HOOD - Earnings call transcript Q2 2021

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Operator

Thank you for standing by and welcome to Robinhood’s Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your host, Head of Investor Relations and Capital Markets, Irvin Sha. ahead. go Please

Irvin Sha

CFO, welcome for and With thank for Tenev; you today, Thanks, second everyone quarter us and Vlad Co-Founder, Robinhood’s CEO call. Warnick. XXXX joining our Latif, and and Jason earnings us conference

could the call materially investors.robinhood.com. you risk and to Before will the differences financial today’s XX-Q earnings results operational to cause can Relations expectations the the it we plans. contain update for in to and is well subsequent factors consider as differ Investor Robinhood’s presentation website be third at GAAP about events. Actual found information let that results Vlad. quarter, with turn measures. in XXXX getting Reconciliations we that, from will as most non-GAAP statements on as today, described want XX, Potential the started, just Today’s comparable for presentation we no I that the include to our remind over expectations. August forward-looking All undertake our SEC. are might our strategic me duty discussion Form With on of also filed

Vlad Tenev

and all listeners joining of first you you, for thank earnings our call. Thank Robinhood’s Irv, to

our belief to the of the that from some founded wealth to everyone system. creation new world. sources the of of of be U.S. Before financial sharing the you are The are on one in the QX, should briefly to I highlights company want introduce who those financial We in greatest participate for our Robinhood markets welcome story.

millions removes economic, emotional Robinhood have participating. customers our than many the fix enjoying including But better mission product strong bigger record investing. app we’re mobile-first and in institutions others. elements that on many of money However, platform. individuals leadership and place, become through attracting our barriers clear worldwide. from in kept and the most a access worth want We distributed already to a access We new than the platform, most has a with unevenly have believe mobile, so We and and path the foundational net been and is educational to trusted track that to tools vertically-integrated built culturally engagement high relevant that customer of

updates, use posters our For to our that the quarterly through to aren’t run the our we’re values in them frame going up resources allocate just hang lens values. to and progress We we our wall actually the office. These four of on business.

the is in of safety So our majority value allocating resources been first. here. order, our priority We’ve first

equities support. high-priority related and topics, In phone the of expanded in trading our making services surges some we’re So highest made scale, one, for Number we’re single heavily been more leadership a of the redundancy let of progress volume. we now year. serving resiliency this customers and options continued and second especially the on important services. on to in live support to Number priority talent safety pleased we’re We’ve me go customer made methodically through team the to our crypto resilient and by for have filled well investing points we’ve added over in quarter double we’ve senior upgrade engineering two, year, engineering also and the trading, We’ve our failure, stability systems progress QX, working them our roles security. to of eliminate additional with and here. to down issues and account trading first. enhance I’m

to substantially end able towards support XX/X our of working phone year. We’re all being the of customer the contacts provide for by

support the team and technology hired to And and speed hundreds doubling and licensed contact the the customer increase us, of of customers our we’ve of since We’re our trained beginning service representatives, also eliminating the of year. applying customer quality reasons are responses. size

We us content Robinhood at building run. stay investors. the to aren’t a be investors first-time And customer long want reason that with We helps long-term customers on service remain of over educational focused become done quality number though. the three, we

we of educational customers which quick basics rollout set modules the quarter, courses of allow our to in started first app, investing. This on interactive take the to

continuing We’re months. tools out to this introducing and the look interactive to forward advanced in coming build learning more

So that’s safety first, our top value.

little a second our bit talk power. about me is value, participation Let

customers new worldwide. a new IPO wealthier is have increasing as invest income high or to meaningful public at A this investors. treated products, on everyone regardless access every is day markets able financial and been lets on this with decades. have of as all these excluding do far. IPO Robinhood, than share continue view product, own, this as our engagement to it’s exchanges, our Xx six worth investors value deals. which the IPO deal. Six And great oldest customers just towards build expanding customers better through as deals you’ll our meaningful their another institutional on and shares to oversubscribed access companies, wealth. in equally, IPO allocations company offered example see so of customer net our on seen focused At Access We their to greater for step We’ve at So for by for of Robinhood, consistently trading companies Access don’t get price a our that before is customers we

