal years beginning after December 15, 2022 on a prospective basis, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the timing of adoption and impact of this new guidance on our consolidated financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | NOTE 3: BUSINESS COMBINATIONS On August 13, 2021, we acquired all outstanding stock of Say Technologies. New York-based Say Technologies, founded in 2017, is an investor communications and shareholder engagement platform. The acquisition of Say Technologies will allow us to empower retail investors to access their full ownership rights by facilitating proxy and issuer materials delivery and making shareholder voting on corporate matters easier. The acquisition date fair value of the consideration transferred for Say Technologies was $132.8 million, which consisted of the following: (in thousands) Fair Value Cash $ 132,168 Share-based compensation awards attributable to pre-combination services 639 Total consideration $ 132,807 We entered into holdback agreements with certain employees of Say Technologies for $11.1 million in cash payments, which are contingent upon the continuous service of the employees and treated as post-combination compensation expense over the required service period of three years. For employees of Say Technologies with unvested Say Technologies equity awards, we issued replacement awards whose aggregate estimated fair value was $6.3 million. See Note 12 for further information. Transaction costs associated with the acquisition, which included legal, due diligence, and other professional fees, were not material. The purchase price allocation is based on a preliminary valuation and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during the measurement period (up to one year from the acquisition date). The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition: (in thousands) Fair Value Cash and cash equivalents $ 15,412 Accounts receivable 1,704 Goodwill 92,951 Intangible assets 34,600 Other current assets 192 Accounts payable, accrued expenses and other current liabilities (9,354) Deferred tax liability (2,698) Net assets acquired $ 132,807 The excess of purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes. Goodwill is primarily attributed to the assembled workforce of Say Technologies and anticipated operational synergies. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions at the time of acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: (in thousands, except years) Fair Value Useful Life Developed technology $ 22,000 3 Customer relationships 12,000 10 Trade names 600 3 Total $ 34,600 The overall weighted average useful life of the identified amortizable intangible assets acquired is five years. The estimated fair values of the intangible assets acquired approximate the amounts a market participant would pay for these intangible assets as of August 13, 2021. We used the replacement cost method to estimate the fair value of developed technology and the relief from royalty method to estimate the fair value of trade names. A multi-period excess earnings method was used to estimate the fair value of customer relationships. Tangible net assets were valued at their respective carrying amounts as of the acquisition date, as these amounts approximated fair value. During the fourth quarter of 2021, we recorded an immaterial measurement period adjustment to other non-current liabilities with a corresponding decrease to goodwill, based on facts and circumstances in existence as of the effective date of the acquisition. Results of operations of Say Technologies were included in our results since the date of acquisition and were not material for the year ended December 31, 2021. Pro forma results of operations for Say Technologies have not been presented as the effect of this acquisition was not material. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 4: GOODWILL AND INTANGIBLE ASSETS Goodwill The carrying amount of goodwill for the period indicated was as follows: (in thousands) Carrying Amount As of December 31, 2020 $ — Additions due to business combinations 100,521 As of December 31, 2021 $ 100,521 Substantially all of the additions related to the Say Technologies acquisition as disclosed in Note 3 and the remainder related to other immaterial business acquisitions. There was no impairment of goodwill during the year ended December 31, 2021. We had no goodwill as of December 31, 2020. Intangible Assets The components of intangible assets, net as of December 31, 2021 were as follows: (in thousands, except years) Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life - Years Finite-lived intangible assets Developed technology $ 23,100 $ (2,829) $ 20,271 2.58 Customer relationships 12,000 (460) 11,540 9.62 Trade names 600 (76) 524 2.62 Domain names 163 (43) 120 11.63 Indefinite-lived intangible assets 1,652 — 1,652 N/A Total $ 37,515 $ (3,408) $ 34,107 As of December 31, 2021, the estimated future amortization expense of finite-lived intangible assets was as follows: (in thousands) Intangible Assets 2022 $ 9,104 2023 9,104 2024 6,218 2025 1,210 2026 1,210 Thereafter 5,609 Total $ 32,455 Amortization expense of intangible assets was $3.4 million for the year ended December 31, 2021. There was no impairment of intangible assets during the year ended December 31, 2021. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 5: REVENUES Disaggregation of Revenues The following table presents our revenue disaggregated by revenue source: Year ended December 31, (in thousands) 2019 2020 2021 Transaction-based revenues: Options $ 110,656 $ 440,070 $ 688,899 Cryptocurrencies 9,487 26,708 419,382 Equities 50,688 251,200 287,734 Other — 2,155 6,335 Total transaction-based revenues 170,831 720,133 1,402,350 Net interest revenues: Securities lending 6,380 98,165 137,153 Margin interest 19,104 66,781 131,823 Interest on segregated cash and securities 36,281 13,401 4,023 Other interest revenue 9,865 3,972 4,181 Interest expenses related to credit facilities (991) (4,882) (20,218) Total net interest revenues 70,639 177,437 256,962 Other revenues 36,063 61,263 155,831 Total net revenues $ 277,533 $ 958,833 $ 1,815,143 Contract Balances Contract receivables are recognized when we have an unconditional right to invoice and receive payment under a contract and are derecognized when cash is received. Transaction-based revenue receivables due from market makers are reported in receivables from brokers, dealers, and clearing organizations while other revenue receivables due from our relationship with a third-party investor communications company are reported in other current assets on the consolidated balance sheets. The table below sets forth contract receivables balances for the periods indicated: December 31, (in thousands) 2020 2021 Beginning of the period $ 20,577 $ 111,871 End of the period 111,871 83,207 Increase (decrease) in contract receivables during the period $ 91,294 $ (28,664) The increase between the beginning and ending balance of our contract receivables for the year ended December 31, 2020 primarily results from the growth of our business over the period. The decrease for the year ended December 31, 2021 primarily results from lower transaction-based revenues for equities and options for the month of December 2021 as compared to the month of December 2020. Timing differences between our performance and counterparties’ payments also contributed to the change during the periods presented. Contract liabilities consist of unearned subscription revenue, are recognized when users remit contractual cash payments in advance of the time we satisfy our performance obligations under the contract, and are recorded as other current liabilities on the consolidated balance sheets. The table below sets forth contract liabilities balances for the period indicated: December 31, (in thousands) 2020 2021 Beginning of the period $ 954 $ 2,060 End of the period 2,060 3,211 Increase in contract liabilities during the period $ 1,106 $ 1,151 |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | NOTE 6: ALLOWANCE FOR CREDIT LOSSES The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from Fraudulent Deposit Transactions and losses on margin borrowings, for the periods indicated: Year ended December 31, (in thousands) 2019 2020 2021 Beginning balance $ 6,013 $ 17,122 $ 34,092 Provision for credit losses 11,109 59,134 78,337 Write-offs — (42,164) (72,213) Ending balance $ 17,122 $ 34,092 $ 40,216 During the years ended December 31, 2019, 2020, and 2021, the provision for credit losses related to unsecured balances of receivables from users was $11.1 million, $58.0 million and $77.1 million while the remaining balances were related to other receivables. As of December 31, 2019, 2020, and 2021, the ending allowance for credit losses related to unsecured balances of receivables from users was $17.1 million, $33.5 million, and $38.4 million while the remaining balances were related to other receivables. |
INVESTMENTS AND FAIR VALUE MEAS
INVESTMENTS AND FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
INVESTMENTS AND FAIR VALUE MEASUREMENT | NOTE 7: INVESTMENTS AND FAIR VALUE MEASUREMENT Investments We invest in marketable debt securities which are classified as available-for-sale. We elected the fair value option on our available-for-sale debt securities and carry them at fair value with adjustments to fair value presented in other expense (income), net in our consolidated statements of operations. Investments on the consolidated balance sheet consisted of the following: December 31, 2021 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Debt securities: Asset-backed securities $ 5,082 $ — $ (4) $ 5,078 Commercial paper 13,717 — — 13,717 Corporate bonds 7,392 — (8) 7,384 Government bonds 1,012 — (2) 1,010 Total investments $ 27,203 $ — $ (14) $ 27,189 We did not hold any investments as of December 31, 2020. All of our debt securities as of December 31, 2021 had a stated contractual maturity or redemption date within one year. Fair Value of Financial Instruments Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 User-held fractional shares 802,483 — — 802,483 Other current assets: Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Fractional share repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 4,003,552 $ — $ — $ 4,003,552 Investments: Asset-backed securities — 5,078 — 5,078 Commercial paper — 13,717 — 13,717 Corporate bonds — 7,384 — 7,384 Government bonds 1,010 — — 1,010 User-held fractional shares 1,834,479 — — 1,834,479 Other current assets: Equity securities - securities owned 13,611 — — 13,611 Total financial assets $ 5,852,652 $ 26,179 $ — $ 5,878,831 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 97 $ — $ — $ 97 Fractional shares repurchase obligations 1,834,479 — — 1,834,479 Total financial liabilities $ 1,834,576 $ — $ — $ 1,834,576 During the year ended December 31, 2021, we did not have any transfers in or out of Level 3 assets or liabilities. Convertible Notes and Warrant Liability In February 2021, we issued two tranches of convertible notes (the “convertible notes”) and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (the “warrant liability”). We elected the fair value option for both tranches of the convertible notes as we believe it best reflects their underlying economics. Under the fair value option, the convertible notes were initially measured at their issuance date estimated fair value and subsequently remeasured at their estimated fair value at the end of each reporting period. Upon the closing of the IPO, all of our outstanding convertible notes and warrants were reclassified from liability to equity. See Note 11 for further information. For the year ended December 31, 2021, we recorded expense due to changes in fair value of $1.92 billion for the convertible notes in our consolidated statements of operations, none of which was attributable to the change in the instrument-specific credit risk. We have elected to present the component related to accrued interest in the change in fair value of convertible notes and warrant liability. For the year ended December 31, 2021, due to changes in fair value, we recorded $127.1 million for the warrant liability in our consolidated statements of operations. The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,918,565 127,092 Reclassifications to equity (5,217,596) (380,036) End of period, December 31, 2021 $ — $ — |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8: INCOME TAXES The components of income (loss) before income taxes were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Domestic $ (104,690) $ 14,773 $ (3,685,936) Foreign (2,897) (943) 1,504 Income (loss) before income taxes $ (107,587) $ 13,830 $ (3,684,432) The components of the provision for (benefit from) income taxes were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Current: Federal $ (58) $ 2,780 $ (249) State (295) 3,801 4,990 Foreign — — — Total current tax expense (benefit) (353) 6,581 4,741 Deferred: Federal — — (1,084) State — — (1,525) Foreign (665) (200) (132) Total deferred tax expense (benefit) (665) (200) (2,741) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 $ 2,000 The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows: Year ended December 31, (in thousands) 2019 2020 2021 Federal tax benefit at statutory rate $ (22,593) $ 2,905 $ (773,731) State tax benefit, net of federal benefit (5,491) (862) (131,494) Foreign rate differential (57) (2) (448) Share-based compensation (1,221) (2,654) 17,338 Tender offer compensation 4,229 3,607 1,640 Research and development credits (2,104) (10,489) (48,111) Non-deductible regulatory settlements — 21,000 10,920 Non-deductible change in convertible notes and warrant — — 429,588 Permanent differences — 526 322 Other 905 52 367 Change in valuation allowance 25,314 (7,702) 495,609 Total provision for (benefit from) income taxes $ (1,018) $ 6,381 $ 2,000 Significant components of our deferred tax assets and liabilities consist of the following: Year ended December 31, (in thousands) 2020 2021 Deferred tax assets: Accruals and other liabilities 14,849 $ 24,319 Lease liabilities 13,794 39,909 Tax credit carryforwards 9,058 81,457 Net operating loss carryforwards 3,141 251,202 Share-based compensation 3,123 134,723 Other 3,386 21,411 Total deferred tax assets 47,351 553,021 Deferred tax liabilities: Right of use assets (12,551) (34,182) Depreciation and amortization (6,965) (22,977) Total deferred tax liabilities (19,516) (57,159) Valuation allowance (26,909) (494,902) Net deferred tax assets $ 926 $ 960 The following is a reconciliation of the beginning and ending amount of the deferred tax asset valuation allowance: Year ended December 31, (in thousands) 2019 2020 2021 Balance at beginning of period $ 9,631 $ 35,207 $ 26,909 Charged/(credited) to net income 25,576 (8,298) 470,691 Charges utilized/(write-offs) — — (2,698) Balance at end of period $ 35,207 $ 26,909 $ 494,902 The realization of tax benefits of net deferred assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on all available evidence for the year ending December 31, 2021, we believe it is more likely than not that the tax benefits of the remaining U.S. federal and state net deferred tax assets may not be realized, and accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $468.0 million for the year ended December 31, 2021. As of December 31, 2021, we have $944.3 million of U.S. federal, $823.9 million of state, and $5.1 million of non-U.S. net operating loss carryforwards available to reduce future taxable income. Of the U.S. federal net operating loss carryforwards, $1.0 million will begin to expire in 2037 and the $943.3 million will carryforward indefinitely. Our state net operating losses begin to expire in 2022, while our non-U.S. net operating losses do not expire. We have U.S. federal tax credit carryforwards of $80.8 million that will begin to expire in 2040, if not utilized, and state tax credit carryforwards of $2.2 million that will begin to expire in 2026 and $52.4 million that do not expire. Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization. We had unrecognized tax benefits of approximately $7.4 million and $46.2 million as of December 31, 2020 and 2021. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. We record interest and penalties related to unrecognized tax benefits in income tax expenses. There were no interest or penalties during the years ended December 31, 2020 and 2021. The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year ended December 31, 2020 2021 Unrecognized benefit - beginning of period $ 2,177 $ 7,420 Gross increases - current year tax positions 4,395 37,879 Gross increases - prior year tax positions 848 909 Unrecognized benefit - end of period $ 7,420 $ 46,208 We file in U.S. federal, various state, and foreign jurisdictions. The tax years from 2013 remain open to examination by the U.S. federal and state authorities, due to carryover of unused net operating losses and tax credits. The tax years from 2018 remain open for the most significant foreign jurisdiction. |
PROPERTY, SOFTWARE, AND EQUIPME
PROPERTY, SOFTWARE, AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, SOFTWARE, AND EQUIPMENT, NET | NOTE 9: PROPERTY, SOFTWARE, AND EQUIPMENT, NET Property, software, and equipment are presented net of accumulated depreciation and amortization and summarized as follows: Year ended December 31, (in thousands) 2020 2021 Tenant improvements $ 18,945 $ 64,313 Internally developed software 16,992 31,142 Computer equipment 9,203 23,731 Furniture and fixtures 8,024 21,927 Construction in progress 9,756 44,343 Total 62,920 185,456 Less: accumulated depreciation and amortization (17,086) (39,037) Property, software, and equipment, net $ 45,834 $ 146,419 Depreciation expense of property and equipment was $2.1 million, $5.7 million, and $15.3 million for the years ended December 31, 2019, 2020, and 2021. Amortization expense of internally developed software was $3.3 million, $4.2 million, and $6.8 million for the years ended December 31, 2019, 2020, and 2021. |
OFFSETTING ASSETS AND LIABILITI
OFFSETTING ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Offsetting [Abstract] | |
OFFSETTING ASSETS AND LIABILITIES | NOTE 10: OFFSETTING ASSETS AND LIABILITIES Certain financial instruments are eligible for offset on our consolidated balance sheets under GAAP. Our securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Our policy is to recognize amounts subject to master netting arrangements on a gross basis on the consolidated balance sheets. Substantially all securities borrowing and lending agreements have an open contractual term and may be terminated upon notice by either party except for one of these agreements, which has a contractual term of 30 days with a daily minimum commitment of $25 million. Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 345 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 372 345 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 372 345 Security collateral received (361) (329) Net amount $ 11 $ 16 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 3,651,035 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,921,118 3,651,035 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,921,118 3,651,035 Security collateral pledged (1,787,819) (3,426,766) Net amount $ 133,299 $ 224,269 ________________ (1) Securities borrowed are included in receivables from brokers, dealers, and clearing organizations on the consolidated balance sheets. |
FINANCING ACTIVITIES AND OFF-BA
