Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 02, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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$0.0001 par value per share | |
Trading Symbol(s) | HOOD | |
Name of each exchange on which registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001783879 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Common Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 754,859,894 | |
Common Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 123,976,064 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 4,717 | $ 4,835 |
Cash, cash equivalents, and securities segregated under federal and other regulations | 4,521 | 4,448 |
Receivables from brokers, dealers, and clearing organizations | 207 | 89 |
Receivables from users, net | 4,303 | 3,495 |
Securities borrowed | 2,107 | 1,602 |
Deposits with clearing organizations | 585 | 338 |
Asset related to user cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
User-held fractional shares | 1,975 | 1,592 |
Held-to-maturity investments | 495 | 413 |
Prepaid expenses | 64 | 63 |
Other current assets | 348 | 207 |
Total current assets | 45,545 | 31,790 |
Property, software, and equipment, net | 122 | 120 |
Goodwill | 175 | 175 |
Intangible assets, net | 46 | 48 |
Non-current held-to-maturity investments | 10 | 73 |
Other Assets, Noncurrent | 190 | 126 |
Total assets | 46,088 | 32,332 |
Current liabilities: | ||
Accounts payable and accrued expenses | 351 | 384 |
Payables to users | 6,074 | 5,097 |
Securities loaned | 4,215 | 3,547 |
User cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fractional shares repurchase obligation | 1,975 | 1,592 |
Other current liabilities | 275 | 217 |
Total current liabilities | 39,113 | 25,545 |
Other non-current liabilities | 90 | 91 |
Total liabilities | 39,203 | 25,636 |
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, 2023 and March 31, 2024. | 0 | 0 |
Additional paid-in capital | 12,176 | 12,145 |
Accumulated other comprehensive loss | (2) | (3) |
Accumulated deficit | (5,289) | (5,446) |
Total stockholders’ equity | 6,885 | 6,696 |
Total liabilities and stockholders’ equity | 46,088 | 32,332 |
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) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Noncurrent prepaid assets | $ 4 | $ 3 |
Preferred stock, par value (in dollars 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 dollars 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) | 753,880,032 | 745,401,862 |
Common stock, shares outstanding (in shares) | 753,880,032 | 745,401,862 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 124,480,224 | 126,760,802 |
Common stock, shares outstanding (in shares) | 124,480,224 | 126,760,802 |
Common Class C | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 7,000,000,000 | 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, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Net interest revenues | $ 254 | $ 208 |
Total net revenues | 618 | 441 |
Operating expenses: | ||
Brokerage and transaction | 35 | 36 |
Technology and development | 196 | 199 |
Operations | 44 | 42 |
Marketing | 67 | 26 |
General and administrative | 118 | 647 |
Total operating expenses | 460 | 950 |
Other (income) expense, net | (4) | 0 |
Income (loss) before income taxes | 162 | (509) |
Provision for income taxes | 5 | 2 |
Net income (loss) | 157 | (511) |
Net income (loss) attributable to common stockholders: | ||
Basic | 157 | (511) |
Diluted | $ 157 | $ (511) |
Net income (loss) per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.18 | $ (0.57) |
Diluted (in dollars per share) | $ 0.18 | $ (0.57) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||
Basic (in shares) | 875,319,407 | 896,924,695 |
Diluted (in shares) | 895,779,155 | 896,924,695 |
Transaction-based revenues | ||
Revenues: | ||
Total transaction-based revenues | $ 329 | $ 207 |
Other revenues | ||
Revenues: | ||
Total transaction-based revenues | $ 35 | $ 26 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 157 | $ (511) |
Other comprehensive income (loss), net of tax: | ||
Reclassification adjustment for net gains included in net income | 1 | 0 |
Total other comprehensive income (loss), net of tax | 1 | 0 |
Total comprehensive income (loss) | $ 158 | $ (511) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net income (loss) | $ 157 | $ (511) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 17 | 20 |
Provision for credit losses | 16 | 9 |
Share-based compensation | 62 | 598 |
Other | 0 | 5 |
Changes in operating assets and liabilities: | ||
Securities segregated under federal and other regulations | (692) | 0 |
Receivables from brokers, dealers, and clearing organizations | (118) | (36) |
Receivables from users, net | (796) | 57 |
Securities borrowed | (505) | (327) |
Deposits with clearing organizations | (247) | (61) |
Current and non-current prepaid expenses | 0 | 2 |
Other current and non-current assets | (157) | (8) |
Accounts payable and accrued expenses | (46) | 18 |
Payables to users | 977 | 285 |
Securities loaned | 668 | 775 |
Other current and non-current liabilities | 41 | 2 |
Net cash provided by (used in) operating activities | (623) | 828 |
Investing activities: | ||
Purchases of property, software, and equipment | (2) | 0 |
Capitalization of internally developed software | (7) | (5) |
Proceeds from sales and maturities of available-for-sale investments | 0 | 9 |
Purchases of held-to-maturity investments | (171) | (487) |
Proceeds from maturities of held-to-maturity investments | 154 | 2 |
Purchases of credit card receivables | (29) | 0 |
Collections of purchased credit card receivables | 11 | 0 |
Asset acquisition, net of cash acquired | (3) | 0 |
Net cash used in investing activities | (47) | (481) |
Financing activities: | ||
Taxes paid related to net share settlement of equity awards | (40) | (2) |
Payments of debt issuance costs | (14) | (10) |
Borrowings on Credit Card Funding Trust | 17 | 0 |
Change in principal collected from customers due to Coastal Bank | 3 | 0 |
Proceeds from exercise of stock options, net of repurchases | 4 | 1 |
Net cash used in financing activities | (30) | (11) |
Net increase (decrease) in cash, cash equivalents, segregated cash, and restricted cash | (700) | 336 |
Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period | 9,346 | 9,357 |
Cash, cash equivalents, segregated cash, and restricted cash, end of the period | 8,646 | 9,693 |
Reconciliation of cash, cash equivalents, segregated cash and restricted cash, end of the period: | ||
Cash and cash equivalents, end of the period | 4,717 | 5,459 |
Segregated cash and cash equivalents, end of the period | 3,829 | 4,213 |
Restricted cash in other current assets, end of the period | 83 | 1 |
Restricted cash in other non-current assets, end of the period | 17 | 20 |
Cash, cash equivalents, segregated cash, and restricted cash, end of the period | 8,646 | 9,693 |
Supplemental disclosures: | ||
Cash paid for interest | 7 | 3 |
Cash paid for income taxes, net of refund received | $ 2 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
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) |
Increase (decrease) in stockholder's equity | |||||
Net (loss) income | (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) |
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2023 | 872,162,664 | ||||
Balance at beginning of period at Dec. 31, 2023 | 6,696 | $ 0 | 12,145 | (3) | (5,446) |
Increase (decrease) in stockholder's equity | |||||
Net (loss) income | 157 | 157 | |||
Shares issued in connection with stock option exercise, net of repurchases (in shares) | 1,265,016 | ||||
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) | 4,932,576 | ||||
Issuance of common stock upon settlement of restricted stock units, net of shares withheld | (40) | (40) | |||
Change in other comprehensive income | 1 | 1 | |||
Share-based compensation | 67 | 67 | |||
Balance at end of period, Common stock (in shares) at Mar. 31, 2024 | 878,360,256 | ||||
Balance at end of period at Mar. 31, 2024 | $ 6,885 | $ 0 | $ 12,176 | $ (2) | $ (5,289) |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood 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 by users on our RHC platform; • Robinhood Credit, Inc. (“Robinhood Credit”), which offers credit cards with certain rewards offerings; and • Robinhood Money, LLC, which offers a spending 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 platforms 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 platforms, 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 platforms (none of which are allowed to be purchased on margin and which do not serve as collateral for margin loans), however, following our adoption of SEC Staff Accounting Bulletin 121 (“SAB 121”), 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, 2024 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, 2023 (“2023 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 2023 Form 10-K, other than as disclosed below. 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 reclassifications have been made to prior period amounts 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 taken as a whole and had no impact on previously reported total assets, total liabilities and net income (loss). 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, share-based compensation (“SBC”), 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, determination of hedge effectiveness, 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 2023 2024 Market maker: Citadel Securities, LLC 13 % 12 % Wintermute Trading Ltd — % 10 % All others individually less than 10% 32 % 30 % Total as percentage of total revenue: 45 % 52 % 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. Variable Interest Entities We evaluate our ownership, contractual and other interests in entities to determine if we have a variable interest in an entity. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical and prospective information, among other factors. If we determine that an entity for which we hold a contractual or ownership interest in is a variable interest entity (“VIE”) and that we are the primary beneficiary, we consolidate such entity in the consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we determine whether any changes in the interest or relationship with the entity impacts the determination of whether we are still the primary beneficiary. Asset Acquisitions Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. We allocate the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements There were no new accounting pronouncements adopted during the three months ended March 31, 2024 that materially impacted our unaudited condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This amendment will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this guidance will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impacts of the amendment on our consolidated financial statements. In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in guidance improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures. In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income taxes (Topic 740): Improvements to Income Taxes Disclosures.” This guidance requires annual disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures. In March 2024, the SEC adopted final rules under SEC Release No. 34-99678 and No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (the “Final Rules”), which requires registrants to provide certain climate-related information in their registration statements |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 3: REVENUES Disaggregation of Revenues The following table presents our revenues disaggregated by revenue source: Three Months Ended (in millions) 2023 2024 Transaction-based revenues: Options $ 133 $ 