We’re still of in that QX. for deals pleased that following to about IPO two to days the XX% the allotted held our XX priced the were see customers XX% shares to

more align their We’re that Robinhood shareholders. issuers new optimistic to better with will view way retail more and as themselves a

over encouraged customers our of product, Management from also QX. to Cash to X to at grew which million We’re end customers the the response see

participation power. is that’s So

focus. customer third for Now value, our radical

products to So make our their relationship features We them. customers. we that listen to behalf exist happy. and customers with our more on We to deliver innovate deepen

are showing interest in crypto. Our lot of customers a

asking first us. trade customers in quarter for their we are In crypto is place share fact, And equities. this from where in the larger of rather more a than first our customers saw new

in heavily our investing team. We’re

on working out crypto as deposit the more new crypto. withdraw coins, features investments, such recurring rolling your ability to and We’re

bit of crypto principles And product. final on future a now first We’re excited value, our the thinking. about our

So and our math is in physics. foundation art,

deep We to problems and have a ways down finding new them. solve for appreciation complex breaking

While been to others principles that doing, to we we what that believe do a pay will first bold have and differentiator of be bigger the the difficult strive close for our regardless how bets make is. thinking attention quo We us. challenge over bigger time, status challenge

Jason, this moment I take Now off it at Technologies. before Say like hand I’d to team welcome the to to

truly connecting more deeply Say invest heard. on and their there customers focus With with with investors think team to vote, right quarter with customers have our possibilities retail companies discuss Say’s have ask services, they over excited voices And engage to never for the that, to We Jason really are financial them management, proxy thrilled join questions of it before. their a interesting is results. technology, to opportunity we in. and company simple Say’s retail turn second With let our exercise it like by Q&A us for make empowering the Robinhood to can to me

Jason Warnick

up a active talk provide users year-over-year. a strong some billion, driven customer driven of XX.X by Increases and XXX% $XX growing equities, interest were as reached the $XXX Thanks, about accounts reached then in billion leading since up value our had XX.X assets. of on options and billion; $XXX In performance We by underlying during XXX% classes up KPIs, followed well under quarter, QX. commentary QX net primary $XX year-over-year. Vlad. million, primary the in by asset across all three up Monthly was QX AUC customer up reached million. and cumulative $X.X crypto. customer deposits the growth XXX% our way, QX, growth custody in million, first across net seen crypto The in increases year-over-year, as QX funded market I’ll with billion assets

We revenue. saw from increased $XX on clearly up to same equities during the total and down growth million revenues crypto. net increased revenues revenues up in just user $X significantly record the number year-over-year, in by crypto QX, now up decline of traders we driven previous equities rotated strong million, Robinhood XXX% QX, $XXX were our to year-over-year quarter. turn interest as up Crypto equity the map $XXX million, of Options activity At let’s versus we million to customers’ year-over-year. in Transaction trading. increased QX, XX% based base our from XXX% QX, the $XXX million crypto is in in in $XXX year. million and XX% interest Now In crypto time year-over-year. for quarter. last to the active saw the were achieved

in XX% from of for up down And XX% overview were the an traded same year. QX. relatively X.X% equities, accounts last which trading the of starts Notably, quarter options, XX% year-over-year, trading a For traded compares volume down quarter in options QX, of was was from to which in which year-over-year, for activity funded accounts last record funded same at of XX% were set in XX% DARTs equity flat same year. of crypto accounts was in in XX% in from crypto, traded X.X% the up funded Dogecoin year. QX, XX% last crypto quarter DARTs

see as over flow. Now one maturity, various reliance payment products our continued order on time, and for diversification you should such revenue as achieve stream, less any

our for increased. for equities in to declining crypto as and We XX% as signs XX% the revenue of percentage QX order are options in this already prior a in seeing interest of customer promising quarter payment flow from with

fluctuate flow the near-term as revenue run, We additional increase. makeup products. expect to of add the again order should be payment may in the for continue continued the diversification But long over we trend and to

$XX million our amounts grew balance, of up the turning as XX% year-over-year, in borrowed advantage lending they million, we some on X.X% to as customers XX% took totaled revenues, $XX in year-over-year, quarter, softness net up experienced we the interest our Securities average million. rates $X,XXX. market XXX% increased $XX earned. interest to totaled over lending Margin but APY year-over-year securities Now