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | NOTE 11: FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving Credit Facilities In September 2019, we entered into a $400.0 million committed and secured line of credit with a maturity date of September 25, 2020 (the “September 2019 Credit Facility”). In June 2020, we amended the September 2019 Credit Facility and increased the aggregate committed and secured revolving line of credit amount to $550.0 million with a maturity date of June 5, 2021. This line of credit was primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit was determined at the time a loan was initiated and the applicable interest rate under this line of credit was calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. There were no outstanding borrowings under the September 2019 Credit Facility at December 31, 2020. We were obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility quarterly in arrears. The September 2019 Credit Facility was terminated in April 2021. In October 2019, we entered into a $200.0 million committed and unsecured revolving line of credit with a syndicate of banks maturing in October 2023 (the “October 2019 Credit Facility”). In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $600.0 million with a maturity date of October 29, 2024. In April 2021, we further increased the aggregate credit amount available under the October 2019 Credit Facility to $625.0 million. Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00% or (b) the Alternative Base Rate. The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from London Interbank Offered Rate (“LIBOR”), multiplied by the Statutory Reserve Rate at the applicable time. The Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50% and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00%. If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent. There were no outstanding borrowings under the October 2019 Credit Facility at December 31, 2020 and 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10% on any unused amount of the October 2019 Credit Facility quarterly in arrears. In April 2021, we entered into a $2.18 billion committed and secured revolving line of credit, subject to certain borrowing base limitations, with a maturity date of April 15, 2022 (the “April 2021 Credit Facility”). Borrowings from the April 2021 Credit Facility must be specified to be Tranche A, Tranche B, Tranche C, or a combination thereof. Tranche A loans are secured by users’ securities purchased on margin and are used primarily to finance margin loans. Tranche B loans are secured by the right to the return from NSCC Margin Deposits and cash and property in a designated collateral account and used for the purpose of satisfying NSCC Deposit Requirements. Tranche C loans are secured by the right to the return of eligible funds from any reserve account of Robinhood and cash and property in a designated collateral account and used for the purpose of satisfying reserve requirements under Rule 15c3-3 of the Exchange Act. Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate is calculated as a per annum rate equal to 1.25% for Tranche A loans and 2.50% for Tranche B and Tranche C loans, plus the Short-Term Funding Rate at the applicable time. The Short-Term Funding Rate is equal to the greatest of (i) the Eurodollar Rate for a one month interest period on such day, which equals to the Eurodollar Base Rate that is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time, (ii) the Federal Funds Effective Rate, and (iii) the Overnight Bank Funding Rate in effect on such day. There were no outstanding borrowings under the April 2021 Credit Facility at December 31, 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.50% on any unused amount of the April 2021 Credit Facility quarterly in arrears. All of the agreements for the September 2019 Credit Facility, October 2019 Credit Facility, and April 2021 Credit Facility contain customary covenants restricting our ability to incur debt, incur liens, and undergo certain fundamental changes. We were in compliance with all covenants under these facilities as of December 31, 2020 and 2021, as applicable. Convertible Notes and Warrant Liability Convertible Notes In February 2021, we issued two tranches of convertible notes, consisting of $2.53 billion aggregate principal amount of Tranche I convertible notes and $1.02 billion aggregate principal amount of Tranche II convertible notes. Interest on the convertible notes accrued at 6% per annum, compounding semi-annually in arrears, and was payable in kind. The convertible notes did not have a maturity date. In the event of a public offering of our common stock to the public in an IPO on a nationally-recognized exchange in the United States, resulting in at least $500 million of gross proceeds to us (a “Qualifying IPO”) before the 12 month anniversary of the convertible notes issuance date, the convertible notes were to automatically convert into shares of our Class A common stock at a conversion price equal to the lower of (i) 70% of the cash price per share paid by investors in the Qualifying IPO and (ii) $38.29 (in the case of the Tranche I convertible notes) or $42.12 (in the case of the Tranche II convertible notes). As our IPO was a Qualifying IPO, upon completion, the aggregate outstanding principal and accrued interest of the convertible notes converted into 137.3 million shares of Class A common stock at a conversion price of $26.60 per share. Warrant Liability We granted to each purchaser of the Tranche I convertible notes a warrant, equal to 15% of the aggregate proceeds invested by such purchaser, to purchase a variable number of equity securities. In aggregate, the maximum purchase amount of all warrants is $379.8 million with a strike price that was to equal the lower of (i) 70% of the price per share in the Qualifying IPO and (ii) $38.29. As our IPO was a Qualified IPO, upon completion, the warrants became exercisable for 14.3 million shares of Class A common stock at a strike price of $26.60. As a result, the warrant liability was reclassified to additional paid-in capital, as the warrants are now exercisable for a fixed number of shares. Off-Balance Sheet Risk |
MEZZANINE EQUITY, COMMON STOCK
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | NOTE 12: MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY Redeemable Convertible Preferred Stock The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 In February 2021, we authorized 244.3 million shares of Series G-1 redeemable convertible preferred stock in connection with our convertible notes. No shares of Series G-1 were issued or outstanding immediately prior to our IPO. Immediately prior to our IPO, all outstanding shares of redeemable convertible preferred stock were converted into shares of our Class A common stock on a one-to-one basis and their carrying value of $2.18 billion was reclassified into stockholders' equity. As such, there were no shares of redeemable convertible preferred stock authorized or issued and outstanding as of December 31, 2021. Preferred Stock Pursuant to our Charter, our board of directors may issue shares of our preferred stock in one or more series and, subject to the applicable law of the State of Delaware, our board of directors may set the powers, rights, preferences, qualifications, limitations and restrictions of such preferred stock. As of December 31, 2021, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding. Common Stock Voting Rights We have three classes of common stock: Class A, Class B, and Class C. Holders of our Class A common stock are entitled to one vote per share on all matters to be voted upon by our stockholders, holders of our Class B common stock are entitled to 10 votes per share on all matters to be voted upon by our stockholders and, except as otherwise required by applicable law, holders of our Class C common stock are not entitled to vote on any matter to be voted upon by our stockholders. The holders of our Class A common stock and Class B common stock vote together as a single class, unless otherwise required by our Charter or applicable law. Conversion of Class B Common Stock Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. All Class B common stock will automatically convert (as a class) into Class A common stock upon the earliest of (i) the date and time specified by the affirmative vote of the holders of at least 80% of the then-outstanding shares of Class B common stock, voting separately as a class, (ii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date on which the number of then-outstanding shares of Class B common stock represents less than 5% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding, (iii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date that (A) each founder is no longer providing services to our Company as an officer, employee, or consultant and (B) each founder is not a director of our Company as a result of a voluntary resignation by such founder from our board of directors or as a result of a written request or agreement by such founder not to be renominated as a director of our Company at an annual or special meeting of stockholders, (iv) nine months after the death or total disability of both founders (subject to a delay of up to 18 months as may be approved by a majority of our independent directors), or (v) August 2, 2036, the date that is 15 years from the completion of our IPO (the “Final Conversion Date”). Shares of Class B common stock will also automatically convert into shares of Class A common stock upon sale or transfer except for certain permitted transfers described in our Charter. In addition, each share of Class B common stock held by a stockholder who is a natural person, or held by permitted transferees or permitted entities of such natural person (each as described in our Charter) will automatically convert into shares of Class A common stock nine months following the death or total disability of such natural person (subject to a delay of up to 18 months as may be approved by a majority of our independent directors). Notwithstanding the foregoing, in the event such natural person is a founder, to the extent (i) a person designated by such founder and approved by a majority of the independent directors then in office or (ii) the other founder, in each case, has or shares voting control over the shares of Class B common stock held by the deceased or disabled founder, such shares will be treated as being held of record by such person or other founder and will not convert into shares of Class A common stock as a result of such founder’s death or total disability. Conversion of Class C Common Stock Upon the conversion or exchange of all outstanding shares of our Class B common stock into shares of Class A common stock, each outstanding share of Class C common stock will convert automatically into one share of Class A common stock on the date or time fixed by our board of directors. Dividend Rights Subject to the rights of any holders of our preferred stock, the holders of our common stock will be entitled to receive ratable dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for the payment of dividends. Right to Receive Liquidation Distributions If we liquidate, dissolve or wind up, after all liabilities and, if applicable, the holders of each series of our preferred stock have been paid in full, the holders of our common stock will be entitled to share ratably in all remaining assets. No Preemptive or Similar Rights Our common stock has no preemptive or conversion rights or other subscription rights. No redemption or sinking fund provisions are applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future. Warrants As of December 31, 2021, warrants outstanding consisted of warrants to purchase 14.3 million shares of Class A common stock with a strike price of $26.60 per share. The warrants expire on February 12, 2031. The warrants can be exercised with cash or net shares settled at the holder’s option. In aggregate, the maximum purchase amount of all warrants is $379.8 million. No warrants were exercised during 2021. Equity Incentive Plans Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan Our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), provided for share-based awards to eligible participants, granted as incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”) or restricted stock awards (“RSAs”). Options could be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted generally vest quarterly on a straight-line basis and expire seven years from the date of grant. Our 2013 Plan was terminated in connection with adoption of our 2020 Plan, and our 2020 Plan was terminated in connection with the adoption of our 2021 Plan (defined below) but any awards outstanding under our 2013 Plan and 2020 Plan remain in effect in accordance with their terms. Any shares that were or otherwise would become available for grant under the 2013 Plan or 2020 Plan will be available for grant under the 2021 Plan. No new awards may be granted under our 2013 Plan or 2020 Plan. 2021 Omnibus Incentive Plan In June 2021, our board of directors and our stockholders approved and adopted our 2021 Omnibus Incentive Plan (the “2021 Plan”). Our 2021 Plan became effective on July 27, 2021, immediately prior to the date on which the SEC declared effective our IPO registration statement, for which the final prospectus was dated July 28, 2021 and filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933 on July 30, 2021 (the “IPO Prospectus”). Our 2021 Plan provides for the grant of share-based awards (such as options, including ISOs and NSOs, SARs, RSAs, RSUs, performance units, and other equity-based awards) and cash-based awards. The aggregate number of shares available for grant under the 2021 Plan was equal to approximately 14% of the number of shares of our common stock (of all classes) outstanding immediately upon the closing of the IPO. Thereafter, any shares subject to awards under the 2013 Plan, the 2020 Plan, or the 2021 Plan that expire or terminate or are forfeited to or repurchased or withheld for taxes by the Company will again become available under the 2021 Plan. In addition, the number of shares available under the 2021 Plan will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 5% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by our board of directors. As of December 31, 2021, an aggregate of 316.7 million shares had been authorized for issuance under the 2013 Plan, 2020 Plan, and 2021 Plan since inception, of which 71.0 million shares had been issued under the plans since inception, 122.9 million shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 122.8 million shares remained available for new grants under the 2021 Plan. On January 1, 2022, an additional 43.2 million shares became available for grant under the 2021 Plan pursuant to its annual evergreen feature. Stock Option Activity A summary of stock option activity for the year ended December 31, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Granted during the period — — Exercised during the period (6,706,616) 2.06 Cancelled and forfeited during the period (309,744) 4.52 Balance at December 31, 2021 14,527,468 $ 2.20 5.37 $ 226,000 Options vested and expected to vest at December 31, 2021 14,527,468 $ 2.20 5.37 $ 226,000 Options exercisable at December 31, 2021 13,521,686 $ 1.87 5.23 $ 214,813 The weighted-average grant date fair value of options granted during the years ended December 31, 2019 and 2020 was $2.31 and $3.64. No options were granted during 2021. The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions: Year ended December 31, 2019 2020 2021 Dividend yield 0 % 0 % N/A Risk-free interest rate 2.29 % 0.61 % N/A Expected volatility 31.20 % 36.69 % N/A Expected term (years) 6.03 6.04 N/A The total intrinsic value of options exercised during 2019, 2020, and 2021 was $29.0 million, $45.0 million, and $178.7 million. The total grant-date fair value of options that vested for each of the periods presented was immaterial. Time-Based RSUs We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition. The awards become eligible to vest based on continuous employment by each recipient through the vesting date, which is considered a service condition. Prior to our IPO, our outstanding Time-Based RSUs vested based upon the satisfaction of both a time-based service condition and a performance-based condition, namely the occurrence of a liquidity event, such as the IPO. The following table summarizes the activity related to our Time-Based RSUs for the year ended December 31, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted in acquisitions (1) 124,934 50.63 Granted (other than in acquisitions) 33,044,671 38.26 Vested (27,881,049) 19.57 Forfeited (3,572,135) 23.36 Unvested at December 31, 2021 49,428,070 $ 31.78 _______________ (1) Represents replacement RSUs granted in connection with our acquisition of Say Technologies. Per the terms of the merger agreement with Say Technologies, certain unvested outstanding RSUs held by Say Technologies employees were canceled and replaced with RSUs under our 2021 Plan. The fair value of Time-Based RSUs that vested on the IPO date was $780.7 million. The fair value of all other Time-Based RSUs that vested during 2021 was $273.5 million as of the respective vesting dates. No Time-Based RSUs vested during 2020 or 2019. Market-Based RSUs We granted 27.7 million market-based RSUs to our co-founders, Mr. Tenev and Mr. Bhatt, during the year ended December 31, 2019 that were modified in May 2021 (the “2019 Market-Based RSUs”). The awards become eligible to vest based on (i) achievement of share price targets considered market vesting conditions (approximately 5.6 million, 8.3 million, and 13.8 million RSUs vest upon achievement of share price targets of $30.45, $50.75, and $101.50, respectively, with the stock price targets initially measured based on our IPO price and, for all RSUs that did not vest upon IPO, measured based on the average of our Class A common stock’s volume weighted average trading price for each trading day during any 60 consecutive trading days), and (ii) continuous employment by each recipient through the vesting date, which is considered a service condition. Once the number of 2019 Market-Based RSUs eligible to vest has been determined based on the satisfaction of the 2019 Market-Based RSU share price target (the “Eligible 2019 Market-Based RSUs”), half of those Eligible 2019 Market-Based RSUs will immediately vest and be settled and the remaining half vest according to a quarterly time-based vesting condition, which is satisfied based on three-month service periods retroactive to August 1, 2018 through August 1, 2024, subject to continued service on each such vesting date during that period. A total of approximately 5.6 million of the 2019 Market-Based RSUs became Eligible 2019 Market-Based RSUs in connection with our IPO. Of these, a total of 4.0 million vested immediately upon our IPO and the remainder will be subject to vesting in equal installments on each August 1, November 1, February 1, and May 1 through August 1, 2024. Prior to the modification, any tranche of 2019 Market-Based RSUs that had not achieved its share price target upon IPO would have been forfeited. The modification allows the awards to continue to be measured against the same price targets as were outlined in the original 2019 grant though December 31, 2025. The amendment to the 2019 Market-Based RSUs was determined to be a modification of a market condition, therefore, we estimated the pre-modification and post-modification fair value of the awards to determine the incremental fair value generated by the modification. To value the awards, we used a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets might not be satisfied. If the price targets are met sooner than the derived service period, we will adjust our share-based compensation expense to reflect the cumulative expense associated with the vested award. The 2019 Market-Based RSUs had a weighted-average grant date fair value of $0.29 per RSU. Upon modification, the weighted-average incremental fair value of the 2019 Market-Based RSUs was $21.01 per RSU. In May 2021, we granted 35.5 million additional market-based RSUs to Mr. Tenev and Mr. Bhatt (the “2021 Market-Based RSUs” and together with the 2019 Market-Based RSUs, “Market-Based RSUs”) with a weighted-average grant date fair value of $22.68 per RSU. These awards vest based on (i) achievement of share price targets, considered a market condition, over a period of 8 years from issuance (4.5 million will vest upon achievement of each of the $120 and $150 share price targets, and 5.3 million will vest upon achievement of each of the $180, $210, $240, $270, and $300 share price targets, in each case, measured using the average of the volume weighted average trading price for each trading day during any 60 consecutive trading days ) , and (ii) continuous employment by each recipient through the vesting date , which is considered a service condition. We estimated the grant date fair value of the 2021 Market-Based RSUs using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets might not be satisfied. If the price targets are met sooner than the derived service period, we will adjust our share- based compensation expense to reflect the cumulative expense associated with the vested award. As of December 31, 2021, none of the 2021 Market-Based RSUs had vested based on share price targets. The following table summarizes the activity related to our Market-Based RSUs for the year ended December 31, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 27,663,658 $ 0.29 Granted 35,520,000 22.68 Vested (4,264,814) 2.34 Forfeited — — Unvested at December 31, 2021 58,918,844 $ 23.50 The fair value of Market-Based RSUs that vested on the IPO date was $153.3 million. The fair value of all other Market-Based RSUs that vested during 2021 was $8.1 million as of the respective vesting dates. No Market-Based RSUs vested during 2020 or 2019. 