Q4 2023 Robinhood Markets Inc Earnings Call

Operator: There will be a question and answer session. To ask a question during this session, you'll need to press star 1 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1 1 again.

To ask a question. During this session you will need to press star one on your telephone. If your question has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, Chris Cagle, Vice President of corporate S. P N E and investor relation.

Operator: As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Chris Cagle, Vice President of Corporate FP&A and Investor Relations. Please go ahead.

Chris Cagle: All right, thank you, Jonathan, and thank you to everyone for joining Robinhood's Q4 earnings call. With us today are the CEO and co-founder of Vlad Tennis, and CFO. Before getting started, I want to remind you that today's call will contain forward-looking statements. Actual results could differ materially from our expectations, and we have no duty to provide updates unless legally required, potential risk factors that could cause differences, including regulatory developments described in the press release we issued today, the earnings presentation, and our SEC filings, all of which can be found at investors.robinhood.com. Today's discussion will also include non-GAAP financial measures. Reconciliation to the gap results we consider most comparable can be found in the earnings presentation.

Please go ahead.

Alright, Thank you Jonathan and thank you to everyone for joining rather it's Q4 earnings call with US today, our CEO and co founder glad tenants and CFO.

Before getting started I want to remind you that today's call will contain forward looking statements actual results could differ materially from our expectations and we have no duty to provide updates unless legally required.

Risk factors that could cause differences.

<unk> regulatory.

We continue to monitor our.

In the press release, we issued today.

And our SEC filings all of which can be found at investors that Robin Hood.

Today's discussion will also include non-GAAP financial measures.

Reconciliation to the GAAP results, we consider most comparable can be found in the earnings presentation with that let me turn it over to Brad.

Chris Cagle: With that, let me turn it over to Vlad. Thanks, Chris. Hi everyone.

Thanks, Chris.

Hi, everyone, we're going to try something a little bit different today I'm going to keep my remarks brief so that we can spend more time on Q&A.

Vlad Tenev: We're going to try something a little bit different today. I'm going to keep my remarks brief so that we can spend more time on Q&A. Robinhood's focused on three things. Number one, winning the active trader market. Two, increasing wallet share as we deepen relationships with our customers. And three, expanding internationally. First off, I want to congratulate our team on a strong 2023. Trading market share was up 14% for equities and 19% for options year over year.

Robert It's focused on three things number one winning the active trader market.

Two increasing wallet share as we deepen relationships with our customers and three expanding internationally.

First off want to congratulate our team for a strong 2023 trading market share was up 14% for equities and 19% for options year over year.

Vlad Tenev: Gold subscribers were up 25% to 1.4 million, and assets under custody exceeded 100 billion, fueled by the strength of our 27% organic growth in net deposits. And we've launched brokerage in the UK and crypto in the EU. A couple points to call out.

Gold subscribers were up 25% to $1 4 million in assets under custody exceeded 100 billion fueled by the strength of our 27% organic growth in net deposits and we've launched brokerage in the UK and crypto in the EU.

Couple of points to call out in Q4, we finished with $1 $3 billion of net positive brokerage account transfers into robinhood and we've already exceeded that total halfway through Q1, we've been taking trading market share for some time and now we're winning net asset inflows from.

Vlad Tenev: In Q4, we finished with $1.3 billion of net positive brokerage account transfers into Robinhood, and we've already exceeded that total halfway through Q1. We've been trading market share for some time, and now we're winning net asset inflows from every one of our major competitors, averaging over $100,000 per transfer. And as for funded customers, we've already grown more in the first half of Q1 than we did in each of the last eight quarters. So I love the momentum we're building, and I'm excited about 2024. But before I discuss our roadmap, let's have Jason review our financial results. Thanks, Vlad.

Every one of our major competitors, averaging over $100000 per transfer.

And as for funded customers, we've already grown more in the first half of Q1 than we did in each of the last eight quarters. So I love the momentum we're building and I am excited about 2024.

Before I discuss our roadmap, let's have Jason review, our financial results.

Thanks, Glenn it's good to speak with everyone. Today, we had a strong Q4 and 2023 and we have a lot of momentum starting 2024.

Jason: It's good to speak with everyone today. We had a strong Q4 and 2023, and we have a lot of momentum going into 2024. Looking at 2023, we delivered significant profitable growth with record full-year revenues, record adjusted EBITDA, and record adjusted EBITDA margins. We grew revenues 37% to $1.9 billion, delivered adjusted EBITDA of $536 million, which is more than three times our prior high, and drove 124% incremental margins as revenues grew by more than $500 million, even while we lowered costs. And we expanded the adjusted EBITDA margin to 29% as we make progress over time towards the 50% plus levels we see from incumbents. And looking at Q4, we delivered three cents of positive gap EPS. Aside from the regulatory charges last quarter, Q4 would have been our third straight quarter of positive earnings per share. It was also our sixth straight quarter of positive adjusted EBITDA.

Looking at 2023, we delivered significant profitable growth with record full year revenues record adjusted EBITDA and record adjusted EBITDA margins.

We grew revenues, 37% to $1 9 billion.

Delivered adjusted EBITDA of $536 million, which is more than three times our prior high.

Drove a 124% incremental margins as revenues grew by more than $500 million, even while we lowered costs and we expanded adjusted EBITDA margins of 29% as we make progress over time towards the 50% plus levels, we see from incumbents.

And looking at Q4, we delivered <unk> <unk> of positive GAAP EPS.

Aside from the regulatory charges last quarter Q4 would have been our third straight quarter of positive earnings per share.

Q4 was also our sixth straight quarter of positive adjusted EBITDA.

Jason: We're pleased with our results in 2023 and aim to continue delivering profitable growth in 2024. Now, let's move to our fourth quarter business results. Assets Under Custody finished Q4 back over $100 billion for the first time since 2021. We delivered strong Q4 net deposit growth at a 21% annualized rate, and we're focused on driving net deposits even higher by improving our user experience and value proposition.

We're pleased with our results in 2023 and aim to continue delivering profitable growth in 2024.

Let's move to our fourth quarter business results.

Assets under custody finished Q4 back over 100 billion for the first time since 2021, we.

We delivered strong Q4 net deposit growth at a 21% annualized rate.

And we're focused on driving net deposits, even higher by improving our user experience and value proposition.

Jason: When we look at historical customer cohorts, we see they have consistently added to their net deposits over time, which we think provides a strong foundation for sustainable long-term asset growth. And newer cohorts are starting with balances 1.5 to 2 times higher, which is even more encouraging. We're also delivering growth in Robinhood Gold. Compared to our average customer, gold subscribers in Q4 had more than eight times the assets of our average customer, with an average of about $40,000, grew net deposits more than twice as fast, and adopted our products at higher rates. Gold subscribers are up 25% year-over-year to 1.42 million. Gold ARPU is multiples of our average customer, which includes Q4 annualized recurring subscription revenue of $85 million.

When we look at historical customer cohorts, we see they have consistently added to their net deposits over time.

Which we think provides a strong foundation for sustainable long term asset growth.

And newer cohorts are starting with balances one and a half to two times higher.

Which is even more encouraging.

We're also delivering growth and robinhood gold compared to our average customer gold subscribers in Q4 had more than eight times the assets with an average of about $40000 grew net deposits more than twice as fast and have adopted our products at higher rates.

Gold subscribers are up 25% year over year to $1 $42 million.

<unk> is multiples of our average customer, which includes Q4 annualized recurring subscription revenue of $85 million.

Jason: This gold growth brings our adoption rate up to 6.1%, and we're working to take this even higher as we keep improving the value proposition. We also have strong momentum to start the year, as we added another 60,000 gold subscribers in January alone. That is nearly three times the monthly average we saw in 2023. Our team is also hard at work on new credit cards for Robinhood customers, starting with something special for gold customers. Currently, for funded customers with our historical X1 credit card, they have an ARPU of over $300 on credit alone. That's nearly four times our current average.

This gold growth brings our adoption rate up to six 1% and were working to take this even higher as we keep improving the value proposition.

We also have strong momentum to start the year as we added another 60000 gold subscribers in January alone that is nearly three times. The monthly average we saw in 2023.

Our team is also hard at work on new credit cards for Robyn had customers starting with something special for gold customers.

Currently for funded customers with our historical X one credit card they have an <unk> of over $300 on credit alone.

Nearly four times our current average.

Jason: This represents another opportunity for us to diversify our business and introduce new products to our customers, who have a median credit score of about 720 and two-thirds of whom are prime or prime plus. We look forward to sharing more about our plans with you soon. Now, let's turn to financial results. In the fourth quarter, we generated a net income of $30 million.

This represents another opportunity for us to diversify our business and introduce new products to our customers who have a median credit score of about 720, and two thirds of whom are prime or prime plus.

We look forward to sharing more about our plans with you soon.

Now, let's turn to financial results in the fourth quarter, we generated net income of $30 million as total net revenues increased 1% sequentially to 471 million and total expenses came in better than our outlook.

Jason: Total net revenues increased 1% sequentially to $471 million, and total expenses came in better than our outlook. Looking at Q4 revenues, transaction revenues increased as crypto notional volumes nearly doubled, and other revenues grew as we saw early traction in Sherwood Media and added more gold subscribers. These increases were partially offset by the anticipated decline in net interest revenues from lower SEC lending demand across the industry.

Looking at Q4 revenues transaction revenues increased as crypto notional volumes nearly doubled and other revenues grew as we saw early traction and Sherwood media and added more gold subscribers.

These increases were partially offset by the anticipated decline in net interest revenues from lower SEC lending demand across the industry.

Jason: Looking at fourth-quarter expenses, adjusted OPEX was $364 million, performing better than our outlook even while we increased our growth investment. And for share-based compensation, it was $81 million, in line with our outlook. This combination drove Q4 adjusted EBITDA of $133 million, up 62% from a year ago.