Gold book credit. facilities million ability and margin revenues in from in increase net XXX% the end committed in interest lines related billion year-over-year which to the of $XX XXX% Robinhood increased for capital driven QX. We today increase working Interest significantly by billion and an and as credit to an increased revenue to borrow $X.X our was And expense, is Our offset subscription have revenues. funds year-over-year. reached quarter, $X.X proxy-related available of other revenues, $X.X of million, an to at through our

rate year-over-year XXX% net to expenses up particularly related $XXX a Technology fees. clearing were or revenues. year-over-year, charged development transaction to of and have line up revenues. leverage saw XX% and million, some outs. of X% operating in this few were $XX call representing net I a total We in now Moving regulatory certain million reduction total Brokerage expenses, for from we’re expenses the XX% year-over-year, and

earlier we Following platform trading ahead decided of and procure additional July. site ensure to particularly June activity cloud high our on help our IPO, year this through stability, to and resources

invest our expenses, they up line headcount, Additionally, or time $XXX to technology-related a as revenue. continue year-over-year net been for see aggressively as decrease hiring development operations to capabilities, XX% we we’ve we And revenues. this of but expect to of percentage million in over were XXX% item total

phone our We’re significantly increasing in support including live professionals. of by support and number increasing the investing function, customer customer support significantly, rolling dedicated out

We incurring during transactions. debit deposit $XX from These costs and card totaled QX. are chargebacks reversed also losses million

this issue. on industry-wide as it’s you We’re and an know, focused

of items. technology address each line some our progress Stock-based compensation and we’re both and using We’re to making included looking to operating expense is forward here. this service in customer

As comp record billion units. In for cumulative we begin compensation RSUs going a QX, a restricted prior stock on to will stock-based one-time reminder, stock our stock-based charge and $X record we in compensation forward. not recognizing RSU did any of IPO,

to in profitability, of was in net convertible of net charge measures $XXX fair of related related compared million $XXX the loss prior Included change QX million a in our value for Now $XX notes to and year. for liability. was income warrant QX the

million up million a record quarter, from the will approximately final million QX. Adjusted in $XX of charge prior $XX was year. these notes in $XX for We in the EBITDA and warrants

let’s to QX. Now turn

to subject in so back less growth which QX QX, is generally and numbers shows a strong and into seasonality, of the As business reminder, our in year. half the

measures. seasonal first for results seeing we experienced fewer headwinds to the that’s the lower activity said, be in industry on in from underway. across predict have new what quarter than weeks operating in And or and accurately trading funded we several result expect in saw revenues of financial to the QX, short-term, QX. period we’re provide and not We period that for commentary so we’ll lower considerably key accounts it and some volatility makes forward-looking the guidance providing That we’ll difficult to

we’re We’re our and roadmap. focused on long-term the excited about very product

things ahead us. introducing money With is to investing big generation turn opportunity questions. that, all it the in a we and let’s We there over next believe are of to

Irvin Sha

that be all announced for management we week, questions Say using team. last we’ll our to shareholders So enable Technologies submit to Robinhood

we As of being had the Q&A We’ll questions by over the pass we’ll shareholders. that, already turn although X,XXX of questions addressed. number today’s by from votes, to received any start community. answering questions After analyst yesterday, are live from the our we’ll that questions top over

will First, dividend future? the a HOOD in payout

Jason Warnick

I’ll take for of it we our point, deploying that, is in At the use business. the Irv. question. the Thanks this capital best think

We’re very much growth stage. in the

have issue now, so And no dividends. to we plans for any

Irvin Sha

Great. Number wallet? two, crypto is Robinhood getting a

Vlad Tenev

particular, community the fill getting And something that working in the know to I been question. to our it’s community access that teams on. and wallets crypto I’ll from ton there’s that on Dogecoin be a enthusiasm of and are happy

tell a bit of So this little about difficult sort is and you me let challenging. why

we explosive year, this QX. crypto, onto we’ve that QX sure talent scaling lot done. systems make has we’re Robinhood of progress And had very the out the that made increased great proud grow of in a load. our handle and work the has can clearly, And and So hiring really during team the had crypto we and team team, the to out growing to growth

and cryptocurrencies deposit want course, at to Of done security is a want wallets crypto do the offering high tricky properly. and we And as make value that. ability standpoint our and top safety very to sure hold as we a and it’s to make we And operations for bulletproof withdraw first. everything because correctly to scale, from that possible, ourselves sure is to is standard

progress as think excited this made as sure definitely our in we’re we we I a we of things, crypto team but hear the in and our you And a it’s with to lot Robinhood for right, key priority the So all have And want out these for at platform. to it’s customers. roll teams well. make

Irvin Sha

Robinhood’s if IRA the soon? a what all Number Are them are future? or XXX(k) any possibility yes, Vlad. plans three, HSA how for Thanks, for accounts? and of And

Vlad Tenev

relevant want to be I’d culturally worldwide. most level, say Robinhood top the we the trusted, app money most

onto For the the platform. investing investors turn really the first and business, to long-term take time is our goal into investors them

top our of are which seen investments launches, shares that You’ve of infrastructure. product DRIP, fractional our like some recurring with recent in built on

in them So our technology, investors. time the we’re to invest tools the content the and educational long-term continuing to first empower investors make and