2021 Employee Share Purchase Plan In June 2021, our board of directors and our stockholders approved and adopted the 2021 Employee Share Purchase Plan (the “ESPP”). Our ESPP became effective on July 27, 2021, immediately prior to the effective date of the IPO Prospectus. The purpose of the ESPP is to enable eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation up to the statutory maximum. The first ESPP purchase occurred in November 2021, and subsequent purchases will occur in May and November each year. The purchase price is equal to 85% of the fair market value of a share of our common stock on the first date of an offering or the date of purchase, whichever is lower. The ESPP has an automatic rollover feature, whereby employees begin a new 12-month offering period if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date. The aggregate number of shares reserved for issuance under the ESPP was equal to approximately 2% of the number of shares of our common stock (of all classes) outstanding upon the closing of the IPO. The number of shares available under our ESPP will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 1% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. No more than 200.0 million shares of common stock may be issued under our ESPP. In November 2021, 0.3 million shares were purchased under the ESPP at a weighted-average price of $24.64. The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model. As of December 31, 2021 , approximately 16.7 million shares remained available for issuance under the ESPP. On January 1, 2022, an additional 8.6 million shares became authorized for issuance under the ESPP pursuant to its annual evergreen feature. Share-Based Compensation The following table presents share-based compensation in our consolidated statements of operations for the periods indicated: Year ended December 31, (in thousands) 2019 2020 2021 Brokerage and transaction $ 427 $ 227 $ 7,527 Technology and development 9,499 18,024 609,307 Operations 139 61 20,261 Marketing 85 613 49,731 General and administrative 16,517 5,405 885,427 Total $ 26,667 $ 24,330 $ 1,572,253 Included in the table above, we recorded share-based compensation expense of $1.05 billion related to Time-Based RSUs, $501.2 million related to Market-Based RSUs, and $5.9 million related to the ESPP for the year ended December 31, 2021. No share-based compensation was recorded in 2019 or 2020 related to Time-Based RSUs, Market-Based RSUs, or the ESPP. The tax benefits recognized in the consolidated statements of operations for share-based compensation were not material during the years ended December 31, 2019, 2020, and 2021. We capitalized share-based compensation expense related to internally developed software of $0.7 million, $0.6 million, and $34.8 million for years 2019, 2020, and 2021. In the year ended December 31, 2019, subsequent to the sale of our Series E redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (the “2019 Tender Offer”). The 2019 Tender closed on September 9, 2019, when existing employees sold 5.4 million shares of our common stock for an aggregate purchase price of $67.6 million. As the share price paid in the 2019 Tender was in excess of fair value and a portion of the purchasers were existing stockholders, we recorded share-based compensation expense of $18.7 million for the year ended December 31, 2019. In the year ended December 31, 2020, subsequent to the sale of our Series G redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (the “2020 Tender Offer”). The 2020 Tender closed on November 13, 2020, when existing employees sold 1.4 million shares of our common stock for an aggregate purchase price of $21.5 million. With the 2020 Tender Offer, we believe that we had established a pattern of cash settlement of immature shares and stock options only during a very discrete set of circumstances in which we opened a tender offer in conjunction with a preferred stock financing. As such, during the 2020 Tender Offer period, we recorded a liability equal to the fair value of the maximum number of options representing immature shares that could have been redeemed in the tender offer. To the extent that this liability exceeded amounts previously recognized in equity, the excess was recognized as additional share-based compensation expense. Following the closing of the 2020 Tender Offer, the remaining liability of $18.6 million was reclassified to additional paid-in capital. We recorded share-based compensation expense of $17.2 million in connection with this tender offer in the year ended December 31, 2020. In March 2021, we modified certain Time-Based RSUs of approximately 500 employees to remove the one-year vesting cliff, considered to be an improbable to improbable modification. The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $39.75 per share was used to calculate share-based compensation expense. As of December 31, 2021, there was $1.91 billion of unrecognized share-based compensation expense that is expected to be recognized over a weighted-average period of 2.49 years. Scheduled vesting for awards outstanding as of December 31, 2021, is as follows: (in thousands, except for number of shares) Number of Shares (1) Expense 2022 19,332,903 $ 861,709 2023 15,860,370 537,829 2024 11,864,093 324,060 2025 3,880,099 166,052 2026 — 20,675 Total 50,937,465 $ 1,910,325 (1) Excludes future ESPP shares and Market-Based RSUs for which the share price target has not been met as we cannot forecast the vesting of these shares. The above schedule excludes an estimate for forfeitures, which are recognized as they occur, and future equity grants. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NOTE 13: NET INCOME (LOSS) PER SHARE We present net income (loss) per share using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the holders of Class A common stock and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical for Class A common stock and Class B common stock, the undistributed earnings are allocated on a proportionate basis and the resulting income (loss) per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis. The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year ended December 31, 2019 2020 2021 Net income (loss) $ (106,569) $ 7,449 $ (3,686,432) Less: allocation of earnings to participating securities — 4,601 — Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 $ (3,686,432) Weighted-average common stock outstanding - basic 221,664,610 225,748,355 492,381,190 Dilutive effect of stock options and unvested shares — 19,249,033 — Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 492,381,190 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 $ (7.49) Diluted $ (0.48) $ 0.01 $ (7.49) The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period: Year ended December 31, 2019 2020 2021 Redeemable convertible preferred stock 321,626,778 412,742,897 — RSUs 51,687,872 75,375,307 108,359,188 Stock options 27,613,830 60,082 14,527,468 Unvested shares 749,943 8,423 15,126 Warrants — — 14,278,034 ESPP shares — — 246,179 Total anti-dilutive securities 401,678,423 488,186,709 137,425,995 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14: RELATED PARTY TRANSACTIONS Related party transactions may include any transaction between entities under common control or with a related party. We have defined related parties as members of our board of directors, executive officers, principal owners of our outstanding stock, and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations and any other affiliates. In February 2021, we issued two tranches of convertible notes and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities, see Note 11 for further information. Two of the Tranche I investors were related parties prior to the completion of our IPO. Their respective aggregate outstanding principal and accrued interest of their convertible notes automatically converted into shares of Class A common stock upon the closing of our IPO . $2.0 billion of the gross proceeds received from the issuance was contributed to RHS in February 2021. Pursuant to the SEC Uniform Net Capital Rule |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 15: LEASES Our operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park and our office in New York City. Our leases have remaining terms of 1 to 11 years, and many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. We do not have any finance leases. As of December 31, 2020 and 2021, we had $49.2 million and $129.4 million of operating right-of-use assets included as non-current assets other current liabilities other non-current liabilities As of December 31, 2021, we have an executed operating lease that had not yet commenced for office facilities that is expected to be commenced in the first quarter of 2022. Under the terms of the lease, we will have the right to construct tenant improvements to the underlying asset upon commencement. The components of lease expense were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Fixed operating lease expenses $ 5,422 $ 11,420 $ 23,750 Variable operating lease expenses 1,078 3,009 5,376 Short-term lease expenses 1,188 1,222 1,428 Total lease expenses $ 7,688 $ 15,651 $ 30,554 Fixed operating lease expenses primarily consist of monthly base rent amounts due. Variable operating lease expenses are primarily related to payments made to our landlords for common area maintenance, property taxes, insurance, and other operating expenses. Other information related to our operating leases was as follows: December 31, 2020 2021 Weighted-average remaining lease term 5.41 years 7.29 years Weighted-average discount rate 7.02 % 6.27 % Cash flows related to leases were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 $ 6,047 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 $ 96,555 Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2021 are as follows: (in thousands) 2022 $ 32,646 2023 34,821 2024 33,355 2025 32,436 2026 23,724 Thereafter 102,000 Total undiscounted lease payments 258,982 Less: imputed interest (42,046) Less: lease incentives (12,682) Less: leases executed but not yet commenced (53,185) Total lease liabilities $ 151,069 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16: COMMITMENTS & CONTINGENCIES We are subject to contingencies arising in the ordinary course of our business, including contingencies related to legal, regulatory, non-income tax and other matters. We record an accrual for loss contingencies at management’s best estimate when we determine that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If the reasonable estimate is a range and no amount within that range is considered a better estimate than any other amount, an accrual is recorded based on the bottom amount of the range. Amounts accrued for contingencies in the aggregate were $57.6 million and $84.8 million as of December 31, 2020 and 2021. In our opinion, an adequate accrual had been made as of December 31, 2021 to provide for the probable losses of which we are aware and for which we can reasonably estimate an amount. Legal and Regulatory Matters The securities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages. Damages may include, in some cases, punitive damages. Compliance and trading problems that are reported to federal and state regulators, exchanges, or other SROs by dissatisfied users are investigated by such regulatory bodies, and, if pursued by such regulatory bodies or such users, may rise to the level of arbitration or disciplinary action. We are also subject to periodic regulatory audits and inspections. Like other brokerage firms, we have been named as a defendant in lawsuits and from time to time we have been threatened with, or named as a defendant in arbitrations and administrative proceedings. The outcomes of these matters are inherently uncertain and some may result in adverse judgments or awards, including penalties, injunctions, or other relief, and we may also determine to settle a matter because of the uncertainty and risks of litigation. With respect to matters discussed below for which no accrual has been made or which have a potential loss in excess of amounts accrued, we believe, based on current knowledge, that any losses or ranges of losses (in excess of amounts accrued, if applicable) as of December 31, 2021 that are reasonably possible and can be reasonably estimated will not, in the aggregate, have a material adverse effect on our business, financial position, operating results, or cash flows. However, for many of the matters disclosed below, particularly those in early stages, we cannot reasonably estimate the reasonably possible loss (or range of loss), if any. In addition, the ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and cannot be predicted with certainty. Any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows. We might also incur substantial legal fees, which are expensed as incurred, in defending against legal and regulatory claims. Described below are certain pending matters in which there is at least a reasonable possibility that a material loss could be incurred. We intend to continue to defend these matters vigorously. Best Execution, Payment for Order Flow, and Sources of Revenue Matters Beginning in December 2020, multiple putative securities fraud class action lawsuits were filed against RHM, RHF, and RHS. Five cases were consolidated in the United States District Court for the Northern District of California. An amended consolidated complaint was filed in May 2021, alleging violations of Section 10(b) of the Exchange Act and various state law causes of action based on claims that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including PFOF). Plaintiffs seek damages, restitution, disgorgement, and other relief. In February 2022, the court granted Robinhood’s motion to dismiss the amended consolidated complaint without prejudice. March 2020 Outages A consolidated putative class action lawsuit relating to service outages on our stock trading platform on March 2-3, 2020 and March 9, 2020 (the “March 2020 Outages”) is pending in the United States District Court for the Northern District of California. The lawsuit generally alleges that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and we failed to implement appropriate backup systems. The lawsuit includes, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment and violations of certain California consumer protection statutes. The lawsuit generally seeks damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief. Plaintiffs’ motion for class certification, which we oppose, and our motion for summary judgment in favor of Robinhood are currently pending. In September 2021, approximately 400 jointly-represented customers initiated an arbitration of individual claims against us arising out of the March 2020 Outages and other alleged system outages. Robinhood is contesting the claims, and a hearing has been scheduled for September 2022. Options Trading and Related Customer Communications and Displays The SEC’s Examinations Division conducted an examination and identified deficiencies, to which RHF responded, with respect to account takeovers, identity theft in connection with new account opening, processes for approving or rejecting certain accounts for options trading, and customer support response times. Certain state regulatory authorities are conducting investigations regarding RHF’s options trading and related customer communications and displays and options trading approval process. RHF is cooperating with the regulators’ requests. FINRA also conducted an investigation and reached a settlement, described below, with RHF regarding the same options trading issues. FINRA Multi-Matter Settlement On June 30, 2021, RHF resolved with FINRA, on a no admit, no deny basis, certain investigations and examinations, including investigations into systems outages, RHF’s options product offering, and margin-related communications with customers, among others. The resolution did not address all the matters FINRA is investigating, including those relating to the Early 2021 Trading Restrictions (as defined below), account takeovers and anti-money laundering issues, RHS’s fractional share trade reporting, customer support procedures, or customer arbitration agreements. RHF and RHS have continued to cooperate with FINRA on these matters. The resolution involved the following components: (i) charges of violations of FINRA rules; (ii) a fine of $57.0 million; (iii) customer restitution of approximately $12.6 million; (iv) a censure; and (v) engagement of an independent consultant. In July 2021, we paid the $57.0 million penalty in cash. As of December 31, 2021, we had paid all of the customer restitution. RHC Anti-Money Laundering, Cybersecurity, and Other Issues In July 2020, the NYDFS issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the NYDFS’s Consumer Protection and Financial Enforcement Division for investigation. In March 2021, the NYDFS informed RHC of alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements, including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with the NYDFS, and (iii) cybersecurity and virtual currency requirements, including deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security. RHC and the NYDFS have reached a settlement in principle with respect to these allegations, subject to final documentation, in connection with which, among other things, RHC expects to pay a monetary penalty and engage a monitor. Additionally, in April 2021, the California Attorney General’s Office issued an investigative subpoena to RHC, seeking documents and answers to interrogatories about RHC’s trading platform, business and operations, application of California’s commodities regulations to RHC, and other matters. RHC is cooperating with this investigation. We cannot predict the outcome of this investigation or any consequences that might result from it. Account Takeovers In November 2020, FINRA Enforcement commenced an investigation into RHF concerning account takeovers, or circumstances under which an unauthorized actor successfully logs into a customer account, as well as anti-money laundering and cybersecurity issues. Since February 2021, RHF has received requests for documents and information from the SEC’s Enforcement Division in connection with its investigation into account takeovers and, more recently, suspicious activity report filings and issues related to the Electronic Funds Transfer Act. Additionally, state regulators, including the New York Attorney General’s Office, have opened inquiries into RHM, RHF, and RHC related to account takeovers. We are cooperating with these investigations and inquiries. The SEC’s Examinations Division also conducted an examination and identified deficiencies, to which RHF responded, with respect to, among other things, account takeovers and identity theft in connection with new account opening. In January 2021, Siddharth Mehta filed a putative class action in California state court against RHF and RHS, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users. RHF and RHS removed this action to the United States District Court for the Northern District of California. Plaintiff generally alleges that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets and seek monetary damages and injunctive relief. The matter is currently in the discovery stage. Massachusetts Securities Division Matter In December 2020, the Enforcement Section of the Massachusetts Securities Division (“MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD in July 2020. The complaint alleges three counts of Massachusetts securities law violations regarding alleged unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020. Among other things, the MSD alleges that our product features and marketing strategies, outages, and options trading approval process constitute violations of