Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 04, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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$0.0001 par value per share | |
Trading Symbol(s) | HOOD | |
Name of each exchange on which registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001783879 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Common Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 775,510,054 | |
Common Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 127,445,988 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 5,459 | $ 6,339 |
Cash segregated under federal and other regulations | 4,213 | 2,995 |
Receivables from brokers, dealers, and clearing organizations | 112 | 76 |
Receivables from users, net | 3,152 | 3,218 |
Securities borrowed | 844 | 517 |
Deposits with clearing organizations | 247 | 186 |
Asset related to user cryptocurrencies safeguarding obligation | 11,489 | 8,431 |
User-held fractional shares | 1,217 | 997 |
Held-to-maturity investments | 290 | 0 |
Prepaid expenses | 90 | 86 |
Other current assets | 75 | 72 |
Total current assets | 27,188 | 22,917 |
Property, software, and equipment, net | 137 | 146 |
Goodwill | 100 | 100 |
Intangible assets, net | 23 | 25 |
Non-current held-to-maturity investments | 195 | 0 |
Non-current prepaid expenses | 11 | 17 |
Other non-current assets | 131 | 132 |
Total assets | 27,785 | 23,337 |
Current liabilities: | ||
Accounts payable and accrued expenses | 203 | 185 |
Payables to users | 4,986 | 4,701 |
Securities loaned | 2,609 | 1,834 |
User cryptocurrencies safeguarding obligation | 11,489 | 8,431 |
Fractional shares repurchase obligation | 1,217 | 997 |
Other current liabilities | 113 | 105 |
Total current liabilities | 20,617 | 16,253 |
Other non-current liabilities | 122 | 128 |
Total liabilities | 20,739 | 16,381 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value. 210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and March 31, 2023. | 0 | 0 |
Additional paid-in capital | 12,462 | 11,861 |
Accumulated deficit | (5,416) | (4,905) |
Total stockholders’ equity | 7,046 | 6,956 |
Total liabilities and stockholders’ equity | 27,785 | 23,337 |
Common Class A | ||
Stockholders’ equity: | ||
Common stock, value | 0 | 0 |
Common Class B | ||
Stockholders’ equity: | ||
Common stock, value | 0 | 0 |
Common Class C | ||
Stockholders’ equity: | ||
Common stock, value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 210,000,000 | 210,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 21,000,000,000 | 21,000,000,000 |
Common stock, shares issued (in shares) | 772,702,942 | 764,888,917 |
Common stock, shares outstanding (in shares) | 772,702,942 | 764,888,917 |
Common Class B | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 127,538,580 | 127,862,654 |
Common stock, shares outstanding (in shares) | 127,538,580 | 127,862,654 |
Common Class C | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 7,000,000,000 | 7,000,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Net interest revenues | $ 208 | $ 55 |
Total net revenues | 441 | 299 |
Operating expenses: | ||
Brokerage and transaction | 36 | 31 |
Technology and development | 199 | 268 |
Operations | 42 | 91 |
Marketing | 26 | 32 |
General and administrative | 647 | 268 |
Total operating expenses | 950 | 690 |
Loss before income taxes | (509) | (391) |
Provision for income taxes | 2 | 1 |
Net loss | (511) | (392) |
Net loss attributable to common stockholders: | ||
Basic | (511) | (392) |
Diluted | $ (511) | $ (392) |
Net loss per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ (0.57) | $ (0.45) |
Diluted (in dollars per share) | $ (0.57) | $ (0.45) |
Weighted-average shares used to compute net loss per share attributable to common stockholders: | ||
Basic (in shares) | 896,924,695 | 867,769,168 |
Diluted (in shares) | 896,924,695 | 867,769,168 |
Transaction-based revenues | ||
Revenues: | ||
Revenues | $ 207 | $ 218 |
Other revenues | ||
Revenues: | ||
Revenues | $ 26 | $ 26 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (511) | $ (392) |
Foreign currency translation | 0 | (1) |
Total other comprehensive loss, net of tax | 0 | (1) |
Total comprehensive loss | $ (511) | $ (393) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net loss | $ (511) | $ (392) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 20 | 12 |
Provision for credit losses | 9 | 8 |
Share-based compensation | 598 | 220 |
Other | 5 | 0 |
Changes in operating assets and liabilities: | ||
Receivables from brokers, dealers, and clearing organizations | (36) | (36) |
Receivables from users, net | 57 | 1,417 |
Securities borrowed | (327) | 0 |
Deposits with clearing organizations | (61) | 34 |
Current and non-current prepaid expenses | 2 | 26 |
Other current and non-current assets | (8) | (24) |
Accounts payable and accrued expenses | 18 | (2) |
Payables to users | 285 | 673 |
Securities loaned | 775 | (1,500) |
Other current and non-current liabilities | 2 | 1 |
Net cash provided by operating activities | 828 | 437 |
Investing activities: | ||
Purchase of property, software, and equipment | 0 | (13) |
Capitalization of internally developed software | (5) | (8) |
Purchase of available-for-sale investments | 0 | (14) |
Proceeds from maturities of available-for-sale investments | 9 | 1 |
Purchase of held-to-maturity investments | (485) | 0 |
Net cash used in investing activities | (481) | (34) |
Financing activities: | ||
Taxes paid related to net share settlement of equity awards | (2) | (3) |
Payments of debt issuance costs | (10) | 0 |
Draws on credit facilities | 0 | 11 |
Repayments on credit facilities | 0 | (11) |
Proceeds from exercise of stock options, net of repurchases | 1 | 3 |
Net cash provided by (used in) financing activities | (11) | 0 |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase in cash, cash equivalents, segregated cash and restricted cash | 336 | 403 |
Cash, cash equivalents, segregated cash and restricted cash, beginning of the period | 9,357 | 10,270 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 9,693 | 10,673 |
Cash and cash equivalents, end of the period | 5,459 | 6,191 |
Segregated cash, end of the period | 4,213 | 4,458 |
Restricted cash (current and non-current), end of the period | 21 | 24 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 9,693 | 10,673 |
Supplemental disclosures: | ||
Cash paid for interest | 3 | 3 |
Cash paid for income taxes, net of refund received | $ 0 | $ 1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit |
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2021 | 863,912,613 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 7,293 | $ 0 | $ 11,169 | $ 1 | $ (3,877) |
Net loss | (392) | (392) | |||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | 1,438,358 | ||||
Shares issued in connection with stock option exercise, net of repurchases | 4 | 4 | |||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld (in shares) | 4,457,038 | ||||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld | (3) | (3) | |||
Change in other comprehensive income | (1) | (1) | |||
Share-based compensation | 230 | 230 | |||
Balance at end of period, Common stock (in shares) at Mar. 31, 2022 | 869,808,009 | ||||
Balance at end of period at Mar. 31, 2022 | 7,131 | $ 0 | 11,400 | 0 | (4,269) |
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2022 | 892,751,571 | ||||
Balance at beginning of period at Dec. 31, 2022 | 6,956 | $ 0 | 11,861 | 0 | (4,905) |
Net loss | (511) | (511) | |||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | 502,862 | ||||
Shares issued in connection with stock option exercise, net of repurchases | 1 | 1 | |||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld (in shares) | 6,987,089 | ||||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld | (2) | (2) | |||
Change in other comprehensive income | 0 | ||||
Share-based compensation | 602 | 602 | |||
Balance at end of period, Common stock (in shares) at Mar. 31, 2023 | 900,241,522 | ||||
Balance at end of period at Mar. 31, 2023 | $ 7,046 | $ 0 | $ 12,462 | $ 0 | $ (5,416) |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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” and, 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: • Robinhood Financial LLC (“RHF”), a registered introducing broker-dealer; • Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer; • Robinhood Crypto, LLC (“RHC”), which provides users the ability to buy, sell, and transfer cryptocurrencies and is responsible for the custody of user cryptocurrencies held on our platform; and • Robinhood Money, LLC (“RHY”), which offers a pre-paid debit card (the “Robinhood Cash Card”) and a spending account that help customers invest, save, and earn rewards. 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. 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 they transact on our platform, including those that collateralize margin loans, and, as a result, such securities are not presented on our unaudited condensed consolidated balance sheets, other than user-held fractional shares which are presented gross. Our users also have ownership of the cryptocurrencies they transact on our platform (none of which are allowed to be purchased on margin and which do not serve as collateral for margin loans), and we recognize a liability to reflect our safeguarding obligation along with a corresponding asset on our balance sheet related to the cryptocurrencies we hold in custody for users. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC for interim financial reporting. The condensed consolidated financial statements are unaudited, and in management’s opinion, include all adjustments, including normal recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2023 or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). There have been no material changes in our significant accounting policies as described in our audited consolidated financial statements included in our 2022 Form 10-K. The unaudited condensed consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior-period amounts have been reclassified to conform to the current period’s presentation. The impact of these reclassifications is immaterial to the presentation of the unaudited condensed consolidated financial statements and had no impact on previously reported total assets, total liabilities and net loss. During the three months ended March 31, 2023, we reorganized our management reporting structure from a single entity-level reporting unit into four reporting units. As a result, we performed a goodwill impairment assessment immediately before and after the reorganization. This quantitative assessment did not result in impairment, considering the fair value of each reporting unit significantly exceeded the corresponding carrying amount of net assets. We continue to operate and report financial information in one operating segment. Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include, but are not limited to, those related to revenue recognition and share-based compensation, the determination of allowances for credit losses, valuation of user cryptocurrencies safeguarding obligation and corresponding asset, investment valuation, capitalization of internally developed software, useful lives of property, software, and equipment, valuation and useful lives of intangible assets, incremental borrowing rate used to calculate operating lease right-of-use assets and related liabilities, impairment of long-lived assets, uncertain tax positions, income taxes, accrued and contingent liabilities. Actual results could differ from these estimates and could have a material adverse effect on our operating results. Concentrations of Revenue and Credit Risk Concentrations of Revenue We derived transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Three Months Ended 2022 2023 Market maker: Citadel Securities, LLC 22 % 13 % Entities affiliated with Susquehanna International Group, LLP (1) 12 % 5 % Entities affiliated with Wolverine Holdings, L.P. (2) 10 % 5 % All others individually less than 10% 28 % 22 % Total as percentage of total revenue: 72 % 45 % ________________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (2) Consists of Wolverine Execution Services, LLC and Wolverine Securities, LLC Concentrations of Credit Risk 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. In March 2023, certain U.S. banks failed and were taken over by the U.S. Federal Deposit Insurance Corporation (“FDIC”). Our exposure to impacted U.S. banks is immaterial as of March 31, 2023. However, we have taken steps to help ensure that the loss of all or a significant portion of any uninsured amount would not have an adverse effect on our ability to pay our operational expenses or make other payments. Investments We invest in marketable debt securities and determine the classification at the time of purchase. Available-for-sale investments are recorded at fair value. We have elected the fair value option for our available-for-sale investments as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics. Fair value adjustments are presented in other expense (income), net and interest earned on the debt securities as net interest revenues in our unaudited condensed consolidated statements of operations. Held-to-maturity investments are securities that we have both the ability and positive intent to hold until maturity and are recorded at amortized cost. Interest income is calculated using the effective interest method, adjusted for deferred fees or costs, premium, or discount existing at the date of purchase. Interest earned is included in interest revenues, net in our unaudited condensed consolidated statements of operations. We evaluate held-to-maturity investment for credit losses on a quarterly basis. We do not expect credit losses for our held-to-maturity investments that are obligations of states and political subdivisions and securities issued by U.S. government sponsored agencies. We monitor remaining securities by type and standard credit rating. There was no reserve for credit losses as of March 31, 2023. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements There are no recently adopted accounting pronouncements that are material to us as of March 31, 2023. Recently Issued Accounting Pronouncements Not Yet Adopted There are no new accounting pronouncements that we have not yet adopted that are material to us as of March 31, 2023. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 3: REVENUES Disaggregation of Revenues The following table presents our revenue disaggregated by revenue source: Three Months Ended (in millions) 2022 2023 Transaction-based revenues: Options $ 127 $ 133 Cryptocurrencies 54 38 Equities 36 27 Other 1 9 Total transaction-based revenues 218 207 Net interest revenues: Interest on corporate cash and investments 1 68 Margin interest 35 53 Interest on segregated cash and cash equivalents and deposits 1 45 Securities lending, net 24 26 Cash sweep — 22 Interest expenses related to credit facilities (6) (6) Total net interest revenues 55 208 Other revenues 26 26 Total net revenues $ 299 $ 441 For our fully-paid securities lending program under which we borrow fully-paid shares from participating users and lend them to third parties (“Fully-Paid Securities Lending”), we earn revenue for lending certain securities based on demand for those securities and portions of such revenues are paid to participating users, and those payments are recorded as interest expense. For the three months ended March 31, 2023, such interest revenue earned was $10 million and such interest expenses paid to participating users was $2 million. As the program was launched in the second quarter of 2022, no such interest revenue earned or expenses incurred for the three months ended March 31, 2022. 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 related to proxy revenues due from issuers are reported in other current assets on the unaudited condensed consolidated balance sheets. Contract liabilities, which consist of unearned subscription revenue, are recognized when users remit cash payments in advance of the time we satisfy our performance obligations and are recorded as other current liabilities on the unaudited condensed consolidated balance sheets. The table below sets forth contract receivables and liabilities for the period indicated: (in millions) Contract Receivables Contract Liabilities Beginning of period, January 1, 2023 $ 60 $ 3 End of period, March 31, 2023 85 3 Changes during the period $ 25 $ — |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2023 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | NOTE 4: ALLOWANCE FOR CREDIT LOSSES Substantially all of the allowance for credit losses relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and losses on margin lending. Fraudulent Deposit Transactions occur when users initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount. The following table summarizes the allowance for credit losses: Three Months Ended (in millions) 2022 2023 Beginning balance $ 40 $ 18 Provision for credit losses 8 9 Write-offs (28) (7) Ending balance $ 20 $ 20 |
INVESTMENTS AND FAIR VALUE MEAS
INVESTMENTS AND FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
INVESTMENTS AND FAIR VALUE MEASUREMENT | NOTE 5: INVESTMENTS AND FAIR VALUE MEASUREMENT Investments Available-for-sale At December 31, 2022 and March 31, 2023, our available-for-sale investments which are included in other current assets on the unaudited condensed consolidated balance sheets were $10 million and $1 million, with no significant unrealized gains or losses. Refer to Fair Value of Instruments below for further details. As of December 31, 2022 and March 31, 2023, all of our available-for-sale investments had a stated contractual maturity or redemption date within one year. Held-to-maturity We had no held-to-maturity investments as of December 31, 2022. The following table summarizes our held-to-maturity investments as of March 31, 2023: March 31, 2023 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: Corporate debt securities $ 250 $ — $ — $ (1) $ 249 U.S. Treasury securities 112 — — — 112 Commercial paper 49 — — — 49 Certificates of deposit 47 — — — 47 U.S. government agency securities 27 — — — 27 Total held-to-maturity investments $ 485 $ — $ — $ (1) $ 484 There were no sales of held-to-maturity investments for the three months ended March 31, 2023. The table below presents the amortized cost and fair value of held-to-maturity investments by contractual maturity and the maximum maturity per security is two years: March 31, 2023 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: Corporate debt securities $ 80 $ 170 $ 250 U.S. Treasury securities 91 21 112 Commercial paper 49 — 49 Certificates of deposit 47 — 47 U.S. government agency securities 23 4 27 Total held-to-maturity investments $ 290 $ 195 $ 485 Fair value Debt securities: Corporate debt securities $ 80 $ 169 $ 249 U.S. Treasury securities 91 21 112 Commercial paper 49 — 49 Certificates of deposit 47 — 47 U.S. government agency securities 23 4 27 Total held-to-maturity investments $ 290 $ 194 $ 484 Fair Value of Financial Instruments Financial assets and liabilities measured at fair value on a recurring basis were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2022 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 735 $ — $ — $ 735 Other current assets: Available-for-sale investments: Commercial paper — 5 — 5 Government bonds 3 — — 3 Corporate bonds — 2 — 2 Equity securities - securities owned 8 — — 8 Asset related to user cryptocurrencies safeguarding obligation — 8,431 — 8,431 User-held fractional shares 997 — — 997 Total financial assets $ 1,743 $ 8,438 $ — $ 10,181 Liabilities User cryptocurrencies safeguarding obligation $ — $ 8,431 $ — $ 8,431 Fractional share repurchase obligations 997 — — 997 Total financial liabilities $ 997 $ 8,431 $ — $ 9,428 March 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 45 $ — $ — $ 45 Commercial paper — 2 — 2 Corporate debt securities — 2 — 2 Other current assets: Equity securities - securities owned 9 — — 9 Available-for-sale investments: Corporate bonds — 1 — 1 Asset related to user cryptocurrencies safeguarding obligation — 11,489 — 11,489 User-held fractional shares 1,217 — — 1,217 Total financial assets $ 1,271 $ 11,494 $ — $ 12,765 Liabilities User cryptocurrencies safeguarding obligation $ — $ 11,489 $ — $ 11,489 Fractional share repurchase obligations 1,217 — — 1,217 Total financial liabilities $ 1,217 $ 11,489 $ — $ 12,706 The fair value for certain financial instruments that are not required to be measured or reported at fair value was presented on our unaudited condensed consolidated balance sheets as follows: March 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: Corporate debt securities $ — $ 249 $ — $ 249 U.S. Treasury securities 112 — — 112 Commercial Paper — 49 — 49 Certificates of deposit — 47 — 47 U.S. government agency securities — 27 — 27 Total financial assets $ 112 $ 372 $ — $ 484 The fair values used for held-to-maturity investments are obtained from an independent pricing service and represent fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, relevant yield curves, credit spreads and prices from market makers and live trading systems. Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided. During the three months ended March 31, 2023, we did not have any transfers in or out of Level 3 assets or liabilities. Safeguarded user cryptocurrencies Safeguarded user cryptocurrencies were as follows: December 31, March 31, (in millions) 2022 2023 Bitcoin (BTC) $ 2,327 $ 3,887 Ethereum (ETH) 2,341 3,292 Dogecoin (DOGE) 2,802 3,017 Other 961 1,293 Total user cryptocurrencies safeguarding obligation and corresponding asset $ 8,431 $ 11,489 The fair value of the user cryptocurrencies safeguarding obligation and the corresponding asset were determined based on observed market pricing representing the last price executed for trades of each cryptocurrency as of December 31, 2022 and March 31, 2023. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6: INCOME TAXES Three Months Ended (in millions, except percentages) 2022 2023 Loss before income taxes $ (391) $ (509) Provision for income taxes 1 2 Effective tax rate (0.3) % (0.5) % Our tax provision for interim periods is determined using an estimated annual effective tax rate (“ETR”), adjusted for discrete items arising in the period. In each quarter, we update our estimated annual ETR and make a year-to-date calculation of the provision. For the three months ended March 31, 2022 and March 31, 2023 the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by current taxes payable. The realization of tax benefits of net deferred tax 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 the available objective evidence during the three months ended March 31, 2023, we believe it is more likely than not that the tax benefits of the remaining U.S. net deferred tax assets may not be realized. 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. |
SECURITIES BORROWING AND LENDIN
SECURITIES BORROWING AND LENDING | 3 Months Ended |
Mar. 31, 2023 | |
Offsetting [Abstract] | |
SECURITIES BORROWING AND LENDING | NOTE 7: SECURITIES BORROWING AND LENDING When we lend securities to third parties we receive cash as collateral for the securities loaned. In the table below, the cash collateral we hold related to loaned securities is presented in “securities loaned” and the fair value of securities lent is presented in “security collateral pledged.” Similarly, when we borrow securities from third parties or fully-paid securities from users, we provide cash collateral. In the table below, the amount of that cash collateral is presented in “securities borrowed” and the fair value of the securities received is presented in “security collateral received.” Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers; however, we do not net securities borrowing and lending transactions. Therefore, activity related to securities borrowing and lending activities are presented gross in our unaudited condensed consolidated balance sheets. The following tables set forth certain balances related to our securities borrowing and lending activities as of December 31, 2022 and March 31, 2023: December 31, March 31, (in millions) 2022 2023 Assets Securities borrowed Gross amount of securities borrowed $ 517 $ 844 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 517 844 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 517 844 Security collateral received (509) (846) Net amount $ 8 $ (2) Liabilities Securities loaned Gross amount of securities loaned $ 1,834 $ 2,609 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,834 2,609 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,834 2,609 Security collateral pledged (1,629) (2,368) Net amount $ 205 $ 241 We obtain securities on terms that permit us to pledge and/or transfer securities to others. As of December 31, 2022 and March 31, 2023, we were permitted to re-pledge securities with a fair value of $4.36 billion for both periods under margin account agreements with users, and securities with a fair value of $18.4 million and $1.0 million that we had borrowed under master securities loan agreements (“MSLAs”) with third parties. Under the Fully-Paid Securities Lending program, as of March 31, 2023, we were permitted to re-pledge securities with a fair value of $6.34 billion including securities with a fair value of $845.0 million that we had borrowed from users. |
FINANCING ACTIVITIES AND OFF-BA
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | NOTE 8: FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving Credit Facilities October 2019 Credit Facility In October 2019, we entered into a $200 million committed and unsecured revolving line of credit with a syndicate of banks maturing in October 2023 (the “October 2019 Credit Facility”). The October 2019 Credit Facility was subsequently amended to, among other things, increase the aggregate committed and unsecured revolving line of credit amount to $625 million with a maturity date of October 29, 2024 and change the applicable interest rates. Refer to Note 12 - Financing Activities and Off-Balance Sheet Risk, of the 2022 Form 10-K for more information. April 2023 Credit Agreement On March 24, 2023, RHS, our wholly-owned subsidiary, entered into the Second Amended and Restated Credit Agreement (the “April 2023 Credit Agreement”) among RHS, as borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, amending and restating the $2.275 billion 364-day senior secured revolving credit facility entered into in April 2022 (Refer to Note 12 - Financing Activities and Off-Balance Sheet Risk, of the 2022 Form 10-K for more information). The April 2023 Credit Agreement provides for a 364-day senior secured revolving credit facility with a total commitment of $2.175 billion. Under circumstances described in the April 2023 Credit Agreement, the aggregate commitments may be increased by up to $1.0875 billion, for a total commitment under the April 2023 Credit Agreement of $3.2625 billion. Borrowings under the 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 National Securities Clearing Corporation (“NSCC”) of 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 the borrower and cash and property in a designated collateral account and used for the purpose of satisfying reserve requirements under Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Borrowings under the April 2023 Credit Agreement will bear interest at a rate per annum equal to the greatest of (i) Daily Simple Secured Overnight Financing Rate ("SOFR") plus 0.10%, (ii) the Federal Funds Effective Rate (as defined in the April 2023 Credit Agreement) and (iii) the Overnight Bank Funding Rate (as defined in the April 2023 Credit Agreement), in each case, as of the day the loan is initiated, plus an applicable margin rate. The applicable margin rate is 1.25% for Tranche A loans and 2.50% for Tranche B and Tranche C loans. Undrawn commitments will accrue commitment fees at a rate per annum equal to 0.50%. The April 2023 Credit Agreement requires RHS to maintain a minimum consolidated tangible net worth and a minimum excess net capital, and subjects RHS to a specified limit on minimum net capital to aggregate debit items. In addition, the April 2023 Credit Agreement contains certain customary affirmative and negative covenants, including limitations with respect to debt, liens, fundamental changes, asset sales, restricted payments, investments and transactions with affiliates, subject to certain exceptions. Amounts due under the April 2023 Credit Agreement may be accelerated upon an “event of default,” as defined in the April 2023 Credit Agreement, such as failure to pay amounts owed thereunder when due, breach of a covenant, material inaccuracy of a representation, or occurrence of bankruptcy or insolvency, subject in some cases to cure periods. As of December 31, 2022 and March 31, 2023, there were no borrowings outstanding under our revolving credit facilities. We were in compliance with all covenants, as applicable, under our revolving credit facilities as of December 31, 2022 and March 31, 2023. Off-Balance Sheet Risk two one |
COMMON STOCK AND STOCKHOLDERS'
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | NOTE 9: COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY Preferred Stock As of March 31, 2023, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding. Common Stock We have three authorized 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 Amended and Restated Certificate of Incorporation (our "Charter") or applicable law. Warrants As of March 31, 2023, 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 and can be exercised with cash or net shares at the holder’s option. In aggregate, the maximum purchase amount of all warrants is $380 million. As of March 31, 2023, the warrants have not been exercised and are included as a component of additional paid in capital on the unaudited condensed consolidated balance sheets. 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”). 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 Omnibus Incentive Plan (the "2021 Plan") 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 Our 2021 Plan became effective on July 27, 2021, and 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. As of March 31, 2023, an aggregate of 405 million shares had been authorized for issuance under the 2013 Plan, 2020 Plan, and 2021 Plan, of which 106 million shares had been issued under the plans, 101 million shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 198 million shares remained available for new grants under the 2021 Plan. Time-Based RSUs We grant RSUs that vest upon the satisfaction of a time-based service condition (“Time-Based RSUs”). The following table summarizes the activity related to our Time-Based RSUs for the three months ended March 31, 2023, which is the period we grant our company-wide annual refresh grants: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2022 56,116,782 $ 18.55 Granted 19,251,484 9.72 Vested (7,078,184) 15.53 Forfeited (4,700,651) 17.24 Unvested at March 31, 2023 63,589,431 $ 17.33 Market-Based RSUs In 2019 and 2021, we granted to our founders RSUs under which vesting is conditioned upon both the achievement of share price targets and the continued employment by each recipient over defined service periods (“Market-Based RSUs”). In February 2023, we cancelled the 2021 Market-Based RSUs of 35.5 million unvested shares (the “2021 Founders Award Cancellation”). We recognized $485 million share-based compensation (“SBC”) expense related to the cancellation during the three months ended March 31, 2023, which was included in the general and administrative expense in our unaudited condensed statement