We’re also looking at types. multiple account

tax mechanism Roth the to are us teams, We’ve think things proud earnings advantaged see scaling operations a account at So is new our of beneficiaries. and engineering we And going from giving so to that work you’re our as in products. of radar. this product as not you’ll the certainly We really product and going And people that, accounts that use least what But like well find as a done accounts IRAs, foreseeable all I and intend multiple future. to don’t to area. joint and announce access we’re IRAs to continued in types development on future. do been the see for like we’ve

Irvin Sha

four, Number the in timeline? to If are there Great. launch plans any yes, is what other Robinhood countries?

Vlad Tenev

have we beginning in think we’ve to And So company. global. want very the Robinhood going that a be that global a we advantages of said actually we from lot

large of even by offering to reasonable best customers have strongly the to quality people in than low financial I our U.S. think tools. where the overseas value proposition the access and resonate, experience more customer costs perhaps and

for us very a aligned well. mission there’s as global opportunity think it’s we us for and great So

dealt turn feel to the over improvements so, to pandemic to our our global seen, as the the infrastructure, from global staffing strains attention said, we’ve we’ve the on scale So U.S. well-positioned opportunity domestic in and business we on dramatically, with a our that past more our to due our to the That XX having and scale have ability international. focused opportunity. of or in handle some our the business months we been business,

specific to focus of more in and do lot So bit we timeline opportunity. But anticipate we find no excitement able little a this at a point. be we’ll that do dates the

Irvin Sha

get initial Robinhood we as and a question, hoody investors, Next hat can jacket?

Jason Warnick

take this Vlad. one I’ll

enthusiasm the Robinhood excited for customers. know the I love get the find We’d about brand. to love a get really our way So that in employees of swag. to hands

this. So I right look go will can’t at say make now. a commitment we’ll But that I

the to it’s merchandise of our branded I in our think get community. a idea great hands

Vlad Tenev

I Yes. agree.

Irvin Sha

Thanks. How on HOOD’s do you not price manipulated ensure Robinhood? is

Jason Warnick

all on we And they take that one regulators this any so brokerages, platform. primarily activity that potentially take sharing there. when activity I’ll see stock, action, our well. we the on information it monitor we includes from trading that Like as can any take with manipulative

got commitment. we’ve a So this. strong at And that’s team our looking

Irvin Sha

next What’s can what you Robinhood, is order PFOF for if regulated, for do? payment or flow is

Jason Warnick

innovation is lead as on certainly time. diversification have, things place revenue money existing to be go money. that Vlad app. products all about, our over products. that our not implies want on So to explain payment the do single And what the it’s over is customers is, misunderstood, products, disclosures. is the more you what and long-term, you streams component but features tell We we will It’s on attention of And flow tell to disclosures was focused how for to That our best that the and more business new and regulated primarily all and we in to so that the our What the be just talking for our single I naturally question. been to payment money order required that I for already. make do often we provide order we is flow appreciate

Next?

Irvin Sha

year? over value maximize What are shareholder your plans next the to

Jason Warnick

management tend a to the mentioned, to that, So really want on as tell be long-term. as And will I just single app. you I the focus team we money we

new That is a as mentioned really have they’re the and crypto are a space. said lot more that out on our more from asking new in so We deliver. customers coins rolling features. number roadmaps functionality, going earlier, Vlad And products of take short-term, that to we’re we our things and of for about the that cues in

We management excited is we’re that customers think place for X as to generate well that’s so products lending. offer to adoption a management cash fully opportunity announced million opportunities our also more returns We shareholders, get us about roll customers. really now cash as interesting of for that out securities has our pretty I value, will think higher us over and returns more through lot there in of paid front increase us. And product. for

Irvin Sha

Great. Are about post in future? and feature stock the near we can comments we where the a getting discuss more

Vlad Tenev

to with would further this of very through And do And example. great do a safely take with I to say I’ll and opportunity of Well, lot more course, for interact we with that with there’s but chance customers that’s in there. this the forces And excited make see each customers other. joining through Robinhood sure be acquisition our interested connect about a companies give shareholders we’re and we Say. And we exploring that that their we’re deeply want excited possibilities why careful one. think as that closer everyone. to I format we that Say, were that to retail of companies in

Irvin Sha

allow to this to another? stocks users one, over skipping plan a gift been answered. one there has to I’ve Is

Vlad Tenev

I’ll take as that Yes. one well.