Massachusetts securities laws. MSD subsequently filed an amended complaint that seeks, among other things, injunctive relief (a permanent cease and desist order), censure, restitution, disgorgement, appointment of an independent consultant, an administrative fine, and revocation of RHF's license to operate in Massachusetts. If RHF were to lose its license to operate in Massachusetts, we would not be able to acquire any new customers in Massachusetts, and we expect that our current customers in Massachusetts would be unable to continue utilizing any of the services or products offered on our platform (other than closing their positions) and that we may be forced to transfer such customers’ accounts to other broker-dealers. Additionally, revocation of RHF’s Massachusetts license could trigger similar disqualification or proceedings to restrict or condition RHF’s registration by other state regulators. A revocation of RHF’s license to operate in Massachusetts would result in RHF and RHS being subject to statutory disqualification by FINRA and the SEC, which would then result in RHF needing to obtain relief from FINRA subject to SEC review in order to remain a FINRA member and RHS possibly needing relief from FINRA or other SROs. In April 2021, RHF filed a complaint and motion for preliminary injunction and declaratory relief in Massachusetts state court seeking to enjoin the MSD administrative proceeding and challenging the legality of the Massachusetts fiduciary duty standard. In May 2021, the state court denied RHF’s motion for a preliminary injunction, finding that RHF would not suffer irreparable harm if MSD proceeded with the pending administrative action, but determined that RHF may seek a declaration that the disputed regulation is unlawful without first exhausting its remedies in the administrative action. In September 2021, the parties filed cross-motions for partial judgment on the pleadings and a hearing was held on those motions in December 2021. Text Message Litigation In August 2021, Cooper Moore filed a putative class action against RHF alleging that RHF initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington state law. The complaint seeks statutory and treble damages, injunctive relief, and attorneys’ fees and costs. The case is currently pending in the U.S. District Court for the Western District of Washington. RHF has filed a motion to dismiss the complaint. Early 2021 Trading Restrictions Matters Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (the “Early 2021 Trading Restrictions”). A number of individual and putative class actions related to the Early 2021 Trading Restrictions were filed against RHM, RHF, and RHS, among others, in various federal and state courts. In April 2021, the Judicial Panel on Multidistrict Litigation entered an order centralizing the federal cases identified in a motion to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions in the United States District Court for the Southern District of Florida (the “MDL”). The court subsequently divided plaintiffs’ claims against Robinhood into three tranches: federal antitrust claims, federal securities law claims, and state law claims. In July 2021, plaintiffs filed consolidated complaints seeking monetary damages in connection with the federal antitrust and state law tranches. The federal antitrust complaint asserted one violation of Section 1 of the Sherman Act; the state law complaint asserted negligence and breach of fiduciary duty claims. In August 2021, we moved to dismiss both of these complaints. In September 2021, plaintiffs filed an amended complaint asserting state law claims of negligence, breach of fiduciary duty, tortious interference with contract and business relationship, civil conspiracy, and breaches of the covenant of good faith and fair dealing and implied duty of care. In November 2021, the court dismissed the federal antitrust complaint without prejudice, and plaintiffs for the federal securities tranche filed a complaint alleging violations of Sections 9(a) and 10(b) of the Exchange Act. In January 2022, we moved to dismiss the federal securities law complaint, and plaintiffs filed an amended complaint in connection with the federal antitrust tranche. In January 2022, the court dismissed the state law complaint with prejudice. In February 2022, Robinhood moved to dismiss the amended complaint filed in connection with the federal antitrust tranche. RHM, RHF, RHS, and our Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), the U.S. Department of Justice, Antitrust Division, the SEC’s Division of Enforcement, FINRA, the New York Attorney General’s Office, other state attorneys general offices, and a number of state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev’s cell phone. There have been several inquiries based on specific customer complaints. We have also received requests from the SEC’s Division of Examinations and Division of Enforcement and FINRA related to employee trading in certain securities that were subject to the Early 2021 Trading Restrictions, including GameStop Corp. and AMC Entertainment Holdings, Inc., during the week of January 25, 2021. These matters include requests related to whether any employee trading in these securities may have occurred after the decision to impose the Early 2021 Trading Restrictions and before the public announcement of the Early 2021 Trading Restrictions on January 28, 2021. The SEC’s Division of Examinations concluded their examinations related to the Early 2021 Trading Restrictions. In February 2021, SEC staff notified us of their findings to which we are in the process of responding. FINRA has also requested information about policies, procedures, and supervision related to employee trading generally. In addition, we have received information and testimony requests from certain committees and members of the U.S. Congress and Mr. Tenev, among others, has provided testimony with respect to the Early 2021 Trading Restrictions. We are cooperating with these investigations and examinations. Registration Requirements for Member Personnel In July 2021, RHF received a FINRA investigative request seeking documents and information related to its compliance with FINRA registration requirements for member personnel, including related to the FINRA non-registration status of Mr. Tenev and Co-Founder and Chief Creative Officer Mr. Bhatt. Robinhood is cooperating with the investigation. IPO Litigation In December 2021, Philip Golubowski filed a putative class action in the U.S. District Court for the Northern District of California against RHM, the officers and directors who signed Robinhood’s IPO offering documents, and Robinhood’s IPO underwriters. Plaintiff’s claims are based on alleged false or misleading statements in Robinhood’s IPO offering documents allegedly in violation of Sections 11 and 12(a) of the Securities Act. Plaintiff seek compensatory damages, rescission of shareholders’ share purchases, and an award for attorneys’ fees and costs. In February 2022, certain alleged Robinhood stockholders submitted applications seeking appointment by the court to be the lead plaintiff to represent the putative class in this matter. Pursuant to the Private Securities Litigation Reform Act of 1995, the deadline for the court to appoint a lead putative class plaintiff is March 17, 2022. In January 2022, Robert Zito filed a complaint derivatively on behalf of Robinhood against Robinhood’s directors at the time of its IPO in the U.S. District Court for the District of Delaware. Plaintiff alleges claims for breach of fiduciary duties, waste of corporate assets, unjust enrichment, and violations of Section 10(b) of the Exchange Act. Plaintiff’s claims are based on allegations of false or misleading statements in Robinhood’s IPO offering documents, and plaintiff seeks an award of damages and restitution to the Company, injunctive relief, and an award for attorney’s fees and costs. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. |
Consolidation | All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, the valuation and estimated useful lives of acquired intangible assets, uncertain tax positions, accrued liabilities, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. |
Segment Information | Segment Information We operate and report financial information in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. All our revenues and substantially all of our assets are attributed to or located in the United States. |
Revenue Recognition | Revenue Recognition Transaction-Based Revenues We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. Net Interest Revenues Net interest revenues consist of interest revenues less interest expenses. We earn and incur interest revenues and expense on securities lending transactions. We also earn interest on margin loans to users, which constitute the majority of receivables from users, net in the consolidated balance sheets, and on our segregated cash, cash and cash equivalents, and deposits with clearing organizations. We incur interest expenses in connection with our revolving credit facilities. Other Revenues Other revenues primarily consists of Robinhood Gold subscription fees. Our contract with users are for a term of 30 days and renew automatically each month. Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied. Other revenues also consist of proxy rebates and ACATS fees charged to users. Proxy rebates are revenues earned through our partnership with a third-party investor communications company. We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms. We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied. ACATS fees are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer. We recognize revenue when our performance obligation of administering the transfer is satisfied. |
Concentrations of credit | Concentrations of Credit We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. Default of a counterparty in equities and options trades, which are facilitated through clearinghouses, would generally be spread among the clearinghouse's members rather than falling entirely on us. It is our policy to review, as necessary, the credit standing of each counterparty. |
Operating Expenses | Operating Expenses Brokerage and Transaction Brokerage and transaction costs primarily consist of broker-dealer transaction expenses (such as fees paid to centralized clearinghouses and regulatory fees), market data expenses, cash and share- based compensation and benefits as well as allocated overhead for employees engaged in clearing and brokerage functions, and cash management transactions expenses (such as network fees and card processing fees). Technology and Development Technology and development costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for engineering, data science, and design personnel who support and improve our platform and develop new products, costs for cloud infrastructure services, and costs associated with computer hardware and software, including amortization of internally developed software. Operations Operations costs consist of customer service related expenses, including cash and share-based compensation and benefits as well as allocated overhead for employees engaged in customer support, and costs incurred to support and improve customer experience (such as third-party customer service vendors). Operations costs also include our provision for credit losses and fraud in connection with unrecoverable receivables due to Fraudulent Deposit Transactions and chargebacks for unauthorized debit card use. |
Marketing | Marketing Marketing costs primarily consist of marketing incentive expenses associated with the Robinhood Referral Program |
General and Administrative Costs | General and Administrative General and administrative costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for certain executives and employees engaged in legal, finance, human resources, risk, and compliance. General and administrative costs also include legal expenses, settlements and penalties, business insurance, and other professional fees. |
Employee Retirement Benefits | Employee Retirement BenefitsWe offer a defined contribution 401(k) plan to full-time employees. Employees may elect to contribute to a traditional 401(k) plan, which qualifies as a deferred compensation arrangement under Section 401 of the Code. In this case, participating employees defer a portion of their pre-tax earnings. Employees may also contribute to a Roth 401(k) plan using post-tax dollars. |
Research and Development Costs | Research and Development CostsResearch and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred. Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation. |
Share-based Compensation | Share-based Compensation Common Stock Fair Value The fair value of our common stock is determined on the grant date using the closing price of our common stock, which is traded on the Nasdaq Global Select Market. Prior to our IPO, the absence of an active market for our common stock required our board of directors to determine the fair value of our common stock for each grant date with respect to which awards were approved. Our board of directors considered numerous objective and subjective factors to determine the fair value of our common stock including: contemporaneous third-party valuations of our common stock, sales of our common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our operating and financial performance, the valuation of comparable companies, the lack of marketability, and general and industry specific economic outlook, amongst other factors. Stock Options We estimate the fair value of stock options granted to employees using the Black-Scholes option-pricing model. The fair value of stock options is recognized as compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for when they occur. The Black-Scholes option-pricing model incorporates various assumptions in estimating the fair value of stock-based awards. In addition to the fair value of our common stock, these variables include: Expected volatility —As we do not have sufficient trading history of our common stock, we estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies over a period equal to the expected term of the award. Expected term —We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-free interest rate —Based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Expected dividend yield —We utilize a dividend yield of 0% as we have not paid, and do not anticipate paying, dividends on our common stock. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life. Time-Based RSUs We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition. Prior to our IPO, our Time-Based RSUs vested based upon the satisfaction of both a time-based service condition and a performance-based condition, namely the occurrence of a liquidity event such as the IPO. The fair value of our RSUs is estimated based on the fair value of our common stock on the date of grant. The time-based service condition for our awards is generally satisfied over four years. We record share-based compensation expense for Time-Based RSUs on an accelerated attribution method over the requisite service period. The performance-based condition for our pre-IPO grants was satisfied upon the occurrence of the IPO in 2021, at which point we recorded a cumulative one-time share-based compensation expense determined using the awards’ grant-date fair value. Share-based compensation related to the remaining time-based service after the IPO is recorded over the remaining requisite service period. As of December 31, 2019 and 2020, we had not recognized share-based compensation for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. No performance-based conditions exist for our post-IPO grants. Market-Based RSUs We have granted RSUs that vest upon the satisfaction of all the following conditions: time-based service conditions, performance-based conditions, and market-based conditions. The time-based service condition for these awards generally is satisfied over six years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, as described above. The market-based conditions are satisfied upon our achievement of specified share prices. For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected capital raise percentage. We estimate the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of a qualifying event based on our expectation at the time of measurement of the award’s value. We record share-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. We determine the requisite service period by comparing the derived service period to achieve the market-based condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period. Upon the occurrence of our IPO in 2021, we recorded a cumulative one-time share-based compensation expense determined using the grant-date fair values. Share-based compensation related to remaining time-based service and market-based conditions to be met will be recorded over the remaining derived requisite service period. |
Net Income (Loss) per Share | Net Income (Loss) per Share Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. Our participating securities consist of all series of our redeemable convertible preferred stock. Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses. Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include deposits with banks and money market funds or highly liquid financial instruments with maturities of three months or less at the time of purchase. We maintain cash in bank accounts at financial institutions that exceed federally insured limits. We also maintain cash in money market funds which are not FDIC insured. We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf. As we have not experienced any losses in such accounts and we believe that we have placed our cash on |
Cash and Securities Segregated Under Federal and Other Regulations | Cash and Securities Segregated Under Federal and Other Regulations We are required to segregate cash and/or qualified securities for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Exchange Act. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. |
Restricted Cash | Restricted CashWe are required to maintain restricted cash deposits to back letters of credit for certain property leases. We have no ability to draw on such funds as long as they remain restricted under the applicable agreements. Cash subject to restrictions that expire within one year is included in other current assets in our consolidated balance sheets. |
Investments | InvestmentsWe invest in marketable debt securities which are classified as available-for-sale and are initially recorded at fair value. These securities are comprised of asset-backed securities, commercial paper, corporate bonds and government bonds. We have elected the fair value option for our debt securities as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics. We elected to present interest earned on the debt securities as interest income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, our own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: Level 1 Inputs: unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by us Level 2 Inputs: quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly Level 3 Inputs: unobservable inputs that are significant to the fair value of the assets or liabilities |
Receivables From Brokers, Dealers, and Clearing Organizations/Receivables From Users, Net | Receivables From Brokers, Dealers, and Clearing Organizations Receivables from brokers, dealers, and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers. These receivables are short term and settle within 30 days. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Receivables From Users, Net Receivable from users, net is primarily made up of margin receivables. Margin receivables are adequately collateralized by users’ securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses. We monitor margin levels and require users to deposit additional collateral, or reduce margin positions, to meet minimum collateral requirements and avoid automatic liquidation of their positions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for receivables from users. We have no expectation of credit losses for receivables from users that are fully secured, where the fair value of the collateral securing the balance is equal to or in excess of the receivable amount. This is based on our assessment of the nature of the collateral, potential future changes in collateral values, and historical credit loss information relating to fully secured receivables. In cases where the fair value of the collateral is less than the outstanding receivable balance from a user, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately. The provision for credit losses is recorded as operations expense on the consolidated statement of operations. We write-off unsecured balances when the balance becomes outstanding for over 180 days or when we otherwise deem the balance to be uncollectible. |
