HOOD - Earnings call transcript Q1 2022

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Operator

Thank you for standing by and welcome to Robinhood’s First Quarter 2022 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 call may be recorded. [Operator Instructions] I would now like to hand the call over to your host for today, Irvin Sha, Head of Investor Relations and Capital Markets. ahead. go Please

Irvin Sha

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

Before our presentation about contain today's you will from operational and I plans. getting outlook could forward-looking and our differ want materially started, financial remind that to our strategic statements Actual results expectations.

XXXX of the posted investors and monitor page on statements deemed payment could developments public SEC our relating order issued website to structure to and sites, our that from from should We Relations to the engagement means we release overview XX-K presentation continue our remind vendor intend information as it related the material law. SEC information be cause material differences slide time-to-time, as Form information digital risk monitor regulatory as XX, All the the to disclosing and take those Hood, is are We as be as subsequent on April potential today no information. call described other factors our for duty could filed February matters events for press and flow filings. market Other afternoon, update Relations XXXX, use of website, to in Investor by Under it such this there, practices. routinely blog, on except our of you to Investor XXth, and that the required our in

earnings unless include financial most it on investors.robinhood.com. the results over our that, period Relations the at And comparisons growth discussion measures. Reconciliations the Vlad. with will be will in Investor me presentation consider also all to non-GAAP we As to results, let Today's discuss we can the in year, turn prior noted. our found website same to comparable GAAP otherwise percentage be

Vlad Tenev

joining. thanks everyone and to Irv, Thanks for

story against two accelerating climate. of product the quarter this competing development, our juxtaposed macroeconomic difficult a was So forces,

roadmap On growth. that same to the last we progress future One, ambitious most of ecosystem their the a our an of in our experienced products the we on face offers never made a at and expand financial lifetimes. will for foundation We At strong tremendous customers. time, challenging macro call, I laid this customers quarter built out our Robinhood have environment.

While financial users monthly also strong were we volumes, net lowest and this. of trading saw under see pleased to results deposits and reflect our active level in churn decreased our and assets we custody years,

in and our optimize focused important growth period been a it's pace at we business long-term. a we're where the to for hyper has of and keep place hired on efficiency with stay company business, Our scaled the to but and

us by is and deeper leaner model, the So charging make get I've dig discipline offense the cost moving earlier team starting challenged the adjusted reduction of ahead. no on still the EBITDA profitability week, but announced force towards this that year. a operating in playing we with We're mistake, end Robinhood and to to back

our believe through XXXX the lot a of know got products unpack that several value over flight in call. on and will to roadmap execute to and here I there's we course of while continuing customers are We we'll revenues. significant to walk the this we've generating add new all

with So let's start the product updates.

about product our excited super of humming short, engine that. So and in I'm is

rollout us We expansion. lending of our we to trading There's acquire be of Ziglu, accelerate withdrawals. Robinhood to last crypto the here the of began since crypto help which we four added paid entered into We We instant currencies international we're spoke, wallets. for still will debit We began agreement started. just new getting our funding to of our completed proud an securities our and selection, our We a product. fully introduced Cash and crypto card rollout the Just extended and we rollout Card. hours. lot the

customers with on letting let get invest debit automatically of that view Cash but see and additional the to less two expect Robinhood And which transaction a the to the Now, we've interchange, roughly Starting the We're credit volume. as in access the of cash card. as direct to investing, giving revenues offer in bring customers a to of few card you'd their way days their Card, have also delivered. from me it’s XXX one into disposable cards are details start scales, what paycheck. them from rewards deposit We what similar income. a who portion simple be we to interested money product early points we'll expect to new we're basis

much the slowly bright see adoption we'll in so friction. card direct around also out We fees we're usage customers anything here. for Rolling expand better We're would experience. to customer access expect of they into bank to ensure their Robinhood all user by behavior far, for paychecks spots with directly using early seeing a we deposit Robinhood more except depositing still with user and direct to of what lower their and midyear. happy and stages points of understand and repeat our use We're and

our on high rate yield bringing back anticipated cash uninvested we tuned hikes, Stay coming that. the for also brokerage for with be customers. So on will more

let's Now about crypto. talk

utilize technology investments more by tools. to the As class that services. has We system operating than making financial major potential a powers an just you crypto The future can crypto of powerful and financial the we've smartphone asset become and that connection believe internet behind an the anyone tell, with create is allowing here. been to

the more fees other lot on coming are on months, adopters. contribute a you'll early is In so are plans the complicated to us wealthy ecosystem. see crypto and that serving mainly However, high platforms this from products our of to the

we've made. crypto progress on Now, in the already here are few updates

our is an rollout wallet we're wallets all to important First, excited completed of enables that The with the primitive engage ecosystem. have customers to the so to our customers. crypto of broader crypto

low can and user customers expect Just our with simple using fees like crypto wallets a trading experience.