this. appreciate So really the we enthusiasm for

A that our general, of even program I through lot out already at make find our do about us. we’ll to customers looking using in are customers think other how and our better. product referrals system that, be

to is thought should this stocks continue something expect continued And and innovation there. you that certainly is we’ve about gifting so product explore. And would

Irvin Sha

think the to have a for more then analysts. questions we few and I time just we’ll get

year a So driver from of access IPOs company has XXXX? differentiates in for been many Does on growth calendar substantial years? new access can an IPO the revenue the Robinhood Robinhood exciting platforms. of expect and users IPO the see rest How investing next few as feature further other

Vladimir Tenev

in I at to about IPO worth IPOs the we offered high price it way been much something for retail line has reserved Yes, past. Access with when has typically thought that individuals mission, is investors, in our net the think been very the to

diamond of live Jason that have So we’re see And that that speak. about, from get to customers good handed, in mentioned, is these customers. happy that things as think excited go other the such we’re product IPOs really have reception and been so to relatively I participating one a been

on and them. been XX to for flipping days stocks So they’ve haven’t holding these been over

a have really So In that deliver them. want a revenue business. optimizing access that misconception growth as with But about eye roll with do we’re think expect invaluable happy is and value a in to we any them we retail an term. expect the IPO immediate it to in we feature, valuable becomes the And issuers IPOs folks can IPOs. to that think and had customers, general, as companies growing for well. of be that addresses do customers way it lot we it this to generate We to a constituency I out more about to deliver Access have to didn’t clearer to

Irvin Sha

a apps compete in cetera? to maybe app future with other and taken one. market to better are Okay, last like – the the What Fidelity, make et one steps Robinhood Webull,

Vladimir Tenev

been Product been Robinhood Yes, prioritizing. has development that absolutely. has something

design you’ve over what So to you listen and seen we’ve our use. that accelerate and the should to and unique continued over understand of over customers. to teams past continued customers they user time. to research continue few could want see We’ve time, what advantage hopefully years, take And

the become continue That’s worldwide. delivering culturally look trusted value our app we’ll So expanding relevant businesses improving and services, money to the goal. great existing existing most most and products our to really and

Irvin Sha

to And and the up the ask to into analysts enter Great. remind that will on guys. Thanks how I open the line for operator queue. with the that,

Operator

Sandler Ross [Operator Instructions] line from Barclays. Our first question of of the comes

please. question, Your

Ross Sandler

guys. Hey,

years do look look product outside for terms if And brokerage, of areas Going to back roadmap see east, what app and the to we which we as core and you money explore? took of to get like investment Ant payment holiday single gold them Robinhood adopt the about of for something the money the Financial, logical four services in comment, single outside product. to of majority to standard kind their users the is of the app concept, new

about you as you rate do outside how lot. So brokerage? attach go of a feel Thanks

Vladimir Tenev

Yes, the thanks for question.

think that’s I’ll thoughts. I an share important my one.

So fit. offering as services optimize customers, we we the want we market prioritize for about to generally, product think new to way is

we rely task of aside So within habits, the our fit. making sort so too we on don’t independently for much product daily sure innate that ability then And to that, products platform, teams achieved because cross use things with product basis, engage sell sort us we market and from higher our well. us if with trust we time, that daily on they’ll we then habits, – value customers their over that trust with with daily of think if lower their frequency, customers a as transactions look

we’re in equities our and with And business. and and we’ve investing why then interested options, into with beyond expanded also that’s deposit. cryptocurrency spending why So that’s started direct paycheck

our and our of million end management which grew one we’ve to of yield at that things QX. So cash talked is product, customers that little over about X bit the is a high savings debit the card

product player more something very, couple took with be a sort in that and double that using keep couple with encouraged of future I those that is since years, on space. a we showing see just long-term more, setting. we a our So impact we’re think management substantial keep X that excited to to products mean, proud down launch, million perspective And I of. cryptocurrency delivering we’re of business. investing started before line that And an on cash customers opportunity have massive to very years really of by really adoption. be value in subscribers And to

but what happy We’re adding a making and keep to also encouraged customers services we want products the it’s we by and improving over keep by time. long-term and recognize business functionality our we see,

Irvin Sha

Thanks, Ross.