Deposits With Clearing Organizations | Deposits With Clearing Organizations We are required to maintain collateral deposits with clearing organizations such as Depository Trust & Clearing Corporation and Options Clearing Corporation which allow us to use their security transactions services for trade comparison, clearance, and settlement. The clearing organizations establish financial requirements, including deposit requirements, to reduce their risk. The required level of deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility. We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations. As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements. |
Fractional Share Program | Fractional Share Program We operate our fractional share program for the benefit of our users and maintain an inventory of securities held exclusively for the fractional share program. This proprietary inventory is recorded within other current assets on our consolidated balance sheets. |
Other Current Assets | Other Current AssetsOther current assets primarily includes prepaid expenses, securities owned by us for the Robinhood Referral Program and fractional share program, and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. These prepaid expenses include items such as prepayments on insurance, cloud infrastructure service costs, and software subscriptions. |
Robinhood Referral Program | Robinhood Referral Program The stock rewarded under this program is a share or shares, selected randomly from our previously purchased inventory of settled shares held exclusively for this program, which are included in other current assets in our consolidated balance sheets. Each stock reward is assigned at the time the reward is earned and each share cannot be associated with more than one reward at a time. Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period. As the inventory of shares are held specifically for the referral program and not as investments of the Company, gains and losses from changes in the fair market value of the shares are recorded within marketing expense in our consolidated statement of operations until the reward is claimed. Shares are derecognized when they are claimed by the user and delivered to the users’ account. |
Property, Software and Equipment | Property, Software, and Equipment Property, software, and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Fixture and furniture 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Repairs and maintenance that do not enhance or extend the asset’s function and/or useful life are charged to expenses as incurred. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Internally developed software is capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Capitalized costs consist of salaries and payroll related costs for employees and fees paid to third-party |
Other Non-Current Assets | Other Non-Current AssetsOther non-current assets primarily includes right-of-use assets, net of accumulation of amortization, and prepaid expenses, for contract terms longer than 12 months. |
Leases | LeasesWe elected to apply the short-term lease measurement and recognition practical expedient to our leases where applicable, thus leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease right-of-use assets and operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date for each lease. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate that we would pay to borrow on a collateralized basis with similar terms and payments as the lease. Operating lease right-of-use assets also include any prepaid lease payments and lease incentives. Our lease agreements generally contain lease and non-lease components. Non-lease components, which primarily include payments for maintenance and utilities, are combined with lease payments and accounted for as a single lease component. We include the fixed non-lease components in the determination of the right-of-use assets and operating lease liabilities. We record the amortization of the right-of-use asset and the accretion of lease liability as rent expense and allocate it as overhead in the consolidated statements of operations. |
Business Combinations | Business CombinationsWe account for acquisitions of entities or asset groups that qualify as businesses in accordance with ASC 805, “Business Combinations”. The purchase price of the acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and is allocated to reporting units expected to benefit from the business combination. We test goodwill for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances indicate that goodwill might be impaired. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. In testing for goodwill impairment, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if we conclude otherwise, we proceed to a quantitative assessment. |
Intangible Assets, Net | Intangible Assets, NetIntangible assets are carried at cost and amortized on a straight-line basis over their estimated useful lives. The Company evaluates the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Payables to Users | Payables to UsersPayables to users represent users’ funds on deposit, and/or funds accruing to users as a result of settled trades and other security related transactions. |
Securities Borrowed and Loaned | Securities Borrowed and Loaned Securities borrowed and loaned result from transactions with other brokers, dealers, or financial institutions. Securities borrowing transactions require us to deposit cash with the lender whereas securities lending transactions result in us receiving cash collateral, with both requiring cash in an amount generally in excess of the market value of the securities. We earn interest revenue on cash collateral deposited with us, and can earn or incur additional revenue or expense for lending certain securities based on demand for that security. Substantially all of our securities borrowing and loan transactions have an open contractual term and, upon notice by either party, may be terminated within three business days. We manage risks associated with our securities lending and borrowing activities by requiring credit approvals for counterparties, by monitoring the market value of securities loaned and collateral values for securities borrowed on a daily basis and requiring additional cash as collateral for securities loaned or return of collateral for securities borrowed when necessary, and by participating in a risk-sharing program offered through the Options Clearing Corporation. Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers, however we do not net securities lending transactions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for securities borrowed receivables. |
Loss Contingencies | Loss Contingencies We are subject to claims and lawsuits in the ordinary course of business, including arbitration, class actions and other litigation, some of which include claims for substantial or unspecified damages. We are also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. We review our lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provide disclosures and record loss contingencies in accordance with the loss contingencies accounting guidance. We establish an accrual for losses at management’s best estimate when we assess that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If the reasonable estimate is a range and no amount within that range is considered a better estimate than any other amount, an accrual is recorded based on the bottom amount of the range. Accrual for loss contingencies are recorded in accounts payable and accrued expenses on the consolidated balance sheets and expensed in general and administrative expenses in our consolidated statements of operations. We monitor these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjust the amount as appropriate. |
Cryptocurrencies | CryptocurrenciesWe act as an agent in the cryptocurrency transactions of our users. We have determined we are an agent because we do not control the cryptocurrency before delivery to the user, we are not primarily responsible for the delivery of cryptocurrency to our users, we are not exposed to risks arising from fluctuations of the market price of cryptocurrency before delivery to the customer, and we do not set the prices charged to users. After purchasing cryptocurrency on the platform, users are the legal owners of cryptocurrency held under custody by us and users have all the rights and benefits of ownership, including the rights to appreciation and depreciation of the cryptocurrency. Accordingly, the cryptocurrency we hold in custody on behalf of our users is not reflected on our consolidated balance sheets. |
Income Taxes | Income Taxes Income tax expense is an estimate of current income taxes payable in the current fiscal year based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences and carryforwards that we recognize for financial reporting and income tax purposes at enacted tax rates expected to be in effect when taxes are actually paid or recovered. We account for income taxes under the asset and liability method, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements, but have not been reflected in our taxable income. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe that they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets including, but not limited to, historical cumulative loss experience and expectations of future earnings, tax planning strategies, and the carry-forward periods available for tax reporting purposes. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our tax provision would increase or decrease in the period in which the assessment is changed. We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. We account for uncertain tax positions, including net interest and penalties, as a component of income tax expense or benefit. We make adjustments to these uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact to our consolidated financial statements and operating results. |
Reclassifications | Reclassifications Certain prior-year amounts have been reclassified to conform to the current year’s presentation. The impact of these reclassifications is immaterial to the presentation of the financials. |
Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share, Debt—Modifications and Extinguishments, Compensation—Stock Compensation, and Derivatives and Hedging—Contracts in Entity’s Own Equity . The guidance clarifies modifications or exchanges of freestanding equity-classified written call options (e.g. warrants). The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective July 1, 2021. The adoption of the guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations . This guidance requires contract assets and contract liabilities from contracts with customers that are acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract. The guidance is effective for fiscal years beginning after December 15, 2022 on a prospective basis, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the timing of adoption and impact of this new guidance on our consolidated financial statements. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Concentration of Credit Risk | We derived transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Year ended December 31, 2019 2020 2021 Market maker: Citadel Securities, LLC 29 % 34 % 22 % Tai Mo Shan Limited (1) — % — % 15 % Entities affiliated with Susquehanna International Group, LLP (2) 13 % 18 % 12 % Entities affiliated with Wolverine Holdings, L.P. (3) 12 % 10 % 10 % All others individually less than 10% 8 % 13 % 18 % Total as percentage of total revenue: 62 % 75 % 77 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC |
Schedule Of Property, Software and Equipment | Property, software, and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Fixture and furniture 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Property, software, and equipment are presented net of accumulated depreciation and amortization and summarized as follows: Year ended December 31, (in thousands) 2020 2021 Tenant improvements $ 18,945 $ 64,313 Internally developed software 16,992 31,142 Computer equipment 9,203 23,731 Furniture and fixtures 8,024 21,927 Construction in progress 9,756 44,343 Total 62,920 185,456 Less: accumulated depreciation and amortization (17,086) (39,037) Property, software, and equipment, net $ 45,834 $ 146,419 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Acquisition Date Fair Value of Concentration Transferred | The acquisition date fair value of the consideration transferred for Say Technologies was $132.8 million, which consisted of the following: (in thousands) Fair Value Cash $ 132,168 Share-based compensation awards attributable to pre-combination services 639 Total consideration $ 132,807 (in thousands) Fair Value Cash and cash equivalents $ 15,412 Accounts receivable 1,704 Goodwill 92,951 Intangible assets 34,600 Other current assets 192 Accounts payable, accrued expenses and other current liabilities (9,354) Deferred tax liability (2,698) Net assets acquired $ 132,807 |
Schedule of Components of Identifiable Intangible Assets Acquired | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: (in thousands, except years) Fair Value Useful Life Developed technology $ 22,000 3 Customer relationships 12,000 10 Trade names 600 3 Total $ 34,600 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Movement on Goodwill | The carrying amount of goodwill for the period indicated was as follows: (in thousands) Carrying Amount As of December 31, 2020 $ — Additions due to business combinations 100,521 As of December 31, 2021 $ 100,521 |
Schedule of Components of Finite-Lived Intangible Assets | The components of intangible assets, net as of December 31, 2021 were as follows: (in thousands, except years) Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life - Years Finite-lived intangible assets Developed technology $ 23,100 $ (2,829) $ 20,271 2.58 Customer relationships 12,000 (460) 11,540 9.62 Trade names 600 (76) 524 2.62 Domain names 163 (43) 120 11.63 Indefinite-lived intangible assets 1,652 — 1,652 N/A Total $ 37,515 $ (3,408) $ 34,107 |
Schedule of Components of Indefinite-Lived Intangible Assets | The components of intangible assets, net as of December 31, 2021 were as follows: (in thousands, except years) Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life - Years Finite-lived intangible assets Developed technology $ 23,100 $ (2,829) $ 20,271 2.58 Customer relationships 12,000 (460) 11,540 9.62 Trade names 600 (76) 524 2.62 Domain names 163 (43) 120 11.63 Indefinite-lived intangible assets 1,652 — 1,652 N/A Total $ 37,515 $ (3,408) $ 34,107 |
Schedule of Future Amortization Expense in Acquired Intangible Assets | As of December 31, 2021, the estimated future amortization expense of finite-lived intangible assets was as follows: (in thousands) Intangible Assets 2022 $ 9,104 2023 9,104 2024 6,218 2025 1,210 2026 1,210 Thereafter 5,609 Total $ 32,455 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregated by Revenue Source | The following table presents our revenue disaggregated by revenue source: Year ended December 31, (in thousands) 2019 2020 2021 Transaction-based revenues: Options $ 110,656 $ 440,070 $ 688,899 Cryptocurrencies 9,487 26,708 419,382 Equities 50,688 251,200 287,734 Other — 2,155 6,335 Total transaction-based revenues 170,831 720,133 1,402,350 Net interest revenues: Securities lending 6,380 98,165 137,153 Margin interest 19,104 66,781 131,823 Interest on segregated cash and securities 36,281 13,401 4,023 Other interest revenue 9,865 3,972 4,181 Interest expenses related to credit facilities (991) (4,882) (20,218) Total net interest revenues 70,639 177,437 256,962 Other revenues 36,063 61,263 155,831 Total net revenues $ 277,533 $ 958,833 $ 1,815,143 |
Receivables and Contract Balances | The table below sets forth contract receivables balances for the periods indicated: December 31, (in thousands) 2020 2021 Beginning of the period $ 20,577 $ 111,871 End of the period 111,871 83,207 Increase (decrease) in contract receivables during the period $ 91,294 $ (28,664) The table below sets forth contract liabilities balances for the period indicated: December 31, (in thousands) 2020 2021 Beginning of the period $ 954 $ 2,060 End of the period 2,060 3,211 Increase in contract liabilities during the period $ 1,106 $ 1,151 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
Allowance For Credit Losses Of Receivables From Users | The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from Fraudulent Deposit Transactions and losses on margin borrowings, for the periods indicated: Year ended December 31, (in thousands) 2019 2020 2021 Beginning balance $ 6,013 $ 17,122 $ 34,092 Provision for credit losses 11,109 59,134 78,337 Write-offs — (42,164) (72,213) Ending balance $ 17,122 $ 34,092 $ 40,216 |
INVESTMENTS AND FAIR VALUE ME_2
INVESTMENTS AND FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Debt Securities, Available-for-sale | Investments on the consolidated balance sheet consisted of the following: December 31, 2021 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Debt securities: Asset-backed securities $ 5,082 $ — $ (4) $ 5,078 Commercial paper 13,717 — — 13,717 Corporate bonds 7,392 — (8) 7,384 Government bonds 1,012 — (2) 1,010 Total investments $ 27,203 $ — $ (14) $ 27,189 |
Schedule Of Financial Assets and Liabilities Measured At Fair Value On A Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 User-held fractional shares 802,483 — — 802,483 Other current assets: Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Fractional share repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 December 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 4,003,552 $ — $ — $ 4,003,552 Investments: Asset-backed securities — 5,078 — 5,078 Commercial paper — 13,717 — 13,717 Corporate bonds — 7,384 — 7,384 Government bonds 1,010 — — 1,010 User-held fractional shares 1,834,479 — — 1,834,479 Other current assets: Equity securities - securities owned 13,611 — — 13,611 Total financial assets $ 5,852,652 $ 26,179 $ — $ 5,878,831 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 97 $ — $ — $ 97 Fractional shares repurchase obligations 1,834,479 — — 1,834,479 Total financial liabilities $ 1,834,576 $ — $ — $ 1,834,576 |
Schedule Of Changes In Estimated Fair Value Of Convertible Notes And Warrant Liability | The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,918,565 127,092 Reclassifications to equity (5,217,596) (380,036) End of period, December 31, 2021 $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) before income taxes were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Domestic $ (104,690) $ 14,773 $ (3,685,936) Foreign (2,897) (943) 1,504 Income (loss) before income taxes $ (107,587) $ 13,830 $ (3,684,432) |
Schedule of Income Tax Provision (Benefit) | The components of the provision for (benefit from) income taxes were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Current: Federal $ (58) $ 2,780 $ (249) State (295) 3,801 4,990 Foreign — — — Total current tax expense (benefit) (353) 6,581 4,741 Deferred: Federal — — (1,084) State — — (1,525) Foreign (665) (200) (132) Total deferred tax expense (benefit) (665) (200) (2,741) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 $ 2,000 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows: Year ended December 31, (in thousands) 2019 2020 2021 Federal tax benefit at statutory rate $ (22,593) $ 2,905 $ (773,731) State tax benefit, net of federal benefit (5,491) (862) (131,494) Foreign rate differential (57) (2) (448) Share-based compensation (1,221) (2,654) 17,338 Tender offer compensation 4,229 3,607 1,640 Research and development credits (2,104) (10,489) (48,111) Non-deductible regulatory settlements — 21,000 10,920 Non-deductible change in convertible notes and warrant — — 429,588 Permanent differences — 526 322 Other 905 52 367 Change in valuation allowance 25,314 (7,702) 495,609 Total provision for (benefit from) income taxes $ (1,018) $ 6,381 $ 2,000 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities consist of the following: Year ended December 31, (in thousands) 2020 2021 Deferred tax assets: Accruals and other liabilities 14,849 $ 24,319 Lease liabilities 13,794 39,909 Tax credit carryforwards 9,058 81,457 Net operating loss carryforwards 3,141 251,202 Share-based compensation 3,123 134,723 Other 3,386 21,411 Total deferred tax assets 47,351 553,021 Deferred tax liabilities: Right of use assets (12,551) (34,182) Depreciation and amortization (6,965) (22,977) Total deferred tax liabilities (19,516) (57,159) Valuation allowance (26,909) (494,902) Net deferred tax assets $ 926 $ 960 |