we recently with with of beneficial integration fees will network, customers. than near power globally penny, which to instantaneous less announced our transaction planned hugely Second, the Bitcoin a our transfers lightning

on of updates our international integrated, will don't at build on yet have coming integration. more global we we will virtually serve Eventually technology While expansion. accelerate expect ability no we'll Bitcoin share the specific cost out fully this our as important component be scale timing in once the we’re an to and remittances a months we

effortlessly Solana. add we're relatively using to Compound, support new This about new part the scenes, framework custody new four new and add to added Inu, also We coins we listing good Third, time. of refining coins, with Polygon, feel expect been our over soon core is coins, to be a evaluate the process and we've coins that able Behind and Shiba crypto will chains. and and tokens, minimal year to began infrastructure last effort. more

fees. different and Bitcoin through recently agreement in million, Ziglu's that XX yield to UK and boost we into move in spend cash. platform and customers $XXX for Ziglu acquire an primarily Ziglu lets without pound Lastly, earn transact entered a Sterling even on based abroad cryptocurrencies, products money is crypto

on line paid a our all more our great well These sharing be more customers, customers. of years critical work this ability expansion hours, small way also earlier expected particularly set simplicity our this weeks. We've in on will the coming once number where this of they relatively but obtain introduced securities recently customers be serving to which our trade one to important doing the more we lending and extended also a to had year. quarter customers at first no this and of our requests. is and to features deeper They've to be contract the the with we'll dive advanced products. we're local forward customers, have a the companies to a way and their but for enhance flexibility broadly months, in the FCA look love the the on least, fees, UK launched the They and options type customers customer Over simplicity no we we're top drive crypto one and building This been bring to the information the but solving. segment. financial move which and we excel advanced top next fully our week, few knowledge. the crypto providing Mark significant regular portion while UK helpful that more challenge of benefit plans love being laser great And the close, And as so increase yield is There's even portfolios. confident we the that platform getting we stay through core pleasure They few revenue. registration will we this for a revenue. design we real our only believe for of the in positioned much And Ziglu expertise, the customers, That advanced to months. of screening to past improvements in to advanced the services I've incredibly in small charting get to flows, expand Last as not of a share rolled it have all beyond. want also interface international large and they focused that to asset know more as from making we've faster later operations of advanced two They We will well of commitment demonstrated their together. earlier out compliance, not was trading tools, give team. of trading commissions, our continue of while

the Now the macro call, mentioned presented the at top environment. the of by challenges I

markets. Robinhood low our has low most and For period a in inflation rates, history, rising interest operated of of

opposite Our experiencing of these the time all customers trends now three going direction, in in for perhaps the lives. first their are

us let some customer seeing. trading We've result, been we're As activities. watching me you tell And a with and less reducing what regularly their engaging are behavior.

a our engage active. customers falling overall, but customers continuing are numbers with we still larger MAUs us, our to remaining look So have million with the a deeper, level to down bit total March. in come When XX.X are

that We are seeing have balances. those pronounced more lower from declines

became with frequently less more our in the in asset all cautious uncertainty customers their the across and trading portfolios, smaller classes. market, amounts With

rise we've some encouraging in net its levels significantly Although, crypto down particular years. came seen to reached point pretty deposit in are activity but has continuing and churn signs, lowest

So we're going the in? to the we focused on great to long-term. a building We're environment We're for position. how in responding are remain

that, product let XX ahead strong technology on Together nearly million the with efficiency, of turn and customers, momentum. with future over me our bright. have us remains We team, focus a great it And strong Jason. to operational

Jason Warnick

Vlad. Thanks

Before about adjusted to numbers, to we about like the we're how talk EBITDA. to I'd positive get back thinking getting

run to As heard he's challenged positive you just us achieve from year-end. by rate Vlad, a

It's how today, do rolling from and advanced that securities lean. better delivering we execute top be XXXX interest out there? So stronger critical to on fully From get lending, revenue we we line service upside roadmap see where and net paid monetizing we stand withdrawals. more customers, generating our our instant

longer horizon, a from even that over on making initiatives work. in several more investments. will new think time interchange also card the have benefits in cash coming crypto we the be and We're there other Robinhood We

pace is in and grew We of XXX are We to roles, hired fast, period inefficiencies a big, We We the X,XXX as but grow of sometimes on we also fast, just workflows. in went to the particularly to as costs. needed we that from of duplicate through than deliver about at end get just needed, resulted XXXX years. headcount more the up keep on our in our business. our optimizing recently with nearly headcount two organization, it focused

affecting an announced we team. believe than we previously So force we of even aggressive our we week, earlier planning. But team can as for year our our in X% the goal leaner look this a at product with we were plans accomplish reduction

of for plans opportunity share to We're based addition XXXX. we the to grow force, quarter, headcount expenses, well. versus also XX%. our excluding now between other significantly at in compensation flat and roughly all We're of our year. looking these reduction Last So this expect to We operating have have last versus I we year. hiring as believe to guided XX% XXXX and in costs increase costs our and keep between there X% X% end aiming cut

a lot in I've to reach do We a this we reach lot – have on goal profitability, to have team. got the to confidence but

business the cash how in and how corporate to excess. needed talk is specifically let's about much Now much run is true

billion our We’re sheet. $X currently on holding about in cash balance

this days, for a small only of we fraction capital. working During use most

last stock stress about and for of credit such $X.X We beyond also including Doge year’s as hold billion liquidity stress have rallies, scenarios. we scenarios, liquidity high our some currently facilities meme excess