I'd also note that our monthly metrics now include total SEC lending revenues, so investors have even more visibility into the drivers of our net interest revenues through the quarter.

Looking at fourth quarter expenses, adjusted Opex was $364 million performing better than our outlook, even while we increased our growth investments and for share based compensation. It was $81 million in line with our outlook.

This combination drove Q4, adjusted EBITDA of $133 million up 62% from a year ago.

Now, let's move to our 2024 outlook, we aim to deliver another year of revenue growth and margin expansion.

Jason: Now let's move to our 2024 outlook. We aim to deliver another year of revenue growth and margin expansion. Looking at revenues, with the current macro backdrop, we're planning for strong growth in 2024, driven by continued 20-plus percent net deposit growth, increasing gold adoption, double-digit gains in trading market share, exciting new product introductions, and our diversified revenue model. And the year is off to a great start. January net deposits were nearly $4 billion, of which about one-third was net positive transfers in from other brokers.

Looking at revenues with the current macro backdrop, we're planning for strong growth in 2024, driven by continued 20 plus percent net deposit growth increasing gold adoption double digit gains in trading market share exciting new product introductions and our diversified revenue.

Model.

In the year is off to a great start.

January net deposits were nearly $4 billion of which about one third was net positive transfers in from other brokers.

Jason: That January result was the highest monthly total since the first half of 2021, and we're seeing continued strength in early February. Looking at expenses, we plan to continue investing across new products, features, marketing, and international, while getting more efficient in our existing businesses and managing head count growth all in low single digits. Our 2024 outlook for combined adjusted OPEX and share-based compensation is $1.85 to $1.95 billion, which is up 5% at the midpoint from last year's $1.81 billion, excluding the founder award cancellation. This range includes about $85 million of quarterly share-based compensation, similar to our run rate for the back half of 2023.

That January result was the highest monthly total since the first half of 2021, and we're seeing continued strength in early February.

Looking at expenses, we plan to continue investing across new products features marketing and international while getting more efficient in our existing businesses and managing head count growth all in to low single digits.

Our 2020 for outlook for combined adjusted Opex and share based compensation is 185 to $1 95 billion, which is up 5% at the midpoint from last year's $1 eight 1 billion, excluding the founder award cancellation.

This range includes about $85 million of quarterly share based compensation similar to a run rate for the back half of 2023.

Jason: As for timing, we anticipate Q1 will likely be in the upper half of our implied range as we lean into marketing investments to start the year. We also continue to closely manage our share count. In 2023, our diluted share count decreased nearly 5% due to the purchase of 55 million shares in Q3.

As for timing, we anticipate Q1 will likely be in the upper half of our implied range as we lean into marketing investments to start the year.

We also continue to closely manage our share count in 2023 diluted share count decreased nearly 5% due to the purchase of 55 million shares in Q3 and.

Jason: And in 2024, we expect to manage dilution to 2% or less. We believe this plan positions us to drive profitable growth again in 2024 as we grow revenues and expand margins. We'll have to see how the year plays out, but so far, we like the growth we're driving to start the year. I also wanted to share some perspective on the interest rate backdrop in 2024. First, when we look at the forward curve, the implied average Fed funds rate in 2024 is roughly the same as it was in 2023, making rates a fairly neutral input for revenue year over year. Second, out of our 30 plus billion of interest earning assets, Less than half of that is rate sensitive because we pass the vast majority of cash sweep interest onto our customers. So as rates move, we do not anticipate a significant change in the yield we earn on cash sweep.

And in 2024, we expect to manage dilution to 2% or less.

We believe this plan positions us to drive profitable growth again in 2024, as we grow revenues and expand margins, we'll have to see how the year plays out, but so far we like the growth we're driving to start the year.

I also wanted to share some perspective on the interest rate backdrop in 2024.

First when we look at the forward curve the implied average fed funds rate in 2024 is roughly the same as it was in 2023, making.

Making rates are fairly neutral input for revenue year over year.

Second of our 30 plus billion of interest, earning assets less than half of that is rate sensitive because we passed the vast majority of cash sweep interest onto our customers. So as rates move we do not anticipate a significant change in the yield we earn on cash sweeps.

Jason: And third, and most importantly, declining interest rates tend to support growth and asset balances and trading. So we think 2024 is the year when interest rates will shift from being a headwind for our business growth to being a tailwind. In closing, we had a strong Q4 and 2023, and we have a lot of momentum to start the year. We remain focused on driving profitable growth for shareholders as we work to maximize EPS and free cash flow per share in 2024 and the years to come. Now I'll turn the call back to Vlad.

And third and most importantly, declining interest rates tend to support growth in asset balances and trading. So we think 2024 is the year. When we will see interest rates shift from being a headwind for our business growth into a tailwind.

In closing, we had a strong Q4 and 2023 and we have a lot of momentum to start the year, we remain focused on driving profitable growth for shareholders as we work to maximize EPS and free cash flow per share in 2024 and the years to come.

Now I'll turn the call back to flat.

Vlad Tenev: Thank you, Jason. As we enter the year, I want to highlight some of the areas we're most excited about to drive growth in 2024 and beyond. First, to win the active trader market, we're going to continue to invest in our user experience on mobile, where we're currently number one in market share. In addition, we will be launching a more feature-rich professional offering on the web for active traders. And we're also working on expanding our selection of tradable assets, in particular with index options and futures coming later this year. Second, to grow WalletShare, we're focused on increasing gold memberships and net deposits. We plan to keep investing to make Robinhood Gold even more valuable for our customers and build off the early success of our retirement offering. At the same time, we also plan to launch new products like credit cards and add new account types such as joint accounts.

Thanks, Jason.

As we entered the year I want to highlight some of the areas. We're most excited about to drive growth in 2024 and beyond first for winning the active trader market, we're going to continue to invest in our user experience on mobile where we're currently number one in market share. In addition, we will be launching a more feature rich.

Professional offering on the web for active traders and we're also working on expanding our selection of tradable assets in particular with index options and futures coming later this year.

Second to grow wallet share, we're focused on increasing gold memberships and net deposits, we plan to keep investing to make robinhood gold even more valuable for our customers and build off the early success of our retirement offerings at the same time, we also plan to launch new products like credit cards, and add new account types such as joy.

Accounts.

Vlad Tenev: And third, for international expansion, after launching crypto in the EU and brokerage in the UK, we have tens of thousands of international customers so far. What we're hearing from customers is that they want more of the full Robinhood product suite, so we're working to build that for them. We're also pursuing opportunities to expand into more jurisdictions.

And third for international expansion after launching crypto in the EU and brokerage in the UK, we have tens of thousands of international customers. So far what we're hearing from customers is that they want more of the full robinhood product suite. So we're working to build that for them. We're also pursuing opportunities to expand into more jurisdictions.

Vlad Tenev: Reflecting on the past four years, we've tripled our customer base and grown revenues nearly seven times. And when we look at all that's in front of us, we're excited by the opportunity to continue growing Robinhood significantly from here. And we have a ton of momentum to start 2024.

Reflecting on the past four years, we've tripled our customer base and grown revenues nearly seven times and when we look at all of that is in front of US. We're excited by the opportunity to continue growing robinhood significantly from here and we have a ton of momentum to start 2024, I want to thank our customers and team for a great 2023.

The team has been working incredibly hard the roadmap is fall. There's so much to do now let's move on to questions.

Vlad Tenev: I want to thank our customers and team for a great 2023. The team's been working incredibly hard, the roadmap is full, and there's so much to do. Now, let's move on to questions. Thank you, Vlad.

Thank you Glenn.

For the Q&A session will start by answering the top five shareholder questions Hey technologies.

Several questions that were already on this call or in prior quarters and grouped together questions that shared a common theme.

Operator: For the Q&A session, we'll start by answering the top five shareholder questions for today's technology, ranked by number asked several questions that we already addressed on this call or in prior quarters, and grouped together questions that shared a common theme. After the saved questions, we'll turn to live questions from our analysts. So I'll kick it off with our first question from Say. This one's for Jason.

After the same questions, we will turn to live questions from our analysts so I'll kick it off with our first question from say this one is for Jason.

Stock price is down 70%.

Once you have in place to get your stock price back up as a dividend in the works to at least provide some return on investment.

So the question we're hard at work on the inputs to driving value for shareholders.

In 2023, we increased revenue by over $500 million and grew adjusted EBITDA, even faster and we're focused on driving revenues and profits higher in 2024.

Jason: Your stock price is down 70% since the beginning of the year. What do you have in place to get your stock price back up? Is a dividend in the works to at least provide some return on investment? Thanks for the question.

Over time as we deliver on these inputs to the business I think the stock price should follow.

As for capital returns to shareholders last year, we bought back about 6% of our shares and we'll continue to look for ways, especially efficient ways to deploy our capital, including the investments in growth M&A to accelerate our road map or returns of capital to shareholders over time, but right now to your question we don't.

Jason: We're hard at work on the inputs to driving value for shareholders. In 2023, we increased revenue by over $500 million and grew adjusted EBITDA even faster. And we're focused on driving revenues and profits higher in 2024. Over time, as we deliver on these inputs to the business, I think the stock price should follow. As for capital returns to shareholders, last year we bought back about 6% of our shares, and we'll continue to look for ways, especially efficient ways, to deploy our capital, including investments in growth, M&A to accelerate our roadmap, or returns of capital to shareholders over time. But right now, to answer your question, we don't have any plans for dividends. All right, thank you, Jason. The next question's for Vlad.

Any plans for dividends.

Alright, Thank you Jason next question's for glad glad.

To get robinhood to the next level to start competing with fidelity and the rest of the most common brokers.