154 Cryptocurrencies 38 126 Equities 27 39 Other 9 10 Total transaction-based revenues 207 329 Net interest revenues: Margin interest 53 72 Interest on corporate cash and investments 68 70 Interest on segregated cash, securities, and deposits 45 58 Cash Sweep 22 39 Securities lending, net 26 15 Credit card, net — 6 Interest expenses related to credit facilities (6) (6) Total net interest revenues 208 254 Other revenues 26 35 Total net revenues $ 441 $ 618 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. The following table presents interest revenue earned and interest expense paid from Fully-Paid Securities Lending: Three Months Ended (in millions) 2023 2024 Interest revenue $ 10 $ 13 Interest expense (2) (2) Fully-Paid Securities Lending, net $ 8 $ 11 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 primarily 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 the period, January 1, 2024 $ 87 4 End of the period, March 31, 2024 166 5 Changes during the period $ 79 $ 1 The difference between the opening and ending balances of our contract receivables was primarily driven by increases in trading volumes for cryptocurrencies, equities, and options for the three months ended March 31, 2024 and timing differences between our performance and counterparties’ payments. We recognized all revenue from amounts included in the opening contract liabilities balance in the three months ended March 31, 2024. |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2024 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | NOTE 4: ALLOWANCE FOR CREDIT LOSSES Allowance for Credit Losses - Brokerage Related Brokerage related allowance for credit losses primarily relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions, losses on margin lending, and reserves on proxy revenue receivables. Fraudulent Deposit Transactions occur when users initiate deposits into their accounts, make trades on our platforms 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 brokerage related allowance for credit losses as a reduction of receivables from users, net on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2023 2024 Beginning balance $ 18 $ 15 Provision for credit losses 9 6 Write-offs (7) (2) Ending balance $ 20 $ 19 Allowance for Credit Losses - Credit Card Related Credit card related allowance for credit losses represents management’s estimate of expected credit losses from credit exposure over the remaining expected life of credit card receivables. The credit card receivables allowance takes into account information from internal and external sources, including historical collection data, charge off trends by FICO cohort, and market data. We write-off balances when the balance becomes outstanding for over 180 days or when we otherwise deem the balance to be uncollectible. The following table summarizes the allowance related to interest receivables from customers that carry a balance and purchased credit card receivables, shown as a reduction of receivables from users, net on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2024 Beginning balance $ 1 Provision for credit losses 2 Write-offs (1) Ending balance $ 2 The following table summarizes the allowance related to off-balance sheet credit card receivables, shown as part of accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2024 Beginning balance $ 32 Provision for credit losses 8 Payments to Coastal Bank (9) Recoveries 1 Ending balance $ 32 |
INVESTMENTS AND FAIR VALUE MEAS
INVESTMENTS AND FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
INVESTMENTS AND FAIR VALUE MEASUREMENT | NOTE 5: INVESTMENTS AND FAIR VALUE MEASUREMENT Investments Available-for-sale As of December 31, 2023 and March 31, 2024, we had $500 million of available-for-sale time deposits classified as cash equivalents on the unaudited condensed consolidated balance sheets. These investments had a maturity of three months or less at the time of purchase, and an aggregate market value equal to amortized cost. Refer to Fair Value of Financial Instruments below for further details. Held-to-maturity The following tables summarize our held-to-maturity investments: December 31, 2023 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: Corporate debt securities $ 205 $ — $ — $ (1) $ 204 U.S. Treasury securities 202 — — — 202 U.S. government agency securities 42 — — — 42 Certificates of deposit 34 — — — 34 Commercial paper 3 — — — 3 Total held-to-maturity investments $ 486 $ — $ — $ (1) $ 485 March 31, 2024 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: U.S. Treasury securities $ 338 $ — $ — $ — $ 338 Corporate debt securities 158 — — (1) 157 U.S. government agency securities 9 — — — 9 Total held-to-maturity investments $ 505 $ — $ — $ (1) $ 504 There were no sales of held-to-maturity investments during the three months ended March 31, 2024. The table below presents the amortized cost and fair value of held-to-maturity investments by contractual maturity; the maximum maturity is two years: December 31, 2023 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: Corporate debt securities $ 153 $ 52 $ 205 U.S. Treasury securities 184 18 202 U.S. government agency securities 39 3 42 Certificates of deposit 34 — 34 Commercial paper 3 — 3 Total held-to-maturity investments $ 413 $ 73 $ 486 Fair value Debt securities: Corporate debt securities $ 152 $ 52 $ 204 U.S. Treasury securities 184 18 202 U.S. government agency securities 39 3 42 Certificates of deposit 34 — 34 Commercial paper 3 — 3 Total held-to-maturity investments $ 412 $ 73 $ 485 March 31, 2024 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: U.S. Treasury securities $ 330 $ 8 $ 338 Corporate debt securities 158 — 158 U.S. government agency securities 7 2 9 Total held-to-maturity investments $ 495 $ 10 $ 505 Fair value Debt securities: U.S. Treasury securities $ 330 $ 8 $ 338 Corporate debt securities 157 — 157 U.S. government agency securities 7 2 9 Total held-to-maturity investments $ 494 $ 10 $ 504 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, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits $ — $ 500 $ — $ 500 Money market funds 146 — — 146 Deposits with clearing organizations: U.S. Treasury securities 50 — — 50 Other current assets: Stablecoin 20 — — 20 Equity securities - securities owned 10 — — 10 Other non-current assets: Money market funds - escrow account 2 — — 2 Asset related to user cryptocurrencies safeguarding obligation — 14,708 — 14,708 User-held fractional shares 1,592 — — 1,592 Total financial assets $ 1,820 $ 15,208 $ — $ 17,028 Liabilities Accounts payable and accrued expenses: User cryptocurrencies safeguarding obligation $ — $ 14,708 $ — $ 14,708 Fractional shares repurchase obligations 1,592 — — 1,592 Total financial liabilities $ 1,592 $ 14,708 $ — $ 16,300 March 31, 2024 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits $ — $ 500 $ — $ 500 Money market funds 99 — — 99 U.S. Treasury securities 13 — — 13 Cash, cash equivalents, and securities segregated under federal and other regulations: U.S. Treasury securities 792 — — 792 Deposits with clearing organizations: U.S. Treasury securities (1) 150 — — 150 Other current assets: Stablecoin 101 — — 101 Equity securities - securities owned 11 — — 11 Other non-current assets: Money market funds - escrow account 2 — — 2 Asset related to user cryptocurrencies safeguarding obligation — 26,223 — 26,223 User-held fractional shares 1,975 — — 1,975 Total financial assets $ 3,143 $ 26,723 $ — $ 29,866 Liabilities User cryptocurrencies safeguarding obligation $ — $ 26,223 $ — $ 26,223 Fractional shares repurchase obligations 1,975 — — 1,975 Total financial liabilities $ 1,975 $ 26,223 $ — $ 28,198 ____________________________ (1) As of March 31, 2024, $150 million of our U.S. Treasury securities were pledged to a clearing organization to meet margin requirements for our security lending program. 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: December 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: Corporate debt securities $ — $ 204 $ — $ 204 U.S. Treasury securities 202 — — 202 U.S. government agency securities — 42 — 42 Certificates of deposit — 34 — 34 Commercial paper — 3 — 3 Total held-to-maturity investments $ 202 $ 283 $ — $ 485 March 31, 2024 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: U.S. Treasury securities $ 338 $ — $ — $ 338 Corporate debt securities — 157 — 157 U.S. government agency securities — 9 — 9 Total held-to-maturity investments $ 338 $ 166 $ — $ 504 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, 2024, 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) 2023 2024 Bitcoin (BTC) $ 6,149 $ 10,309 Dogecoin (DOGE) 3,319 7,365 Ethereum (ETH) 3,761 5,629 Other 1,479 2,920 Total user cryptocurrencies safeguarding obligation and corresponding asset $ 14,708 $ 26,223 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, 2023 and March 31, 2024. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | NOTE 6: DERIVATIVES AND HEDGING ACTIVITIES In 2023, we entered into two interest rate floors that were designated as cash flow hedges of interest rate risk associated with our margin receivables. One interest rate floor with a notional amount of $2 billion was effective as of June 30, 2023. Another with a notional amount of $1 billion was effective as of January 1, 2024. Both interest rate floors have a maturity of six months. As of March 31, 2024 and December 31, 2023, the fair value of hedging instruments were immaterial and included in other current assets in our consolidated balance sheets. Amounts reported in accumulated other comprehensive income (loss) (“AOCI”) related to interest rate floors will be reclassified to net interest revenues as interest payments are received or paid on the hedged items. During the next 12 months, we expect to reclassify $2 million of losses from AOCI as a reduction to net interest revenues. As of March 31, 2024, we hedged our exposure to the variability in future cash flows for forecasted transactions over a maximum period of one year. The following table summarizes the amount of gain or loss recognized in AOCI on our unaudited condensed consolidated financial statements: Three Months Ended (in millions) 2024 Derivatives designated as hedging instruments: Loss reclassified from AOCI into net interest revenues included in effectiveness assessment $ 1 The following table summarizes the components of AOCI related to hedging activities on our unaudited condensed consolidated financial statements: Three Months Ended (in millions) 2024 Beginning balance $ (3) Other comprehensive loss before reclassifications, net of tax — Reclassification adjustment for net gains included in net interest revenues, net of tax 1 Other comprehensive loss after reclassifications, net of tax $ 1 Ending balance $ (2) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7: INCOME TAXES Three Months Ended (in millions, except percentages) 2023 2024 Income (loss) before income taxes $ (509) $ 162 Provision for income taxes 2 5 Effective tax rate (0.5) % 3.0 % 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, 2023 and March 31, 2024, 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, 2024, we believe it is more likely than not that the tax benefits of the remaining U.S. federal, state and certain foreign 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, 2024 | |
Offsetting [Abstract] | |