to also it And makes this line grow of change, an the we annual our million. rate the additional have I’d have to rate are With our by $X prudent strong do free think also sense by we money. cash? effect move way us up business. first gives of to hikes run captured effects talk when also billion so. Fed. flexibility inorganically like a growing we to it $XX sight of balance why rate optimizing We about of excess about we do this an the while have We to sheet, And it’s

rate the $XX each will from million banking incremental pass the our book, be think to hikes to effect by several margin we along will much range $XX the pass we ahead, be us million and value and size customers. of of in partners our next the how the Looking determined of to

move XXXX. of quarter let’s to the numbers first Now for the

QX the reminder, XX% accounts very a Cumulative year. the meme rally stock is owing prior to strong year up last quarter funded million As year-over-year. lapping net in XX.X reached a

churned had the and quarter, year-over-year and lower and lowest engaging accounts. we’re this significant in years. accounts, the resurrections XXX,XXX We one sequentially. decline we past less, majority in is we’ve continues several seen the of active users improve XXX,XXX balances, And market to During has rates X,XXX had with new reached of which XX.X million MAUs. customers the monthly seeing our sequential Churn driving XX% down X%

year-over-year up to XX% was the year-over-year sequentially. from classes. the billion trader down we across QX. and XX% were million that billion Customers deposits rebate was volumes while than up Assets $XX all versus placing were under revenue trades were our year-over-year pattern sequentially. for were and venue placing XX% $XXX anticipated quarter the trades softer customers seen a revenues down based $XX some and by by trades, their the XX% the the But We increase million Transaction of XX% size quarter. down and declines in year-over-year, Total trading were were in $XX.X and XX% $X.X net several but notional the trading rates. sequentially. XX% environment were XX% saw Revenues per trader XX%. volumes all notional contracts during XX% These down had categories. were million revenue year-over-year, trades options in decreased improvement was XX% XX% we the asset $XXX million $XXX and down quarter were Options custody number Equities expectations. quarter. notional sequentially. million XX% and revenue came crypto down was of as remain revenues XX% as placing XX% across XX% in down volumes incremental what offset average down soft Customers weeks for of This the down significantly year-over-year first trading for trader year-over-year driven asset year-over-year and Customers down declines per year-over-year down recent XX%. well

year-over-year and demand XX% under up to customer down interest hard XX% $X.X was up securities billion from interest XX% to year-over-year net receivables $XX.X down revenues we XX% sequentially, X% XX% down the for year-over-year components $XX.X Moving was cash margin year-over-year. securities. XX% were billion lending XX% borrow sequentially, to quarter Securities billion billion, but offset users. up custody. million up include $X.X year-over-year. as $X.X for lending And assets year-over-year, Equities and Crypto was Margin saw of they billion increased to was and $XX for Options increased year-over-year down XX% primary interest. million million lower $XX XX% $XX by and sequentially.

managing borrowing. their Over the quarter, users actively of the saw our margin course we

putting flat margin book the prior year. our As billion, a to it result, $X.X declined with roughly

and offsetting moving margin changes March rate million. up X% XX, floating to was XX rate $X expense, with An increased fed which forward. of this we interest along our we basis was As revenue rates interest anticipate points

prior million decline driven Moving decrease decline as we by $XX They year-over-year versus other The revenues. reduction experienced XX% ACATS XX% this was the to fees last were year XX% a sequentially. out and churn elevated in quarter, an our year.

each engagement Before metrics note will We’ll trading, disclosures closing by month that investors.robinhood.com metrics asset monthly shared after information we’ll class. out, of months of revenue our growth, the KPIs. providing each The the top With earnings. of about metrics these quarter. like to trading no starting of user quarter for at website be for mid be calendar last to longer post and volumes These quarter I’d two we end month this will the this including begin the the at providing relations change, first and guidance. investor will include darts

Given of activity, revenue, the preferable guidance. revenues providing trading looking top KPIs of we our monthly our transaction from believe based particularly is to forward disclosures volatility

So far were QX. volumes Irv, in what the line to seeing throughout we in most with of April, we’re seeing With let’s trading Q&A. move that

Irvin Sha

And questions M. B times live plans management’s a to to analyst question regain with cap? the our Basir are and/or grow ranked by and Abdul top that Q&A this already a were any answering Thanks, from into After number pass by Jason. common Say theme. that share start we’ll we’ll that, market we’ll echoed is and votes. Leading addressed of from is Jazz together the group K, questions over couple Vendor what community. quarter’s session, question that first We’ll from over it by questions Andrew turn questions The

Vlad Tenev

Thank I’ll field Sure. Andrew. that you, one.

in a time we on great focus And long-term. the is a me building know this during company our is let the first markets. say for time that all challenging So this

heard about talk of to beginning You’ve call. invest going of new And areas. product continue this the areas investment several us we’re to throughout large in

velocity momentum across developments continue to business Our our new and core these accelerate. both product going to and is

You year. positive the discipline also to heard we’re by operational adjusted on to EBITDA and getting the going focused end of be

products. greater the get course lead engaged adjusted of use this lot by time most EBITDA the and of rate continue throughout us think with new especially Robinhood deepening cap allow will to over we’re a to have I in the in smoothen to to relationships long-term customers to that positive that for the company And activity will completely good lead a going But increases time. year, year. building in over believe we to reiterate the over customers, variations will invest our time, out and that end market the market monetization

Irvin Sha

The from who Hood a question Vlad. Sunny Jason? dividend? pay Thanks, when P to is next comes asks, going

Jason Warnick

of is the Jason. as be This Sunny. it’s now. opportunity We’ve better to business. ahead investing of about us right the early to the think out Thanks, and a paying for appreciate think now lot best But capital We right our got dividends. for today question. It’s use talking we be in too we’ve been us that’s

Irvin Sha

Great.