Thanks for the question so for starters I think Robin Hood is already competing with fidelity in the rest of the common brokers. If you look at active traders, we've been growing trading market share by double digits. So that's not not just volume or market share. We won head to head net asset <unk>.

<unk> from.

All the other major brokerages in Q4 and that includes fidelity. So that means that more assets actually flowed from fidelity to Robin Hood in Q4 than the other way around.

And so to take it to the next level.

We're really excited about our strategy, we think there's so much more to do for active traders.

Vlad Tenev: Vlad, what will it take to get Robinhood to the next level, to start competing with Fidelity and the rest of the most common brokers? Thanks for the question. So for starters, I think Robinhood is already competing with Fidelity and the rest of the common brokers. If you look at active traders, we've been growing our trading market share by double digits. So that's not just volume, but market share.

Roadmap is full.

That includes investments across.

A slew of areas, one making sure that the user experience remains best in class and continuing to invest there, adding new product innovations that our competitors don't offer such as 24 hour market.

New asset classes like futures, which are active traders have been really excited about and asking for.

New account types and more of the table Stakes features that.

Vlad Tenev: We won head-to-head net asset transfers from all the other major brokerages in Q4, and that includes Fidelity. So that means that more assets actually flowed from Fidelity to Robinhood in Q4 than the other way around. Um, and so, to take it to the next level, we're really excited about our strategy. We think there's so much more to do for active traders. The roadmap is full, and that includes investments across a slew of areas.

We just still have to get to so there is a lot to do and I should also mention not a lot of the brokers have adopted new technologies like crypto and Thats, an area, where we're continuing to invest in Ics extending our lead throughout 2024 and beyond.

Increasing wallet share we've talked a little bit about the success, we're seeing in driving net account transfers from other brokers. We think that there is a lot of headroom. There is a lot of improvements in.

Vlad Tenev: One, making sure that the user experience remains best in class and continuing to invest there. Adding new product innovations that our competitors don't offer, such as the 24-hour market. New asset classes, like futures, which our active traders have been really excited about and asking for. And new account types and more of the table stakes features that we just still have to get to. So, there's a lot to do.

Our passive offerings like retirement.

Roadmap there is full and we're very excited about the credit card and international we did launch in the UK for brokerage crypto for EU.

It expands the addressable market quite dramatically not a lot of the common brokers, even have an international presence to note.

Vlad Tenev: And I should also mention that not a lot of the brokers have adopted new technologies like crypto. And that's an area where we're continuing to invest, and I see us extending our lead throughout 2024 and beyond, increasing WalletShare. We've talked a little bit about the success we're seeing in driving net account transfers from other brokers. We think that there's a lot of headroom.

And I think over the couple over the next few years, we're making significant investments there. So I think if we're successful executing on our strategy you could see robinhood, winning by even larger margins going forward.

Alright. Thank you will add the next question's from Jason Jason Robinson has been profitable often on do you see robinhood, joining the S&P 500 by qualifying and being profitable four quarters in a row.

Vlad Tenev: There's a lot of improvements in our passive offerings like retirement. The roadmap there is full, and we're very excited about the credit card. And international, we did launch in the UK for brokerage and crypto for the EU. That expands the addressable market quite dramatically. Not a lot of the common brokers even have an international presence to note.

We'd love to join the S&P 500, and I think we're focused on the right things to do that delivering consistent profitability revenues even higher.

Remember, though there are only 500 spots on this and there is a committee decision. So it is not completely in our control, but we will keep focused on our business and over time it would be great to be part of that index alright. Thank you. Jason next question are you glad.

What kind of progress should we expect from the company in 2024.

So I'll break it down into three areas we're focused on.

Vlad Tenev: And I think over the next few years, we're making significant investments there. So I think if we're successful executing on our strategy, you could see Robinhood winning by even larger margins going forward. All right. Thank you, Vlad.

For winning in the active trader market. There is user experience improvements new assets like futures and index options.

As well as I mentioned in my remarks earlier today, we've been doing very well on mobile we're number one in market share there.

Jason: The next question is for Jason. Jason, Robinhood has been profitable off and on. Do you see Robinhood joining the S&P 500 by qualifying and being profitable for four quarters in a row? We'd love to join the S&P 500, and I think we're focused on the right things to do that. Delivering consistent profitability and growing revenues even higher. You know, remember, though, there are only 500 spots for this, and this is a committee decision, so it's not completely in our control, but we'll keep focused on our business, and over time, it would be great to be part of that industry. All right. Thank you, Jason. The next question for you is for you, Vlad.

<unk> on web.

Haven't been doing as well and so we're making a big investment there and we're going to be launching.

More professional offering geared toward active traders. So we're very excited about.

About that.

As we continue to execute here you should be able to track the progress and continued market share gains across all of the assets that we offer including equities options and crypto.

Four increasing wallet share.

Card is something we're very excited about including a.

A special.

Special credit card for gold customers, there's more to do on Robinhood gold in general and in retirement and will also be building and offering new account types like joint accounts.

Vlad Tenev: What kind of progress should we expect from the company in 2024? So I'll break it down into the three areas we're focused on. For winning in the active trader market, there are user experience improvements, new assets like futures and index options, as well as, as I mentioned in my remarks earlier today, we've been doing very well on mobile. We're number one in market share there.

You should be able to track progress there by looking at our net deposits and our gold subscribers.

And then expanding internationally.

Yes.

We launched in the EU for crypto and.

In the UK for brokerage.

Really what we're focused and focusing on is delivering more features making those experiences more feature rich and building on the initial U K and EU momentum that we've generated and then.

Vlad Tenev: Frankly, on the web, we haven't been doing as well. And so we're making a big investment there, and we're gonna be launching a more professional offering geared toward active traders. So we're very excited about that, and as we continue to execute here, you should be able to track the progress in continued market share gains across all the assets that we offer, including equities, options, and crypto. For increasing wallet share, the credit card is something we're very excited about, including a special, branded credit card for gold customers.

What you should see there is.

An increase in the percentage of our funded customers that come from international markets as well as new funded customer growth overtime.

Alright, Thank you Brad.

And Budd. This last question is also for you.

Please offer a yearly realized gain and loss tracker, showing short and long term gains.

I ask this in multiple Earth.

You have to track track it manually in excel.

Vlad Tenev: There's more to do on Robinhood Gold in general and in retirement, and we'll also be building and offering new account types like joint accounts, and then you should be able to track progress there by looking at our net deposits and our gold subscribers. And then we expanded internationally; we launched in the EU for crypto and in the UK for brokerage. Really, what we're focusing on is delivering more features, making those experiences more feature-rich, and building on the initial UK and EU momentum that we've generated. And then what you should see is an increase in the percentage of our funded customers that come from international markets, as well as new funded customer growth over time. All right. Thank you, Vlad.

Well, thank you for the feedback and thanks for continuing to ask there is an impact you asking because this is something that the team has actually been working towards we're working hard to make great improvements to our tax slot in P&L tracking this year and we hope you'll you'll like them so stay tune.

Thank you Brad that concludes our shareholder questions from say technologies. We appreciate our shareholders taking time to ask these questions of when Jason and look forward to more next quarter now ill turn the call over to Jonathan to lead Q&A from our analysts.

Certainly thank you one moment for our first question and our first question for today comes from the line of Dan <unk> from Mizuho. Your question. Please.

Hey, good evening.

Vlad Tenev: And Vlad, this last question is also for you. Please offer a yearly realized gain and loss tracker showing short and long-term gains. I've asked this in multiple IRFs. You currently have to track it manually in Excel.

Amazing results.

Congratulations team really good making me proud.

Thank you Dan.

Of course, yes, I was actually really really impressed by your comment a lot about the $1 3 billion of net net positive brokerage account transfer.

Vlad Tenev: Well, thank you for the feedback and thanks for continuing to ask. There is an impact on you asking because this is something that the team has actually been working towards. We're working hard to make great improvements to our tax slot and P&L tracking this year, and we hope you'll like them. So stay tuned. Great. Thank you, Vlad.

To me it looks like Youre, gaining massive share I know in the past other brokers, who have said that they are taking share away from you. It looks like the tide is turning like.

What are you seeing now.

Yes, I mean.

We've been investing a lot in the user experience we have been investing in the service.

Products results speak for themselves in Q4, we were net positive.

So positive on a net basis for account transfers from every one of our major competitors.

Operator: That concludes our shareholder questions from Say Technologies. We appreciate our shareholders taking time to ask these questions of Vlad and Jason and look forward to more next quarter. Now I will turn the call over to Jonathan to lead Q&A from our analysts. Certainly, thank you. One moment for our first question. And our first question for today comes from the line of Dan Dolette from Mizzou. Your question, please.

And these are big accounts coming in so what's what's really amazing is I think the new functionality that we've been offering and the service quality improvements have led to people being comfortable moving in hundreds of thousands of dollars into into robinhood, which.

People wouldn't really talk about as much but now it's becoming a destination for people serious money.

Dan Dolev: Amazing results. Congratulations, team, really good, making me proud. Thank you, Dan. Yeah, so I was actually really, really impressed by your comments a lot about the 1.3 billion net positive brokerage account transfer. To me, it looks like you're gaining massive share. I know in the past, other brokers have said that they're taking share away from you. Looks like the tide is turning. Where are you seeing?

We're going to continue to double down on that again I want to emphasize.

We're not getting complacent, there's a ton of work that remains to be done.

And to be able to deliver these types of results and see customers coming to us from all of our major competitors in Q4.

And from what we've announced.

So far in Q1 has just been really positive and it's taken a ton of work from the team to both improve the product and service and.

Yes.