of operations. No further expense associated with these awards were recognized after the cancellation. No other payments, replacement equity awards or benefits were granted in connection with the cancellation. The following table summarizes the activity related to our Market-Based RSUs for the three months ended March 31, 2023: Eligible to Vest (1) Not Eligible to Vest (2) Total Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2022 806,858 57,650,926 58,457,784 $ 23.67 Granted — — — Vested (115,266) — (115,266) 2.34 Cancelled — (35,520,000) (35,520,000) 22.68 Unvested at March 31, 2023 691,592 22,130,926 22,822,518 $ 25.32 ________________ (1) Represents RSUs that became eligible to vest upon achievement of share price targets and vest upon satisfaction of time-based service requirements. (2) Represents RSUs that have not yet become eligible to vest because share price targets have not yet been achieved. Share-Based Compensation The following table presents SBC on our unaudited condensed consolidated statements of operations for the periods indicated: Three Months Ended (in millions) 2022 2023 Brokerage and transaction $ 1 $ 2 Technology and development 82 54 Operations 4 2 Marketing 5 1 General and administrative 128 539 Total (1) $ 220 $ 598 ________________ (1 ) For the three months ended March 31, 2023 and 2022, SBC expense primarily consisted of $528 million and $84 million related to Market-Based RSUs and $67 million and $130 million related to Time-Based RSUs. We capitalized SBC expense related to internally developed software of $4 million and $10 million during the three months ended March 31, 2023 and March 31, 2022, respectively. As of March 31, 2023, there was $0.7 billion of unrecognized SBC expense that is expected to be recognized over a weighted-average period of 1.3 years |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 10: NET LOSS PER SHARE We present net 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 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 loss per share: (in millions, except share and per share data) Three Months Ended 2022 2023 Net loss $ (392) $ (511) Net loss attributable to common stockholders $ (392) $ (511) Weighted-average common shares outstanding - basic 867,769,168 896,924,695 Dilutive effect of stock options and unvested shares — — Weighted-average common shares used to compute diluted loss per share 867,769,168 896,924,695 Net loss per share attributable to common stockholders: Basic $ (0.45) $ (0.57) Diluted $ (0.45) $ (0.57) The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended 2022 2023 Time-Based RSUs 77,721,705 63,632,646 Market-Based RSUs 58,803,580 22,822,518 Stock options 17,486,667 14,540,171 Early-exercised stock options 7,362 — Warrants 14,278,034 14,278,034 ESPP shares 634,603 1,070,783 Total anti-dilutive securities 168,931,951 116,344,152 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11: 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 the 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. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 12: LEASES Our operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park, CA and our office in New York City, NY. We do not have any finance leases. Lease assets and liabilities recognized on our unaudited condensed consolidated balance sheets were as follows: December 31, March 31, (in millions) Classification 2022 2023 Lease right-of-use assets: Operating lease assets Other non-current assets $ 92 $ 87 Lease liabilities: Current operating lease liabilities Other current liabilities 21 23 Non-current operating lease liabilities Other non-current liabilities 127 120 Total lease liabilities $ 148 $ 143 Cash flows related to leases were as follows: Three Months Ended (in millions) 2022 2023 Operating cash flows: Payments for operating lease liabilities $ 3 $ 7 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 32 $ — |
COMMITMENTS & CONTINGENCIES
COMMITMENTS & CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13: 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. If a loss is not probable, or a probable loss cannot be reasonably estimated, no accrual is recorded. Amounts accrued for contingencies in the aggregate were $85 million as of December 31, 2022 and $88 million as of March 31, 2023. In our opinion, an adequate accrual had been made as of each such date 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 increase in litigation and regulatory investigations involving the brokerage and cryptocurrency industries. Litigation has included and may in the future include class action suits that generally seek substantial and, in some cases, punitive damages. Federal and state regulators, exchanges, or other SROs investigate issues related to regulatory compliance that may result in enforcement action. We are also subject to periodic regulatory audits and inspections that have in the past and could in the future lead to enforcement investigations or actions. 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, we believe, based on current knowledge, that any losses (in excess of amounts accrued, if applicable) as of March 31, 2023 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 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 Civil Litigation 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. In March 2022, plaintiffs filed a second consolidated amended complaint, alleging only violations of Section 10(b) of the Exchange Act, which Robinhood moved to dismiss. In October 2022, the court granted Robinhood’s motion in part and denied it in part. In November 2022, Robinhood filed a motion for judgment on the pleadings, which the court denied in January 2023. March 2020 Outages A consolidated putative class action lawsuit relating to the service outages on our stock trading platform on March 2-3, 2020 and March 9, 2020 (“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. In May 2022, the parties notified the court that they had reached an agreement in principle resolving this action. The settlement agreement has been preliminarily approved by the court. In addition, 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. The parties have reached an agreement to resolve this matter. State Regulatory Matters Certain state regulatory authorities have conducted investigations regarding RHF’s options trading and related customer communications and displays, options and margin trading approval process, the March 2020 Outages, and customer support prior to June 2020. RHF reached settlements with several state regulators including the Alabama Securities Commission, the California Department of Financial Protection and Innovation, the Colorado Division of Securities, the Delaware Department of Justice - Investor Protection Unit, the New Jersey Bureau of Securities, the South Dakota Division of Insurance, and the Texas State Securities Board, under which we have agreed to pay a monetary penalty of $200,000 per state. RHF anticipates additional potential state settlements as part of a multi-state settlement related to these issues totaling up to approximately $10 million. The Financial Industry Regulatory Authority (“FINRA”) previously conducted an investigation and reached a settlement with RHF regarding many of these issues. Brokerage Enforcement Matters FINRA Enforcement staff are conducting investigations related to, among other things, RHS’s reporting of fractional share trades, as applicable, to a Trade Reporting Facility, the Over-the-Counter Reporting Facility, the Order Audit Trail System, and the Consolidated Audit Trail; RHS’s reporting of accounts holding significant options positions to the Large Option Position Report system; processing of certain requests for transfers of assets from Robinhood through the Automated Customer Account Transfer System; responses to Electronic Blue Sheets requests from FINRA; the delays in notification from third parties and process failures within our brokerage systems and operations in connection with the handling of a 1-for-25 reverse stock split transaction of Cosmo Health, Inc, in December 2022 (the “Q4 2022 Processing Error”); RHF’s compliance with FINRA registration requirements for member personnel; marketing involving social media influencers and affiliates; collaring the prices of certain trade orders; and RHS’ compliance with best execution obligations. We are cooperating with these investigations. RHS has received requests from the SEC Division of Enforcement regarding its compliance with Regulation SHO’s trade reporting and other requirements in connection with securities lending, fractional share trading, and the Q4 2022 Processing Error, and previously received similar requests from FINRA examinations staff. RHS and RHF have also received requests from the SEC Division of Enforcement and FINRA Enforcement staff related to the Firms’ compliance with recordkeeping requirements, including requests regarding off-channel communications. We are cooperating with these investigations. Robinhood Crypto Matters RHC has received subpoenas from the California Attorney General’s Office seeking information about, among other things, RHC’s trading platform, business and operations, custody of customer assets, customer disclosures, and coin listings. RHC is cooperating with this investigation. Account Takeovers, Anti-Money Laundering, and Cybersecurity Matters FINRA Enforcement and the SEC Division of Enforcement are investigating account takeovers (i.e., circumstances under which an unauthorized actor successfully logs into a customer account), as well as anti-money laundering compliance and cybersecurity issues. The SEC’s Division of Enforcement is also investigating issues related to compliance with the Electronic Funds Transfer Act. We are cooperating with these investigations. 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 seeks monetary damages and injunctive relief. In April 2022, the parties reached a settlement in principle to resolve this matter. The settlement agreement has been preliminarily approved by the court. 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 alleged 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 alleged 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 September 2021, the parties filed cross-motions for partial judgment on the pleadings. In March 2022, the court ruled in favor of RHF, declaring that the Massachusetts fiduciary duty regulation was unlawful. The MSD is appealing the ruling and it is scheduled to be heard by the Massachusetts Supreme Judicial Court in May 2023. A hearing on the two remaining counts alleged by the MSD in its amended administrative complaint has been continued pending resolution of the appeal. 