L. from up declining combat active monthly to do Robinhood Next What user? Daniel will

Vlad Tenev

that take I’ll one. Sure.

So the very seen recent quickly we it’s grown few last the have at declines. But Robinhood to look has think years. important context. broader over I

we’ve over look X.X nearly monthly instance, to the around if active two For MAUs you doubled at right million from million. users XX.X years, past

rolled with ways. Cash new So Card, we is good And out innovate we’re the our which a rolling and roll engage going out products. to customers us looking we’re continue out our A customers. ahead, see new in to recently to example

paychecks anything bank than local a for and using investing Robinhood cost would except depositing have for direct their more lower into they better and their experience. with us for, a great customer much using just think that to it’s customers us I way use

add time. also existing our ability but and over continue more we to we’re our significantly products confident only ones in new as So products, grow not to adding investing crypto, to while these retain customers, new

Irvin Sha

Great.

year? Next up the is one from focus number Kevin L. What this

Vlad Tenev

decisions on one course, we’ll lean And making our with customers, building products of Yes, with smart us focusing focus our is for focusing one. and number capital. on customers balance that I’ll field our that The that love. operating

roadmap last there’s we customers that and As we benefit know ambitious of to quarter, said lots you our from. things could look

additional that more long-term course, and their there’s crypto. customers retirement to portfolios, yield have week started and get earlier which So which do on allows Securities rolling of we for out this to investing. lending

I excited demonstrating we what So lot is continue a and really, of and that’s that we’re really think moving this saw quarter and exciting to momentum forward. execution,

Irvin Sha

Okay.

accounts got L. questions be we’ve up, a Ryan and Basically Sarah B Next on couple soon? retirement from accounts retirement available will

Vlad Tenev

Yes.

focus making us have accounts retirement So been for and this great been we’ve progress. year a

be it’ll customers, expect when excited. design customers out and have think it It’ll and bring user roll And in from from year. see we excited I to to a store, have what that great products. really the customers they’ll Robinhood Robinhood same later that this come experience product, we’re be

Irvin Sha

From to the Excellent. is S. changes this big three are What Robinhood customers top next bringing Abinav year?

Vlad Tenev

Sure. Hey Abinav.

lot feature – mentioned made lots the and active I’ve our mentioned product about mention to investor I So we’ve the to Three one, customer improvements experience our of themes and experience. board. set a velocity accelerating, across

trading We’re an excited our platform. the that engaged of better process The account and and improvements active investors. products, to most lot are and we’ve to the our experience of day new better up small also setting people with And day better on serve a getting to into seen really Robinhood.

area valuable the So line top but been of valuable huge these focus of it’s customers, company. also for to the a

with Cash in well. different on spending And the they similar credit experience excited customers that’s a what investing our a only then also number direct And where bonus the deposit would engaging we improved selection two, is talked easy as your we to is quality to two lot into cards And deposits one four. we’ve from it little around not only incredibly surprise direct for paid market We’ve but this see crypto. as a that Number high get of and for also that invest as paycheck I’ll gives card. securities We customers our to get Card. rewards here. debit So us days customers to cost and ability one. customers is ways. early, been a crypto. the make give also the are bit third we’ve the No This well throw increased about area

You’ve heard retirement. me talk about

that think have to low cost investing for a Robinhood. need for with this long-term get user our to and very important I customers love grown and help experience same expect is customers the very, the from

we’re very that we customers So think excited for to really you’ll it. our deliver like and

Irvin Sha

Awesome. Thanks, Vlad.

I time the we one think have analyst shift we’ll just and maybe for then question community. to last

one Eduardo So V global? the last from is when is Robinhood going

Vlad Tenev

acquisition we’re excited announced have Well, to the of Ziglu.

the first We from close product year, customers expect build later to and accelerant great and we the of the then have to an roll a to base think in and the rest this we acquisition UK intend Europe it’s our and world. out that awesome

Irvin Sha

to questions that, operator ask line. the Thank the Say. to on you. I And who up Awesome. open with posted everyone the Thanks will

Operator

[Operator Devin Instructions] Our first Securities. question Ryan comes from JMP of

is line Your open.

Devin Ryan

and Vlad are How you? afternoon Good Jason.