Operator

you. Thank

of ahead. question Research. next Steven comes Please from go Our Wolfe Chubak

Steven Chubak

evening. good Hi,

do you for which a a an mind? comments makes order scenario, on through of a revenue of payment the of ban some market under for the from alternative. most thinking buy is Jason, Could appreciate outright internalization? earlier path I number order the one to So institute PFOF. flow internalization And viable hit? regulators different building sense such offset of the the And versus If maker, a much scenarios is flow, in how your ultimately

Jason Warnick

you Yes, a thanks I a of for heavy clearing history tell was projects has question. example capability, the Robinhood terms doing like in our certainly What of an itself for lift. challenging go

And did, fast and incredibly platform, partnered our if more own that with the third as positions successfully over control something it helped a well grow think we I really just to us time, team our verticalize destiny, than party.

flow. the to even we have it. in internalize I monetize And do So think as others certainly do the the industry capability or market make a to way

viable So for us. I think option a it’s

our even for I you think. internally not terms don’t go of That’s economics, I’d banned. that, that flow order before to payment view just tell we is there, the expect what we In be

an We active it dialogue. to be expect

with were for payment a you commissions and a order study that of I little Robinhood, of we’ll the before think And it people to kept for I regulators small a investors top paying context are that, is definitely tell engage. What lot bit be asking flow. on out. of done,

before this customers see barrier million cheaper been country think And have, we the good. of that has down and can XX.X breaking investing by so just commissions that been never you I has in that

that don’t put barriers have kept making we’ll defending and and And been that taken down up out. customers people sure our definitely so be we

such have the both want internalization, it, question. want we Buy terms go difficult $X.XXX stream, an payment build, don’t is but that in certainly In to of to terms that, it’s don’t to stream us. that too probably it’s is at I’d to that. for at build order we But flow traded, far I looked economics, for option Thanks I do $X.XX I confidence go it, your versus in small to of us $XXX not revenue for would a terribly think, buying for replace. we you on down And per too in far about revenue because got think, look scenario. us tell we’ve a

Steven Chubak

Great.

This suggests was I ask just hoping ACATS is capture larger leaving graduation unpack graduation of I about my hoping cohort. topic the For risk. well you’re guys follow-up, times have to certainly the to than maybe four risk, data positioned that account. you address you was account the The the that of on strategy that’s Robinhood provided. to millennial typical the could growing the average wealth

points your really biggest to clients as that to mitigate need pressures? try wealth, you Now, feel you accumulate of to more pain are where address some the those

Vladimir Tenev

a can there. I you. our the level, I’d think and say We thoughts at we’re some very engagement retention there. with on happy actually really favorably high compare we share Thank Yes, platform.

I at the now. only customers that have ACATS thing of don’t that is live think, ACATS right particular, people lot in looking one realize a channel we out to

Robinhood, of provide conversion, lot very, ACATS are to functionality. a keen through we interest ACATS is their back had through self-clearing customers very actually we’re XXXX. expressing in in. did our to in And We an to. into turn-off So accounts we’re consolidating which listening that in And something temporarily

we of we because never in support So, Well, Robinhood. say, of right the will ACATS oh, lose don’t is an part actually a lot to now. ACATS brokers reason

where channel typically ACATS higher ACH. assets is a So see will you than

the sort think customer channel specific. is more specific than I So, of observation

ACATS we with in we sizes do when the to this that allow and will platform. typically change see You ACATS, anticipate larger do account

Jason Warnick

In our part that of what would question terms about you in fully risk, roadmap. tell we our intend I customers, to your product with is graduation grow you that see of the

that’s we when pieces investors what don’t As roll that account really tell products going concern. we’ve then I allowed will to we look and inspire we talked you new concentration not would at churn, that any wanting about that a investors And out, that. we’re demographic the of so see kind that long-term become to we be is, customer seeing

Steven Chubak

much questions. Thank you taking That’s my right. so for

Jason Warnick

Yes, bet. you

Operator

Thank you.

question next Josh Our from KeyBanc. Beck of comes

question Your please.

Josh Beck

to I invest as in a taking Jason, I you the team about you cohort question. and crypto. bit propensity little the bit the a for Thank you, XQ. new in brought that that well to about think had commented ask wanted

notable. would you with any contrasts that was that prior new certainly maybe that there you do So felt was Are cohorts notable? compare other

Jason Warnick

would the higher. $X.X I is, which was million was record, net near large what QX, cohort Yes, in about accounts in QX a funded certainly in quarter, say slightly came a

us first that the crypto equities. it’s at the during with early you a was tell heard the to us we over over of platform. the bit more versus But What project trading they time us, seen our as of in we well the say tend our engaged, when deposits think net this period. you’ve love as that momentum grow to at trades small, out. the we’ve with and highly the they on they I that for on look customers overall So And they start both that look cohorts generate they’re of cohorts, time, revenue in newer cohorts I’d first cryptocurrency put terms business XX%

so nothing to there’s far, And that that continue. suggest won’t

Josh Beck

and thinking marketing referral And for year? the has you maybe of QX? helpful. follow-up. composition like that of just channel in And the spend the rest looked Very about how are a then What