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 filed a motion to dismiss the complaint. In February 2022, Moore and Andrew Gillette filed an amended complaint, which RHF again moved to dismiss. In August 2022, the court denied RHF’s motion to dismiss. 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 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 January 2022, the court dismissed the state law complaint with prejudice. Plaintiffs have appealed the court’s order to the United States Court of Appeals for the Eleventh Circuit. In November 2021, the court dismissed the federal antitrust complaint without prejudice. In January 2022, plaintiffs filed an amended complaint in connection with the federal antitrust tranche and Robinhood moved to dismiss the amended complaint. In May 2022, the court dismissed the federal antitrust complaint with prejudice. Plaintiffs have appealed the court’s order to the United States Court of Appeals for the Eleventh Circuit. In November 2021, 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. In August 2022, the court granted in part and denied in part Robinhood’s motion to dismiss. 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 ("DOJ”), 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 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. We are cooperating with these investigations. FINRA Enforcement has also requested information about policies, procedures, and supervision related to employee trading generally. In January 2023, approximately 4,700 jointly represented customers filed a statement of claim with FINRA to initiate arbitration of individual claims against RHF and RHS arising out of the Early 2021 Trading Restrictions. 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 initial public offering (“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 of 1933, as amended (the “Securities Act”). Plaintiff seeks 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, and in March 2022, the court appointed lead plaintiffs. In June 2022, plaintiffs filed an amended complaint. In August 2022, Robinhood filed a motion to dismiss the complaint. In February 2023, the court granted Robinhood’s motion without prejudice. In March 2023, plaintiffs filed a second amended complaint. 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 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. In March 2022, the district court entered a stay of this litigation pending resolution of Robinhood’s motion to dismiss in the Golubowski securities action discussed above. In August 2022, a shareholder sent a letter to the RHM board of directors demanding, among other things, that the board of directors pursue causes of action on behalf of the Company related to allegations of misconduct in connection with the Early 2021 Trading Restrictions, Robinhood’s IPO offering documents, and the data security incident we experienced in November 2021 when an unauthorized third-party socially engineered a customer support employee by phone and obtained access to certain customer support systems (the “November 2021 Data Security Incident”). The Board has formed a Demand Review Committee that is reviewing the demand. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC for interim financial reporting. The condensed consolidated financial statements are unaudited, and in management’s opinion, include all adjustments, including normal recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2023 or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). There have been no material changes in our significant accounting policies as described in our audited consolidated financial statements included in our 2022 Form 10-K. The unaudited condensed consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior-period amounts have been reclassified to conform to the current period’s presentation. The impact of these reclassifications is immaterial to the presentation of the unaudited condensed |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include, but are not limited to, those related to revenue recognition and share-based compensation, the determination of allowances for credit losses, valuation of user cryptocurrencies safeguarding obligation and corresponding asset, investment valuation, capitalization of internally developed software, useful lives of property, software, and equipment, valuation and useful lives of intangible assets, incremental borrowing rate used to calculate operating lease right-of-use assets and related liabilities, impairment of long-lived assets, uncertain tax positions, income taxes, accrued and contingent liabilities. Actual results could differ from these estimates and could have a material adverse effect on our operating results. |
Concentrations of Credit Risk | Concentrations of Credit Risk 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 |
Investments | Investments We invest in marketable debt securities and determine the classification at the time of purchase. Available-for-sale investments are recorded at fair value. We have elected the fair value option for our available-for-sale investments as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics. Fair value adjustments are presented in other expense (income), net and interest earned on the debt securities as net interest revenues in our unaudited condensed consolidated statements of operations. Held-to-maturity investments are securities that we have both the ability and positive intent to hold until maturity and are recorded at amortized cost. Interest income is calculated using the effective interest method, adjusted for deferred fees or costs, premium, or discount existing at the date of purchase. Interest earned is included in interest revenues, net in our unaudited condensed consolidated statements of operations. We evaluate held-to-maturity investment for credit losses on a quarterly basis. We do not expect credit losses for our held-to-maturity investments that are obligations of states and political subdivisions and securities issued by U.S. government sponsored agencies. We monitor remaining securities by type and standard credit rating. There was no reserve for credit losses as of March 31, 2023. |
Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements There are no recently adopted accounting pronouncements that are material to us as of March 31, 2023. Recently Issued Accounting Pronouncements Not Yet Adopted There are no new accounting pronouncements that we have not yet adopted that are material to us as of March 31, 2023. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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: Three Months Ended 2022 2023 Market maker: Citadel Securities, LLC 22 % 13 % Entities affiliated with Susquehanna International Group, LLP (1) 12 % 5 % Entities affiliated with Wolverine Holdings, L.P. (2) 10 % 5 % All others individually less than 10% 28 % 22 % Total as percentage of total revenue: 72 % 45 % ________________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Revenue Source | The following table presents our revenue disaggregated by revenue source: Three Months Ended (in millions) 2022 2023 Transaction-based revenues: Options $ 127 $ 133 Cryptocurrencies 54 38 Equities 36 27 Other 1 9 Total transaction-based revenues 218 207 Net interest revenues: Interest on corporate cash and investments 1 68 Margin interest 35 53 Interest on segregated cash and cash equivalents and deposits 1 45 Securities lending, net 24 26 Cash sweep — 22 Interest expenses related to credit facilities (6) (6) Total net interest revenues 55 208 Other revenues 26 26 Total net revenues $ 299 $ 441 |
Schedule of Contract Receivables and Liabilities Balances | The table below sets forth contract receivables and liabilities for the period indicated: (in millions) Contract Receivables Contract Liabilities Beginning of period, January 1, 2023 $ 60 $ 3 End of period, March 31, 2023 85 3 Changes during the period $ 25 $ — |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Credit Loss [Abstract] | |
Schedule of Allowance for Credit Losses Receivable | The following table summarizes the allowance for credit losses: Three Months Ended (in millions) 2022 2023 Beginning balance $ 40 $ 18 Provision for credit losses 8 9 Write-offs (28) (7) Ending balance $ 20 $ 20 |
INVESTMENTS AND FAIR VALUE ME_2
INVESTMENTS AND FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Held-to-Maturity Investments | The following table summarizes our held-to-maturity investments as of March 31, 2023: March 31, 2023 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: Corporate debt securities $ 250 $ — $ — $ (1) $ 249 U.S. Treasury securities 112 — — — 112 Commercial paper 49 — — — 49 Certificates of deposit 47 — — — 47 U.S. government agency securities 27 — — — 27 Total held-to-maturity investments $ 485 $ — $ — $ (1) $ 484 |
Schedule of Amortized Cost and Fair Value of Held-to-Maturity Investments by Contractual Maturity Date | The table below presents the amortized cost and fair value of held-to-maturity investments by contractual maturity and the maximum maturity per security is two years: March 31, 2023 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: Corporate debt securities $ 80 $ 170 $ 250 U.S. Treasury securities 91 21 112 Commercial paper 49 — 49 Certificates of deposit 47 — 47 U.S. government agency securities 23 4 27 Total held-to-maturity investments $ 290 $ 195 $ 485 Fair value Debt securities: Corporate debt securities $ 80 $ 169 $ 249 U.S. Treasury securities 91 21 112 Commercial paper 49 — 49 Certificates of deposit 47 — 47 U.S. government agency securities 23 4 27 Total held-to-maturity investments $ 290 $ 194 $ 484 |