Vlad Tenev

you. Good Devin. from to hear Hi,

Devin Ryan

the for disclosure. thanks First all, of monthly

around through forward. helpful question that’ll guess, I by first year getting be moving expectations you think very breakeven I here, appreciate end.

operating those think folks some you you think that there? around there’s might continue about expect Or a about more from to to is, larger expand, quarter’s of manage if of help products and think and expect in revenue traction breakeven? that question to to you you launched from of in here they And should the level, how that Should given just I we out can lot getting But weren’t of contribution figure kind you’ve kind the results. a a that inflect you then, just part profitability, lot of us leverage new of do is, succeed scale the there? how around are maintaining see trying kind and through second them. lot hopefully it of initiatives then revenues maybe to from extent the the what prior

Jason Warnick

going of rates be of of had The kind of we effect improvements it by fully rolling mid about Jason. out primarily the started opportunity bit on securities we get just last team to rising by are what going an can and we’re and on of platform. about meaningful EBITDA adjusted some to from XXs all our to to rate talk the the thoughts. we has about withdrawal have We we’ve a the securities costs Vlad contributors continues where for to kind this just about more need year get think customers to is the get X we making a as end contributors The started need And aggressive instant some of the breakeven, able to where to incredibly to then contribute get capture that he lot It’s another It’s it’s is that contributor. of times progress. there. The if quarter. NIM commitment out better. – to $XX whole of attach revenue have We fed achieve get serve operating think goal. customers. we can This or goal. going in, depending be that paid the to biggest today the for to got this I’ll we’re interest quarter focus Devin. biggest to lending. have to Thanks, X We talked a that take listening margin there. we the halo lending, additional on We there. It’s take year goal the ARPU of Vlad to them to of active to going It’s able end of well. to We heard the customers. the I that the All by think our platform, and

our relative forward? the continue that think want see invest discipline. to rollout to company. less and DNA, term the as to you’re to it’s maintaining a we’re thing going We continue growth. manage company to to how is as What of we this year. overall year I In to you to investments we’re we the I’ll be want we it operational the are that continue relatively But that be are gain products terms add that beyond to for for of monetization to going profitability that making tell part of that would long expect going one lean going aggressively a platform, We I momentum. not But

Vlad Tenev

would year, improvements I And efficient. Robinhood’s just the operate that infrastructure. Devin it’s And Yes. over part add lot to our technology we’ve a and and of DNA very to lean much past made of

we demonstrate is, times. to we well want business what we the works very, during expect sure So model slow very make economic that

to in come sure that upside efficiency And improved to I equities that. tremendously and so remains is DNA think fact hard to infrastructure the and should And from economic the we see strong. crypto, business help we’ve volatility markets when with our does that. of make times, our also back that and we want to resilient But going

Devin Ryan

great. And ask then that. just Okay, I’ll appreciate here. quick follow-up one I

normalize those curve? revenues basis of to points You maybe sensitivity on maybe we forward end it a the or I think the on, of kind reinstating interest of XXX on rate how high earlier environment should gave of kind providing not more the – here. yield short hikes normalized if Are we to continue a you roll cash or couple opportunities rate around of kind because higher of the types in comments

Jason Warnick

have. that question. is there’s that in there appreciate I variability What interest Yes. we that the earning say accounts some I’d

down look you came balances, margin quarter example, If for at the this meaningfully.

the we’re you point to do less. and During borrowing to It customers the to levels. intend balances depends just the then And the how back we’re on realize on to banking depending that their well. customers involved, able quarter or some as we realize to pass also much from manage more partners raised, our able

Devin Ryan

leave I’ll so it great. much. Okay, there. Thanks

Jason Warnick

Devin. Thanks,

Vlad Tenev

you. Thank

Operator

you. Thank

JPMorgan. next from comes of Worthington Our question Ken

Your question please.

Ken Worthington

Thanks Hi. question. my taking Good for afternoon.

I initiatives it think by about IPO, think opportunity underway, gold But the direct of I these engagement maybe clients sense could, to time. would future number of I those? initiatives guys sort is accounts are offered I initiatives coming seeing of us thought seeing How out how rolled others. many utilizing told you and You get past there. be for I a guys How if have and And of ACATS. couple, know of during much some for members money helpful incoming the have you you some a where there? of are number the some you the had gone. you’ve there’s deposits from? think a your

list, how on If are some but continues you’ve you know a card many list on cards waiting that usage? And are using and many us to update in the think had days of grow. How I initiative the new, how could clients time. waiting were for debit early just I that

Jason Warnick

Ken. Thanks,

ticking some So just of kind these. of through

of channel, I new is good. of to seen ACATS, really Direct on what account for of simply the we offering foundational Cash while viewed Robinhood. something types are where well future more are that inflowing great a So pushing for the I’d the that Last deposits, And needed deposits the feedback come wanted as a deposits around that it. one rollout we hasn’t functionality we ACATS. in recently, we’ve with net quarter, billion that you channels portion just particular say. have been we that a $X.X in as have going the guess, Card. been that But into kind of functionality thousands as helpful in tell customers I’d of a had really customers we’ve the retirement we’ve has we’ve as be the It’s is been customers we that platform. portion using from And to joining until just to that do us. like functionality, be just have had

as deposit customers we’re as direct nice that the paycheck, really on well seeing early the So is Card It’s but spend direct of deposit. a invest. that early to when adoption their able signal the do they’re Cash

today gold that customers. we rolling we’ve going terms advanced on And product that’s customers. And working appeal on a then team attach later debit subscription And we’ll that started propositions the have is cards, this of a rate appeals are larger Card. gold. largely small more The In subscription the add to X.X% to about overall swath product to Cash value of that update year. Robinhood out something new you our to just

of it that had the out card million of on customers customers. we about And X on the rolling Cash Card it. prior slowly, had So waitlist thousands we reached hundreds debit

we appeal it out good to to really this as continue proposition feel that of we about value roll customers. so card And it’ll our the