Vlad Tenev: Yeah, I mean, we've been investing a lot in the user experience, we've been investing in the service, the product, and the results speak for themselves. In Q4, we were net positive, so positive on a net basis for account transfers from every one of our major competitors, and these are big accounts coming in. So what's really amazing is I think the new functionality that we've been offering and the service quality improvements have led to people being comfortable moving hundreds of thousands of dollars into Robinhood, which people wouldn't really talk about as much, but now it's becoming a destination for people's serious money. We're going to continue to double down on that. Again, I want to emphasize that we're not getting complacent. There's a ton of work that remains to be done.

Where that's happening.

Can I squeeze in another quick question.

I know, it's early days, but.

Can you talk a little bit about progress in terms of.

Accounts and traction you're getting in the U K.

I think a huge opportunity for robinhood, so I just wanted to see.

The traction has been going and congrats again.

Yeah, No. We're very excited about that a big part of our strategy is making robinhood available to hundreds of millions of additional customers and so.

I think we've talked about tens of thousands of customers in the EU and the UK already the U K is still rolling out.

So we're working towards the app being generally available to any customer in the coming months.

We know we've got a lot of work to do there is theres a lot of features that exist in the U S that our customers expect in these markets.

Vlad Tenev: And to be able to deliver these types of results and see customers coming to us from all of our major competitors in Q4. And, you know, from what we've announced so far in Q1, has just been really positive. And it's taken a ton of work from the team to both improve the product and service and get to where that's happening. Amazing stuff.

And especially on the crypto side, there is going to be things that we can deliver in those markets that are not available in the U S. So the roadmap is full and both of the teams have been grinding exceptionally hard to improve the product at a very fast clip there.

Thank you.

Thank you one moment for our next question.

Vlad Tenev: Can I squeeze in another quick question? I know it's early days, but how, you know, can you talk a little bit about progress, accounts, and traction you're getting in the UK because, you know, this is... a huge opportunity for Robinhood. Black.

And our next question comes from the line of Devin Ryan from JMP Securities. Your question. Please.

Great. Thanks, so much <unk> hi, Jason how are you.

Hey, Devin.

A question just on kind of interest rates and trading and appreciate kind of the universe correlation that you talked about.

Vlad Tenev: Yeah, no, we're very excited about that. A big part of our strategy is making Robinhood available to hundreds of millions of additional customers. And so I think we've talked about tens of thousands of customers in the EU and the UK already. The UK is still rolling out.

Obviously sitting here today with materially higher customer cash balances.

As you mentioned, you're passing along the majority of that benefit declined. So if rates eventually do start to move lower how are you guys thinking about the magnitude that could move back into the market from kind of those cash balances and then what the implications are on <unk> is that.

Vlad Tenev: So we're working towards the app being generally available to any customer in the coming months, and we know we've got a lot of work to do. There are a lot of features that exist in the US that our customers expect in these markets. And, you know, especially on the crypto side, there are going to be things that we can deliver in those markets that are not available in the US. So the roadmap is full, and both of the teams have been grinding exceptionally hard to improve the product at a very fast clip. Thank you. Thank you.

Net positive to <unk> or how should we think about the interplay to revenues.

Yeah, Devin this is Jason when we when we've looked at kind of the movement of trading activity.

Relative to interest rates, moving up and down we've seen a pretty strong inverse correlation there.

So we feel really good that we've got a nice natural hedge in the business.

Operator: One moment for our next question. Our next question comes from Devin Ryan from JMP Securities. Great. Thanks so much. Hi, Vlad. Hi, Jason. How are you?

<unk> inter.

Interest rates falling and interest in trading picking up and so.

In my in my comments I talked a bit about.

<unk>.

Passing along.

Devin Ryan: Hey Devin, a question just on interest rates and trading, and I appreciate kind of the inverse correlation that you talked about. Obviously, we sit here today with materially higher customer cash balances, and as you mentioned, you're passing along the majority of that benefit to clients. So if rates eventually start to move lower, how are you guys thinking about the magnitude that could move back into the market from kind of those cash balances and then just what the implications are on ARPU? Is that a net positive for ARPU, or how should we think about the interplay? Yeah, Devin, this is Jason.

A big portion of the interest rates to customers on gold sweep.

Looking at the average interest rates expected for 'twenty four being roughly in line with 23. So we feel really good about that and then as I as I mentioned kind of most importantly, we think that falling interest rates create a tailwind for the business. So so overall, we feel really good about delivering strong revenue growth.

In this current macro environment.

Okay.

Okay terrific and then just a follow up here just on expenses, obviously I think the expense guide 5% at the midpoint is very good.

And you guys sound confident you can still fund all of your growth initiatives. So how.

How do you guys think about maybe core growth and expenses over the intermediate term maybe next three to five years I would assume there would be higher than that 5%.

Jason: You know, when we've looked at kind of the movement of trading activity relative to interest rates moving up and down, we've seen a pretty strong inverse correlation there. And so we feel really good that we've got a nice, natural hedge in the business between, you know, interest rates falling and interest in trading picking up. And so, you know, in my comments, I talked a bit about passing along a big portion of the interest rates to customers on GoldSweep, looking at the average interest rates expected for 24 being roughly in line with 23, so we feel really good about that. And then, as I mentioned, kind of most importantly, we think that falling interest rates create a tailwind for the business. So overall, we feel really good about delivering strong revenue growth in this current macro environment. Okay, terrific.

Walk us through some of the moving parts there and then just the second part of the question is just thoughts on leaning in more on marketing spend I mean, you had a fantastic quarter stuff that you're having a lot of <unk>.

Success with these promotions and I'm just curious if maybe it makes sense to even lean in more there because it would seem to pay off.

Good with all the momentum you have there. Thank you.

Great Great questions. So first of all when we look at core expense growth. This year, we actually have a plan to take that down high single digits, perhaps even 10% and redirecting that spend to fund new growth initiatives.

And then kind of looking out over the mid to longer term in terms of core growth.

We think that could be low single digits, perhaps even lower.

Still a lot of opportunity for us to drive efficiency in this business and we think we can.

Maintain our core business and redirect the savings into growth initiatives over time on your on your question about leaning more into marketing Youre on the same page as the management team that is the plan. This year and we are planning to spend up to about $100 million more in marketing in.

Jason: And then just a follow-up here, just on expenses. Obviously, I think the expense guide 5% of the midpoint is very good, and you guys sound confident that you can still fund all of your growth initiatives. So how do you guys think about maybe core growth and expenses over the intermediate term, maybe the next three to five years? I would assume there would be higher than that 5%.

2024, which is baked into this guidance.

<unk> is really focused on bringing in high LTV customers with that spend and we're liking kind of the early signals that we're that we're seeing and so we want to lean in more there.

Okay, that's really great color. Thank you guys appreciate it.

Thanks, Kevin.

Jason: Maybe just walk us through some of the moving parts there. And then the second part of the question is just thoughts on leaning in more on marketing spend. I mean, you had a fantastic quarter.

Q1 moment for our next question.

Okay.

And our next question comes from the line of Alex Mark Graf from <unk>. Your question. Please.

Jason: Sounds like you're having a lot of, you know, success with these promotions. And I'm just curious if maybe it makes sense to even lean in more there because it would seem the payoff is very good with all the momentum you have there. Thank you.

Hey team. Thanks for taking my question just wanted to come back to the.

Account transfer and some of this disclosure around the 1% bonus offering.

Just wanted to understand how the average balance transfer I think it was 100000 kind of stacked up against your expectations for that campaign and then.

Jason: So first of all, when we look at core expense growth this year, we actually have a plan to take that down to high single digits, perhaps even 10%, and redirect that spend to fund new growth initiatives. And then kind of looking out over the mid to longer term, in terms of core growth, you know, we think that could be low single digits, perhaps even lower. There's still a lot of opportunity for us to drive efficiency in this business. And, and, and we think we can, you know, maintain our core business and redirect the savings into growth initiatives over time. On your question about leaning more into marketing, you're on the same page as the management team. That is the plan for this year.

Glad with some of your comments earlier I mean is that.

Directionally kind of the new normal and some of these transfer campaigns or how should we think about that.

Yes, so I would just say.

Looking looking back over the past 10 years, we've taken market share of the trading activity now we're coming for the assets too. So our focus is increasingly going to be on driving asset growth. We just completed the 1%.

<unk> for cats in taxable brokerage accounts, we saw over $3 billion in cats in from that and now we're turning our focus on the 3% retirement promotion on rollovers and transfers for retirement accounts that runs through tax season on average as you pointed out the customers transferring assets.

Jason: And we are planning to spend, you know, up to about $100 million more in marketing in 2024, which is baked into this guidance. The team is really focused on bringing in high-LTV customers with that spend, and we're liking kind of the early signals that we're seeing. And so we want to lean in more there. Okay, that's really great color.

Over a much larger than kind of the average account size and.

We're really excited about the momentum that's giving us to start the year.

And maybe if I could just squeeze in one more any sort of color observations you can share with us.

Devin Ryan: Thank you. Thank you. Thank you for our next question. And our next question comes from the line of Alex Markraff from KBCM. Hey, team.

The interplay between some of the spot bitcoin Etfs that were made available.

In the early part of the year as opposed to.

Operator: Thanks for taking my question. I just wanted to come back to the average balance, 100,000 kind of stacked up again, their expectations for that campaign. And then Vlad, with some of your comments earlier, I mean, is that... Directionally, kind of the new normal. Transfer campaigns, or what should we call them? Yeah, so I would just say.

Direct ownership.

Yeah. Alex This is Jason I'll go ahead and take that.

So we're really pleased to be offering all 11 of the bitcoin Etfs on the first day of trading I think that was a great outcome.

For customers.

So far we're seeing nice interest in the Etfs, but we think it's.

It's additive about 5% of our overall trading.

In crypto is through the ETF with 95% still being on spot trading through the crypto business and.