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 were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2022 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 735 $ — $ — $ 735 Other current assets: Available-for-sale investments: Commercial paper — 5 — 5 Government bonds 3 — — 3 Corporate bonds — 2 — 2 Equity securities - securities owned 8 — — 8 Asset related to user cryptocurrencies safeguarding obligation — 8,431 — 8,431 User-held fractional shares 997 — — 997 Total financial assets $ 1,743 $ 8,438 $ — $ 10,181 Liabilities User cryptocurrencies safeguarding obligation $ — $ 8,431 $ — $ 8,431 Fractional share repurchase obligations 997 — — 997 Total financial liabilities $ 997 $ 8,431 $ — $ 9,428 March 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 45 $ — $ — $ 45 Commercial paper — 2 — 2 Corporate debt securities — 2 — 2 Other current assets: Equity securities - securities owned 9 — — 9 Available-for-sale investments: Corporate bonds — 1 — 1 Asset related to user cryptocurrencies safeguarding obligation — 11,489 — 11,489 User-held fractional shares 1,217 — — 1,217 Total financial assets $ 1,271 $ 11,494 $ — $ 12,765 Liabilities User cryptocurrencies safeguarding obligation $ — $ 11,489 $ — $ 11,489 Fractional share repurchase obligations 1,217 — — 1,217 Total financial liabilities $ 1,217 $ 11,489 $ — $ 12,706 |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | The fair value for certain financial instruments that are not required to be measured or reported at fair value was presented on our unaudited condensed consolidated balance sheets as follows: March 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: Corporate debt securities $ — $ 249 $ — $ 249 U.S. Treasury securities 112 — — 112 Commercial Paper — 49 — 49 Certificates of deposit — 47 — 47 U.S. government agency securities — 27 — 27 Total financial assets $ 112 $ 372 $ — $ 484 |
Schedule of Safeguarded Cryptocurrencies | Safeguarded user cryptocurrencies were as follows: December 31, March 31, (in millions) 2022 2023 Bitcoin (BTC) $ 2,327 $ 3,887 Ethereum (ETH) 2,341 3,292 Dogecoin (DOGE) 2,802 3,017 Other 961 1,293 Total user cryptocurrencies safeguarding obligation and corresponding asset $ 8,431 $ 11,489 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | Three Months Ended (in millions, except percentages) 2022 2023 Loss before income taxes $ (391) $ (509) Provision for income taxes 1 2 Effective tax rate (0.3) % (0.5) % |
SECURITIES BORROWING AND LEND_2
SECURITIES BORROWING AND LENDING (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Offsetting [Abstract] | |
Schedule of Assets Subject to Master Netting Arrangement | The following tables set forth certain balances related to our securities borrowing and lending activities as of December 31, 2022 and March 31, 2023: December 31, March 31, (in millions) 2022 2023 Assets Securities borrowed Gross amount of securities borrowed $ 517 $ 844 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 517 844 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 517 844 Security collateral received (509) (846) Net amount $ 8 $ (2) Liabilities Securities loaned Gross amount of securities loaned $ 1,834 $ 2,609 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,834 2,609 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,834 2,609 Security collateral pledged (1,629) (2,368) Net amount $ 205 $ 241 |
Schedule of liabilities Subject to Master Netting Arrangement | The following tables set forth certain balances related to our securities borrowing and lending activities as of December 31, 2022 and March 31, 2023: December 31, March 31, (in millions) 2022 2023 Assets Securities borrowed Gross amount of securities borrowed $ 517 $ 844 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 517 844 Gross amount of securities borrowed not offset on the consolidated balance sheets: Securities borrowed 517 844 Security collateral received (509) (846) Net amount $ 8 $ (2) Liabilities Securities loaned Gross amount of securities loaned $ 1,834 $ 2,609 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 1,834 2,609 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 1,834 2,609 Security collateral pledged (1,629) (2,368) Net amount $ 205 $ 241 |
COMMON STOCK AND STOCKHOLDERS_2
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
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 three months ended March 31, 2023, which is the period we grant our company-wide annual refresh grants: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2022 56,116,782 $ 18.55 Granted 19,251,484 9.72 Vested (7,078,184) 15.53 Forfeited (4,700,651) 17.24 Unvested at March 31, 2023 63,589,431 $ 17.33 The following table summarizes the activity related to our Market-Based RSUs for the three months ended March 31, 2023: Eligible to Vest (1) Not Eligible to Vest (2) Total Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2022 806,858 57,650,926 58,457,784 $ 23.67 Granted — — — Vested (115,266) — (115,266) 2.34 Cancelled — (35,520,000) (35,520,000) 22.68 Unvested at March 31, 2023 691,592 22,130,926 22,822,518 $ 25.32 ________________ (1) Represents RSUs that became eligible to vest upon achievement of share price targets and vest upon satisfaction of time-based service requirements. |
Schedule of Share-Based Compensation | The following table presents SBC on our unaudited condensed consolidated statements of operations for the periods indicated: Three Months Ended (in millions) 2022 2023 Brokerage and transaction $ 1 $ 2 Technology and development 82 54 Operations 4 2 Marketing 5 1 General and administrative 128 539 Total (1) $ 220 $ 598 ________________ (1 ) |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Income (Loss) Per Share | The following table presents the calculation of basic and diluted loss per share: (in millions, except share and per share data) Three Months Ended 2022 2023 Net loss $ (392) $ (511) Net loss attributable to common stockholders $ (392) $ (511) Weighted-average common shares outstanding - basic 867,769,168 896,924,695 Dilutive effect of stock options and unvested shares — — Weighted-average common shares used to compute diluted loss per share 867,769,168 896,924,695 Net loss per share attributable to common stockholders: Basic $ (0.45) $ (0.57) Diluted $ (0.45) $ (0.57) |
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 loss per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended 2022 2023 Time-Based RSUs 77,721,705 63,632,646 Market-Based RSUs 58,803,580 22,822,518 Stock options 17,486,667 14,540,171 Early-exercised stock options 7,362 — Warrants 14,278,034 14,278,034 ESPP shares 634,603 1,070,783 Total anti-dilutive securities 168,931,951 116,344,152 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities Lessee | Lease assets and liabilities recognized on our unaudited condensed consolidated balance sheets were as follows: December 31, March 31, (in millions) Classification 2022 2023 Lease right-of-use assets: Operating lease assets Other non-current assets $ 92 $ 87 Lease liabilities: Current operating lease liabilities Other current liabilities 21 23 Non-current operating lease liabilities Other non-current liabilities 127 120 Total lease liabilities $ 148 $ 143 |
Schedule of Component of Lease Expense, Other Information and Cash Flows | Cash flows related to leases were as follows: Three Months Ended (in millions) 2022 2023 Operating cash flows: Payments for operating lease liabilities $ 3 $ 7 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 32 $ — |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Concentration of Credit Risk (Details) - Customer Concentration Risk - Revenue Benchmark | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Citadel Securities, LLC | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | 22% |
Entities affiliated with Susquehanna International Group, LLP | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 5% | 12% |
Entities affiliated with Wolverine Holdings, L.P. | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 5% | 10% |
All others individually less than 10% | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22% | 28% |
Total as percentage of total revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 45% | 72% |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 segment unit | |
Accounting Policies [Abstract] | |
Number of reporting units | unit | 4 |
Number of operating segments | segment | 1 |
REVENUES - Revenue Disaggregate
REVENUES - Revenue Disaggregated By Revenue Source (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Interest on corporate cash and investments | $ 68 | $ 1 |
Margin interest | 53 | 35 |
Interest on segregated cash and cash equivalents and deposits | 45 | 1 |
Securities lending, net | 26 | 24 |
Cash sweep | 22 | 0 |
Interest expenses related to credit facilities | (6) | (6) |
Total net interest revenues | 208 | 55 |
Total net revenues | 441 | 299 |
Options | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 133 | 127 |
Cryptocurrencies | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 38 | 54 |
Equities | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 27 | 36 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 9 | 1 |
Transaction-based revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 207 | 218 |
Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 26 | $ 26 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Securities borrowing and lending, interest revenue | $ 10,000,000 | $ 0 |
Securities borrowing and lending, interest expenses incurred | $ 2,000,000 | $ 0 |
REVENUES - Receivables and Cont
REVENUES - Receivables and Contract Liabilities Balances (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Contract with Customer, Asset [Roll Forward] | |
Beginning of period, January 1, 2023 | $ 60 |
End of period, March 31, 2023 | 85 |
Changes during the period | 25 |
Contract with Customer, Liability [Roll Forward] | |
Beginning of period, January 1, 2023 | 3 |
End of period, March 31, 2023 | 3 |
Changes during the period | $ 0 |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses of Receivables From Users (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 18 | $ 40 |
Provision for credit losses | 9 | 8 |
Write-offs | (7) | (28) |
Ending balance | $ 20 | $ 20 |
INVESTMENTS AND FAIR VALUE ME_3
INVESTMENTS AND FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Available-for-sale investments | $ 1,000,000 | $ 10,000,000 |
Unrealized gain | 0 | |
Unrealized loss | 0 | |
Held-to-maturity investments | 485,000,000 | $ 0 |
Sales of held-to-maturity investments | $ 0 |
INVESTMENTS AND FAIR VALUE ME_4
INVESTMENTS AND FAIR VALUE MEASUREMENT - Held-To-Maturity Debt Securities (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | $ 485,000,000 | $ 0 |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | (1,000,000) | |
Fair Value | 484,000,000 | |
Corporate debt securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 250,000,000 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | (1,000,000) | |
Fair Value | 249,000,000 | |
U.S. Treasury securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 112,000,000 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 112,000,000 | |
Commercial paper | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 49,000,000 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 49,000,000 | |
Certificates of deposit | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 47,000,000 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 47,000,000 | |