Jason Warnick

Yes.

coming historically, QX. channel referral customers saw the kind majority we’ve our either through rates organically we of So, our you seen us, similar to as by in customer or know, of channel,

expect to referral we to platform. forward, Looking have robust customer a continue

out more We our customers. brand broad to advertising scale are investing get in message to

continue in of messaging. way as customers, But expect And us see been to invest those we we acquire well. that the forward be to structurally, so you kinds we’ve in our going and efficient to to very should diligent expect

Josh Beck

much. so Thanks

Jason Warnick

Thank Yes. you.

Operator

you. Thank

comes question next from Sean Our of Rosenblatt. Horgan

Your is open. line

Sean Horgan

Hey, question. for my taking thanks

management. inflows strategy, more get things crypto like offer longer accounts crypto interest specifically, retain or First users monetization rewards to do term. to any and one is sense wanted have to And you your earning for platform? on on a I drive aspirations cash your

Vladimir Tenev

Yes, can I one. feel second the

So we community. a of certainly, enthusiasm from see our crypto lot

that newer will on our the more platform, we’re feature term looking think well. to. have or enthusiasm that’s also of I and adding crypto we’ll We’ve to be be interest something hearing excitement for roll wallets something of deposit as a so that functionality. lot and And that coins, are foundational looking withdrawal we’re increasing out kind listings and rewards we the heard

has center for growing, small excellence company. a great XXXX it’s a The really the product off crypto started So, team. within as and of become engineering been very team

I for think And build there. work the we’re of to proud We’re excited customers.

management, I maybe, you think Maybe, about question well, asked there monetization? that Jason… was cash as a

Jason Warnick

would participating ton who what back a to that are and tell Yes, intention to is pass I Sean, value cash our card debit you, customers is of with our management product.

becomes customers, excited interest at low rate of pass the And interest environment interesting. the the earn certainly we today majority We’re incentives. about that rewards and to along we

form interesting payment. over I to that a think environment interest as as the opportunity think want to customers But fluctuate. we look debit really Robinhood’s time. card us primary their over our of for rate that’s And we will monetization time

Sean Horgan

Thanks. then very guys. it’s another grown crypto, rapidly. really obviously that’s guess follow-up, Great, I helpful, just on And

so being to interest think the trends customers. get I an a landscape. for area sense competitive of you listings Vlad, for And and as market want I share mentioned,

speed platform? the a a pricing, what makes in for new get or just sense demand choose assets, it’s Robinhood to So, whether want different user over listing, to a

Vladimir Tenev

in customers particular, really I the that behind the it’s think are which low key year, that I this appreciate value propositions offering. to crypto, Yes, think cost started two fact a have

aspect in everything as we’re I offer that for customers is to we with coins give free cash and commissions. also an crypto. of offering. And functionality, we, some are attractive fact the that, it customers, place management ability think and to commissioned We’re easy their the continue that and something our understand and fees pricing move the securities, where on companies build and add to costs has transaction coins continued we’ll very out with people And that’s think And meets to be new been more it’s the that. looking platform. they multiple of and are, be that to of to deal accessible offer it’s we Robinhood especially percents competitors, relative charging proud and the choose customers us And and has we the proud one with I an to off that our

Sean Horgan

my Great. questions. Thanks for taking

Irvin Sha

we questions. – think I two more have

Operator

Excellent.

Our of Jason Bazinet question Citi. from next comes

is open. line Your

Jason Bazinet

question accounts. Thanks. I just your had a about

If and you penetrated? Do think you on account said anywhere based current how million that brokerage have and a percentage whatever is base else, deeply your had $XX account, a never took number that in Thanks. someone that are accounts have segment Before competitor? of hasn’t a sort of you out to you – market? the from of start growth stealing certain run

Vlad Tenev

thanks, Jason. Yes,

really join I is to investing to of access, And our other us proud they their think that really what to that provide elsewhere. that by is mission, system. the directly our that’s account, speaking us, I they’re definition, first brokerage that, time, think this the kind to accounts customers we’re brokerage to referring about they really, tell financial the of of tell have half XX% new you’re when

think to don’t continue no for we investing an an to there’s reach this And who why for anyone reason investing opportunity really literally shouldn’t so think out people investor to to, I speaks everybody. be accounts, us is have

with incredibly attractive considered we roll that, And use, folks is and market more, first products with of in to account, Robinhood, even about you addressable we way you’re don’t to become Robinhood and as with going think where continue checking crypto place. is haven’t particularly we with ease then, a terms to account, part anyone so grow think for platform to And our go need of the it, us. out more see of features mobile think previously customers, to checking be our the globally, and the that possibly a I

about to we’re response And ahead opportunity investing. us. limiting optimistic of that’s, So pretty the the

more a we single app we I for talk do, about being think lot can money when our the customers. there’s that