Alex Markraff: Looking back over the past 10 years, we've taken market share of the trading activity. Now we're coming for the assets too. So our focus is increasingly going to be on driving asset growth. We just completed the 1% promo for ACATs in taxable brokerage accounts. We saw over $3 billion in ACATs from that. And now we're turning our focus on the 3% retirement promotion on rollovers and transfers for retirement accounts that runs through tax season. On average, as you pointed out, the customers transferring assets over are much larger than the average account size, and we're really excited about the momentum that it gives us to start the year. And maybe if I could just squeeze in one more, any sort of color observation you could share with us?

And Thats.

Stabilized so we feel really good to offer the selection for customers. We think it increases overall market interest in crypto and.

And also brings liquidity to the market. So net net we're really pleased with with the bitcoin Etfs.

Great. Thanks for all the detail.

Okay. Thank you one moment for our next question.

And our next question comes from the line of will Nance from Goldman Sachs. Your question. Please.

Hey, guys I appreciate you taking the question.

Yes.

The prepared remarks, we're talking about.

Continued revenue growth and margin expansion for the year.

And it sounds like.

The assumption is it's probably coming on the revenue side more from the trading side than from NII, given the commentary around <unk>.

Jason: You know, the interplay, spot, Bitcoin ETFs that were made available in the early part of the year, as opposed to, you know, direct Bitcoin. Alex, this is Jason. I'll go ahead and take that. You know, we're really pleased to be offering all 11 of the Bitcoin ETFs on the first day of trading. I think that was a great outcome for customers. So far, you know, we're seeing nice interest in the ETFs. But we think it's, we think it's additive. About 5% of our overall trading in crypto is through the ETF, with 95% still being on spot trading through the crypto business. And that's when I stabilized it.

<unk> sort of being a push so.

Correct me, if I'm wrong there.

If there's like an assumption around on our earning asset growth, but I guess my thought my question would be.

And the earlier response to one of the questions. It sounds like there's actually a lot more growth related investments happening underneath the surface and as an expense guide and you guys are funding that with continued operational efficiencies.

Doing what you guys have done an amazing job over the past two years are doing in right sizing the expense base. So just maybe can you talk about sort of how much of that growth related investments and sort of discretionary.

Jason: So, you know, we feel really good about offering this selection for customers; we think it increases, you know, overall market interest in crypto and also brings liquidity to the market. So, net net, we're really pleased with the Bitcoin ETF. Great, thanks for all the, Thank you.

We do see some corner some kind of reduction in either near term trading activity.

I know, we saw very nice increase and it seems like both options and crypto towards the end of the year.

Alex Markraff: One moment for our next question. Our next comes from the line of Will Nance from Goldman Sachs. Your question.

What kind of flex is there in those growth related investments.

Yes, I mean I think.

Marketing is almost always considered a discretionary spend and so as I mentioned in my earlier response that we're leaning into marketing.

Will Nance: Hey, guys, appreciate you taking the question. I know in the prepared remarks, we're talking about, you know, continued revenue growth and margin expansion for the year. And it sounds like, you know, that's probably coming on the revenue side more from the trading side than from NII, given the commentary around, you know, rates sort of being a push. So, you know, correct me if I'm wrong there, if you're, you know, if there's like an assumption around better earning asset growth. But I guess my thought, and my question would be, in the earlier response to one of the questions, it sounds like there's actually a lot more growth-related investments happening underneath the surface in this expense guide, and you guys are funding that with continued operational efficiencies and doing what you guys have done an amazing job over the past two years of doing and right-sizing the expense base.

That is always up to reevaluation up or down depending on the.

The macro backdrop, and how that changes and also how effective the marketing spend is and so we will continue to see how that plays out in <unk>.

An update as we go in terms of.

The cost savings that we're realizing in our core business I said.

High single digits, perhaps even 10% of cost reduction there and.

And we're to redeploying that into new areas of our business.

Areas that flat with highlighting.

Earlier, new growth is certainly discretionary I'd say that we've decided though that we're pursuing these growth opportunities and so I wouldn't expect us to pull back there.

Certainly in 2024.

And will you do.

You did say rates or greater a push and I agree with that I would say that we also continue to see strong kind of double digit growth in net deposits and so assets continue to improve year over year, and we're certainly starting with a higher balance at the beginning of 'twenty. Four then than what we saw in 'twenty three.

Yes, all of that makes sense and then just questions around.

Will Nance: So just maybe can you talk about how much of that growth-related investment is discretionary? And if we do see some kind of reduction in either near-term trading activity, I know we saw a very nice increase in both options and crypto towards the end of the year. What kind of flex is there in those growth-related investments? Yeah, I mean, I think, you know, marketing is almost always considered a discretionary spend.

Thought process around the European expansion over the course of this year.

What does that play into expectations, if any and what slate.

Latest thinking on when this could be a more meaningful part of the story over time, thanks for taking my questions Tonight.

Yeah, I'll take that one while it is still early we really like the initial traction we're seeing we're already seeing a healthy portion of our user growth coming from outside of the U S.

Jason: And so, you know, as I mentioned in my earlier response that we're leaning into marketing, you know, that that is always up for reevaluation, up or down, depending on the macro backdrop, how that changes, and also how effective the marketing spend is. And so we'll continue to see how that plays out and, and, and, and, and update you as we go in terms of, you know, the cost savings that we're realizing in our core business. I said, you know, high single digits, perhaps even 10% of cost reduction there. And we're redeploying that into new areas of our business areas that, you know, Vlad was highlighting earlier. New growth is certainly discretionary, but I'd say that we've decided, though, that we're pursuing these growth opportunities. And so I wouldn't expect us to pull back there, you know, certainly in 2024.

And our focus now is really rounding out the products, we are bringing more services to customers across the globe, We think theres a huge opportunity for international to become a big part of our business.

Yes.

Thank you one moment for our next question.

And our next question.

It comes from the line of Steven <unk> from Wolfe Research Your question. Please.

Hey, Good afternoon. This is Michael and I Mistyped is filling in for Steven.

Just wanted to ask Michael <unk> land here, Hey, Brian how are you doing.

Good Okay. Good to hear just wanted to touch on Sakhalin here could you give us an update on where you are in the journey for the fully paid program how much incremental penetration you think you can drive and given the uptake has been obscured by what's challenging backdrop can you remind investors what do you think that business.

Could deliver from a revenue perspective, and a more normal environment. Thanks.

Jason: And yeah, you know, Will, you said rates are a push, and I agree with that. But I would say that we also continue to see strong double-digit growth in net deposits, and so assets continue to improve year over year, and we're certainly starting with a higher balance at the beginning of 2024 than what we saw in 2023. Yep, all that makes sense. And then just questions around the thought process around European expansion over the course of this year. You know, how does that play into expectations, if any?

Yes, Thanks, Michael for the question.

We're really pleased with the progress that we're making on the inputs of.

Of.

The securities lending business, particularly fully paid securities lending equities enrolled in the program increase from Q3 to Q4 from 10 billion to $14 billion. So really.

Really pleased with that added 500000 customers.

Into the program.

A quarter basis.

Still think that there is quite a bit of headroom for us to continue to penetrate.

And get.

Securities lending fully paid into the hands of our customers. It's a great way to augment yield as we all know and and the team is hard at work to make sure customers understand that I think that's showing up in the progress that we're making.

Will Nance: And, you know, what's the latest thinking on when this could be a more meaningful part of the story over time? Thanks for taking the question. Yeah, I'll take that one.

At the.

At the moment the the rebate rates that we're seeing are lower across the industry.

But over time.

I think as that normalizes a bit.

The progress that we're making on inputs is really going to show through from a revenue basis.

Vlad Tenev: While it's still early, we really like the initial traction we're seeing. We're already seeing a healthy portion of our user growth coming from outside of the US. And our focus now is really rounding out the product suite, bringing more services to customers across the globe. We think there's a huge opportunity for international to become a big part of our business. Thank you.

Yes, we think we still have room to run and we could make meaningful progress towards heightened penetration this year.

Got it. Thank you and then I guess my follow up I wanted to briefly hit on expenses again, maybe.

In a different vein now now that the head count reductions are largely in the rear view, how should we be thinking about the direction of travel for expense per head given the scalability of robinhood, coupled with the investments youre, making particularly international where I imagine.

Operator: And our next question comes from the line of Stephen Chubut from Wolf Research. Your question, please. Hey, good afternoon. This is a...

Stephen Chubut: I just wanted to check lend here. Hey, Vlad, I... Good. I just want to touch on SecLend here. Could you give us an update on where you are in the journey to the fully paid program? how much incremental penetration you think you can drive and, given the uptake, by what's a challenging back, are my investors. Yeah, thanks, Michael, for the question. You know, we're really pleased with the progress that we're making on the inputs of, you know, the securities lending business, particularly fully paid securities lending equities enrolled in the program increased from Q3 to Q4 from 10 billion to 14 billion. So really, really pleased with that added 500,000 customers into the program, you know, on a sequential quarter basis. But I still think that there's quite a bit of headroom for us to continue to penetrate and get, you know, securities lending fully paid into the hands of our customers.

That may drive some incremental head count head count growth. Thanks.

So the plan on head count is to be <unk>.

Lastly, flat to slightly up this year. So we feel really good about the head count posture that we have in terms of the expense per head.

There does continue to be opportunity for us to get even more efficient today, the vast majority of our.

Of our head count and higher cost U S geographies and Theres opportunity there over time I think the real opportunity for us on head count is really just increasing revenue per employee.

<unk>.

And there we feel like we're just getting started there is a lot of opportunity for us to leverage the fixed cost infrastructure that we have at the company as we grow the business over time.

Great. Thanks for taking my questions.

You bet.

One moment for our next question.