U.S. government agency securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 27,000,000 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | $ 27,000,000 |
INVESTMENTS AND FAIR VALUE ME_5
INVESTMENTS AND FAIR VALUE MEASUREMENT - Amortized Cost and Fair Value of Held-To-Maturity Investments by Contractual Maturity Date (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Within 1 Year | $ 290,000,000 | |
1 to 2 Years | 195,000,000 | |
Amortized Cost | 485,000,000 | $ 0 |
Fair value | ||
Within 1 Year | 290,000,000 | |
1 to 2 Years | 194,000,000 | |
Total | 484,000,000 | |
Corporate debt securities | ||
Amortized cost | ||
Within 1 Year | 80,000,000 | |
1 to 2 Years | 170,000,000 | |
Amortized Cost | 250,000,000 | |
Fair value | ||
Within 1 Year | 80,000,000 | |
1 to 2 Years | 169,000,000 | |
Total | 249,000,000 | |
U.S. Treasury securities | ||
Amortized cost | ||
Within 1 Year | 91,000,000 | |
1 to 2 Years | 21,000,000 | |
Amortized Cost | 112,000,000 | |
Fair value | ||
Within 1 Year | 91,000,000 | |
1 to 2 Years | 21,000,000 | |
Total | 112,000,000 | |
Commercial paper | ||
Amortized cost | ||
Within 1 Year | 49,000,000 | |
1 to 2 Years | 0 | |
Amortized Cost | 49,000,000 | |
Fair value | ||
Within 1 Year | 49,000,000 | |
1 to 2 Years | 0 | |
Total | 49,000,000 | |
Certificates of deposit | ||
Amortized cost | ||
Within 1 Year | 47,000,000 | |
1 to 2 Years | 0 | |
Amortized Cost | 47,000,000 | |
Fair value | ||
Within 1 Year | 47,000,000 | |
1 to 2 Years | 0 | |
Total | 47,000,000 | |
U.S. government agency securities | ||
Amortized cost | ||
Within 1 Year | 23,000,000 | |
1 to 2 Years | 4,000,000 | |
Amortized Cost | 27,000,000 | |
Fair value | ||
Within 1 Year | 23,000,000 | |
1 to 2 Years | 4,000,000 | |
Total | $ 27,000,000 |
INVESTMENTS AND FAIR VALUE ME_6
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Total financial assets | $ 12,765 | $ 10,181 |
Liabilities | ||
Total financial liabilities | 12,706 | 9,428 |
Commercial paper | ||
Assets | ||
Cash equivalents | 2 | |
Available-for-sale investments | 5 | |
U.S. government agency securities | ||
Assets | ||
Available-for-sale investments | 3 | |
Corporate debt securities | ||
Assets | ||
Cash equivalents | 2 | |
Available-for-sale investments | 1 | 2 |
Equity securities - securities owned | ||
Assets | ||
Other current assets | 9 | 8 |
Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Other current assets | 11,489 | 8,431 |
User-held fractional shares | ||
Assets | ||
Other current assets | 1,217 | 997 |
User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
Other liabilities | 11,489 | 8,431 |
Fractional share repurchase obligations | ||
Liabilities | ||
Other liabilities | 1,217 | 997 |
Money market funds | ||
Assets | ||
Cash equivalents | 45 | 735 |
Level 1 | ||
Assets | ||
Total financial assets | 1,271 | 1,743 |
Liabilities | ||
Total financial liabilities | 1,217 | 997 |
Level 1 | Commercial paper | ||
Assets | ||
Cash equivalents | 0 | |
Available-for-sale investments | 0 | |
Level 1 | U.S. government agency securities | ||
Assets | ||
Available-for-sale investments | 3 | |
Level 1 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Available-for-sale investments | 0 | 0 |
Level 1 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 9 | 8 |
Level 1 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Other current assets | 0 | 0 |
Level 1 | User-held fractional shares | ||
Assets | ||
Other current assets | 1,217 | 997 |
Level 1 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
Other liabilities | 0 | 0 |
Level 1 | Fractional share repurchase obligations | ||
Liabilities | ||
Other liabilities | 1,217 | 997 |
Level 1 | Money market funds | ||
Assets | ||
Cash equivalents | 45 | 735 |
Level 2 | ||
Assets | ||
Total financial assets | 11,494 | 8,438 |
Liabilities | ||
Total financial liabilities | 11,489 | 8,431 |
Level 2 | Commercial paper | ||
Assets | ||
Cash equivalents | 2 | |
Available-for-sale investments | 5 | |
Level 2 | U.S. government agency securities | ||
Assets | ||
Available-for-sale investments | 0 | |
Level 2 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 2 | |
Available-for-sale investments | 1 | 2 |
Level 2 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Level 2 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Other current assets | 11,489 | 8,431 |
Level 2 | User-held fractional shares | ||
Assets | ||
Other current assets | 0 | 0 |
Level 2 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
Other liabilities | 11,489 | 8,431 |
Level 2 | Fractional share repurchase obligations | ||
Liabilities | ||
Other liabilities | 0 | 0 |
Level 2 | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Assets | ||
Total financial assets | 0 | 0 |
Liabilities | ||
Total financial liabilities | 0 | 0 |
Level 3 | Commercial paper | ||
Assets | ||
Cash equivalents | 0 | |
Available-for-sale investments | 0 | |
Level 3 | U.S. government agency securities | ||
Assets | ||
Available-for-sale investments | 0 | |
Level 3 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Available-for-sale investments | 0 | 0 |
Level 3 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Level 3 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Other current assets | 0 | 0 |
Level 3 | User-held fractional shares | ||
Assets | ||
Other current assets | 0 | 0 |
Level 3 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
Other liabilities | 0 | 0 |
Level 3 | Fractional share repurchase obligations | ||
Liabilities | ||
Other liabilities | 0 | 0 |
Level 3 | Money market funds | ||
Assets | ||
Cash equivalents | $ 0 | $ 0 |
INVESTMENTS AND FAIR VALUE ME_7
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Assets | |
Held-to-maturity investments | $ 484 |
Corporate debt securities | |
Assets | |
Held-to-maturity investments | 249 |
U.S. Treasury securities | |
Assets | |
Held-to-maturity investments | 112 |
Commercial paper | |
Assets | |
Held-to-maturity investments | 49 |
Certificates of deposit | |
Assets | |
Held-to-maturity investments | 47 |
U.S. government agency securities | |
Assets | |
Held-to-maturity investments | 27 |
Estimate of Fair Value Measurement | |
Assets | |
Held-to-maturity investments | 484 |
Estimate of Fair Value Measurement | Corporate debt securities | |
Assets | |
Held-to-maturity investments | 249 |
Estimate of Fair Value Measurement | U.S. Treasury securities | |
Assets | |
Held-to-maturity investments | 112 |
Estimate of Fair Value Measurement | Commercial paper | |
Assets | |
Held-to-maturity investments | 49 |
Estimate of Fair Value Measurement | Certificates of deposit | |
Assets | |
Held-to-maturity investments | 47 |
Estimate of Fair Value Measurement | U.S. government agency securities | |
Assets | |
Held-to-maturity investments | 27 |
Estimate of Fair Value Measurement | Level 1 | |
Assets | |
Held-to-maturity investments | 112 |
Estimate of Fair Value Measurement | Level 1 | Corporate debt securities | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 1 | U.S. Treasury securities | |
Assets | |
Held-to-maturity investments | 112 |
Estimate of Fair Value Measurement | Level 1 | Commercial paper | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 1 | Certificates of deposit | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 1 | U.S. government agency securities | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 2 | |
Assets | |
Held-to-maturity investments | 372 |
Estimate of Fair Value Measurement | Level 2 | Corporate debt securities | |
Assets | |
Held-to-maturity investments | 249 |
Estimate of Fair Value Measurement | Level 2 | U.S. Treasury securities | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 2 | Commercial paper | |
Assets | |
Held-to-maturity investments | 49 |
Estimate of Fair Value Measurement | Level 2 | Certificates of deposit | |
Assets | |
Held-to-maturity investments | 47 |
Estimate of Fair Value Measurement | Level 2 | U.S. government agency securities | |
Assets | |
Held-to-maturity investments | 27 |
Estimate of Fair Value Measurement | Level 3 | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 3 | Corporate debt securities | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 3 | U.S. Treasury securities | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 3 | Commercial paper | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 3 | Certificates of deposit | |
Assets | |
Held-to-maturity investments | 0 |
Estimate of Fair Value Measurement | Level 3 | U.S. government agency securities | |
Assets | |
Held-to-maturity investments | $ 0 |
INVESTMENTS AND FAIR VALUE ME_8
INVESTMENTS AND FAIR VALUE MEASUREMENT - Summary of Crypto Assets Held in Custody (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | $ 11,489 | $ 8,431 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 11,489 | 8,431 |
Bitcoin (BTC) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,887 | 2,327 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,887 | 2,327 |
Ethereum (ETH) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,292 | 2,341 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,292 | 2,341 |
Dogecoin (DOGE) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,017 | 2,802 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 3,017 | 2,802 |
Other | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 1,293 | 961 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | $ 1,293 | $ 961 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (509) | $ (391) |
Provision for income taxes | $ 2 | $ 1 |
Effective tax rate | (0.50%) | (0.30%) |
SECURITIES BORROWING AND LEND_3
SECURITIES BORROWING AND LENDING - Schedule of Assets and Liabilities Subject to Master Netting Arrangements (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Gross amount of securities borrowed | $ 844 | $ 517 |
Gross amount offset on the consolidated balance sheets | 0 | 0 |
Amounts of assets presented on the consolidated balance sheets | 844 | 517 |
Securities borrowed | 844 | 517 |
Security collateral received | (846) | (509) |
Net amount | (2) | 8 |
Liabilities | ||
Gross amount of securities loaned | 2,609 | 1,834 |
Gross amount of securities loaned offset on the consolidated balance sheets | 0 | 0 |
Amounts of liabilities presented on the consolidated balance sheets | 2,609 | 1,834 |
Securities loaned | 2,609 | 1,834 |
Security collateral pledged | (2,368) | (1,629) |
Net amount | $ 241 | $ 205 |
SECURITIES BORROWING AND LEND_4
SECURITIES BORROWING AND LENDING - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Offsetting Assets [Line Items] | ||
Security collateral received | $ 846 | $ 509 |