SECURITIES BORROWING AND LENDING | NOTE 8: SECURITIES BORROWING AND LENDING 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 on our unaudited condensed consolidated balance sheets. When we borrow securities from fully-paid securities from users or third parties, we provide cash collateral to our users and third parties, which represents our rights to the collateral provided to our users and is recorded as “securities borrowed”, an asset, on our unaudited condensed consolidated balance sheets. When we lend securities to third parties, we receive cash as collateral, which represents our obligation to return the collateral and is recorded as “securities loaned”, a liability, on 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, 2023 and March 31, 2024: December 31, March 31, (in millions) 2023 2024 Assets Securities borrowed Gross amount of cash collateral provided to users for securities borrowing transactions $ 1,602 $ 2,107 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 1,602 2,107 Gross amount not offset on the consolidated balance sheets: Cash collateral provided to users and third parties for securities borrowing transactions 1,602 2,107 Fair value of securities borrowed from users and third parties (1,536) (2,060) Net amount $ 66 $ 47 Liabilities Securities loaned Gross amount of cash collateral received from counterparties for securities lending transactions $ 3,547 $ 4,215 Gross amount offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 3,547 4,215 Gross amount not offset on the consolidated balance sheets: Cash collateral received from counterparties for securities lending transactions 3,547 4,215 Fair value of securities pledged to counterparties (3,188) (3,834) Net amount $ 359 $ 381 We obtain securities on terms that permit us to pledge and/or transfer securities to others. As of December 31, 2023 and March 31, 2024, we were permitted to re-pledge securities with a fair value of $4.78 billion and $5.74 billion under margin account agreements with users, and securities with a fair value of an immaterial balance and $6 million that we borrowed under the master securities loan agreements (“MSLAs”) with third parties. Under the Fully-Paid Securities Lending program, as of March 31, 2024, we were permitted to re-pledge securities with a fair value of $19.22 billion including securities with a fair value of $2.05 billion that we had borrowed from users. |
FINANCING ACTIVITIES AND OFF-BA
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | NOTE 9: FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving Credit Facilities RHM March 2024 Credit Agreement On March 22, 2024, RHM entered into a second amended and restated credit agreement with a syndicate of banks (the “RHM March 2024 Credit Agreement”) amending and restating the unsecured revolving line of credit entered into in October 2019 and as thereafter amended (refer to Note 13 - Financing Activities and Off-Balance Sheet Risk, of the 2023 Form 10-K for more information). The RHM March 2024 Credit Agreement has an initial commitment of $750 million with a maturity date of March 22, 2027. Under circumstances described in the RHM March 2024 Credit Agreement, the aggregate commitments may be increased by up to $187.5 million, for a total commitment of up to $937.5 million. Borrowings under the RHM March 2024 Credit Agreement will bear interest at a rate per annum equal to the Alternate Base Rate or Adjusted Term SOFR (“Secured Overnight Financing Rate”) plus an applicable margin. For purposes of the RHM Credit Agreement, the Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.5% and (iii) the Adjusted Term SOFR for a one month interest period plus 1.0%. The Adjusted Term SOFR Rate is equal to the Term SOFR, published by the Term SOFR Administrator, plus the Term SOFR Adjustment. The Term SOFR Adjustment is 0.10%. If the Adjusted Term SOFR Rate is less than the floor of 0%, such rate shall be deemed to be equal to the floor. RHM is obligated to pay a commitment fee calculated at a per annum rate equal to 0.25% on any unused amount of the RHM March 2024 Credit Agreement. RHS March 2024 Credit Agreement On March 22, 2024, RHS, our wholly-owned subsidiary, entered into the Third Amended and Restated Credit Agreement (the “RHS March 2024 Credit Agreement”) among RHS, as borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, amending and restating the $2.175 billion 364-day senior secured revolving credit facility entered into in March 2023 (refer to Note 13 - Financing Activities and Off-Balance Sheet Risk, of the 2023 Form 10-K for more information). The RHS March 2024 Credit Agreement provides for a 364-day senior secured revolving credit facility with a total commitment of $2.25 billion. Under circumstances described in the RHS March 2024 Credit Agreement, the aggregate commitments may be increased by up to $1.125 billion, for a total commitment of $3.375 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 RHS March 2024 Credit Agreement will bear interest at a rate per annum equal to the greatest of (i) Daily Simple SOFR plus 0.10% (as defined in the RHS March 2024 Credit Agreement), (ii) the Federal Funds Effective Rate (as defined in the RHS March 2024 Credit Agreement) and (iii) the Overnight Bank Funding Rate (as defined in the RHS March 2024 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 RHS March 2024 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 RHS March 2024 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 RHS March 2024 Credit Agreement may be accelerated upon an “event of default,” as defined in the RHS March 2024 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, 2023 and March 31, 2024, there were no borrowings outstanding and we were in compliance with all covenants, as applicable, under our revolving credit facilities. Credit Card Funding Trust Under terms of the Coastal Community Bank (“Coastal Bank”) Program Agreement (discussed below), Robinhood Credit has the ability to purchase credit card receivables originated and held for a period of time by Coastal Bank. Robinhood Credit continues to earn interest from customers and uses these purchased credit card receivables as collateral under a trust structure to access debt financing in the ordinary course of business. To help facilitate these transactions, we created a VIE known as the Credit Card Funding Trust (the “Trust”). We are the primary beneficiary of the Trust as, through our role as the servicer and administrator, we have the power to direct the activities that most significantly affect the Trust's economic performance and, due to owning all the equity interest in the Trust, have the right to receive benefits or the obligation to absorb losses. As such, we consolidate the Trust in the condensed consolidated financial statements. Substantially all of the Trust’s assets and liabilities are the purchased credit card receivables, included in receivables from users, net, and the outstanding borrowing, included in other current liabilities, on the unaudited condensed consolidated balance sheets. Our exposure to losses in the Trust is limited to the carrying value of net assets held by the Trust, including expected credit losses related to the purchased credit card receivables (Refer to Note 4 - Allowance for Credit Losses). For the Trust, the creditors have no recourse to our general credit and the liabilities of the Trust can only be settled by the Trust’s assets. Additionally, the assets of the Trust can only be used to settle obligations of the Trust. The credit card receivables of the Trust have risks and characteristics similar to other off-balance sheet credit card receivables owned by Coastal Bank and were underwritten to the same standard. Accordingly, the performance of these assets is expected to be similar to other comparable credit card receivables. As of March 31, 2024, the Trust had one arrangement in place to borrow up to $100 million. Borrowings under this arrangement bear interest at an annual rate of SOFR plus 3%. During the quarter ended March 31, 2024, we purchased $31 million of credit card receivables and the outstanding balance of borrowing principal and interest was $17 million. As of March 31, 2024, the carrying value of purchased credit card receivables, net of provision for credit losses, was $19 million. There were no purchases of credit card receivables or borrowings under this arrangement prior to the quarter ended March 31, 2024. For the quarter ended March 31, 2024, the related interest revenue and interest expense of the Trust were immaterial. Off-Balance Sheet Risk Coastal Bank Program Agreement Under a program agreement between us and Coastal Bank (the “Program Agreement”) most recently amended in November 2023, Coastal Bank may fund up to $300 million of credit card receivables. Robinhood Credit pays Coastal Bank interest based on the average balance of advances during the month at the federal funds rate plus a margin of 3.75% on the first $150 million and 3.00% on such amounts in excess of $150 million. The credit card receivables and the funding from Coastal Bank are off-balance sheet, considering Coastal Bank is the legal lender and originator, the party to which the customer has a creditor-borrower relationship, and the legal owner of the receivables. As of March 31, 2024, the off-balance sheet credit card receivables funded under the Program Agreement was $177 million. Transaction Settlement two one |
COMMON STOCK AND STOCKHOLDERS'
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY | NOTE 10: COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY Preferred Stock As of March 31, 2024, 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, 2024, 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 settled at the holder’s option. In aggregate, the maximum purchase amount of all warrants is $380 million. As of March 31, 2024, the warrants had not been exercised and were included as a component of additional paid-in capital on the unaudited condensed consolidated balance sheets. Equity Incentive Plans 2021 Omnibus Incentive Plan Our 2021 Omnibus Incentive Plan (the “2021 Plan”) became effective on July 27, 2021, and provides for the grant of share-based awards (such as options, including incentive stock options, non statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance units, and other equity-based awards) and cash-based awards. As of March 31, 2024, an aggregate of 448 million shares had been authorized for issuance under our Amended and Restated 2013 Stock Plan, as amended, 2020 Equity Incentive Plan, as amended, and 2021 Plan, of which 137 million shares had been issued under the plans, 72 million shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 239 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, 2024, 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, 2023 34,551,998 $ 14.99 Granted 14,420,757 16.97 Vested (7,358,077) 14.95 Forfeited (1,899,675) 15.15 Unvested at March 31, 2024 39,715,003 $ 15.71 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 SBC expense related to the cancellation during the three months ended March 31, 2023, which was included in the general and administrative expense on our unaudited condensed statement of operations. No further expense associated with these awards was 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, 2024: Eligible to Vest (1) Not Eligible to Vest (2) Total Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2023 345,796 22,130,926 22,476,722 $ 25.67 Granted — — — Vested (115,264) — (115,264) 2.34 Forfeited (115,264) (5,993,795) (6,109,059) 25.59 Unvested at March 31, 2024 115,268 16,137,131 16,252,399 $ 25.87 ________________ (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) 2023 2024 Brokerage and transaction $ 2 $ 2 Technology and development 54 44 Operations 2 2 Marketing 1 2 General and administrative 539 12 Total (1) $ 598 $ 62 ________________ (1) For the three months ended March 31, 2023, SBC expense primarily consisted of $67 million related to Time-Based RSUs and $528 million related to Market-Based RSUs. For the three months ended March 31, 2024, SBC expense primarily consisted of $68 million related to Time-Based RSUs and a negative $9 million related to Market-Based RSUs, as portion of the Market-Based RSUs became fully