Vlad Tenev

extended ask about hours. trading just I’ll you one didn’t that there throw in

I So during control trading that say But would it’s early. were some our versus the seeing we behavior still rollout, group. lift in pretty

to just the that been with really we’ve pleased of the novelty the have We But determine it’s not feature. new response. customer

As markets. of you advanced trading goal along XX/X allowing one in been a our the probably of users, and into know, it’s most step about equities huge ask the for features way it’s

Ken Worthington

Awesome. missed thank something, I I least for the thanks taking that. for questions. at so And you knew

Jason Warnick

question, your for Ken. Thanks

Operator

Thank you.

Please Our ahead. Piper Repetto next go Sandler. comes from question Rich of

Rich Repetto

Vlad evening, Jason. Good Yes. and

Vlad Tenev

Hey Rich.

Rich Repetto

you I advanced that focusing accounts talked it of trades the XX% where generated lot e-brokerage the How guess So what sort to you rule the XX-XX revenue. was a at generally understand from Vlad? an industry, the question, of look user my doing, are there we about and and XX% about of traditionally on

how class, it. how are is crypto or question feel may it’s my defining guess whether I any be for define users? It sort you asset these you different of but So by option,

So of And we get users. you’re this home does your of sort at base. to rule, that XX-XX the overall to it ring users advance some many advanced way it looking does customer feeling how

Jason Warnick

Jason, Thanks take It’s this Rich. one. I’ll

a is revenue. example, where of do power for have out Robinhood that the a the customers, is them thousands provides it of customers we’re extra going the we feel we particularly an in money smaller terms aside don’t to So like is the those But hundreds matches start they’re to is more like investing of contribute Card, we’re portion haven’t the able help about, giving that excited like Cash with why that opportunity This do that products contribute. of to law one customers. rolling roundups of set to reasons said, new really how roundup of many, but Robinhood and

portion a our it’s customer base. of So big

Rich Repetto

But how cutoff? is an user sought have are some definition advanced internal I to – or a of have you guess what

Jason Warnick

ways the we’ve outside not shared that look to something at it’s it but internally, do We have company.

Vlad Tenev

Yes. A lot of it is based on engagement with different products.

some that customers advanced we So options. are trading have

everyone and customers We platform. a fees quite way competitive rates, our utilizing the reason for experience crypto are our low customer. to our trading more that these our customers and ones we’re issue for the a saying experience customers they’re crypto also And the are engaged, – margin than we are is, likely on typical whenever have bit improvements more user love we Robinhood them that great and help since will to that have there’s believe an advanced run into

think for as adding as features really, the experience the them, good making by typical will well be we new experience customer more So really the and for pristine flawless.

we lot for So to leverage there’s advanced more customers. here high think do a and there’s our more

Rich Repetto

in X% follow-up, that’s Jason, just said on quick said what you I one to expense the beginning. believe when Okay. And now, growth the X% you

this out build all would build for the to way out basis. the what expenses the the that’s expenses, then be use be So – of you would products. new and the And and an out revenues sort goal back EBITDA

Jason Warnick

primary you the share The Yes. expenses be operating on thing back primary – that you thing would out compensation. that based

in the increase that the well X% related restructuring force we But as it to OpEx. just reduction We about about charge have year-over-year right small on X% in announced. to relatively that’s a think way

Rich Repetto

Thanks it. very it. Appreciate guys. much Got

Vlad Tenev

you. Thank

Operator

you. Thank

from comes question Goldman next of Will Nance Our Sachs.

please. question, Your

Will Nance

my Good evening. guys. questions. taking Thanks Hey for

you First, disclosures, all the comments. I earlier to for thank say new echo want I the

been to question net on despite actually three to it the growing flows. clip. terms very the strong looking net the some and seems of following forward last be in mean, to will you’re months forward that. I have something the base of new cumulative going assets. annualized XX% in slowdown at the I new a trading think XX% like I And monthlys or asset and quite a helpful deposits like ask also wanted trends activity,

it deepen to seems customers in forward, fees to the levels as modernization to from AUM share opportunity perspective? relationships. It monetization, strategies solid long-term just cash third-parties investment And about or overall an then based about talk with you through AUM increased could think revenue place wallet is asset tying continue the from company. maybe you for going advisory be like a So

do you how that size set? on kind opportunity of Just the

Vlad Tenev

custody on assets share and of seen And the with under certainly assets long-term deepening custody the the correlation between the Yes. under we We’ve of revenue correlated with think wallet our kind are that and customers and health business. relationships platform.