Jason Warnick

together. Americans Yes, retirement, investments according and outside a have to money percentage I greater that, have XX- no research, XX% XX-year-old recent would also of some about of XX% don’t say of to all invested

we’ve well progress. made though So even

a to participation markets. the in encourage to do there’s think I greater lot

Jason Bazinet

you. Thank

Operator

you. Thank

from Our Research. Chubak Steven comes next of Wolf question

open. is line Your

Steven Chubak

Hi, thank one on some follow just for had commentary. XQ up. you of so outlook the the question accommodating much I

pronounced the we’re the prepared peers that frame more that just moderating. magnitude. ecosystem. that pronounced of growths contextualize and account attributed particularly among just could slowdown I How are crypto mentioned you’re Dogecoin, I And suggests You decline. levels we’re of XQ, seeing in in Robinhood within the know activity seeing some help remarks, the and to you orders a of tracking levels to just coins hoping seasonality, a was some data of your terms like you’re overall activity of in you volume seeing – just

Vlad Tenev

the tend trading as as seasonality I accounts, in into half of the thanks being highest, be you less. quarter Yes, brokerages to new year for activity highlighted well saw traditionally, first your the question, for what quarter with and second the the of terms back quarters

of the overall Robinhood portion So, bigger a is becoming market.

that, pay is so And seasonality we something attention to.

mostly or we predicting, some when long-term the dramatic of tends not have benefit they from it is other us. markets, volatility QX volatility. And and but that have several for focused pretty to moments short-term been when from And, will of over notable incredibly is an kind time in not those helpful benefit opportunity. And moments The also which outsize a happen really difficult that, tailwind which just there pretty continue, we’re predict of strong do thing makes in Robinhood in the there’s again. on really But we that because equities, tailwind. in results, with QX, is crypto, to happen, we’re more

on year as very, you back small. accepted a that crypto and from QX incredibly becoming times more year, than think year, go it’s put we is if we’re I for million strong customers. for of the factors, market mainstream appropriate previously Robinhood commentary saw and But just way of on one crypto pretty $X you I didn’t the overall, had it’ll revenue exist. ago, a that, to This in it in XX higher in deliver doing really so very about levels Even continue external kind we’ll would indication the point of crypto, to trading we you far. QX you it’s products how to give map in think and terms provide a

Steven Chubak

And term me longer so for final one a Thanks one just opportunity. just were on much.

source scale could unpack You alluded you primary potential PFOF, brokerages was the your tried in to interest U.S. abroad. gives hoping is of what I what expanding your to internationally; expand in of have And jurisdictions. a confidence expand abroad. given failed strategy to international also revenue Maybe of could years be you and number number the you a can banned certainly over

Jason Warnick

a on business. at investing you last an position domestically, of I sure and half, here tell comments the have lot some cash a, of what a here in Vlad the year we’ve work we’ve look strong platform based to management have, sure, we And expanding business. year I certainly international would a have we over the we’re crypto is, and very kind has uniquely got Yes, done I’m to, we today market, each growing assets business, that also a

ways depending that so each market there. approach the there’s of on variety we circumstances international can a And

at number flow in think, terribly of of we terms of payment a interest look ways order was businesses it’s earlier something not monetizing mentioned And barrier companies. certainly in there’s U.S. accepted, it’s investing distinction as payment in that not Forex could investing, particularly there’s whether for a just a of geography-to-geography, the look high absence speaking, from generally that internationally, lot for those opportunities, whether internalization, fees, flow. In order we product there’s we and us at is for or as there’s a for

Steven Chubak

questions. color. That’s Thanks additional accommodating the for great

Jason Warnick

Yes, course. of

Vlad Tenev

you. Thank

Irvin Sha

Thank All time for right. the And today. forward next on call we look to everyone, taking catching the the one. you for

Vlad Tenev

Appreciate the you. questions. Thank

Jason Warnick

Yes, very you. much. Thank

Operator

This for concludes participating. today’s conference call. Thank you

You may now disconnect.

Robinhood Markets (HOOD) 19 Aug 212021 Q2 Earnings call transcript