vested in prior periods and was net of an $11 million reversal of previously recognized expense related to unvested awards that were forfeited upon the resignation of our co-founder and former Chief Creative Officer. We capitalized SBC expense related to internally developed software of $4 million and $5 million during the three months ended March 31, 2023 and 2024. As of March 31, 2024, there was $502 million of unrecognized SBC expense that is expected to be recognized over a weighted-average period of 0.95 years |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NOTE 11: NET INCOME (LOSS) PER SHARE The following table presents the calculation of basic and diluted income (loss) per share: (in millions, except share and per share data) Three Months Ended 2023 2024 Class A Class B Class A Class B Basic earnings per share (“EPS”): Numerator Net income (loss) $ (438) $ (73) $ 134 $ 23 Net income (loss) attributable to common stockholders $ (438) $ (73) $ 134 $ 23 Denominator Weighted-average common shares outstanding - basic 769,223,564 127,701,131 749,497,411 125,821,996 Basic EPS $ (0.57) $ (0.57) $ 0.18 $ 0.18 Diluted EPS: Numerator Net income (loss) $ (438) $ (73) $ 134 $ 23 Reallocation of net income as a result of conversion of Class B to Class A common stock — — 23 — Reallocation of net income to Class B common stock — Net income (loss) for diluted EPS $ (438) $ (73) $ 157 $ 23 Denominator Weighted-average common shares outstanding - basic 769,223,564 127,701,131 749,497,411 125,821,996 Dilutive effect of stock options and unvested shares — — 20,459,748 — Conversion of Class B to Class A common stock — — 125,821,996 — Weighted-average common shares outstanding - diluted 769,223,564 127,701,131 895,779,155 125,821,996 Net income (loss) per share attributable to common stockholders: Basic $ (0.57) $ (0.57) $ 0.18 $ 0.18 Diluted $ (0.57) $ (0.57) $ 0.18 $ 0.18 The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period: Three Months Ended 2023 2024 Time-Based RSUs 63,632,646 4,595,054 Market-Based RSUs 22,822,518 6,045,473 Stock options 14,540,171 2,602,524 Warrants 14,278,034 14,278,034 Employee Stock Purchase Plan ("ESPP") 1,070,783 — Total anti-dilutive securities 116,344,152 27,521,085 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
LEASES | NOTE 12: LEASES Our operating leases are comprised of office facilities, and 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 2023 2024 Lease right-of-use assets: Operating lease assets Other non-current assets $ 68 $ 70 Lease liabilities: Current operating lease liabilities Other current liabilities 20 21 Non-current operating lease liabilities Other non-current liabilities 89 89 Total lease liabilities $ 109 $ 110 Cash flows related to leases were as follows: Three Months Ended (in millions) 2023 2024 Operating cash flows: Payments for operating lease liabilities $ 7 $ 7 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ — $ 6 |
COMMITMENTS & CONTINGENCIES
COMMITMENTS & CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS & 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 $190 million as of December 31, 2023 and $184 million as of March 31, 2024. 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, and many other industries in which we operate, are 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, 2024 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 unspecified monetary 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. In March 2024, Plaintiffs filed a motion for class certification, which Robinhood is opposing. 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 service outages on our U.S. stock trading platform on March 2-3, 2020 and March 9, 2020 (the “March 2020 Outages”), and customer support prior to June 2020. RHF has reached and paid settlements with 46 states for an aggregate of $9.2 million and may reach settlements with the remaining states as part of a multi-state settlement related to these issues for approximately $1 million. The Financial Industry Regulatory Authority (“FINRA”) previously conducted an investigation and reached a settlement with RHF regarding many of these issues. The New York Attorney General is conducting an investigation into brokerage execution quality. We are cooperating with this investigation. 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 (“ACATS”); 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 and RHS’s compliance with FINRA registration requirements for member personnel; marketing involving social media influencers and affiliates; collaring the prices of certain trade orders; RHS’s and RHF’s compliance with best execution obligations; RHS’s compliance with FINRA Rules 6190, 5260, and 6121; RHS’s and RHF’s compliance with regulations governing the delivery of required documents; matters related to RHS’s and RHF’s supervision of technology; and origin code reporting. 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, the Q4 2022 Processing Error, and responses to Electronic Blue Sheets requests, and previously received similar requests from FINRA examinations staff including with respect to short interest reporting. RHS and RHF have also received requests from the SEC Division of Enforcement and FINRA Enforcement staff related to RHS’s and RHF’s 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 also has received investigative subpoenas from the SEC regarding, among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations. RHC is cooperating with these investigations. On May 4, 2024, RHC received a “Wells Notice” (the “May 2024 Wells Notice”) from the Staff of the SEC (the “SEC Staff”) stating that the SEC Staff has advised RHC that it made a “preliminary determination” to recommend that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Exchange Act. The potential action may involve a civil injunctive action, public administrative proceeding, and/or a a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities. 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, including 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 SEC’s Division of Enforcement is also investigating issues related to compliance with the Electronic Funds Transfer Act. We are cooperating with these investigations. 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 unspecified total statutory and treble monetary 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. The parties have reached a settlement in principle to resolve this matter and the court has granted preliminary approval. Massachusetts Securities Division Matter In December 2020, the 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. In August 2023, the Massachusetts Supreme Judicial Court reversed the decision of the Massachusetts Superior Court. In January 2024, we settled this matter with the MSD related to supervision of certain product features and marketing strategies, the March 2020 Outages, and our options trading approval process, as well as the November 2021 Data Security Incident, under which we paid a $7.5 million fine and agreed to engage an independent consultant to review, among other things, implementation of the FINRA independent’s recommendations, policies and procedures regarding certain application features, and cybersecurity measures. RHF has dismissed its state court action. 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 U.S. trading 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 unspecified 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. In August 2023, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s order. 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. The complaint seeks unspecified monetary damages, costs and expenses, and other relief. 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. In November 2023, the court denied Plaintiffs’ motion for class certification without prejudice. In April 2024, the court denied Plaintiffs’ motion for leave to file a renewed motion for class certification. In May 2024, Plaintiffs filed a motion for reconsideration of the court’s denial of class certification, which Robinhood is opposing. RHM, RHF, RHS, and our Co-Founder and Chief Executive Officer (“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. 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 unspecified 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 2024, the court granted Robinhood’s motion to dismiss the second amended complaint without leave to amend. In February 2024, plaintiffs filed a notice of appeal to the 9th Circuit and the appeal is currently pending. 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 unspecified 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 November 2021 Data Security Incident. The board of directors has formed a Demand Review Committee that is reviewing the demand. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income (loss) | $ 157 | $ (511) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 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, 2023 (“2023 Form 10-K”). |
Consolidation | The unaudited condensed consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Reclassifications | Certain reclassifications have been made to prior period amounts to conform to the current period’s presentation. |
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, share-based compensation (“SBC”), 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, determination of hedge effectiveness, 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 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. |
Variable Interest Entities | Variable Interest Entities We evaluate our ownership, contractual and other interests in entities to determine if we have a variable interest in an entity. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical and prospective information, among other factors. If we determine that an entity for which we hold a contractual or ownership interest in is a variable interest entity (“VIE”) and that we are the primary beneficiary, we consolidate such entity in the consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: |
Asset Acquisitions | Asset Acquisitions Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. We allocate the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition. |
Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements There were no new accounting pronouncements adopted during the three months ended March 31, 2024 that materially impacted our unaudited condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This amendment will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this guidance will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impacts of the amendment on our consolidated financial statements. In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in guidance improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures. In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income taxes (Topic 740): Improvements to Income Taxes Disclosures.” This guidance requires annual disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures. In March 2024, the SEC adopted final rules under SEC Release No. 34-99678 and No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (the “Final Rules”), which requires registrants to provide certain climate-related information in their registration statements |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 2024 Market maker: Citadel Securities, LLC 13 % 12 % Wintermute Trading Ltd — % 10 % All others individually less than 10% 32 % 30 % Total as percentage of total revenue: 45 % 52 % |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Revenue Source | The following table presents our revenues disaggregated by revenue source: Three Months Ended (in millions) 2023 2024 Transaction-based revenues: Options $ 133 $ 154 Cryptocurrencies 38 126 Equities 27 39 Other 9 10 Total transaction-based revenues 207 329 Net interest revenues: Margin interest 53 72 Interest on corporate cash and investments 68 70 Interest on segregated cash, securities, and deposits 45 58 Cash Sweep 22 39 Securities lending, net 26 15 Credit card, net — 6 Interest expenses related to credit facilities (6) (6) Total net interest revenues 208 254 Other revenues 26 35 Total net revenues $ 441 $ 618 |