Okay.

And our next question comes from the line of Michael Cyprus from Morgan Stanley. Your question. Please.

Hey, good evening. Thanks for taking the question wanted to ask about crypto an area you guys continue to invest in I was hoping you could elaborate on the investments you're looking to make here in 'twenty four and beyond as.

Stephen Chubut: It's a great way to augment yield, as we all know, and the team's hard at work to make sure customers understand that. I think that's showing up in the progress that we're making, you know, at the moment, the rebate rates that we're seeing are lower across the industry. But over time, you know, I think that normalizes a bit, and the progress that we're making on inputs is really going to show through from a revenue standpoint. Yeah, we think we still have room to run, and we could make meaningful progress towards heightened penetration this year. All right, thank you.

As well as how are you envisioning crypto contributing to your business as you look out over the next three to five years.

Yeah, I mean, we're we're investing.

We're investing a large amount into crypto both in the EU and domestically I think there is a ton of improvements.

Left to make last year, we were really focusing on the trader experience.

Jason: And then, I guess on my follow-up, I wanted to briefly hit on expenses again, in a different vein. Now that the head count reductions are largely in the rear view, how should we be... Direction of Travel.

And providing clarity, which we believe we've made significant progress on and just how much better our pricing has been.

With that of our competitors and we've seen that reflected in.

Jason: Scalability of Robinhood, Investments you're making, particularly international. Yeah, so the plan on headcount is to be, you know, roughly flat to slightly up this year. So we feel really good about the headcount posture that we have in terms of the expense per head. You know, there does continue to be opportunity for us to get even more efficient. Today, the vast majority of our headcount is in higher-cost US geographies, and, and there's opportunity there over time. I think the real opportunity for us on headcount is really just increasing revenue per employee. And, and here, we feel like we're just getting started; there's a lot of opportunity for us to leverage the fixed cost infrastructure that we have at the company as we grow the business over time. Great, thanks for taking my question. You bet. Thank you.

Crypto trading market share.

<unk>.

We've also seen and you've probably caught this announcement just in the past couple of days.

Our on ramps technology Robinhood connect.

We've been making meaningful progress there and so if you think about all that we have to be really really good at to power our retail crypto offering.

We've gotten really good at.

At quick money movements getting your Fiat dollars into crypto as seamlessly as possible through building out our transfers products delivering.

Delivering delivering those funds into non custodial wallets seamlessly.

So robin Hood connect really leverages that and turn that into a powerful <unk> product, we announced a partnership with meta mask a couple of days ago and Thats been one of the market leaders in non custodial wallets.

Stephen Chubut: One moment for our next question, and our next question comes from the line of Michael Cyprys from Morgan Stanley. Your question... Hey, good evening.

And they do a really nice thing where you can actually compare.

Operator: Thanks for taking the question. I wanted to ask about crypto, an area you guys continue to invest in. I was hoping you could elaborate on the investments you're looking to make here in 24 and beyond, as well as how you imagine crypto contributing to your business as you look out over the next three to five years. Yeah, I mean, we're investing a large amount into crypto, both in the EU and domestically. I think there's a ton of improvements left to make.

The use of different on ramps and they sorted by.

Which one is the most cost effective and when you kind of look on that page you see Robin Hood at the top so I think it really shows the investments that we've made in our platform and it's reflected in us being able to offer lower cost not just for our consumers, but for business partners as well and I think youll see us chipping away at it mid flight.

We think we can be the leading player in bridging the worlds of traditional financing and crypto. So there is a lot more where that came from.

Michael J. Cyprys: Last year, we were really focusing on the trader experience and providing clarity, which we believe we've made significant progress on, in just how much better our pricing is than that of our competitors. And we've seen that reflected in our crypto trading market share. We've also seen, and you probably caught this announcement just in the past couple of days, our on-ramp technology, Robinhood Connect. We've been making meaningful progress there. And so if you think about all that we have to be really, really good at to power our retail crypto offering, we've gotten really good at quick money movements, getting your fiat dollars into crypto as seamlessly as possible through building out our transfers products, delivering those funds into And so Robinhood Connect really leverages that and turns that into a powerful B2B product. We announced a partnership with Metamask a couple of days ago, and that's one of the market leaders in non-custodial wallets. And they do a really nice thing where you can actually compare the use of different on-ramps, and they sort them by which one is the most cost-effective.

Great just a follow up question if I could on the expense side you guys continue to drive efficiency in the business or do you mentioned, you can reduce underlying costs and 24 by up to 10% or so.

Standing you would look to reinvest that elsewhere, but over the medium term you could potentially look to grow expenses at a low single digit pace I was hoping you could maybe elaborate on the top contributors to that level of efficiency. The specific steps you're taking here in 'twenty four and how those may those steps may differ as you look out over the medium term to hit those.

Particular targets if you will.

Yes, sure I mean.

We've been.

Really kind of fine tuning our skills over the last couple of years in terms of.

Efficiency, we were focused on business process efficiency using technology.

Have a team that we have spun up that helps the business find opportunities to improve.

<unk> one.

One project. We just finished was on recruiting and we think we can save.

20% to 40% of our time just on the recruiting process.

Optimizing our business steps that are involved.

As I mentioned earlier I think there is opportunity for us over time in terms of place of work with the <unk>.

Vlad Tenev: And when you kind of look at that page, you see Robinhood at the top. So I think it really shows the investments that we've made in our platform, and it's reflected in us being able to offer lower costs, not just for our consumers but for business partners as well. And I think you'll see us chipping away at this bit by bit. We think we can be a leading player in bridging the worlds of traditional finance and crypto. So there's a lot more where that came from. Great. Just a follow-up question, if I could.

Vast majority of our employees working in high cost locations within the U S.

That we can make progress on in 'twenty, four as well as beyond so.

Those are the big levers that I would point to.

Great. Thank you.

Thank you one moment for our next question.

And our next question comes from the line of John <unk> from Needham <unk> Company. Your question. Please.

Great.

Thanks for taking my question and congrats on the beat.

I guess I have two here both on the crypto components.

Jason: On the expense side, do you guys continue to drive efficiency in the business, or do you mention you can reduce underlying costs in 24 by up to 10% or so, understanding you'd look to reinvest that elsewhere? And over the medium term, you could potentially look to grow expenses at a low single-digit pace. I was hoping you could maybe elaborate on the top contributors to that level of efficiency, the specific steps you're taking here in 24 hours, and how those steps may differ as you look out over the medium term to hit those particular targets. Yeah, sure.

On the bitcoin Etfs versus buying bitcoin directly on the platform you had mentioned earlier about 5% of overall crypto you thought was flowing into the Etfs.

That 5% that migrated away from buying bitcoin directly or was that an additive 5%.

Yes, we saw we saw it was mostly additive there were some some traders that sold out of spot and got to ETF, but that was really more of the exception.

And we also offer the Etfs and our retirement accounts, which accounted for some of the pickup as well. So overall, we don't view this as cannibalization, it's additive and we think it's really good for customers as well.

Jason: I mean, we've been really kind of fine-tuning our skills over the last couple of years in terms of efficiency; we focused on business process efficiency using technology. We have a team that we've spun up that helps the business find opportunities to improve efficiency. One project we just finished was on recruiting, and we think we can save, you know, 20 to 40% of our time just on the recruiting process from optimizing our business steps that are involved. You know, as I mentioned earlier, I think there's an opportunity for us over time in terms of place of work, you know, with the vast majority of our employees working in high-cost locations within the US. That's something that we can make progress on in 24 hours as well as beyond. So those are the big levers that I'd point to.

Great. Thanks for that and then just one more on the meta mask integration thing Thats really interesting it does kind of.

Robin that would be more of that Fiat on ramp to the ecosystem defy unchanged.

Just curious what is kind of the monetization strategy with that integration short term and then longer term.

Yes so.

We collect fees on the on the activity of the on ramp. So that's the primary source of monetization and then any trading.

On our platform.

For that on ramp also would show up in our transaction based revenues.

Got it understood. Thanks.

Michael J. Cyprys: Great, thank you. Thank you. One moment for our next question, and our next question comes from the line of John Totoro from Needham & Company. Your question... Great. Thanks for taking my question and congratulations on the beats.

Thank you one moment for our next question.

Yeah.

Yeah.

And our next question comes from the line of Patrick <unk> from Piper Sandler Your question. Please.

Yes, thanks for taking the question I just had one on.

Robinhood gold just hoping you could update us on how you think about <unk>.

Operator: I guess I have two here, both on the crypto components. On the Bitcoin ETF versus buying Bitcoin directly on the platform, you'd mentioned earlier about 5% of overall crypto you thought was flowing into the ETF. So was that 5% that migrated away from buying Bitcoin directly? Or was that an added bonus?

Pricing there.

The expanded offerings that youre, adding $5 a month seems like some would've been inexpensive.

Price to pay so just hoping you could update us on your thoughts there and then maybe as we look internationally, how you sort of think about taking the subscription model overseas and how you see that.

John Totoro: Yeah, we saw, we saw it was mostly additive. There were some traders that sold out of spot and got into ETFs, but that was really more of an exception. And we also offer ETFs in our retirement accounts, which accounts for, you know, some of the pickup as well. So overall, we don't view this as cannibalization; it's additive, and we think it's really good for customers as well. Great, thanks for that!

Playing out with <unk>.

Kind of geographic customer mix. Thanks.

Yes. This is Jason I'll start and we'll see if that has any additional.

Color.

We love.

The gold program.

Gold members have.

And <unk> that is multiples of our average <unk>.

And Youre right the $5 a month is just a screaming deal.

We want it to be obvious for every customer that that they should vehicles.