Summary of Valuation Allowance | The following is a reconciliation of the beginning and ending amount of the deferred tax asset valuation allowance: Year ended December 31, (in thousands) 2019 2020 2021 Balance at beginning of period $ 9,631 $ 35,207 $ 26,909 Charged/(credited) to net income 25,576 (8,298) 470,691 Charges utilized/(write-offs) — — (2,698) Balance at end of period $ 35,207 $ 26,909 $ 494,902 |
Schedule of Unrecognized Tax Benefits Roll Forward | The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year ended December 31, 2020 2021 Unrecognized benefit - beginning of period $ 2,177 $ 7,420 Gross increases - current year tax positions 4,395 37,879 Gross increases - prior year tax positions 848 909 Unrecognized benefit - end of period $ 7,420 $ 46,208 |
PROPERTY, SOFTWARE, AND EQUIP_2
PROPERTY, SOFTWARE, AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule Of Property, Software and Equipment | Property, software, and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Fixture and furniture 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Property, software, and equipment are presented net of accumulated depreciation and amortization and summarized as follows: Year ended December 31, (in thousands) 2020 2021 Tenant improvements $ 18,945 $ 64,313 Internally developed software 16,992 31,142 Computer equipment 9,203 23,731 Furniture and fixtures 8,024 21,927 Construction in progress 9,756 44,343 Total 62,920 185,456 Less: accumulated depreciation and amortization (17,086) (39,037) Property, software, and equipment, net $ 45,834 $ 146,419 |
OFFSETTING ASSETS AND LIABILI_2
OFFSETTING ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Offsetting [Abstract] | |
Schedule Of Assets Subject To Master Netting Arrangement | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 345 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 372 345 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 372 345 Security collateral received (361) (329) Net amount $ 11 $ 16 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 3,651,035 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,921,118 3,651,035 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,921,118 3,651,035 Security collateral pledged (1,787,819) (3,426,766) Net amount $ 133,299 $ 224,269 ________________ (1) Securities borrowed are included in receivables from brokers, dealers, and clearing organizations on the consolidated balance sheets. |
Schedule Of Liabilities Subject To Master Netting Arrangement | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 345 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 372 345 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 372 345 Security collateral received (361) (329) Net amount $ 11 $ 16 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 3,651,035 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,921,118 3,651,035 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,921,118 3,651,035 Security collateral pledged (1,787,819) (3,426,766) Net amount $ 133,299 $ 224,269 ________________ (1) Securities borrowed are included in receivables from brokers, dealers, and clearing organizations on the consolidated balance sheets. |
MEZZANINE EQUITY, COMMON STOC_2
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule Of Redeemable Convertible Preferred Stock | The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 |
Schedule Of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Granted during the period — — Exercised during the period (6,706,616) 2.06 Cancelled and forfeited during the period (309,744) 4.52 Balance at December 31, 2021 14,527,468 $ 2.20 5.37 $ 226,000 Options vested and expected to vest at December 31, 2021 14,527,468 $ 2.20 5.37 $ 226,000 Options exercisable at December 31, 2021 13,521,686 $ 1.87 5.23 $ 214,813 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions: Year ended December 31, 2019 2020 2021 Dividend yield 0 % 0 % N/A Risk-free interest rate 2.29 % 0.61 % N/A Expected volatility 31.20 % 36.69 % N/A Expected term (years) 6.03 6.04 N/A |
Schedule Of Activity Related To Time-Based and Market-Based RSUs | The following table summarizes the activity related to our Time-Based RSUs for the year ended December 31, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted in acquisitions (1) 124,934 50.63 Granted (other than in acquisitions) 33,044,671 38.26 Vested (27,881,049) 19.57 Forfeited (3,572,135) 23.36 Unvested at December 31, 2021 49,428,070 $ 31.78 _______________ (1) Represents replacement RSUs granted in connection with our acquisition of Say Technologies. Per the terms of the merger agreement with Say Technologies, certain unvested outstanding RSUs held by Say Technologies employees were canceled and replaced with RSUs under our 2021 Plan. The following table summarizes the activity related to our Market-Based RSUs for the year ended December 31, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 27,663,658 $ 0.29 Granted 35,520,000 22.68 Vested (4,264,814) 2.34 Forfeited — — Unvested at December 31, 2021 58,918,844 $ 23.50 |
Schedule Of Share-Based Compensation | The following table presents share-based compensation in our consolidated statements of operations for the periods indicated: Year ended December 31, (in thousands) 2019 2020 2021 Brokerage and transaction $ 427 $ 227 $ 7,527 Technology and development 9,499 18,024 609,307 Operations 139 61 20,261 Marketing 85 613 49,731 General and administrative 16,517 5,405 885,427 Total $ 26,667 $ 24,330 $ 1,572,253 |
Schedule of Vesting for RSU, ESPP, and Option Awards Outstanding | Scheduled vesting for awards outstanding as of December 31, 2021, is as follows: (in thousands, except for number of shares) Number of Shares (1) Expense 2022 19,332,903 $ 861,709 2023 15,860,370 537,829 2024 11,864,093 324,060 2025 3,880,099 166,052 2026 — 20,675 Total 50,937,465 $ 1,910,325 (1) Excludes future ESPP shares and Market-Based RSUs for which the share price target has not been met as we cannot forecast the vesting of these shares. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule Of Basic and Diluted Income (Loss) Per Share | The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year ended December 31, 2019 2020 2021 Net income (loss) $ (106,569) $ 7,449 $ (3,686,432) Less: allocation of earnings to participating securities — 4,601 — Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 $ (3,686,432) Weighted-average common stock outstanding - basic 221,664,610 225,748,355 492,381,190 Dilutive effect of stock options and unvested shares — 19,249,033 — Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 492,381,190 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 $ (7.49) Diluted $ (0.48) $ 0.01 $ (7.49) |
Schedule Of Potential Common Shares Excluded From The Calculation Of Diluted Net Income (Loss) Per Share | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period: Year ended December 31, 2019 2020 2021 Redeemable convertible preferred stock 321,626,778 412,742,897 — RSUs 51,687,872 75,375,307 108,359,188 Stock options 27,613,830 60,082 14,527,468 Unvested shares 749,943 8,423 15,126 Warrants — — 14,278,034 ESPP shares — — 246,179 Total anti-dilutive securities 401,678,423 488,186,709 137,425,995 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule Of Components Of Lease Expense | The components of lease expense were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Fixed operating lease expenses $ 5,422 $ 11,420 $ 23,750 Variable operating lease expenses 1,078 3,009 5,376 Short-term lease expenses 1,188 1,222 1,428 Total lease expenses $ 7,688 $ 15,651 $ 30,554 Other information related to our operating leases was as follows: December 31, 2020 2021 Weighted-average remaining lease term 5.41 years 7.29 years Weighted-average discount rate 7.02 % 6.27 % Cash flows related to leases were as follows: Year ended December 31, (in thousands) 2019 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 $ 6,047 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 $ 96,555 |
Schedule Of Future Minimum lease Payments | Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2021 are as follows: (in thousands) 2022 $ 32,646 2023 34,821 2024 33,355 2025 32,436 2026 23,724 Thereafter 102,000 Total undiscounted lease payments 258,982 Less: imputed interest (42,046) Less: lease incentives (12,682) Less: leases executed but not yet commenced (53,185) Total lease liabilities $ 151,069 |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Aug. 31, 2021shares | Aug. 02, 2021USD ($)class$ / sharesshares | Dec. 31, 2021USD ($)segmentdayclassperiod$ / sharesshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from issuance of common stock in connection with initial public offering, net of offering costs | $ | $ 2,052,382,000 | $ 0 | $ 0 | ||
Common stock, shares authorized (in shares) | 0 | 777,354,000 | |||
Preferred stock, shares authorized (in shares) | 210,000,000 | 0 | |||
Number of classes of common stock | class | 3 | ||||
Number of operating segments | segment | 1 | ||||
Revenue contract term | 30 days | ||||
Advertising costs | $ | $ 100,500,000 | $ 78,200,000 | 90,900,000 | ||
Defined contribution plan, employer matching contribution, percent of match | 3.00% | ||||
Expense incurred related to defined contribution 401(k) plan | $ | $ 9,500,000 | 3,500,000 | 1,000,000 | ||
Research and development expense | $ | $ 437,600,000 | 52,200,000 | $ 27,700,000 | ||
Number of service periods | period | 2 | ||||
Restricted cash, current | $ | $ 700,000 | 0 | |||
Short-term settlement, period | 30 days | ||||
Threshold period past due, writeoff | 180 days | ||||
Realized and unrealized gains and losses | $ | $ 11,500,000 | 3,000,000 | |||
Prepaid expense, current | $ | $ 92,000,000 | 28,600,000 | |||
Referral program claim period | 60 days | ||||
Prepaid expense, noncurrent | $ | $ 43,600,000 | $ 8,200,000 | |||
Number of business days | day | 3 | ||||
Stock options | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Dividend yield | 0.00% | 0.00% | 0.00% | ||
Time-Based RSUs | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Requisite service period | 4 years | ||||
Market-Based RSUs | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Requisite service period | 6 years | ||||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from issuance of common stock in connection with initial public offering, net of offering costs | $ | $ 2,050,000,000 | ||||
Underwriting discounts and commissions | $ | 90,800,000 | ||||
Deferred offering costs | $ | $ 12,600,000 | ||||
Preferred stock, shares authorized (in shares) | 210,000,000 | ||||
Conversion of convertible preferred stock (in shares) | 412,700,000 | ||||
Conversion of convertible Common Stock (in shares) | 233,300,000 | ||||
Number of classes of common stock | class | 3 | ||||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld | $ | $ 1,010,000,000 | ||||
Share-based payment arrangement, shares withheld for tax withholding obligation (in shares) | 24,600,000 | ||||
Common Class A | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 21,000,000,000 | 0 | |||
Common Class A | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 55,000,000 | ||||
Offering price in IPO (in dollars per share) | $ / shares | $ 38 | ||||
Common stock, shares authorized (in shares) | 21,000,000,000 | ||||
Conversion of stock, shares converted (in shares) | 130,200,000 | ||||
Convertible notes converted to common stock (in shares) | 137,300,000 | ||||
Exercise price (in dollars per share) | $ / shares | $ 26.60 | $ 26.60 | |||
Aggregate warrants exercisable (in shares) | 14,300,000 | 14,300,000 | |||
Restricted stock, shares issued for tax withholdings (in shares) | 10,800,000 | ||||
Common Class A | IPO - Shares from Existing Shareholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 2,600,000 | ||||
Common Class A | Over-Allotment Option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | 4,400,000 | ||||
Common Class B | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 700,000,000 | 0 | |||
Common Class B | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 700,000,000 | ||||
Common Class C | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 7,000,000,000 | 0 | |||
Common Class C | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 7,000,000,000 |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule Of Concentration Of Credit Risk (Details) - Customer Concentration Risk - Revenue Benchmark | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Citadel Securities, LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% | 34.00% | 29.00% |
Tai Mo Shan Limited | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15.00% | 0.00% | 0.00% |
Entities affiliated with Susquehanna International Group, LLP | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | 18.00% | 13.00% |
Entities affiliated with Wolverine Holdings, L.P. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | 12.00% |
All others individually less than 10% | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | 13.00% | 8.00% |
Total as percentage of total revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 77.00% | 75.00% | 62.00% |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Software and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
PPE useful life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
PPE useful life | 7 years |
Internally developed software | |
Property, Plant and Equipment [Line Items] | |
PPE useful life | 3 years |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - Say $ in Thousands | Aug. 13, 2021USD ($) |
Business Acquisition [Line Items] | |
Total consideration | $ 132,807 |
Holdback agreements with certain employees | $ 11,100 |
Business combination, employees services period (in year) | 3 years |
Estimated fair value of equity awards issued | $ 6,300 |
Trademarks and Trade Names | |
Business Acquisition [Line Items] | |
Useful Life | 5 years |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Acquisition Date Fair Value of Consideration Transferred (Details) - USD ($) | Aug. 13, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 100,521,000 | $ 0 | |
Say | |||
Business Acquisition [Line Items] | |||
Cash | $ 132,168,000 | ||
Share-based compensation awards attributable to pre-combination services | 639,000 | ||
Total consideration | 132,807,000 | ||
Cash and cash equivalents | 15,412,000 | ||
Accounts receivable | 1,704,000 | ||
Goodwill | 92,951,000 | ||
Intangible assets | 34,600,000 | ||
Other current assets | 192,000 | ||
Accounts payable, accrued expenses and other current liabilities | (9,354,000) | ||
Deferred tax liability | (2,698,000) | ||
Net assets acquired | $ 132,807,000 |
BUSINESS COMBINATIONS - Sched_2
BUSINESS COMBINATIONS - Schedule of Components of Identifiable Intangible Assets Acquired (Details) - Say $ in Thousands | Aug. 13, 2021USD ($) |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Fair Value | $ 34,600 |
Developed technology | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Fair Value | $ 22,000 |
Useful Life | 3 years |
Customer relationships | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Fair Value | $ 12,000 |
Useful Life | 10 years |
Trade names | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Fair Value | $ 600 |
Useful Life | 3 years |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Movement on Goodwill (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 0 |
Additions due to business combinations | 100,521,000 |
Goodwill, ending balance | $ 100,521,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, impairment loss | $ 0 | |
Goodwill | 100,521,000 | $ 0 |
Amortization expense of intangible assets | 3,400,000 | |
Impairment of intangible assets | $ 0 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Components of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (3,408) | |
Net Carrying Value | 32,455 | |
Indefinite-lived intangible assets | 1,652 | |
Intangible assets, gross carrying value | 37,515 | |
Intangible assets, net | 34,107 | $ 185 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 23,100 | |
Accumulated Amortization | (2,829) | |
Net Carrying Value | $ 20,271 | |
Weighted Average Remaining Useful Life - Years | 2 years 6 months 29 days | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 12,000 | |
Accumulated Amortization | (460) | |
Net Carrying Value | $ 11,540 | |
Weighted Average Remaining Useful Life - Years | 9 years 7 months 13 days | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 600 | |
Accumulated Amortization | (76) | |
Net Carrying Value | $ 524 | |
Weighted Average Remaining Useful Life - Years | 2 years 7 months 13 days | |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 163 | |
Accumulated Amortization | (43) | |
Net Carrying Value | $ 120 | |
Weighted Average Remaining Useful Life - Years | 11 years 7 months 17 days |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Future Amortization Expenses In Acquired In Intangible Assets (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Intangible Assets | |
2022 | $ 9,104 |
2023 | 9,104 |
2024 | 6,218 |
2025 | 1,210 |
2026 | 1,210 |
Thereafter | 5,609 |
Net Carrying Value | $ 32,455 |
REVENUE - Revenue Disaggregated
REVENUE - Revenue Disaggregated by Revenue Sources (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Securities lending | $ 137,153 | $ 98,165 | $ 6,380 |
Margin interest | 131,823 | 66,781 | 19,104 |
Interest on segregated cash and securities | 4,023 | 13,401 | 36,281 |
Other interest revenue | 4,181 | 3,972 | 9,865 |
Interest expenses related to credit facilities | (20,218) | (4,882) | (991) |
Net interest revenues | 256,962 | 177,437 | 70,639 |
Total net revenues | 1,815,143 | 958,833 | 277,533 |
Options | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 688,899 | 440,070 | 110,656 |
Cryptocurrencies | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 419,382 | 26,708 | 9,487 |
Equities | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 287,734 | 251,200 | 50,688 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,335 | 2,155 | 0 |
Transaction-based revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,402,350 | 720,133 | 170,831 |
Other revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 155,831 | $ 61,263 | $ 36,063 |
REVENUE - Receivables and Contr
REVENUE - Receivables and Contract Liabilities Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Contract with Customer, Asset [Roll Forward] | ||
Beginning of the period | $ 111,871 | $ 20,577 |
End of the period | 83,207 | 111,871 |
Increase (decrease) in contract receivables during the period | (28,664) | 91,294 |
Contract with Customer, Liability [Roll Forward] | ||
Beginning of the period | 2,060 | 954 |
End of the period | 3,211 | 2,060 |
Increase in contract liabilities during the period | $ 1,151 | $ 1,106 |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - Allowance For Credit Losses of Receivables From Users (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 34,092 | $ 17,122 | $ 6,013 |
Provision for credit losses | 78,337 | 59,134 | 11,109 |
Write-offs | (72,213) | (42,164) | 0 |
Ending balance | $ 40,216 | $ 34,092 | $ 17,122 |
ALLOWANCE FOR CREDIT LOSSES - N
ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Provision for credit losses | $ 78,337 | $ 59,134 | $ 11,109 | |
Allowance for credit losses | 40,216 | 34,092 | 17,122 | $ 6,013 |
Transaction-based revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Provision for credit losses | 77,100 | 58,000 | 11,100 | |
Allowance for credit losses | $ 38,400 | $ 33,500 | $ 17,122 |
INVESTMENTS AND FAIR VALUE ME_3
INVESTMENTS AND FAIR VALUE MEASUREMENT - Debt Securities Available For Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 27,203 | |
Unrealized Gains | 0 | |
Unrealized Losses | (14) | |