Security collateral pledged | 2,368 | 1,629 |
Amount re-pledged with clearing organizations to meet deposit requirements | 430.7 | 231.2 |
Third Parties | ||
Offsetting Assets [Line Items] | ||
Security collateral received | 1 | 18.4 |
Asset Pledged as Collateral | ||
Offsetting Assets [Line Items] | ||
Securities pledged | 4,360 | $ 4,360 |
Asset Pledged as Collateral | Securities Sold under Agreements to Repurchase | ||
Offsetting Assets [Line Items] | ||
Securities pledged | 6,340 | |
Security collateral received | $ 845 |
FINANCING ACTIVITIES AND OFF-_2
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Mar. 24, 2023 | Apr. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Apr. 30, 2021 | Oct. 31, 2019 | |
Debt Instrument [Line Items] | ||||||
Settlement date basis, equities | 2 days | |||||
Settlement date basis, options | 1 day | |||||
Revolving Credit Facility | Line of Credit | April 2023 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Increase limit on credit facility | $ 1,087,500,000 | |||||
Agreement fee | $ 3,262,500,000 | |||||
Unused capacity, commitment fee percentage | 0.50% | |||||
Revolving Credit Facility | Line of Credit | April 2023 Credit Agreement | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 0.10% | |||||
Revolving Credit Facility | Line of Credit | April 2023 Credit Facility, Tranche A | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 1.25% | |||||
Revolving Credit Facility | Line of Credit | April 2023 Credit Facility, Tranche B and C | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 2.50% | |||||
Revolving Credit Facility | Line of Credit | October 2019 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 200,000,000 | |||||
Outstanding borrowings, long-term | $ 0 | $ 0 | ||||
Revolving Credit Facility | Line of Credit | October 2019 Credit Facility, As Amended | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 625,000,000 | |||||
Revolving Credit Facility | Line of Credit | April 2023 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 2,175,000,000 | $ 2,275,000,000 | ||||
Line of credit facility, term | 364 days | 364 days |
COMMON STOCK AND STOCKHOLDERS_3
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2023 shares | Mar. 31, 2023 USD ($) vote class $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Preferred stock, shares outstanding (in shares) | shares | 0 | 0 | ||
Number of classes of common stock | class | 3 | |||
Share-based compensation | $ | $ 598 | $ 220 | ||
Capitalized share-based compensation expense | $ | 4 | 10 | ||
Unrecognized compensation cost | $ | $ 700 | |||
Unrecognized compensation cost related to outstanding stock options, weighted-average period | 1 year 3 months 18 days | |||
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ | $ 539 | 128 | ||
Market-Based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Canceled (in shares) | shares | 35,500,000 | 35,520,000 | ||
Share-based compensation | $ | $ 528 | $ 84 | ||
Market-Based RSUs | General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ | $ 485 | |||
2013, 2020 and 2021 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock authorized (in shares) | shares | 405,000,000 | |||
Shares issued under plans (in shares) | shares | 106,000,000 | |||
Common stock reserved for issuance (in shares) | shares | 101,000,000 | |||
2021 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares remaining available for issuance (in shares) | shares | 198,000,000 | |||
Tranche 1 Convertible Note Holders | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum amount of all warrants | $ | $ 380 | |||
Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of voting rights per share | vote | 1 | |||
Common Class A | IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate warrants exercisable (in shares) | shares | 14,300,000 | |||
Exercise price (in dollars per share) | $ / shares | $ 26.60 | |||
Common Class B | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of voting rights per share | vote | 10 |
COMMON STOCK AND STOCKHOLDERS_4
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule of Activity Related to Time-Based and Market-Based RSUs (Details) - $ / shares | 1 Months Ended | 3 Months Ended |
Feb. 28, 2023 | Mar. 31, 2023 | |
Time-Based RSUs | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 56,116,782 | |
Granted (in shares) | 19,251,484 | |
Vested (in shares) | (7,078,184) | |
Cancelled (in shares) | (4,700,651) | |
Unvested restricted stock, ending balance (in shares) | 63,589,431 | |
Weighted- average grant date fair value | ||
Unvested restricted stock, Weighted-average grant date fair value, beginning balance (in dollars per share) | $ 18.55 | |
Granted, Weighted-average grant date fair value (in dollars per share) | 9.72 | |
Vested, Weighted-average grant date fair value (in dollars per share) | 15.53 | |
Forfeited, weighted-average grant date fair value (in dollars per share) | 17.24 | |
Unvested restricted stock, Weighted-average grant date fair value, ending balance (in dollars per share) | $ 17.33 | |
Market-Based RSUs Eligible to Vest | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 806,858 | |
Granted (in shares) | 0 | |
Vested (in shares) | (115,266) | |
Cancelled (in shares) | 0 | |
Unvested restricted stock, ending balance (in shares) | 691,592 | |
Market-Based RSUs Not Eligible to Vest | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 57,650,926 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Cancelled (in shares) | (35,520,000) | |
Unvested restricted stock, ending balance (in shares) | 22,130,926 | |
Market-Based RSUs | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 58,457,784 | |
Granted (in shares) | 0 | |
Vested (in shares) | (115,266) | |
Cancelled (in shares) | (35,500,000) | (35,520,000) |
Unvested restricted stock, ending balance (in shares) | 22,822,518 | |
Weighted- average grant date fair value | ||
Unvested restricted stock, Weighted-average grant date fair value, beginning balance (in dollars per share) | $ 23.67 | |
Granted, Weighted-average grant date fair value (in dollars per share) | ||
Vested, Weighted-average grant date fair value (in dollars per share) | 2.34 | |
Forfeited, weighted-average grant date fair value (in dollars per share) | 22.68 | |
Unvested restricted stock, Weighted-average grant date fair value, ending balance (in dollars per share) | $ 25.32 |
COMMON STOCK AND STOCKHOLDERS_5
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY - Schedule of Share-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 598 | $ 220 |
Time-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 67 | 130 |
Market-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 528 | 84 |
Brokerage and transaction | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 2 | 1 |
Technology and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 54 | 82 |
Operations | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 2 | 4 |
Marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 1 | 5 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 539 | $ 128 |
General and administrative | Market-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 485 |
NET LOSS PER SHARE - Calculatio
NET LOSS PER SHARE - Calculation of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (511) | $ (392) |
Net loss attributable to common stockholders | (511) | (392) |
Net loss attributable to common stockholders | $ (511) | $ (392) |
Weighted-average common shares outstanding - basic (in shares) | 896,924,695 | 867,769,168 |
Dilutive effect of stock options and unvested shares (in shares) | 0 | 0 |
Weighted-average common shares used to compute diluted loss per share (in shares) | 896,924,695 | 867,769,168 |
Basic (in dollars per share) | $ (0.57) | $ (0.45) |
Diluted (in dollars per share) | $ (0.57) | $ (0.45) |
NET LOSS PER SHARE - Potential
NET LOSS PER SHARE - Potential Common Shares Excluded from the Calculation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 116,344,152 | 168,931,951 |
Time-Based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 63,632,646 | 77,721,705 |
Market-Based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 22,822,518 | 58,803,580 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 14,540,171 | 17,486,667 |
Early-exercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0 | 7,362 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 14,278,034 | 14,278,034 |
ESPP shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 1,070,783 | 634,603 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Disclosures (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease assets | $ 87 | $ 92 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Current operating lease liabilities | $ 23 | $ 21 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Non-current operating lease liabilities | $ 120 | $ 127 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
Total lease liabilities | $ 143 | $ 148 |
LEASES - Schedule of Cash Flows
LEASES - Schedule of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating cash flows: | ||
Payments for operating lease liabilities | $ 7 | $ 3 |
Supplemental cash flow data: | ||
Lease liabilities arising from obtaining right-of-use assets | $ 0 | $ 32 |
COMMITMENTS & CONTINGENCIES (De
COMMITMENTS & CONTINGENCIES (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Jan. 31, 2023 customer | Dec. 31, 2022 USD ($) | Sep. 30, 2021 customer | Apr. 30, 2021 count | Jan. 31, 2021 customer | Dec. 31, 2020 case count | Mar. 31, 2023 USD ($) | Jan. 28, 2021 tranche | |
Loss Contingencies [Line Items] | ||||||||
Accrued for legal and regulatory contingencies | $ | $ 85,000 | $ 88,000 | ||||||
Number of tranches | tranche | 3 | |||||||
Cosmo Health, Inc. | ||||||||
Loss Contingencies [Line Items] | ||||||||
Reverse stock split | 0.04 | |||||||
Massachusetts Securities Law Violations | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of lawsuits | count | 2 | 3 | ||||||
Putative Securities Fraud Class Action Lawsuit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of lawsuits | case | 5 | |||||||
March 2020 Outages | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of customers | customer | 400 | |||||||
State Regulatory Matters | Unfavorable Regulatory Action | Settled Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Monetary penalty | $ | 200 | |||||||
Additional damages sought value | $ | $ 10,000 | |||||||
Putative Class Actions | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of customers | customer | 2,000 | |||||||
Early 2021 Trading Restrictions Matters | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of customers | customer | 4,700 |