Jason: And then just one more on the Metamask integration. I think that's really interesting. It does kind of pivot Robinhood to be more of that fiat on-ramp to the ecosystem, DeFi, and on-chain stuff. Just curious, though, what is the monetization strategy with that integration, short term and then long term? Yeah, so we collect fees on the activity of the on-ramp.

Subscriber.

So we're paying close attention to the behavior of gold they are bringing in more net deposits there, they're using more of our products and.

And they do all of that with a relatively modest.

Monthly subscription.

Evaluate pricing over time, but all in we just love the economics of the gold subscription.

And I do think overtime there is.

Vlad Tenev: So that's the primary source of monetization. And then any trading on our platform for that on-ramp would also show up in our transaction-based revenue.

As an opportunity for us to take Robinhood gold internationally.

Sure.

Yes, I don't have much to add there I think that.

Other financial service companies offer these gold perks to their high net worth customers.

John Totoro: Understood. Thanks. Thank you. One moment for our next question, and our next question comes from the line of Patrick Moten from Piper Sandler.

And usually there is balance requirements you have to have millions of dollars in your account.

And so we think it's very mission aligned to provide those same types of services to any customer for such a small monthly fee I think it really has the potential to disrupt the wealth management industry. Just in the same way that we've been disrupting trading and our focus has been on making the experience even better.

Operator: Yeah, thanks for taking the question. I just had one on Robinhood Gold. I was just hoping you could give us kind of an update on how you think about pricing there. You know, the expanded offerings that you're adding $5 a month seems, you know, like somewhat of an inexpensive price to pay. So just hoping you could update us on your thoughts there. And then maybe, as we look internationally, how you sort of think about taking the subscription model overseas and how you see that playing out with a different kind of geographic customer mix. Thanks. Yeah, this is Jason. I'll start, and we'll see if Vlad has any additional color.

Getting the adoption rate up making it easy for new customers in particular to onboard onto the product we've seen really healthy improvements in sort of like the first week attach rate of goal.

<unk> among new customers.

And we think that there is further improvements and we've got a lot slated for this year to make the gold offering even better.

Okay. That's great color and then just a follow up on the equities and options take rate have been coming down for the last couple of quarters options.

Patrick Moten: You know, we love the gold program. Gold members have an ARPU that's multiples of our average ARPU. And you're right, the $5 a month is just a screaming deal.

Capture seem to stabilize somewhat in the fourth quarter equities declined again, so just kind of as we look out to next year, how do you think or how do you see the.

Jason: You know, we want it to be obvious for every customer that they should be a gold subscriber, so we're paying close attention to the behavior of gold subscribers. They're making more net deposits. They're using more of our products, and they do all that with a relatively modest, you know, monthly subscription.

The take rates there kind of what's the trajectory.

Next couple of quarters I guess is the question.

Yes, you bet at zero in on options for that for.

For the back half of the year, both Q3 and Q4, we were running at 41.

Per contract.

And in January.

In that zone, but the mix is improving a bit so we'll have to see how the year plays out.

Jason: You know, we'll evaluate pricing over time, but all in all, we just love the economics of the gold subscription. And I do think, over time, there's an opportunity for us to take Robinhood Gold internationally. Yeah, I don't have much to add there. I think that, you know, other financial service companies offer these gold perks to their high net worth customers. And usually, there are balance requirements; you have to have millions of dollars in your account.

Really to highlight on the equity side.

Okay. Thanks, guys.

Thank you.

Q1 moment for our next question.

And our next question comes from the line of Ken Worthington from J P. Morgan Your question. Please.

Hi, good evening, Thanks for taking the question as you look to election season in the FCC do you expect the SEC will execute on the market structure changes proposed last year for equity markets and if so do you think there.

Vlad Tenev: And so we think it's very mission-aligned to provide those same types of services to any customer for such a small monthly fee. I think it really has the potential to disrupt the wealth management industry just in the same way that we've been disrupting trading. And our focus has been on making the experience even better, getting the adoption rate up, and making it easy for new customers, in particular, to onboard onto the product. We've seen really healthy improvements in, sort of like, the first week attach rate of gold among new customers. And we think that there are further improvements, and we've got a lot slated for this year to make the gold offering even better. Okay, that's a great color.

That equity market structure changes will differ from the original proposals or are they likely to stay on track and which are you are most important to Robin Hood here.

So so we think a fair amount will probably be executed heading up into the election season, I think best acts as an important aspect to that we participated in the comment process and we feel like a fair number of our comments were incorporated in.

And thats baked into really the expectations that we have for 2024.

Okay, great. Thank you and then on <unk>.

Okay.

As you mentioned that the <unk> are positive for the major brokers are you seeing positive transfer of assets from the major crypto providers as well.

Patrick Moten: And then just to follow up on the equities and options take rate, you know, those have been coming down for the last couple quarters. Capster seemed to stabilize somewhat in the fourth quarter, but equities declined again. So just kind of as we look out to the next year, how do you think, or how do you see the take rates there? Kind of what's the trajectory over the next couple quarters, I guess, is the question. Thanks.

Okay.

So, it's a little bit difficult to.

Reconcile the crypto activity in that way because.

A lot of people use crypto or robinhood as an on ramp to transfer to purchase crypto and then kind of use it in the web three ecosystem. So it's a little bit different of a behavior than brokerage a cat transfers, where those assets tend to sit.

Jason: Yeah, you bet I zero in on options for that. You know, for the back half of the year, both Q3 and Q4, we were running at 41 cents per contract. And in January, we're in that zone, but the mix is improving a bit.

And accumulate.

Thank you can make really.

Apples to apples comparison.

Sure.

The one thing Ken that I would highlight is that the crypto volume on on Robin Hood nearly doubled in Q4, so really seeing strong engagement and increasing market share.

Jason: So we'll have to see how the year plays out. And, you know, nothing really to highlight on the equity side. Okay. Thanks, guys. Thank you. Thank you. One moment for our next question. And our next question comes from the line of Ken Worthington from... Morgan, your question.

Okay, great. Thanks, so much.

Thanks, Ken.

Thank you one moment for our next question.

Okay.

And our next question comes from the line of Benjamin <unk> from Barclays. Your question. Please.

Operator: Hi, good evening; thanks for taking the question. As we look to election season in the SEC, do you expect the SEC will execute on the market structure changes proposed last year for equity markets? And if so, do you think that equity market structure changes will differ from the original proposals?

Hi, good evening and thanks for taking the question I wanted to follow up on an earlier question about taking the subscription model overseas. Maybe can you talk a little bit about now that you are rolling out in the UK, what the revenue model looks like over there I mean, I think we all understand it will look somewhat different than the U S. But can you kind of give us.

Ken Worthington: Are they likely to stay on track? And which are kind of the most important to Robinhood? So, we think a fair amount will probably be executed heading up into the election season.

Any kind of color on what that should look like as the platform ramps over there what are the main sources of revenues. Thank you.

Yes, Ben I would say in the U K, we know that that payment for order flow isn't allowed but really all of the other income streams are available there over time, so margin fully paid securities lending certainly.

Jason: I think BestX is an important aspect to that. You know, we participated in the comment process, and we feel like a fair number of our comments were incorporated. And, and that's baked into the expectations that we have for 2024. Great, thank you.

Interest on cash and so.

Vlad Tenev: And then on TOAs, you mentioned that the TOAs are positive for the major brokers. Are you seeing positive transfers of assets from the major crypto providers as well? Um, So it's a little bit difficult to reconcile the crypto activity in that way because a lot of people use crypto or Robinhood as an on-ramp to transfer, purchase crypto, and then kind of use it in the Web3 ecosystem. So it's a little bit different of a behavior than brokerage ACAT transfers, where those assets tend to sit and accumulate. So I don't think you can really make apples-to-apples comparisons.

I would say as we look internationally.

Yes.

The revenue characteristics and <unk> in some jurisdictions there'll be a little higher than the U S. Some are little lower but on average we think that.

The income potential is is pretty much on par with what.

What we're seeing in the U S and we know that that market. In particular is very used to subscription products. So we're definitely part of it we're crafting a great gold experience for international and remember that payment for order flow is actually a pretty modest.

A portion of our revenue for equities trading in the U S and so not having that in the U K is it's not a big concern.

Got it that's helpful and maybe one follow up maybe sort of connected can you talk about the activity Youre seeing in your 24 hour markets I know some of the appeal is for overseas investors, who are far away in different time zones, but you've talked in the past about expanding access outside of the traditional trading hours. So what sort of activity you're seeing there what kind of uplift might do you see as you.

Jason: You know, the one thing, Ken, that I'd highlight is that the crypto volume on Robinhood nearly doubled in Q4. So, really, we are seeing strong engagement and increasing market share. Great. Thank you. Thanks again.

Ken Worthington: Thank you. One moment for our next question. And our next question comes from the line of Benjamin Budish from Barclays. Hi, good evening, and thanks for taking the question.

Operator: I wanted to follow up on an earlier question about taking the subscription model overseas. Maybe you could talk a little bit about, now that you're rolling out in the UK, what the revenue model looks like over there? I mean, I think we all understand it will look somewhat different in the US, but can you kind of give us any kind of color on what that should look like as the platform ramps over there?

You continue to roll out more and more stock to that offering. Thank you.

Yeah.

I think the team has done tremendous work, making the 24 hour market offering better and better we started with a pretty limited set of names roughly a year ago <unk> been adding names by the hundreds so.

So we have somewhere around 900 tickers available in the overnight trading session.

Benjamin Budish: What are the kinds of main sources of revenue? Yeah, Ben, I'd say, you know, in the UK, we know that payment for overflow isn't allowed, but really, all of the other income streams are available there over time. So margin, fully paid securities lending, certainly interest on cash. And so, you know, I would say as we look internationally, the revenue characteristics and ARPU, you know, in some jurisdictions will be a little higher than the US.