Fair Value | 27,189 | $ 0 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,082 | |
Unrealized Gains | 0 | |
Unrealized Losses | (4) | |
Fair Value | 5,078 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,717 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 13,717 | |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 7,392 | |
Unrealized Gains | 0 | |
Unrealized Losses | (8) | |
Fair Value | 7,384 | |
Government bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,012 | |
Unrealized Gains | 0 | |
Unrealized Losses | (2) | |
Fair Value | $ 1,010 |
INVESTMENTS AND FAIR VALUE ME_4
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Financial Asset and Liabilities Measured At Fair Value On a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
User-held fractional shares | $ 1,834,479 | $ 802,483 |
Liabilities | ||
Fractional shares repurchase obligation | 1,834,479 | 802,483 |
Fair Value, Recurring | ||
Assets | ||
User-held fractional shares | 1,834,479 | 802,483 |
Total financial assets | 5,878,831 | 1,966,733 |
Liabilities | ||
Fractional shares repurchase obligation | 1,834,479 | 802,483 |
Total financial liabilities | 1,834,576 | 803,178 |
Fair Value, Recurring | U.S. Treasury securities | ||
Assets | ||
Cash and securities segregated under federal and other regulations | 134,994 | |
Fair Value, Recurring | Asset-backed securities | ||
Assets | ||
Investments | 5,078 | |
Fair Value, Recurring | Commercial paper | ||
Assets | ||
Investments | 13,717 | |
Fair Value, Recurring | Corporate bonds | ||
Assets | ||
Investments | 7,384 | |
Fair Value, Recurring | Government bonds | ||
Assets | ||
Investments | 1,010 | |
Fair Value, Recurring | Equity securities - securities owned | ||
Assets | ||
Other current assets | 13,611 | 3,222 |
Fair Value, Recurring | Equity securities - referral program liability | ||
Liabilities | ||
Accounts payable and accrued expenses | 97 | 695 |
Fair Value, Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 4,003,552 | 1,026,034 |
Fair Value, Recurring | Level 1 | ||
Assets | ||
User-held fractional shares | 1,834,479 | 802,483 |
Total financial assets | 5,852,652 | 1,966,733 |
Liabilities | ||
Fractional shares repurchase obligation | 1,834,479 | 802,483 |
Total financial liabilities | 1,834,576 | 803,178 |
Fair Value, Recurring | Level 1 | U.S. Treasury securities | ||
Assets | ||
Cash and securities segregated under federal and other regulations | 134,994 | |
Fair Value, Recurring | Level 1 | Asset-backed securities | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 1 | Commercial paper | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 1 | Corporate bonds | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 1 | Government bonds | ||
Assets | ||
Investments | 1,010 | |
Fair Value, Recurring | Level 1 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 13,611 | 3,222 |
Fair Value, Recurring | Level 1 | Equity securities - referral program liability | ||
Liabilities | ||
Accounts payable and accrued expenses | 97 | 695 |
Fair Value, Recurring | Level 1 | Money market funds | ||
Assets | ||
Cash equivalents | 4,003,552 | 1,026,034 |
Fair Value, Recurring | Level 2 | ||
Assets | ||
User-held fractional shares | 0 | 0 |
Total financial assets | 26,179 | 0 |
Liabilities | ||
Fractional shares repurchase obligation | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | U.S. Treasury securities | ||
Assets | ||
Cash and securities segregated under federal and other regulations | 0 | |
Fair Value, Recurring | Level 2 | Asset-backed securities | ||
Assets | ||
Investments | 5,078 | |
Fair Value, Recurring | Level 2 | Commercial paper | ||
Assets | ||
Investments | 13,717 | |
Fair Value, Recurring | Level 2 | Corporate bonds | ||
Assets | ||
Investments | 7,384 | |
Fair Value, Recurring | Level 2 | Government bonds | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 2 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 2 | Equity securities - referral program liability | ||
Liabilities | ||
Accounts payable and accrued expenses | 0 | 0 |
Fair Value, Recurring | Level 2 | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Assets | ||
User-held fractional shares | 0 | 0 |
Total financial assets | 0 | 0 |
Liabilities | ||
Fractional shares repurchase obligation | 0 | 0 |
Total financial liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | U.S. Treasury securities | ||
Assets | ||
Cash and securities segregated under federal and other regulations | 0 | |
Fair Value, Recurring | Level 3 | Asset-backed securities | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 3 | Commercial paper | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 3 | Corporate bonds | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 3 | Government bonds | ||
Assets | ||
Investments | 0 | |
Fair Value, Recurring | Level 3 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 3 | Equity securities - referral program liability | ||
Liabilities | ||
Accounts payable and accrued expenses | 0 | 0 |
Fair Value, Recurring | Level 3 | Money market funds | ||
Assets | ||
Cash equivalents | $ 0 | $ 0 |
INVESTMENTS AND FAIR VALUE ME_5
INVESTMENTS AND FAIR VALUE MEASUREMENT - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Feb. 28, 2021tranche | |
Convertible notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total loss due to changes in fair value | $ | $ 1,918,565 | |
Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Total loss due to changes in fair value | $ | $ 127,092 | |
Convertible notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Number of tranches issued | tranche | 2 | |
Convertible notes | Investor | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Number of tranches issued | tranche | 2 |
INVESTMENTS AND FAIR VALUE ME_6
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Changes In Estimated Fair Value Of Convertible Notes and Warrant Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Convertible notes | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning of period, January 1, 2021 | $ 0 |
Issued during the period | 3,299,031 |
Total loss due to changes in fair value | 1,918,565 |
Reclassifications to equity | (5,217,596) |
End of period, December 31, 2021 | 0 |
Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning of period, January 1, 2021 | 0 |
Issued during the period | 252,944 |
Total loss due to changes in fair value | 127,092 |
Reclassifications to equity | (380,036) |
End of period, December 31, 2021 | $ 0 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (3,685,936) | $ 14,773 | $ (104,690) |
Foreign | 1,504 | (943) | (2,897) |
Income (loss) before income tax | $ (3,684,432) | $ 13,830 | $ (107,587) |
INCOME TAXES - Components of _2
INCOME TAXES - Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ (249) | $ 2,780 | $ (58) |
State | 4,990 | 3,801 | (295) |
Foreign | 0 | 0 | 0 |
Total current tax expense (benefit) | 4,741 | 6,581 | (353) |
Deferred: | |||
Federal | (1,084) | 0 | 0 |
State | (1,525) | 0 | 0 |
Foreign | (132) | (200) | (665) |
Total deferred tax expense (benefit) | (2,741) | (200) | (665) |
Provision for (benefit from) income taxes | $ 2,000 | $ 6,381 | $ (1,018) |
INCOME TAXES - Provision For (B
INCOME TAXES - Provision For (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal tax benefit at statutory rate | $ (773,731) | $ 2,905 | $ (22,593) |
State tax benefit, net of federal benefit | (131,494) | (862) | (5,491) |
Foreign rate differential | (448) | (2) | (57) |
Share-based compensation | 17,338 | (2,654) | (1,221) |
Tender offer compensation | 1,640 | 3,607 | 4,229 |
Research and development credits | (48,111) | (10,489) | (2,104) |
Non-deductible regulatory settlements | 10,920 | 21,000 | 0 |
Non-deductible change in convertible notes and warrant | 429,588 | 0 | 0 |
Permanent differences | 322 | 526 | 0 |
Other | 367 | 52 | 905 |
Change in valuation allowance | 495,609 | (7,702) | 25,314 |
Provision for (benefit from) income taxes | $ 2,000 | $ 6,381 | $ (1,018) |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Accruals and other liabilities | $ 24,319 | $ 14,849 |
Lease liabilities | 39,909 | 13,794 |
Tax credit carryforwards | 81,457 | 9,058 |
Net operating loss carryforwards | 251,202 | 3,141 |
Share-based compensation | 134,723 | 3,123 |
Other | 21,411 | 3,386 |
Total deferred tax assets | 553,021 | 47,351 |
Deferred tax liabilities: | ||
Right of use assets | (34,182) | (12,551) |
Depreciation and amortization | (22,977) | (6,965) |
Total deferred tax liabilities | (57,159) | (19,516) |
Valuation allowance | (494,902) | (26,909) |
Net deferred tax assets | $ 960 | $ 926 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Asset Valuation Allowance (Details) - Deferred Tax Asset, Valuation Allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 26,909 | $ 35,207 | $ 9,631 |
Charged/(credited) to net income | 470,691 | (8,298) | 25,576 |
Charges utilized/(write-offs) | (2,698) | 0 | 0 |
Balance at end of period | $ 494,902 | $ 26,909 | $ 35,207 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Increase valuation allowance | $ 468,000 | ||
Unrecognized tax benefits | 46,208 | $ 7,420 | $ 2,177 |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 944,300 | ||
Operating loss carryforwards subject to expiration | 1,000 | ||
Tax credit carryforward subject to expiration | 80,800 | ||
Domestic Tax Authority | Indefinite | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, foreign | 943,300 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 823,900 | ||
State and Local Jurisdiction | Indefinite | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward | 52,400 | ||
State and Local Jurisdiction | Expire In 2026 | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward | 2,200 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 5,100 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized benefit - beginning of period | $ 7,420 | $ 2,177 |
Gross increases - current year tax positions | 37,879 | 4,395 |
Gross increases - prior year tax positions | 909 | 848 |
Unrecognized benefit - end of period | $ 46,208 | $ 7,420 |
PROPERTY, SOFTWARE, AND EQUIP_3
PROPERTY, SOFTWARE, AND EQUIPMENT, NET - Schedule Of Property, Software and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | $ 185,456 | $ 62,920 |
Less: accumulated depreciation and amortization | (39,037) | (17,086) |
Property, software, and equipment, net | 146,419 | 45,834 |
Tenant improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | 64,313 | 18,945 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | 31,142 | 16,992 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | 23,731 | 9,203 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | 21,927 | 8,024 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, software and equipment, gross | $ 44,343 | $ 9,756 |
PROPERTY, SOFTWARE, AND EQUIP_4
PROPERTY, SOFTWARE, AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense of property and equipment | $ 15.3 | $ 5.7 | $ 2.1 |
Amortization expense of internally developed software | $ 6.8 | $ 4.2 | $ 3.3 |
OFFSETTING ASSETS AND LIABILI_3
OFFSETTING ASSETS AND LIABILITIES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Offsetting [Abstract] | ||
Contractual term | 30 days | |
Contractual obligation | $ 25,000 | |
Fair value of securities re-pledged | 9,210,000 | $ 4,630,000 |
Security collateral received | 329 | $ 361 |
Amount re-pledged with clearing organizations to meet deposit requirements | $ 220,100 |
OFFSETTING ASSETS AND LIABILI_4
OFFSETTING ASSETS AND LIABILITIES - Schedule Of Assets and Liabilities Subject To Master netting Arrangements (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Gross amount of securities borrowed | $ 345 | $ 372 |
Gross amount offset on the consolidated balance sheets | 0 | 0 |
Amounts of assets presented on the unaudited condensed consolidated balance sheets | 345 | 372 |
Securities borrowed | 345 | 372 |
Security collateral received | (329) | (361) |
Net amount | 16 | 11 |
Liabilities | ||
Gross amount of securities loaned | 3,651,035 | 1,921,118 |
Gross amount of securities loaned offset on the consolidated balance sheets | 0 | 0 |
Amounts of liabilities presented on the consolidated balance sheets | 3,651,035 | 1,921,118 |
Securities loaned | 3,651,035 | 1,921,118 |
Security collateral pledged | (3,426,766) | (1,787,819) |
Net amount | $ 224,269 | $ 133,299 |
FINANCING ACTIVITIES AND OFF-_2
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK - Narrative (Details) | Aug. 02, 2021$ / sharesshares | Apr. 30, 2021USD ($) | Feb. 28, 2021USD ($)tranche$ / shares | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2021USD ($)day$ / sharesshares | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Jun. 30, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||
Settlement date basis, equities | day | 2 | ||||||||
Settlement date basis, options | day | 1 | ||||||||
Tranche 1 Convertible Note Holders | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate proceeds invested, percentage | 15.00% | ||||||||
Maximum amount of all warrants | $ 379,800,000 | ||||||||
Percentage of per unit of warrants required to meet qualify in IPO | 70.00% | ||||||||
Outstanding warrants strike price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Common Class A | IPO | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 26.60 | ||||||||
Aggregate warrants exercisable (in shares) | shares | 14,300,000 | 14,300,000 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 26.60 | $ 26.60 | |||||||
Common stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion of convertible notes to common stock (in shares) | shares | 137,305,156 | ||||||||
Common stock | IPO | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion of convertible notes to common stock (in shares) | shares | 137,300,000 | ||||||||
Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of tranches issued | tranche | 2 | ||||||||
Interest rate on loan | 6.00% | ||||||||
Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Gross proceeds from IPO offering to trigger conversion | $ 500,000,000 | ||||||||
Conversion price percentage, convertible debt | 70.00% | ||||||||
Tranche I Convertible Notes | Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes issued | $ 2,530,000,000 | ||||||||
Tranche I Convertible Notes | Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Tranche II Convertible Notes | Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes issued | $ 1,020,000,000 | ||||||||
Tranche II Convertible Notes | Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 42.12 | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 200,000,000 | ||||||||
Commitment fee percentage | 0.10% | ||||||||
Outstanding borrowings, long-term | $ 0 | $ 0 | |||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Federal Reserve Bank of New York Rate | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 0.50% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar, One Month Interest Period | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility, As Amended | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 625,000,000 | $ 600,000,000 | |||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 400,000,000 | ||||||||
Outstanding borrowings, short-term | $ 0 | ||||||||
Commitment fee percentage | 0.35% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility, As Amended | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 550,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 2,180,000,000 | ||||||||
Outstanding borrowings, short-term | $ 0 | ||||||||
Commitment fee percentage | 0.50% | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility, Tranche A | Short-Term Funding Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility, Tranche B and C | Short-Term Funding Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 2.50% |
MEZZANINE EQUITY, COMMON STOC_3
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule Of Redeemable Convertible Preferred Stock (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 0 | 414,033,220 |
Shares issued (in shares) | 0 | 412,742,897 |
Shares outstanding (in shares) | 0 | 412,742,897 |
Liquidation Amount | $ 2,191,086,000 | |
Carrying Value of Stock, Net of Issuance Costs | $ 0 | $ 2,179,739,000 |
Series A | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 131,913,460 | |
Shares issued (in shares) | 131,913,460 | |
Shares outstanding (in shares) | 131,913,460 | |
Per share liquidation preference (in dollars per share) | $ 0.1954 | |
Liquidation Amount | $ 25,777,000 | |
Per share initial conversion price (in dollars per share) | $ 0.1954 | |
Carrying Value of Stock, Net of Issuance Costs | $ 16,139,000 | |
Series B | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 80,263,020 | |
Shares issued (in shares) | 80,263,020 | |
Shares outstanding (in shares) | 80,263,020 | |
Per share liquidation preference (in dollars per share) | $ 0.6354 | |
Liquidation Amount | $ 50,999,000 | |
Per share initial conversion price (in dollars per share) | $ 0.6354 | |
Carrying Value of Stock, Net of Issuance Costs | $ 50,999,000 | |
Series C | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 43,788,180 | |
Shares issued (in shares) | 43,788,180 | |
Shares outstanding (in shares) | 43,788,180 | |
Per share liquidation preference (in dollars per share) | $ 2.5121 | |
Liquidation Amount | $ 110,000,000 | |
Per share initial conversion price (in dollars per share) | $ 2.5121 | |
Carrying Value of Stock, Net of Issuance Costs | $ 109,870,000 | |
Series D | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 35,774,761 | |
Shares issued (in shares) | 35,774,761 | |
Shares outstanding (in shares) | 35,774,761 | |
Per share liquidation preference (in dollars per share) | $ 10.1450 | |
Liquidation Amount | $ 362,935,000 | |
Per share initial conversion price (in dollars per share) | $ 10.1450 | |
Carrying Value of Stock, Net of Issuance Costs | $ 362,670,000 | |
Series E | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 29,887,357 | |
Shares issued (in shares) | 29,887,357 | |
Shares outstanding (in shares) | 29,887,357 | |
Per share liquidation preference (in dollars per share) | $ 12.4827 | |
Liquidation Amount | $ 373,075,000 | |
Per share initial conversion price (in dollars per share) | $ 12.4827 | |
Carrying Value of Stock, Net of Issuance Costs | $ 372,733,000 | |
Series F | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 48,000,000 | |
Shares issued (in shares) | 48,000,000 | |
Shares outstanding (in shares) | 48,000,000 | |
Per share liquidation preference (in dollars per share) | $ 12.5000 | |
Liquidation Amount | $ 600,000,000 | |
Per share initial conversion price (in dollars per share) | $ 12.5000 | |
Carrying Value of Stock, Net of Issuance Costs | $ 599,284,000 | |
Series G | ||
Temporary Equity [Line Items] | ||
Shares authorized (in shares) | 44,406,442 | |
Shares issued (in shares) | 43,116,119 | |
Shares outstanding (in shares) | 43,116,119 | |
Per share liquidation preference (in dollars per share) | $ 15.5000 | |
Liquidation Amount | $ 668,300,000 | |
Per share initial conversion price (in dollars per share) | $ 15.5000 | |
Carrying Value of Stock, Net of Issuance Costs | $ 668,044,000 |
MEZZANINE EQUITY, COMMON STOC_4
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Narrative (Details) | Jan. 01, 2022shares | Aug. 02, 2021USD ($)class$ / sharesshares | Aug. 01, 2021USD ($)shares | Nov. 30, 2021$ / sharesshares | Jun. 30, 2021shares | May 31, 2021$ / sharesshares | Mar. 31, 2021employee$ / shares | Dec. 31, 2021USD ($)classvote$ / sharesshares | Dec. 31, 2021USD ($)classvote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Feb. 28, 2021USD ($)shares | Dec. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 0 | 0 | 414,033,220 | ||||||||||
Redeemable convertible preferred stock, issued (in shares) | 0 | 0 | 412,742,897 | ||||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 0 | 0 | 412,742,897 | ||||||||||
Conversion of preferred stock to common stock | $ | $ 2,180,000,000 | $ 2,179,739,000 | |||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||||||||
Number of classes of common stock | class | 3 | 3 | |||||||||||
Exercises during period (in shares) | 0 | ||||||||||||
Granted, weighted-average exercise price (in dollars per share) | $ / shares | $ 0 | $ 3.64 | $ 2.31 | ||||||||||
Granted during the period (in shares) | 0 | ||||||||||||
Intrinsic value | $ | $ 178,700,000 | $ 45,000,000 | $ 29,000,000 | ||||||||||
Share-based compensation | $ | 1,572,253,000 | 24,330,000 | 26,667,000 | ||||||||||
Capitalized share-based compensation expense | $ | 34,800,000 | 600,000 | 700,000 | ||||||||||