big of for auto doing invest feature crypto. see that's a And also we day-to-day that long-term. one, tax that spending paychecks on long-term also road. we a over stocks into to new customers. for valuable our and the paycheck Card and also their getting deposits And deposit are a and and some you’ve of the and we And accounts their and opportunity really invest depositing And their and card down see great paychecks the using those directly obviously block additions direct heard between a to about accounts, us we’re there the them custody correlation think new customers advantaged automatically Cash other talk the passive Retirement on building to seamlessly side, Robinhood. crypto portion things products using under into the cash a assets side, asset

look think custody pretty our a horizon, as to assets well. longer under selection that'll significantly we expand time continue out that we So and there as over drive

Jason Warnick

uninvested should on In lending asset value activities, interest some securities obviously trading, terms cash. of there'll on can over we these – added we’ll time be then gathering layer monetizing be available some of services. And

Will Nance

interest-free color. Got margin on just it. can or the amount of balances technical you balances I I Program. if about up could with question because That's rates follow the And rate actually Robinhood margin as thinking maybe subject super be Gold rate repricing rise? one helpful. a as I interest decent talk know the of how some loan margin And modeling, would appreciate under are the rise, the all quick interest interest the about that much to you're

sense is. So wanted how I just that get for significant to a

Vlad Tenev

Yes.

margin member, a for gold if you're $XXXX So borrowing of first, the get your free. you first

I of much there what and disclosed is pretty just interest which customer, good do, borrowing $XXXX. would so how per is can And sizing get of average you kind a Will, the is earning above look at

Will Nance

Got helpful. for questions. my taking it. all Super Thanks

Vlad Tenev

Yes.

Operator

you. Thank

Bank go Our next Please Craig question comes from of of ahead. America. Siegenthaler

Eli Molin

so trading quantify the to wallet wallet, your activity? client the I Thanks. the the for expect digital share you a is in on not it impact Craig. everyone. the you that from also, Hi for question timetable what's can have just launching and tire magnitude a had filling waitlist. This to And of Eli digital growth us then account help the wallet base,

Vlad Tenev

Hi.

They of just because customers less onto because for withdrawal is having customers actually very the see all excited platform, think customers assets. our crypto long-term our to an deposit like We and with your utilize primitive very new wallet. of rollout adopters that revenue we're control about functionality. it's especially crypto so about there a crypto. own few is driver it's think early engaging that We are yes, of important this So who

platform And to our that we're can so legitimate control. crypto to customers that engage more for ecosystem. going customers being a add ways over for our broader the we customers And things, involves time, giving think in more

driver. that, actually So enabled don't wallets on standalone basis, at revenue we wallets but this point as a a view

Jason Warnick

get full the fully absolutely probably that amazing on general No offer. deal coins to not not that mention for commission say know deal the an out, rollout. but well. And to is Yes, actually the Eli remiss you asked there. would fantastic so, we just I rolled as about timetable now availability It it's customers waitlist,

to come that. so, super functionality if able then to be through Robinhood to happy provide with our the broader And they interact ecosystem of kind offer pricing the and having we're Robinhood that to to customers buy and wallet want

Eli Molin

it. Thanks. Got

Operator

you. Thank

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

Michael Anagnostakis

war your over business growth. How and your given rationalizing industry market for afternoon. question hiring headcount, invest a to particularly and competitors is the This support Steven. good on ability rapid long-term. rather confident for continuing the the substantial Hey, to one efforts talent largest pace talent are your other public over win long-term Michael to peers orientation the are at in share of in your is My Anagnostakis of after growing in you announced the

Vlad Tenev

can Yes, I that feel one.

We it's grew So no headcount. fast terms surprise. in of very

been XXX on progression, key our full-time execute it some going QX. And X,XXX our despite couple right at our business, to the hire And actually pace but the still to with end that roles. that this to of goals. in reducing led were up the we've kind shown the at product that thought we're going to keep also roadmap innovation time past grew think headcount quarters. the and planned inefficiency, hiring roles to at in we're redundant XXXX, the accelerate we So we employees quickly of we've end right-sizing rather we the of able achieve and was And pace of the some of of still and to

So I think a the that while it business. hard, of was necessary this long-term health the was for step

Jason Warnick

add that, its in I'd as Robinhood also just at core company. a tech

time employee be an And expect per for company. I to so advantage revenue this would over

going drive just seek to and to we're nimble, for So be lean innovation.

Michael Anagnostakis

you impact disclosed given could with Great. coins. And the some crypto follow sequential the some new the and as around you're go-forward expecting you of dynamics give the my the up, renegotiation movement as you could and the mixed color drivers that around detail well of rebate provide some and

Secondly from you. rollout from are are a those your that Thank only launches indications seeing in been – it's coins, those with any driving weeks. platform you Understandings, the early increased of few prospective these customers. interests

Jason Warnick

bet. you Yes,

customers. talked we venue added the think additional venues. more competition, about rate quarter, rebate for bit that so getting we more a little were context, than slightly last our Michael an is So doubling that had we we In from which great

between the share our rationalized ourselves got that good the just also increase profitability felt We and really there. and about of we venues, the

share coins our are been new we specifically going good. I'm to added coins of that's how thrilled doing. more customers response terms that not has In

provide next week. about metrics mid-month We our monthly will

added just couple to very, that happy be and and progress – doing or weeks very there, sentiment we'll of that been month but able are we're customers see just strong there. the more the has so away, So we've next a kind selection overall

Michael Anagnostakis

Thanks.