Schedule of Interest Revenue Earned and Interest Expense Paid from Fully-paid Securities Lending | The following table presents interest revenue earned and interest expense paid from Fully-Paid Securities Lending: Three Months Ended (in millions) 2023 2024 Interest revenue $ 10 $ 13 Interest expense (2) (2) Fully-Paid Securities Lending, net $ 8 $ 11 |
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 the period, January 1, 2024 $ 87 4 End of the period, March 31, 2024 166 5 Changes during the period $ 79 $ 1 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Credit Loss [Abstract] | |
Schedule of Allowance for Credit Losses Receivable | The following table summarizes the brokerage related allowance for credit losses as a reduction of receivables from users, net on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2023 2024 Beginning balance $ 18 $ 15 Provision for credit losses 9 6 Write-offs (7) (2) Ending balance $ 20 $ 19 The following table summarizes the allowance related to interest receivables from customers that carry a balance and purchased credit card receivables, shown as a reduction of receivables from users, net on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2024 Beginning balance $ 1 Provision for credit losses 2 Write-offs (1) Ending balance $ 2 The following table summarizes the allowance related to off-balance sheet credit card receivables, shown as part of accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet: Three Months Ended (in millions) 2024 Beginning balance $ 32 Provision for credit losses 8 Payments to Coastal Bank (9) Recoveries 1 Ending balance $ 32 |
INVESTMENTS AND FAIR VALUE ME_2
INVESTMENTS AND FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Held-to-Maturity Investments | The following tables summarize our held-to-maturity investments: December 31, 2023 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: Corporate debt securities $ 205 $ — $ — $ (1) $ 204 U.S. Treasury securities 202 — — — 202 U.S. government agency securities 42 — — — 42 Certificates of deposit 34 — — — 34 Commercial paper 3 — — — 3 Total held-to-maturity investments $ 486 $ — $ — $ (1) $ 485 March 31, 2024 (in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Debt securities: U.S. Treasury securities $ 338 $ — $ — $ — $ 338 Corporate debt securities 158 — — (1) 157 U.S. government agency securities 9 — — — 9 Total held-to-maturity investments $ 505 $ — $ — $ (1) $ 504 |
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; the maximum maturity is two years: December 31, 2023 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: Corporate debt securities $ 153 $ 52 $ 205 U.S. Treasury securities 184 18 202 U.S. government agency securities 39 3 42 Certificates of deposit 34 — 34 Commercial paper 3 — 3 Total held-to-maturity investments $ 413 $ 73 $ 486 Fair value Debt securities: Corporate debt securities $ 152 $ 52 $ 204 U.S. Treasury securities 184 18 202 U.S. government agency securities 39 3 42 Certificates of deposit 34 — 34 Commercial paper 3 — 3 Total held-to-maturity investments $ 412 $ 73 $ 485 March 31, 2024 (in millions) Within 1 Year 1 to 2 Years Total Amortized cost Debt securities: U.S. Treasury securities $ 330 $ 8 $ 338 Corporate debt securities 158 — 158 U.S. government agency securities 7 2 9 Total held-to-maturity investments $ 495 $ 10 $ 505 Fair value Debt securities: U.S. Treasury securities $ 330 $ 8 $ 338 Corporate debt securities 157 — 157 U.S. government agency securities 7 2 9 Total held-to-maturity investments $ 494 $ 10 $ 504 |
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, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits $ — $ 500 $ — $ 500 Money market funds 146 — — 146 Deposits with clearing organizations: U.S. Treasury securities 50 — — 50 Other current assets: Stablecoin 20 — — 20 Equity securities - securities owned 10 — — 10 Other non-current assets: Money market funds - escrow account 2 — — 2 Asset related to user cryptocurrencies safeguarding obligation — 14,708 — 14,708 User-held fractional shares 1,592 — — 1,592 Total financial assets $ 1,820 $ 15,208 $ — $ 17,028 Liabilities Accounts payable and accrued expenses: User cryptocurrencies safeguarding obligation $ — $ 14,708 $ — $ 14,708 Fractional shares repurchase obligations 1,592 — — 1,592 Total financial liabilities $ 1,592 $ 14,708 $ — $ 16,300 March 31, 2024 (in millions) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits $ — $ 500 $ — $ 500 Money market funds 99 — — 99 U.S. Treasury securities 13 — — 13 Cash, cash equivalents, and securities segregated under federal and other regulations: U.S. Treasury securities 792 — — 792 Deposits with clearing organizations: U.S. Treasury securities (1) 150 — — 150 Other current assets: Stablecoin 101 — — 101 Equity securities - securities owned 11 — — 11 Other non-current assets: Money market funds - escrow account 2 — — 2 Asset related to user cryptocurrencies safeguarding obligation — 26,223 — 26,223 User-held fractional shares 1,975 — — 1,975 Total financial assets $ 3,143 $ 26,723 $ — $ 29,866 Liabilities User cryptocurrencies safeguarding obligation $ — $ 26,223 $ — $ 26,223 Fractional shares repurchase obligations 1,975 — — 1,975 Total financial liabilities $ 1,975 $ 26,223 $ — $ 28,198 ____________________________ (1) As of March 31, 2024, $150 million of our U.S. Treasury securities were pledged to a clearing organization to meet margin requirements for our security lending program. |
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: December 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: Corporate debt securities $ — $ 204 $ — $ 204 U.S. Treasury securities 202 — — 202 U.S. government agency securities — 42 — 42 Certificates of deposit — 34 — 34 Commercial paper — 3 — 3 Total held-to-maturity investments $ 202 $ 283 $ — $ 485 March 31, 2024 (in millions) Level 1 Level 2 Level 3 Total Assets Held-to-maturity investments: U.S. Treasury securities $ 338 $ — $ — $ 338 Corporate debt securities — 157 — 157 U.S. government agency securities — 9 — 9 Total held-to-maturity investments $ 338 $ 166 $ — $ 504 |
Schedule of Safeguarded Cryptocurrencies | Safeguarded user cryptocurrencies were as follows: December 31, March 31, (in millions) 2023 2024 Bitcoin (BTC) $ 6,149 $ 10,309 Dogecoin (DOGE) 3,319 7,365 Ethereum (ETH) 3,761 5,629 Other 1,479 2,920 Total user cryptocurrencies safeguarding obligation and corresponding asset $ 14,708 $ 26,223 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the Amount of Gain or Loss Recognized in AOCI | The following table summarizes the amount of gain or loss recognized in AOCI on our unaudited condensed consolidated financial statements: Three Months Ended (in millions) 2024 Derivatives designated as hedging instruments: Loss reclassified from AOCI into net interest revenues included in effectiveness assessment $ 1 |
Schedule of the Components of AOCI Related to Hedging Activities | The following table summarizes the components of AOCI related to hedging activities on our unaudited condensed consolidated financial statements: Three Months Ended (in millions) 2024 Beginning balance $ (3) Other comprehensive loss before reclassifications, net of tax — Reclassification adjustment for net gains included in net interest revenues, net of tax 1 Other comprehensive loss after reclassifications, net of tax $ 1 Ending balance $ (2) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | Three Months Ended (in millions, except percentages) 2023 2024 Income (loss) before income taxes $ (509) $ 162 Provision for income taxes 2 5 Effective tax rate (0.5) % 3.0 % |
SECURITIES BORROWING AND LEND_2
SECURITIES BORROWING AND LENDING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023 and March 31, 2024: December 31, March 31, (in millions) 2023 2024 Assets Securities borrowed Gross amount of cash collateral provided to users for securities borrowing transactions $ 1,602 $ 2,107 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 1,602 2,107 Gross amount not offset on the consolidated balance sheets: Cash collateral provided to users and third parties for securities borrowing transactions 1,602 2,107 Fair value of securities borrowed from users and third parties (1,536) (2,060) Net amount $ 66 $ 47 Liabilities Securities loaned Gross amount of cash collateral received from counterparties for securities lending transactions $ 3,547 $ 4,215 Gross amount offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 3,547 4,215 Gross amount not offset on the consolidated balance sheets: Cash collateral received from counterparties for securities lending transactions 3,547 4,215 Fair value of securities pledged to counterparties (3,188) (3,834) Net amount $ 359 $ 381 |
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, 2023 and March 31, 2024: December 31, March 31, (in millions) 2023 2024 Assets Securities borrowed Gross amount of cash collateral provided to users for securities borrowing transactions $ 1,602 $ 2,107 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets 1,602 2,107 Gross amount not offset on the consolidated balance sheets: Cash collateral provided to users and third parties for securities borrowing transactions 1,602 2,107 Fair value of securities borrowed from users and third parties (1,536) (2,060) Net amount $ 66 $ 47 Liabilities Securities loaned Gross amount of cash collateral received from counterparties for securities lending transactions $ 3,547 $ 4,215 Gross amount offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 3,547 4,215 Gross amount not offset on the consolidated balance sheets: Cash collateral received from counterparties for securities lending transactions 3,547 4,215 Fair value of securities pledged to counterparties (3,188) (3,834) Net amount $ 359 $ 381 |
COMMON STOCK AND STOCKHOLDERS_2
COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024, 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, 2023 34,551,998 $ 14.99 Granted 14,420,757 16.97 Vested (7,358,077) 14.95 Forfeited (1,899,675) 15.15 Unvested at March 31, 2024 39,715,003 $ 15.71 The following table summarizes the activity related to our Market-Based RSUs for the three months ended March 31, 2024: Eligible to Vest (1) Not Eligible to Vest (2) Total Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2023 345,796 22,130,926 22,476,722 $ 25.67 Granted — — — Vested (115,264) — (115,264) 2.34 Forfeited (115,264) (5,993,795) (6,109,059) 25.59 Unvested at March 31, 2024 115,268 16,137,131 16,252,399 $ 25.87 ________________ (1) Represents RSUs that became eligible to vest upon achievement of share price targets and vest upon satisfaction of time-based service requirements. (2) |