Remaining liability reclassified to additional paid-in capital | $ | 18,600,000 | ||||||||||||
Unrecognized compensation cost | $ | $ 1,910,000,000 | $ 1,910,000,000 | |||||||||||
Unrecognized compensation cost related to outstanding stock options, weighted-average period | 2 years 5 months 26 days | ||||||||||||
Common stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Conversion of preferred stock to common stock | $ | $ 41,000 | ||||||||||||
Tranche 1 Convertible Note Holders | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Maximum amount of all warrants | $ | $ 379,800,000 | ||||||||||||
IPO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of classes of common stock | class | 3 | ||||||||||||
2019 Tender Offer | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ | 18,700,000 | ||||||||||||
Aggregate purchase price | $ | $ 67,600,000 | ||||||||||||
2019 Tender Offer | Common stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares issued (in shares) | 5,400,000 | ||||||||||||
2020 Tender Offer | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ | 17,200,000 | ||||||||||||
Aggregate purchase price | $ | $ 21,500,000 | ||||||||||||
2020 Tender Offer | Common stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares issued (in shares) | 1,400,000 | ||||||||||||
2021 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Percentage of shares reserved for issuance under equity incentive plan | 14.00% | ||||||||||||
Annual increase as a percentage of outstanding shares | 5.00% | ||||||||||||
Shares remaining available for issuance (in shares) | 43,200,000 | 43,200,000 | |||||||||||
2013 and 2020 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares of common stock authorized (in shares) | 316,700,000 | 316,700,000 | |||||||||||
Shares issued under plans (in shares) | 71,000,000 | ||||||||||||
Common stock reserved for issuance (in shares) | 122,900,000 | ||||||||||||
2020 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares remaining available for issuance (in shares) | 122,800,000 | 122,800,000 | |||||||||||
Conversion of Class B Common Stock into Class A Common | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock, conversion basis | 1 | 1 | |||||||||||
Conversion basis, outstanding shares, percentage | 80.00% | 80.00% | |||||||||||
Conversion basis, percentage of aggregate shares outstanding | 5.00% | ||||||||||||
Conversion basis, approval period, death or total disability of founders | 9 months | ||||||||||||
Conversion basis, approval period delay (up to) | 18 months | ||||||||||||
Conversion basis, final conversion date | 15 years | ||||||||||||
Conversion of Class B Common Stock into Class A Common | Minimum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Conversion basis, outstanding shares, fixed days | 61 days | ||||||||||||
Conversion basis, aggregate outstanding shares, fixed days | 61 days | ||||||||||||
Conversion of Class B Common Stock into Class A Common | Maximum | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Conversion basis, outstanding shares, fixed days | 180 days | ||||||||||||
Conversion basis, aggregate outstanding shares, fixed days | 180 days | ||||||||||||
Conversion of Class C Common Stock into Class A Common | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock, conversion basis | 1 | 1 | |||||||||||
Stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 4 years | ||||||||||||
Vesting rate, percentage | 25.00% | ||||||||||||
Exercisable, period (up to) | 10 years | ||||||||||||
Share-based compensation | $ | $ 0 | $ 0 | |||||||||||
Stock options | Share-based Payment Arrangement, Tranche One | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 1 year | ||||||||||||
RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 8 years | ||||||||||||
Exercisable, period (up to) | 7 years | ||||||||||||
Unvested restricted stock (in shares) | 27,700,000 | ||||||||||||
Consecutive trading days | 60 days | 60 days | |||||||||||
Requisite service period | 3 months | ||||||||||||
Forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 0.29 | ||||||||||||
Weighted-average incremental fair value (in dollars per share) | $ / shares | $ 21.01 | ||||||||||||
Granted (in shares) | 35,500,000 | ||||||||||||
Granted, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.68 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche One | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | 4,500,000 | 5,600,000 | |||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 120 | $ 30.45 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Two | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | 5,300,000 | 8,300,000 | |||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 150 | $ 50.75 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Two | IPO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | 4,000,000 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Three | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | 13,800,000 | ||||||||||||
Price targets, vested (in dollars per share) | $ / shares | 180 | $ 101.50 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Four | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Price targets, vested (in dollars per share) | $ / shares | 210 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Five | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Price targets, vested (in dollars per share) | $ / shares | 240 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Six | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Price targets, vested (in dollars per share) | $ / shares | 270 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Seven | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 300 | ||||||||||||
Time-Based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 1 year | ||||||||||||
Vested in period total fair value | $ | $ 780,700,000 | $ 273,500,000 | $ 0 | $ 0 | |||||||||
Unvested restricted stock (in shares) | 49,428,070 | 49,428,070 | 47,711,649 | ||||||||||
Requisite service period | 4 years | ||||||||||||
Forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 23.36 | ||||||||||||
Granted (in shares) | 33,044,671 | ||||||||||||
Granted, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 38.26 | ||||||||||||
Vested (in shares) | 27,881,049 | ||||||||||||
Share-based compensation | $ | $ 1,050,000,000 | $ 0 | $ 0 | ||||||||||
Number of employees affected | employee | 500 | ||||||||||||
Modified grant date fair value (in dollars per share) | $ / shares | $ 39.75 | $ 31.78 | $ 31.78 | $ 10.84 | |||||||||
2021 Market-Based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested (in shares) | 0 | ||||||||||||
Market-Based RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested in period total fair value | $ | $ 153,300,000 | $ 8,100,000 | |||||||||||
Unvested restricted stock (in shares) | 58,918,844 | 58,918,844 | 27,663,658 | ||||||||||
Requisite service period | 6 years | ||||||||||||
Forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 0 | ||||||||||||
Granted (in shares) | 35,520,000 | ||||||||||||
Granted, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.68 | ||||||||||||
Vested (in shares) | 4,264,814 | 0 | 0 | ||||||||||
Share-based compensation | $ | $ 501,200,000 | $ 0 | $ 0 | ||||||||||
Modified grant date fair value (in dollars per share) | $ / shares | $ 23.50 | $ 23.50 | $ 0.29 | ||||||||||
Employee Stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares remaining available for issuance (in shares) | 16,700,000 | 16,700,000 | |||||||||||
Number of share purchased (in shares) | 300,000 | ||||||||||||
Weighted average price of shares purchased (in dollars per share) | $ / shares | $ 24.64 | ||||||||||||
Share-based compensation | $ | $ 5,900,000 | ||||||||||||
Employee Stock | Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Authorized for issuance under the ESPP (in shares) | 8,600,000 | ||||||||||||
Employee Stock | 2021 ESPP | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Annual increase as a percentage of outstanding shares | 1.00% | ||||||||||||
Shares of common stock authorized (in shares) | 200,000,000 | ||||||||||||
Maximum payroll deduction for ESPP, percentage | 15.00% | ||||||||||||
ESPP purchase price discount, percentage | 85.00% | ||||||||||||
ESPP offering period | 12 months | ||||||||||||
Percentage of shares outstanding after close of offering | 2.00% | ||||||||||||
Series G-1 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 244,300,000 | ||||||||||||
Redeemable convertible preferred stock, issued (in shares) | 0 | ||||||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 0 | ||||||||||||
Common Class A | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Conversion basis | 1 | ||||||||||||
Number of voting rights per share | vote | 1 | 1 | |||||||||||
Common Class A | IPO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Aggregate warrants exercisable (in shares) | 14,300,000 | 14,300,000 | 14,300,000 | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 26.60 | $ 26.60 | $ 26.60 | ||||||||||
Shares issued (in shares) | 55,000,000 | ||||||||||||
Redeemable convertible preferred stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Redeemable convertible preferred stock, issued (in shares) | 0 | 0 | |||||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 0 | 0 | 412,742,897 | 321,626,778 | 291,739,421 | ||||||||
Conversion of preferred stock to common stock | $ | $ (2,179,739,000) | ||||||||||||
Common Class B | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of voting rights per share | vote | 10 | 10 |
MEZZANINE EQUITY, COMMON STOC_5
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule Of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Beginning balance (in shares) | 21,543,828 | ||
Granted during the period (in shares) | 0 | ||
Exercised during the period (in shares) | (6,706,616) | ||
Cancelled and forfeited during the period (in shares) | (309,744) | ||
Ending balance (in shares) | 14,527,468 | 21,543,828 | |
Options vested and expected to vest (in shares) | 14,527,468 | ||
Options exercisable (in shares) | 13,521,686 | ||
Weighted-Average Exercise Price | |||
Beginning balance, weighted-average exercise price (in dollars per share) | $ 2.19 | ||
Granted, weighted-average exercise price (in dollars per share) | 0 | $ 3.64 | $ 2.31 |
Exercised, weighted-average exercise price (in dollars per share) | 2.06 | ||
Cancelled and forfeited, weighted-average exercise price (in dollars per share) | 4.52 | ||
Ending balance, weighted-average exercise price (in dollars per share) | 2.20 | $ 2.19 | |
Options vested and expected to vest, weighted-average exercise price (in dollars per share) | 2.20 | ||
Options exercisable, weighted-average exercise price (in dollars per share) | $ 1.87 | ||
Weighted- Average Remaining Life | |||
Weighted- Average Remaining Life | 5 years 4 months 13 days | 6 years 6 months 7 days | |
Options vested and expected to vest, weighted-average remaining life | 5 years 4 months 13 days | ||
Options exercisable, weighted-average remaining life | 5 years 2 months 23 days | ||
Total Intrinsic Value (in thousands) | |||
Total Intrinsic Value (in thousands) | $ 226,000 | $ 304,590 | |
Options vested and expected to vest, total intrinsic value | 226,000 | ||
Options exercisable, total intrinsic value | $ 214,813 |
MEZZANINE EQUITY, COMMON STOC_6
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Weighted-Average Assumptions (Details) - Stock options | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.61% | 2.29% | |
Expected volatility | 36.69% | 31.20% | |
Expected term (years) | 6 years 14 days | 6 years 10 days |
MEZZANINE EQUITY, COMMON STOC_7
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule Of Activity Related To Time-Based And Market-Based RSUs (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Time-Based RSUs | |||
Number of RSUs | |||
Unvested restricted stock, beginning balance (in shares) | 47,711,649 | ||
Granted in acquisitions (in shares) | 124,934 | ||
Granted (in shares) | 33,044,671 | ||
Vested (in shares) | (27,881,049) | ||
Forfeited (in shares) | (3,572,135) | ||
Unvested restricted stock, ending balance (in shares) | 49,428,070 | 47,711,649 | |
Weighted- average grant date fair value | |||
Unvested restricted stock, weighted-average grant date fair value, beginning balance (in dollars per share) | $ 10.84 | ||
Granted acquisition, weighted-average grant date fair value (in dollars per share) | 50.63 | ||
Granted, weighted-average grant date fair value (in dollars per share) | 38.26 | ||
Vested, weighted-average grant date fair value (in dollars per share) | 19.57 | ||
Forfeited, weighted-average grant date fair value (in dollars per share) | 23.36 | ||
Unvested restricted stock, weighted-average grant date fair value, ending balance (in dollars per share) | $ 31.78 | $ 10.84 | |
Market-Based RSUs | |||
Number of RSUs | |||
Unvested restricted stock, beginning balance (in shares) | 27,663,658 | ||
Granted (in shares) | 35,520,000 | ||
Vested (in shares) | (4,264,814) | 0 | 0 |
Forfeited (in shares) | 0 | ||
Unvested restricted stock, ending balance (in shares) | 58,918,844 | 27,663,658 | |
Weighted- average grant date fair value | |||
Unvested restricted stock, weighted-average grant date fair value, beginning balance (in dollars per share) | $ 0.29 | ||
Granted, weighted-average grant date fair value (in dollars per share) | 22.68 | ||
Vested, weighted-average grant date fair value (in dollars per share) | 2.34 | ||
Forfeited, weighted-average grant date fair value (in dollars per share) | 0 | ||
Unvested restricted stock, weighted-average grant date fair value, ending balance (in dollars per share) | $ 23.50 | $ 0.29 |
MEZZANINE EQUITY, COMMON STOC_8
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule Of Share-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | $ 1,572,253 | $ 24,330 | $ 26,667 |
Brokerage and transaction | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 7,527 | 227 | 427 |
Technology and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 609,307 | 18,024 | 9,499 |
Operations | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 20,261 | 61 | 139 |
Marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 49,731 | 613 | 85 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | $ 885,427 | $ 5,405 | $ 16,517 |
MEZZANINE EQUITY, COMMON STOC_9
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule of Vesting for Awards Outstanding (Details) - Awards $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 50,937,465 |
Expense | $ | $ 1,910,325 |
2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 19,332,903 |
Expense | $ | $ 861,709 |
2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 15,860,370 |
Expense | $ | $ 537,829 |
2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 11,864,093 |
Expense | $ | $ 324,060 |
2025 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 3,880,099 |
Expense | $ | $ 166,052 |
2026 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares (in shares) | shares | 0 |
Expense | $ | $ 20,675 |
NET INCOME (LOSS) PER SHARE - B
NET INCOME (LOSS) PER SHARE - Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net income (loss) | $ (3,686,432) | $ 7,449 | $ (106,569) |
Less: allocation of earnings to participating securities | 0 | 4,601 | 0 |
Net income (loss) attributable to common stockholders | (3,686,432) | 2,848 | (106,569) |
Net income (loss) attributable to common stockholders | $ (3,686,432) | $ 2,848 | $ (106,569) |
Weighted-average common stock outstanding - basic (in shares) | 492,381,190 | 225,748,355 | 221,664,610 |
Dilutive effect of stock options and unvested shares (in shares) | 0 | 19,249,033 | 0 |
Weighted-average common stock outstanding - diluted (in shares) | 492,381,190 | 244,997,388 | 221,664,610 |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ (7.49) | $ 0.01 | $ (0.48) |
Diluted (in dollars per share) | $ (7.49) | $ 0.01 | $ (0.48) |
NET INCOME (LOSS) PER SHARE - P
NET INCOME (LOSS) PER SHARE - Potential Common Shares Excluded From The Calculation Of Diluted Net Income (Loss) Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 137,425,995 | 488,186,709 | 401,678,423 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 108,359,188 | 75,375,307 | 51,687,872 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 14,527,468 | 60,082 | 27,613,830 |
Unvested shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 15,126 | 8,423 | 749,943 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 14,278,034 | 0 | 0 |
ESPP shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 246,179 | 0 | 0 |
Redeemable convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities (in shares) | 0 | 412,742,897 | 321,626,778 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Billions | 1 Months Ended | |
Feb. 28, 2021USD ($)tranche | Aug. 01, 2021party | |
Convertible notes | ||
Related Party Transaction [Line Items] | ||
Number of tranches issued | 2 | |
Investor | ||
Related Party Transaction [Line Items] | ||
Number of related parties | party | 2 | |
Investor | Common Class A | ||
Related Party Transaction [Line Items] | ||
Gross proceeds received from issuance | $ | $ 2 | |
Investor | Convertible notes | ||
Related Party Transaction [Line Items] | ||
Number of tranches issued | 2 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | Dec. 31, 2021USD ($)option | Dec. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | ||
Number of renewal options (or more) | option | 1 | |
Operating lease right-of-use assets | $ 129,400 | $ 49,200 |
Operating lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Total lease liabilities | $ 151,069 | $ 54,100 |
Operating lease liabilities | $ 22,400 | $ 6,100 |
Operating lease, liability, current, statement of financial position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Operating lease liabilities, net of current portion | $ 128,700 | $ 48,000 |
Operating lease, liability, noncurrent, statement of financial position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 11 years |
LEASES - Components Of Lease Ex
LEASES - Components Of Lease Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | |||
Fixed operating lease expenses | $ 23,750 | $ 11,420 | $ 5,422 |
Variable operating lease expenses | 5,376 | 3,009 | 1,078 |
Short-term lease expenses | 1,428 | 1,222 | 1,188 |
Total lease expenses | $ 30,554 | $ 15,651 | 7,688 |
Weighted Average Remaining Lease Term and Discount Rate [Abstract] | |||
Weighted-average remaining lease term | 7 years 3 months 14 days | 5 years 4 months 28 days | |
Weighted-average discount rate | 6.27% | 7.02% | |
Operating cash flows: | |||
Payments for operating lease liabilities | $ 6,047 | $ 12,781 | 4,755 |
Supplemental cash flow data: | |||
Lease liabilities arising from obtaining right-of-use assets | $ 96,555 | $ 25,958 | $ 14,816 |
LEASES - Schedule Of Future Min
LEASES - Schedule Of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 32,646 | |
2023 | 34,821 | |
2024 | 33,355 | |
2025 | 32,436 | |
2026 | 23,724 | |
Thereafter | 102,000 | |
Total undiscounted lease payments | 258,982 | |
Less: imputed interest | (42,046) | |
Less: lease incentives | (12,682) | |
Less: leases executed but not yet commenced | (53,185) | |
Total lease liabilities | $ 151,069 | $ 54,100 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Jun. 30, 2021USD ($) | Sep. 30, 2021plaintiff | Jan. 31, 2021customer | Dec. 31, 2020USD ($)counttranche | Dec. 31, 2021USD ($) | Jul. 31, 2021USD ($) | Jan. 28, 2021tranche |
Loss Contingencies [Line Items] | |||||||
Amount accrued for contingencies in the aggregate | $ 57.6 | $ 84.8 | |||||
Number of tranches | tranche | 3 | ||||||
Massachusetts Securities Law Violations | |||||||
Loss Contingencies [Line Items] | |||||||
Number of lawsuits | count | 3 | ||||||
Putative Securities Fraud Class Action Lawsuit | |||||||
Loss Contingencies [Line Items] | |||||||
Number of lawsuits | tranche | 5 | ||||||
March 2020 Outages | |||||||
Loss Contingencies [Line Items] | |||||||
Number of customers | plaintiff | 400 | ||||||
FINRA Multi-Matter Settlement | Unfavorable Regulatory Action | |||||||
Loss Contingencies [Line Items] | |||||||
Amount accrued for contingencies in the aggregate | $ 57 | ||||||
Fine, amount | $ 57 | ||||||
FINRA Multi-Matter Settlement | Unfavorable Regulatory Action, Customer Restitution | |||||||
Loss Contingencies [Line Items] | |||||||
Fine, amount | $ 12.6 | ||||||
Putative Class Actions | |||||||
Loss Contingencies [Line Items] | |||||||
Number of customers | customer | 2,000 |