Operator

Thank you.

question Barclays. Trevor next comes from Our Young,

Your line open. is

Trevor Young

were the last to you that that data, should four coins And selecting about of viewed should could And Great. cadence kind the Thanks. coins aren't on accelerate framework yet to as you roadmap lastly, forward. alluded now we this eight Vlad, from you. is talk coins in little bit going on of on have listing real-time be platform new the framework that a that nine for place, the then here? recently point, that added. just this in about the or but the tradable tailing question, new coins new expect Thank

Vlad Tenev

a listing Sure. for with evaluation Yes, framework comfortable coins we so new protocol. have do comprehensive and we're our

the can considerations So liquidity get protocol, add the things internal obviously the at coins course, sure expect The coin that and flexibly. research into on time. and coin. based making demand be framework of continuing technology of around both customers customer out kind the looks the behind security We of legal that our of over like external. we'll And and do to more positions

should improving our how you think safely make we've new with in infrastructure time. market you able timelines have question that and say by easier coins I Under also to guys heard to platform. that be many it of listed share we that terms But to this to we at I us data your the that Hood – will expect I the say add to the coins on, been won't be

the it's any have you relative coin. said I certainly likely eventually platform tracking listed data will arbitrary coin there's think – so price that an shouldn't no for any and connection, a – of higher to listed just expect market on likelihood we've being that

Trevor Young

on any users ARPU current marketing goal CAC to or the year? quick you're any and That's and this light Jason, color the thinking really in a later follow just spend higher to helpful. relatedly details reengage And in either on new just dormant of environment up for attract in users about how strategy Thanks.

Jason Warnick

Yes.

expect end of year Pretty the brand So question on products, new awareness. I'd the for thanks the past this marketing that. throughout increase to awareness our support marketing general lean to of quarter on some

and spending right that's we'll a thing do. there the marketing bit So think to our on increase

the customers very the experiments diminishing return that of to CAC and by done we a are over of past We mindful of lot quality understand I've and our channel get.

generally market taken from prior interest periods. where we've in learning of that in investing been we've and has so And environment mindful off that cooled this particular

Vlad Tenev

that. add also I'd And just Yes.

of past low you things still weekly remained marketing when one brokerages, for quarter, our the self-directed despite we're number is look of spend One downloads. proud Robinhood at this

So get to more feel, we with roadmap that's offering. our something the customers look more position, that makes ways and love us very engage we confident. forward us product feel creating the for our to and We value from like

Jason Warnick

of more Probably love. products their just customers our organically platform to more we and come either that too friends or add from Most that improve us our add referrals the customers through and that. the to

I think the more referrals. of that'll spin flywheel that

Trevor Young

Great. for Thanks you to both of you that.

Operator

you. Thank

question next Our from Josh comes of Beck KeyBanc.

Your open. line is

Josh Beck

that to, back taking kind it question. lending. ARPU about Thank of between gap? other you rates was mid-XXs. happening thinking are the whether bridging that team contributors there if I'm about and be should activity I waterfall cash components what's wanted there's other to we the with that happening just or perhaps say like in it's gap. or in What's of believe factors low big sounds for card XXs there's curious just terms I Jason's Certainly the with the of the comment go if it sec

Jason Warnick

Yes.

increases get piece So about that experience that we the of been Those effect big in improvements the are the talking on card. in the to ones, securities we've fully it withdrawals. rates into Fed increases paid a lending traders for on instant halo give as advanced the that revenue cash user That's platform. interchange big the just NIM will their

of for us. think more term I a that's opportunity longer

where get the we to areas are today bridging we other ones to bigger So are where to. need the

Josh Beck

that those on the to holistic direct garner within to financial that or of was more think then important helpful. cash inflows comments up Very picked relationship. Okay. And one I having winning really obviously the other deposits card, certainly I trying

you're some direct terms those of of flows? about being deposit tactically So just able curious, to in gain what thinking

Jason Warnick

own account. and when they like lane. had customers some which an that as heard we in investing out of Well, be tell feature spending talked to the to rolled we've couple this a we to prior investment management, Yes. I was really And cash added to their with card, had the experience sort things. you, because of cash even we their we One

was we separating into different something out balance a card. out rolled was important that the cash So as very

card need card having seamlessly and two-day to to great into think a also fees rewards table really the Robinhood. is have stocks, no into wanted to having deposit just pay thing early customer but with paycheck other invest ability stakes. compelling We just cash add and The just go beyond to crypto. that as reason the experience they the the And direct is I debit well as paycheck and for not a

think continue continue to new as and spin to the So for and progress be this reasons over more customers compelling products, mature the well. we their onto time, the I as direct should add crypto as deposit offerings to equities platform. And and deposit flywheel paychecks there'll

Josh Beck

Vlad. Thanks helpful. Thanks, Very Jason.

Jason Warnick

Josh. Thanks

Operator

ladies Thank And gentlemen, call. you and that conclude for today's participating. does conference

You may now disconnect.

Vlad Tenev

Thank you everyone.

Jason Warnick

you. Thank

Robinhood Markets (HOOD) 29 Apr 222022 Q1 Earnings call transcript