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) 2023 2024 Brokerage and transaction $ 2 $ 2 Technology and development 54 44 Operations 2 2 Marketing 1 2 General and administrative 539 12 Total (1) $ 598 $ 62 ________________ (1) For the three months ended March 31, 2023, SBC expense primarily consisted of $67 million related to Time-Based RSUs and $528 million related to Market-Based RSUs. For the three months ended March 31, 2024, SBC expense primarily consisted of $68 million related to Time-Based RSUs and a negative $9 million related to Market-Based RSUs, as portion of the Market-Based RSUs became fully vested in prior periods and was net of an $11 million reversal of previously recognized expense related to unvested awards that were forfeited upon the resignation of our co-founder and former Chief Creative Officer. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss Per Share | The following table presents the calculation of basic and diluted income (loss) per share: (in millions, except share and per share data) Three Months Ended 2023 2024 Class A Class B Class A Class B Basic earnings per share (“EPS”): Numerator Net income (loss) $ (438) $ (73) $ 134 $ 23 Net income (loss) attributable to common stockholders $ (438) $ (73) $ 134 $ 23 Denominator Weighted-average common shares outstanding - basic 769,223,564 127,701,131 749,497,411 125,821,996 Basic EPS $ (0.57) $ (0.57) $ 0.18 $ 0.18 Diluted EPS: Numerator Net income (loss) $ (438) $ (73) $ 134 $ 23 Reallocation of net income as a result of conversion of Class B to Class A common stock — — 23 — Reallocation of net income to Class B common stock — Net income (loss) for diluted EPS $ (438) $ (73) $ 157 $ 23 Denominator Weighted-average common shares outstanding - basic 769,223,564 127,701,131 749,497,411 125,821,996 Dilutive effect of stock options and unvested shares — — 20,459,748 — Conversion of Class B to Class A common stock — — 125,821,996 — Weighted-average common shares outstanding - diluted 769,223,564 127,701,131 895,779,155 125,821,996 Net income (loss) per share attributable to common stockholders: Basic $ (0.57) $ (0.57) $ 0.18 $ 0.18 Diluted $ (0.57) $ (0.57) $ 0.18 $ 0.18 |
Schedule of Potential Common Shares Excluded from the Calculation of Diluted Net Income (Loss) Per Share | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period: Three Months Ended 2023 2024 Time-Based RSUs 63,632,646 4,595,054 Market-Based RSUs 22,822,518 6,045,473 Stock options 14,540,171 2,602,524 Warrants 14,278,034 14,278,034 Employee Stock Purchase Plan ("ESPP") 1,070,783 — Total anti-dilutive securities 116,344,152 27,521,085 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 2024 Lease right-of-use assets: Operating lease assets Other non-current assets $ 68 $ 70 Lease liabilities: Current operating lease liabilities Other current liabilities 20 21 Non-current operating lease liabilities Other non-current liabilities 89 89 Total lease liabilities $ 109 $ 110 |
Schedule of Cash Flows | Cash flows related to leases were as follows: Three Months Ended (in millions) 2023 2024 Operating cash flows: Payments for operating lease liabilities $ 7 $ 7 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ — $ 6 |
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, 2024 | Mar. 31, 2023 | |
Total as percentage of total revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 52% | 45% |
Citadel Securities, LLC | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12% | 13% |
Wintermute Trading Ltd | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10% | 0% |
All others individually less than 10% | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 30% | 32% |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 03, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Asset Acquisition [Line Items] | |||
Asset acquisition, consideration transferred | $ 3 | $ 0 | |
MNA Holdco LLC | |||
Asset Acquisition [Line Items] | |||
Asset acquisition, consideration transferred | $ 3 | ||
Cash acquired | $ 125 |
REVENUES - Schedule of Revenue
REVENUES - Schedule of Revenue Disaggregated by Revenue Source (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Interest expenses related to credit facilities | $ (6) | $ (6) |
Total net interest revenues | 254 | 208 |
Total net revenues | 618 | 441 |
Transaction-based revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | 329 | 207 |
Options | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | 154 | 133 |
Cryptocurrencies | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | 126 | 38 |
Equities | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | 39 | 27 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | 10 | 9 |
Margin interest | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 72 | 53 |
Interest on corporate cash and investments | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 70 | 68 |
Interest on segregated cash, securities, and deposits | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 58 | 45 |
Cash Sweep | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 39 | 22 |
Securities lending, net | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 15 | 26 |
Credit card, net | ||
Disaggregation of Revenue [Line Items] | ||
Net interest revenues | 6 | 0 |
Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total transaction-based revenues | $ 35 | $ 26 |
REVENUES - Schedule of Interest
REVENUES - Schedule of Interest Revenue Earned and Interest Expense Paid from Fully-paid Securities Lending (Details) - Fully-Paid Securities Lending - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Interest revenue | $ 13 | $ 10 |
Interest expense | (2) | (2) |
Fully-Paid Securities Lending, net | $ 11 | $ 8 |
REVENUES - Schedule of Contract
REVENUES - Schedule of Contract Receivables and Liabilities Balances (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Contract with Customer, Asset [Roll Forward] | |
Beginning of the period, January 1, 2024 | $ 87 |
End of the period, March 31, 2024 | 166 |
Changes during the period | 79 |
Contract with Customer, Liability [Roll Forward] | |
Beginning of the period, January 1, 2024 | 4 |
End of the period, March 31, 2024 | 5 |
Changes during the period | $ 1 |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses of Brokerage Related (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Provision for credit losses | $ 16 | $ 9 |
Brokerage Related Receivables | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 15 | 18 |
Provision for credit losses | 6 | 9 |
Write-offs | (2) | (7) |
Ending balance | $ 19 | $ 20 |
ALLOWANCE FOR CREDIT LOSSES -_2
ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses of Receivables From Users (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Credit Loss [Abstract] | |
Contract with customer, threshold period | 180 days |
Robinhood credit | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | $ 1 |
Provision for credit losses | 2 |
Write-offs | (1) |
Ending balance | $ 2 |
ALLOWANCE FOR CREDIT LOSSES - E
ALLOWANCE FOR CREDIT LOSSES - Expected Credit Loss of Accounts Payable (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 32 | $ 32 |
Provision for credit losses | 8 | |
Payments to Coastal Bank | (9) | |
Recoveries | 1 | |
Ending balance | $ 32 |
INVESTMENTS AND FAIR VALUE ME_3
INVESTMENTS AND FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Sales of held-to-maturity investments | $ 0 | |
Time deposits | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Available-for-sale investments | $ 500,000,000 | $ 500,000,000 |
INVESTMENTS AND FAIR VALUE ME_4
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Held-to-Maturity Investments (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | $ 505 | $ 486 |
Allowance for Credit Losses | 0 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | (1) |
Fair Value | 504 | 485 |
Corporate debt securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 158 | 205 |
Allowance for Credit Losses | 0 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | (1) |
Fair Value | 157 | 204 |
U.S. Treasury securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 338 | 202 |
Allowance for Credit Losses | 0 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 338 | 202 |
U.S. government agency securities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 9 | 42 |
Allowance for Credit Losses | 0 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 9 | 42 |
Certificates of deposit | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 34 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 34 | |
Commercial paper | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Amortized Cost | 3 | |
Allowance for Credit Losses | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | $ 3 |
INVESTMENTS AND FAIR VALUE ME_5
INVESTMENTS AND FAIR VALUE MEASUREMENT -Schedule of Amortized Cost and Fair Value of Held-to-Maturity Investments by Contractual Maturity Date (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Amortized cost | ||
Within 1 Year | $ 495 | $ 413 |
1 to 2 Years | 10 | 73 |
Amortized Cost | 505 | 486 |
Fair value | ||
Within 1 Year | 494 | 412 |
1 to 2 Years | 10 | 73 |
Total | 504 | 485 |
Corporate debt securities | ||
Amortized cost | ||
Within 1 Year | 158 | 153 |
1 to 2 Years | 0 | 52 |
Amortized Cost | 158 | 205 |
Fair value | ||
Within 1 Year | 157 | 152 |
1 to 2 Years | 0 | 52 |
Total | 157 | 204 |
U.S. Treasury securities | ||
Amortized cost | ||
Within 1 Year | 330 | 184 |
1 to 2 Years | 8 | 18 |
Amortized Cost | 338 | 202 |
Fair value | ||
Within 1 Year | 330 | 184 |
1 to 2 Years | 8 | 18 |
Total | 338 | 202 |
U.S. government agency securities | ||
Amortized cost | ||
Within 1 Year | 7 | 39 |
1 to 2 Years | 2 | 3 |
Amortized Cost | 9 | 42 |
Fair value | ||
Within 1 Year | 7 | 39 |
1 to 2 Years | 2 | 3 |
Total | $ 9 | 42 |
Certificates of deposit | ||
Amortized cost | ||
Within 1 Year | 34 | |
1 to 2 Years | 0 | |
Amortized Cost | 34 | |
Fair value | ||
Within 1 Year | 34 | |
1 to 2 Years | 0 | |
Total | 34 | |
Commercial paper | ||
Amortized cost | ||
Within 1 Year | 3 | |
1 to 2 Years | 0 | |
Amortized Cost | 3 | |
Fair value | ||
Within 1 Year | 3 | |
1 to 2 Years | 0 | |
Total | $ 3 |
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) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Cash, cash equivalents, and securities segregated under federal and other regulations | $ 4,521 | $ 4,448 |
Deposits with clearing organizations | 585 | 338 |
Asset related to user cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Liabilities | ||
User cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fair Value, Recurring | ||
Assets | ||
Total financial assets | 29,866 | 17,028 |
Liabilities | ||
Total financial liabilities | 28,198 | 16,300 |
Fair Value, Recurring | U.S. Treasury securities | ||
Assets | ||
Cash equivalents | 13 | |
Cash, cash equivalents, and securities segregated under federal and other regulations | 792 | |
Deposits with clearing organizations | 150 | 50 |
Fair Value, Recurring | Stablecoin | ||
Assets | ||
Other current assets | 101 | 20 |
Fair Value, Recurring | Equity securities - securities owned | ||
Assets | ||
Other current assets | 11 | 10 |
Fair Value, Recurring | Money market funds - escrow account | ||
Assets | ||
Other current assets | 2 | 2 |
Fair Value, Recurring | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Asset related to user cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fair Value, Recurring | User-held fractional shares | ||
Assets | ||
Other current assets | 1,975 | 1,592 |
Fair Value, Recurring | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
User cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fair Value, Recurring | Fractional shares repurchase obligations | ||
Liabilities | ||
Fractional shares repurchase obligations | 1,975 | 1,592 |
Fair Value, Recurring | Time deposits | ||
Assets | ||
Cash equivalents | 500 | 500 |
Fair Value, Recurring | Money market funds | ||
Assets | ||
Cash equivalents | 99 | 146 |
Fair Value, Recurring | Level 1 | ||
Assets | ||
Total financial assets | 3,143 | 1,820 |
Liabilities | ||
Total financial liabilities | 1,975 | 1,592 |
Fair Value, Recurring | Level 1 | U.S. Treasury securities | ||
Assets | ||
Cash, cash equivalents, and securities segregated under federal and other regulations | 792 | |
Deposits with clearing organizations | 150 | 50 |
Fair Value, Recurring | Level 1 | Stablecoin | ||
Assets | ||
Other current assets | 101 | 20 |
Fair Value, Recurring | Level 1 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 11 | 10 |
Fair Value, Recurring | Level 1 | Money market funds - escrow account | ||
Assets | ||
Other current assets | 2 | 2 |
Fair Value, Recurring | Level 1 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Asset related to user cryptocurrencies safeguarding obligation | 0 | 0 |
Fair Value, Recurring | Level 1 | User-held fractional shares | ||
Assets | ||
Other current assets | 1,975 | 1,592 |
Fair Value, Recurring | Level 1 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
User cryptocurrencies safeguarding obligation | 0 | 0 |
Fair Value, Recurring | Level 1 | Fractional shares repurchase obligations | ||
Liabilities | ||
Fractional shares repurchase obligations | 1,975 | 1,592 |
Fair Value, Recurring | Level 1 | Time deposits | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 1 | Money market funds | ||
Assets | ||
Cash equivalents | 99 | 146 |
Fair Value, Recurring | Level 1 | U.S. Treasury securities | ||
Assets | ||
Cash equivalents | 13 | |
Fair Value, Recurring | Level 2 | ||
Assets | ||
Total financial assets | 26,723 | 15,208 |
Liabilities | ||
Total financial liabilities | 26,223 | 14,708 |
Fair Value, Recurring | Level 2 | U.S. Treasury securities | ||
Assets | ||
Cash equivalents | 0 | |
Cash, cash equivalents, and securities segregated under federal and other regulations | 0 | |
Deposits with clearing organizations | 0 | 0 |
Fair Value, Recurring | Level 2 | Stablecoin | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 2 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 2 | Money market funds - escrow account | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 2 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Asset related to user cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fair Value, Recurring | Level 2 | User-held fractional shares | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 2 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
User cryptocurrencies safeguarding obligation | 26,223 | 14,708 |
Fair Value, Recurring | Level 2 | Fractional shares repurchase obligations | ||
Liabilities | ||
Fractional shares repurchase obligations | 0 | 0 |
Fair Value, Recurring | Level 2 | Time deposits | ||
Assets | ||
Cash equivalents | 500 | 500 |
Fair Value, Recurring | Level 2 | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Assets | ||
Total financial assets | 0 | 0 |
Liabilities | ||
Total financial liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | U.S. Treasury securities | ||
Assets | ||
Cash equivalents | 0 | |
Cash, cash equivalents, and securities segregated under federal and other regulations | 0 | |
Deposits with clearing organizations | 0 | 0 |
Fair Value, Recurring | Level 3 | Stablecoin | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 3 | Equity securities - securities owned | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 3 | Money market funds - escrow account | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 3 | Asset related to user cryptocurrencies safeguarding obligation | ||
Assets | ||
Asset related to user cryptocurrencies safeguarding obligation | 0 | 0 |
Fair Value, Recurring | Level 3 | User-held fractional shares | ||
Assets | ||
Other current assets | 0 | 0 |
Fair Value, Recurring | Level 3 | User cryptocurrencies safeguarding obligation | ||
Liabilities | ||
User cryptocurrencies safeguarding obligation | 0 | 0 |
Fair Value, Recurring | Level 3 | Fractional shares repurchase obligations | ||
Liabilities | ||
Fractional shares repurchase obligations | 0 | 0 |
Fair Value, Recurring | Level 3 | Time deposits | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value, Recurring | 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) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Total held-to-maturity investments | $ 504 | $ 485 |
Corporate debt securities | ||
Assets | ||
Total held-to-maturity investments | 157 | 204 |
U.S. Treasury securities | ||
Assets | ||
Total held-to-maturity investments | 338 | 202 |
U.S. government agency securities | ||
Assets | ||
Total held-to-maturity investments | 9 | 42 |
Certificates of deposit | ||
Assets | ||
Total held-to-maturity investments | 34 | |
Commercial paper | ||
Assets | ||
Total held-to-maturity investments | 3 | |
Estimate of Fair Value Measurement | ||
Assets | ||
Total held-to-maturity investments | 504 | 485 |
Estimate of Fair Value Measurement | Corporate debt securities | ||
Assets | ||
Total held-to-maturity investments | 157 | 204 |
Estimate of Fair Value Measurement | U.S. Treasury securities | ||
Assets | ||
Total held-to-maturity investments | 338 | 202 |
Estimate of Fair Value Measurement | U.S. government agency securities | ||
Assets | ||
Total held-to-maturity investments | 9 | 42 |
Estimate of Fair Value Measurement | Certificates of deposit | ||
Assets | ||
Total held-to-maturity investments | 34 | |
Estimate of Fair Value Measurement | Commercial paper | ||
Assets | ||
Total held-to-maturity investments | 3 | |
Estimate of Fair Value Measurement | Level 1 | ||
Assets | ||
Total held-to-maturity investments | 338 | 202 |
Estimate of Fair Value Measurement | Level 1 | Corporate debt securities | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 1 | U.S. Treasury securities | ||
Assets | ||
Total held-to-maturity investments | 338 | 202 |
Estimate of Fair Value Measurement | Level 1 | U.S. government agency securities | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 1 | Certificates of deposit | ||
Assets | ||
Total held-to-maturity investments | 0 | |
Estimate of Fair Value Measurement | Level 1 | Commercial paper | ||
Assets | ||
Total held-to-maturity investments | 0 | |
Estimate of Fair Value Measurement | Level 2 | ||
Assets | ||
Total held-to-maturity investments | 166 | 283 |
Estimate of Fair Value Measurement | Level 2 | Corporate debt securities | ||
Assets | ||
Total held-to-maturity investments | 157 | 204 |
Estimate of Fair Value Measurement | Level 2 | U.S. Treasury securities | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | U.S. government agency securities | ||
Assets | ||
Total held-to-maturity investments | 9 | 42 |
Estimate of Fair Value Measurement | Level 2 | Certificates of deposit | ||
Assets | ||
Total held-to-maturity investments | 34 | |
Estimate of Fair Value Measurement | Level 2 | Commercial paper | ||
Assets | ||
Total held-to-maturity investments | 3 | |
Estimate of Fair Value Measurement | Level 3 | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | Corporate debt securities | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | U.S. Treasury securities | ||
Assets | ||
Total held-to-maturity investments | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | U.S. government agency securities | ||
Assets | ||
Total held-to-maturity investments | $ 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | Certificates of deposit | ||
Assets | ||
Total held-to-maturity investments | 0 | |
Estimate of Fair Value Measurement | Level 3 | Commercial paper | ||
Assets | ||
Total held-to-maturity investments | $ 0 |
INVESTMENTS AND FAIR VALUE ME_8
INVESTMENTS AND FAIR VALUE MEASUREMENT - Schedule of Crypto Assets Held in Custody (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | $ 26,223 | $ 14,708 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 26,223 | 14,708 |
Bitcoin (BTC) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 10,309 | 6,149 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 10,309 | 6,149 |
Dogecoin (DOGE) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 7,365 | 3,319 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 7,365 | 3,319 |
Ethereum (ETH) | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 5,629 | 3,761 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | 5,629 | 3,761 |
Other | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total user cryptocurrencies safeguarding obligation and corresponding asset | 2,920 | 1,479 |
Total user cryptocurrencies safeguarding obligation and corresponding asset | $ 2,920 | $ 1,479 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 USD ($) | Jun. 30, 2023 USD ($) contract | Jan. 01, 2024 USD ($) contract | Dec. 31, 2023 contract | |
Derivatives, Fair Value [Line Items] | ||||
Losses expected to be reclassified from AOCI | $ | $ 2,000,000 | |||
Forecasted transactions over a maximum period (in years) | 1 year | |||
Interest Rate Floor | ||||
Derivatives, Fair Value [Line Items] | ||||
Number of interest rate floors | contract | 1 | 1 | ||
Aggregated notional amount | $ | $ 2,000,000,000 | $ 1,000,000,000 | ||
Maturity of derivative contract | 6 months | 6 months | ||
Designated as Hedging Instrument | Interest Rate Floor | ||||
Derivatives, Fair Value [Line Items] | ||||
Number of interest rate floors | contract | 2 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of the Amount of Gain or Loss Recognized in AOCI (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Designated as Hedging Instrument | |
Derivatives, Fair Value [Line Items] | |
Loss reclassified from AOCI into net interest revenues included in effectiveness assessment | $ 1 |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of the Components of AOCI Related to Hedging Activities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 6,696 | $ 6,956 |
Total other comprehensive income (loss), net of tax | 1 | 0 |
Balance at end of period | 6,885 | $ 7,046 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (3) | |
Other comprehensive loss before reclassifications, net of tax | 0 | |
Reclassification adjustment for net gains included in net interest revenues, net of tax | 1 | |
Total other comprehensive income (loss), net of tax | 1 | |
Balance at end of period | $ (2) |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) before income taxes | $ 162 | $ (509) |
Provision for income taxes | $ 5 | $ 2 |
Effective tax rate | 3% | (0.50%) |
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, 2024 | Dec. 31, 2023 |
Assets | ||
Gross amount of cash collateral provided to users for securities borrowing transactions | $ 2,107 | $ 1,602 |
Gross amount offset on the consolidated balance sheets | 0 | 0 |
Amounts of assets presented on the consolidated balance sheets | 2,107 | 1,602 |
Securities borrowed | 2,107 | 1,602 |
Fair value of securities borrowed from users and third parties | (2,060) | (1,536) |
Net amount | 47 | 66 |
Liabilities | ||
Gross amount of cash collateral received from counterparties for securities lending transactions | 4,215 | 3,547 |
Gross amount offset on the consolidated balance sheets | 0 | 0 |
Amounts of liabilities presented on the consolidated balance sheets | 4,215 | 3,547 |
Securities loaned | 4,215 | 3,547 |
Fair value of securities pledged to counterparties | (3,834) | (3,188) |
Net amount | $ 381 | $ 359 |
SECURITIES BORROWING AND LEND_4
SECURITIES BORROWING AND LENDING - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Offsetting Assets [Line Items] | ||
Fair value of securities borrowed from users and third parties | $ 2,060 | $ 1,536 |
Fair value of securities pledged to counterparties | 3,834 | 3,188 |
Amount re-pledged with clearing organizations to meet deposit requirements | 683 | 676 |
Third Parties | ||
Offsetting Assets [Line Items] | ||
Fair value of securities borrowed from users and third parties | 6 | 0 |
Asset Pledged as Collateral | ||
Offsetting Assets [Line Items] | ||
Securities pledged | 5,740 | $ 4,780 |
Asset Pledged as Collateral | Securities Sold under Agreements to Repurchase | ||
Offsetting Assets [Line Items] | ||
Securities pledged | 19,220 | |
Fair value of securities borrowed from users and third parties | $ 2,050 |
FINANCING ACTIVITIES AND OFF-_2
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Mar. 22, 2024 | Nov. 30, 2023 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||||
Collections of purchased credit card receivables | $ 29,000,000 | $ 0 | ||||
Customer advance balance | $ 177,000,000 | |||||
Settlement date basis, equities | 2 days | |||||
Settlement date basis, options | 1 day | |||||
Robinhood Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 100,000,000 | |||||
Collections of purchased credit card receivables | 31,000,000 | |||||
Outstanding amount | 17,000,000 | |||||
Provision for credit losses | $ 19,000,000 | |||||
Robinhood credit | Coastal Bank | ||||||
Debt Instrument [Line Items] | ||||||
Customer advance limit | $ 300,000,000 | |||||
Robinhood credit | Coastal Bank | Interest Rate Margin One | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 3.75% | |||||
Customer advance limit threshold | $ 150,000,000 | |||||
Robinhood credit | Coastal Bank | Interest Rate Margin Two | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 3% | |||||
Customer advance limit threshold | $ 150,000,000 | |||||
SOFR | Robinhood Credit | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 3% | |||||
RHM March 2024 Credit Facility | Secured Overnight Financing Rate, Interest Period Of One Month | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 0.10% | |||||
RHM March 2024 Credit Facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 0% | |||||
Revolving Credit Facility | April 2023 Credit Agreement | March 2024 credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 2,175,000,000 | $ 2,175,000,000 | ||||
Line of credit facility, term | 364 days | |||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding borrowings, long-term | $ 0 | |||||
Revolving Credit Facility | Line of Credit | RHM March 2024 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 750,000,000 | |||||
Increase limit on credit facility | 187,500,000 | |||||
Remaining borrowing capacity | $ 937,500,000 | |||||
Commitment fee percentage | 0.25% | |||||
Revolving Credit Facility | Line of Credit | RHM March 2024 Credit Facility | Federal Reserve Bank of New York Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 0.50% | |||||
Revolving Credit Facility | Line of Credit | RHM March 2024 Credit Facility | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 1% | |||||
Revolving Credit Facility | Line of Credit | RHS March 2024 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, amount entered into | $ 2,250,000,000 | |||||
Increase limit on credit facility | 1,125,000,000 | |||||
Remaining borrowing capacity | $ 3,375,000,000 | |||||
Line of credit facility, term | 364 days | |||||
Unused capacity, commitment fee percentage | 0.50% | |||||
Outstanding borrowings, long-term | $ 0 | |||||
Revolving Credit Facility | Line of Credit | RHS March 2024 Credit Agreement | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 0.10% | |||||
Revolving Credit Facility | Line of Credit | RHS March 2024 Credit Agreement, Tranche A | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 1.25% | |||||
Revolving Credit Facility | Line of Credit | RHM March 2024 Credit Facility, Tranche B and C | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate on loan | 2.50% |
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, 2024 USD ($) class vote $ / shares shares | Mar. 31, 2023 USD ($) | Dec. 31, 2023 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 | $ | $ 62 | $ 598 | ||
Capitalized share-based compensation expense | $ | 5 | 4 | ||
Unrecognized compensation cost | $ | $ 502 | |||
Unrecognized compensation cost related to outstanding stock options, weighted-average period | 11 months 12 days | |||
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ | $ 12 | 539 | ||
Market-Based RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Canceled (in shares) | shares | 35,500,000 | 6,109,059 | ||
Share-based compensation | $ | $ (9) | 528 | ||
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 | 448,000,000 | |||
Shares issued under plans (in shares) | shares | 137,000,000 | |||
Common stock reserved for issuance (in shares) | shares | 72,000,000 | |||
2021 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares remaining available for issuance (in shares) | shares | 239,000,000 | |||
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, 2024 | |
Time-Based RSUs | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 34,551,998 | |
Granted (in shares) | 14,420,757 | |
Vested (in shares) | (7,358,077) | |
Forfeited (in shares) | (1,899,675) | |
Unvested restricted stock, ending balance (in shares) | 39,715,003 | |
Weighted- average grant date fair value | ||
Unvested restricted stock, beginning balance (in dollars per share) | $ 14.99 | |
Granted (in dollars per share) | 16.97 | |
Vested (in dollars per share) | 14.95 | |
Forfeited (in dollars per share) | 15.15 | |
Unvested restricted stock, ending balance (in dollars per share) | $ 15.71 | |
Market-Based RSUs | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 22,476,722 | |
Granted (in shares) | 0 | |
Vested (in shares) | (115,264) | |
Forfeited (in shares) | (35,500,000) | (6,109,059) |
Unvested restricted stock, ending balance (in shares) | 16,252,399 | |
Weighted- average grant date fair value | ||
Unvested restricted stock, beginning balance (in dollars per share) | $ 25.67 | |
Granted (in dollars per share) | ||
Vested (in dollars per share) | 2.34 | |
Forfeited (in dollars per share) | 25.59 | |
Unvested restricted stock, ending balance (in dollars per share) | $ 25.87 | |
Market-Based RSUs Eligible to Vest | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 345,796 | |
Granted (in shares) | 0 | |
Vested (in shares) | (115,264) | |
Forfeited (in shares) | (115,264) | |
Unvested restricted stock, ending balance (in shares) | 115,268 | |
Market-Based RSUs Not Eligible to Vest | ||
Number of RSUs | ||
Unvested restricted stock, beginning balance (in shares) | 22,130,926 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | (5,993,795) | |
Unvested restricted stock, ending balance (in shares) | 16,137,131 |
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, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 62 | $ 598 |
Time-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 68 | 67 |
Market-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | (9) | 528 |
Share-based payment arrangement, expense reversal | 11 | |
Brokerage and transaction | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 2 | 2 |
Technology and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 44 | 54 |
Operations | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 2 | 2 |
Marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 2 | 1 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 12 | 539 |
General and administrative | Market-Based RSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 485 |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator | ||
Net income (loss) | $ 157 | $ (511) |
Net income (loss) attributable to common stockholders | $ 157 | $ (511) |
Weighted-average common stock outstanding - basic (in shares) | 875,319,407 | 896,924,695 |
Weighted-average common shares used to compute diluted loss per share (in shares) | 895,779,155 | 896,924,695 |
Basic EPS (in dollars per share) | $ 0.18 | $ (0.57) |
Numerator | ||
Net income (loss) | $ 157 | $ (511) |
Net income (loss) for diluted EPS | $ 157 | $ (511) |
Denominator | ||
Net income (loss) per share attributable to common stockholders, Basic (in dollars per share) | $ 0.18 | $ (0.57) |
Net income (loss) per share attributable to common stockholders, Diluted (in dollars per share) | $ 0.18 | $ (0.57) |
Class A | ||
Numerator | ||
Net income (loss) | $ 134 | $ (438) |
Net income (loss) attributable to common stockholders | $ 134 | $ (438) |
Weighted-average common stock outstanding - basic (in shares) | 749,497,411 | 769,223,564 |
Dilutive effect of stock options and unvested shares (in shares) | 20,459,748 | 0 |
Conversion of Class B to Class A common stock (in shares) | 125,821,996 | 0 |
Weighted-average common shares used to compute diluted loss per share (in shares) | 895,779,155 | 769,223,564 |
Basic EPS (in dollars per share) | $ 0.18 | $ (0.57) |
Numerator | ||
Net income (loss) | $ 134 | $ (438) |
Reallocation of net income as a result of conversion of Class B to Class A common stock | 23 | 0 |
Reallocation of net income to Class B common stock | ||
Net income (loss) for diluted EPS | $ 157 | $ (438) |
Denominator | ||
Net income (loss) per share attributable to common stockholders, Basic (in dollars per share) | $ 0.18 | $ (0.57) |
Net income (loss) per share attributable to common stockholders, Diluted (in dollars per share) | $ 0.18 | $ (0.57) |
Class B | ||
Numerator | ||
Net income (loss) | $ 23 | $ (73) |
Net income (loss) attributable to common stockholders | $ 23 | $ (73) |
Weighted-average common stock outstanding - basic (in shares) | 125,821,996 | 127,701,131 |
Dilutive effect of stock options and unvested shares (in shares) | 0 | 0 |
Conversion of Class B to Class A common stock (in shares) | 0 | 0 |
Weighted-average common shares used to compute diluted loss per share (in shares) | 125,821,996 | 127,701,131 |
Basic EPS (in dollars per share) | $ 0.18 | $ (0.57) |
Numerator | ||
Net income (loss) | $ 23 | $ (73) |
Reallocation of net income as a result of conversion of Class B to Class A common stock | 0 | 0 |
Reallocation of net income to Class B common stock | 0 | |
Net income (loss) for diluted EPS | $ 23 | $ (73) |
Denominator | ||
Net income (loss) per share attributable to common stockholders, Basic (in dollars per share) | $ 0.18 | $ (0.57) |
Net income (loss) per share attributable to common stockholders, Diluted (in dollars per share) | $ 0.18 | $ (0.57) |
NET INCOME (LOSS) PER SHARE -_2
NET INCOME (LOSS) PER SHARE - Schedule of Potential Common Shares Excluded from the Calculation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 27,521,085 | 116,344,152 |
Time-Based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 4,595,054 | 63,632,646 |
Market-Based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 6,045,473 | 22,822,518 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 2,602,524 | 14,540,171 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 14,278,034 | 14,278,034 |
Employee Stock Purchase Plan ("ESPP") | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0 | 1,070,783 |
LEASES - Schedule of Assets and
LEASES - Schedule of Assets and Liabilities Lessee (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Operating lease assets | $ 70 | $ 68 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Current operating lease liabilities | $ 21 | $ 20 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Non-current operating lease liabilities | $ 89 | $ 89 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
Total lease liabilities | $ 110 | $ 109 |
LEASES - Schedule of Cash Flows
LEASES - Schedule of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating cash flows: | ||
Payments for operating lease liabilities | $ 7 | $ 7 |
Supplemental cash flow data: | ||
Lease liabilities arising from obtaining right-of-use assets | $ 6 | $ 0 |
COMMITMENTS & CONTINGENCIES (De
COMMITMENTS & CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Jan. 31, 2024 USD ($) | Dec. 31, 2020 count case | Mar. 31, 2024 USD ($) State | Dec. 31, 2023 USD ($) | Jan. 28, 2021 tranche | |
Loss Contingencies [Line Items] | |||||
Accrued for legal and regulatory contingencies | $ 184 | $ 190 | |||
Number of tranches | tranche | 3 | ||||
Putative Securities Fraud Class Action Lawsuit | |||||
Loss Contingencies [Line Items] | |||||
Number of lawsuits | case | 5 | ||||
State Regulatory Matters | Unfavorable Regulatory Action | Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of states | State | 46 | ||||
Payments for legal settlements | $ 9.2 | ||||
Additional damages sought value | $ 1 | ||||
Massachusetts Securities Law Violations | |||||
Loss Contingencies [Line Items] | |||||
Number of lawsuits | count | 3 | ||||
Monetary penalty | $ 7.5 |