Hundreds of thousands of our customers have used the product and we've seen particular, particularly strong activity around earnings when really robinhood is.

Among the only places available to trade some of these tickers. So we're going to continue to invest there I think there's a lot to do particularly as we improve the active trading tooling and offerings. Because this product is resonating, particularly well among R.

Jason: Some a little lower, but on average, we think that, you know, the income potential is pretty much on par with what we'll, what we're seeing in the US. And we know that that market, in particular, is very used to subscription products. So we're definitely hard at work crafting a great gold experience for international customers. Yeah, and remember that payment for overflow is actually a pretty modest portion of our revenue for equities trading in the US. And so not having that in the UK is not a big concern.

Our key active trader customers.

Got it thank you very much.

Thank you.

Does conclude the question and answer session of today's program I'd like to hand, the program back to lead tenants for any further remarks.

Yes, Thank you all.

Great questions and the team is already hard at work.

Getting getting 2024 started so.

Not much holiday rest here for Robin Hood, we look forward to seeing you next quarter.

Vlad Tenev: Got it. That's helpful. And maybe one follow-up, maybe sort of connected. Can you talk about the activity you're seeing in your 24-hour markets? I know some of the appeal is for overseas investors who are far away in different time zones, but you've talked in the past about expanding access outside of the traditional trading hour. So what sort of activity are you seeing there?

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Yes.

[music].

Okay.

Okay.

Okay.

Yes.

Okay.

Vlad Tenev: What kind of uplift might you see as you continue to roll out more stocks to that offer? Yeah, I think the team's done tremendous work making the 24-hour market offering better and better. We started with a pretty limited set of names roughly a year ago.

Okay.

Okay.

Yes.

Yes.

Okay.

Benjamin Budish: They've been adding names by the hundreds, so we have somewhere around 900 tickers available in the overnight trading session. Hundreds of thousands of our customers have used the product, and we've seen particularly strong activity around earnings when, really, Robinhood is among the only places available to trade some of these tickers. So we're going to continue to invest there. I think there's a lot to do, particularly as we improve the active trading tooling and offerings, because this product is responding particularly well among our key active trader customers. Got it. Thank you very much. Fade away.

Okay.

Yes.

Yeah.

Okay.

Yes.

[music].

Yes.

Yeah.

Operator: This does conclude the question and answer session of today's program. I'd like to hand the program back to Vlad Peneth for any further remarks. Yeah, thank you all. Great questions. And the team is already hard at work getting 2024 started. So not much holiday rest for Robinhood.

Okay.

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Okay.

Yes.

Yes.

Vlad Tenev: We look forward to seeing you next quarter. Thank you, ladies and gentlemen, for your participation today. If this does conclude the program, you may now disconnect. Good day, www.michaelcyprys.com Marcus, in the fourth quarter.

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Operator: Full Year 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star-one-one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star-one-one again.

Okay.

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Chris Cagle: As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Chris Cagle, Vice President of Corporate FP&A and Investor Relations. Please go ahead.

Yes.

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Chris Cagle: All right, thank you, Jonathan, and thank you to everyone for joining Robinhood's Q4 earnings call. With us today are the CEO and co-founder of Vlad Tennis, and CFO. Before getting started, I want to remind you that today's call will contain forward-looking statements. Actual results could differ materially from our expectations, and we have no duty to provide updates unless legally required, potential risk factors that could cause differences, including regulatory developments and Michael Cyprys, described in the press release we issued today, the earnings presentation, and our SEC filings, all of which can be found at investors.robinhood.com. Today's discussion will also include non-GAAP financial measures. Reconciliation to the gap results we consider most comparable can be found in the earnings presentation.

Okay.

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Vlad Tenev: With that, let me turn it over to Vlad. Thanks, Chris. Hi everyone.

Yes.

Vlad Tenev: We're going to try something a little bit different today. I'm going to keep my remarks brief so that we can spend more time on Q&A. Robinhood's focused on three things. Number one, winning the active trader market. Two, increasing wallet share as we deepen relationships with our customers. And three, expanding internationally. First off, I want to congratulate our team on a strong 2023. Trading market share was up 14% for equities and 19% for options year over year. Gold subscribers were up 25% to 1.4 million, and assets under custody exceeded 100 billion, fueled by the strength of our 27% organic growth in net deposits. And we've launched brokerage in the UK and crypto in the EU. A couple points to call out.

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Thank you for standing by and welcome to the Robin Hood markets fourth quarter and full year 2023 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone if youre.

Vlad Tenev: In Q4, we finished with $1.3 billion of net positive brokerage account transfers into Robinhood, and we've already exceeded that total halfway through Q1. We've been taking trading market share for some time, and now we're winning net asset inflows from every one of our major competitors, averaging over $100,000 per transfer. And as for funded customers, we've already grown more in the first half of Q1 than we did in each of the last eight quarters. So I love the momentum we're building, and I'm excited about 2024. But before I discuss our roadmap, let's have Jason review our financial results. Thanks, Vlad.

<unk> has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and <unk>.

Now I'd like to introduce your host for today's program, Chris Cagle, Vice President of corporate and Investor Relations. Please go ahead.

Alright, Thank you Jonathan and thank you to everyone for joining <unk> Q4 earnings call with US today are our CEO and co founder of glad tennis and CF.

Before getting started I want to remind you that today's call will contain forward looking statements actual results could differ materially from our expectations and we have no duty to provide updates unless legally required.

The risk factors that could cause differences, including regulatory development. We continue to monitor are described in the press release, we issued today the earnings presentation and our SEC filings.

Jason: It's good to speak with everyone today. We had a strong Q4 and 2023, and we have a lot of momentum going into 2024. Looking at 2023, we delivered significant profitable growth with record full-year revenues, record adjusted EBITDA, and record adjusted EBITDA margin. We grew revenues 37% to $1.9 billion, delivered adjusted EBITDA of $536 million, which is more than three times our prior high, and drove 124% incremental margins as revenues grew by more than $500 million, even while we lowered costs. And we expanded the adjusted EBITDA margin to 29% as we make progress over time towards the 50% plus levels we see from incumbents. And looking at Q4, we delivered 3 cents of positive GAP EPS. Aside from the regulatory charges last quarter, Q4 would have been our third straight quarter of positive earnings per share. It was also our sixth straight quarter of positive adjusted EBITDA.

All of which can be found at investors that Robin Hood.

Today's discussion will also include non-GAAP financial measures reconciliation to the GAAP results. We consider most comparable can be found in the earnings presentation with that let me turn it over to Brad.

Thanks, Chris.

Hi, everyone, we're going to try something a little bit different today I'm going to keep my remarks brief so that we can spend more time on Q&A Rob.

<unk> is focused on three things number one winning the active trader market.

Two increasing wallet share as we deepen relationships with our customers and three expanding internationally.

First off want to congratulate our team for a strong 2023 trading market share was up 14% for equities and 19% for options year over year.

Gold subscribers were up 25% to $1 4 million in assets under custody exceeded 100 billion fueled by the strength of our 27% organic growth in net deposits and we've launched brokerage in the UK and crypto in the EU a couple of points to call out in Q4, we finished with.

Jason: We're pleased with our results in 2023 and aim to continue delivering profitable growth in 2024. Now, let's move to our fourth quarter business results. Assets Under Custody finished Q4 back over $100 billion for the first time since 2021. We delivered strong Q4 net deposit growth at a 21% annualized rate, and we're focused on driving net deposits even higher by improving our user experience and value proposition.

One $3 billion of net positive brokerage account transfers into robinhood and we've already exceeded that total halfway through Q1, we've been taking trading market share for some time and now we're winning net asset inflows from every one of our major competitors averaging over.

Jason: When we look at historical customer cohorts, we see they have consistently added to their net deposits over time, which we think provides a strong foundation for sustainable long-term asset growth. And newer cohorts are starting with balances one and a half to two times higher, which is even more encouraging. We're also delivering growth in Robinhood Gold. Compared to our average customer, gold subscribers in Q4 had more than eight times the assets of our average customer, with an average of about $40,000, grew net deposits more than twice as fast, and adopted our products at higher rates. Gold subscribers are up 25% year-over-year to 1.42 million. Gold ARPU is multiples of our average customer, which includes Q4 annualized recurring subscription revenue of $85 million.

$100000 per transfer.

And as for funded customers, we've already grown more in the first half of Q1 than we did in each of the last eight quarters. So I love the momentum we're building and I am excited about 2024.

Before I discuss our roadmap, let's have Jason and review our financial results.

Thanks, Glenn it's good to speak with everyone. Today, we had a strong Q4 and 2023 and we have a lot of momentum starting 2024.

Looking at 2023, we delivered significant profitable growth with record full year revenues record adjusted EBITDA and record adjusted EBITDA margins, we grew revenues, 37% to $1 9 billion.

<unk> delivered adjusted EBITDA of $536 million, which is more than three times our prior high.

Drove a 124% incremental margins as revenues grew by more than $500 million, even while we lowered costs and we expanded adjusted EBITDA margin to 29% as we make progress over time towards the 50% plus levels, we see from incumbents.

Jason: This gold growth brings our adoption rate up to 6.1%, and we're working to take this even higher as we keep improving the value proposition. We also have strong momentum to start the year, as we added another 60,000 gold subscribers in January alone. That is nearly three times the monthly average we saw in 2023. Our team is also hard at work on new credit cards for Robinhood customers, starting with something special for gold customers. Currently, for funded customers with our historical X1 credit card, they have an ARPU of over $300 on credit alone. That's nearly four times our current average.

And looking at Q4, we delivered <unk> <unk> of positive GAAP EPS.

Aside from the regulatory charges last quarter Q4 would have been our third straight quarter of positive earnings per share.

Q4 was also our sixth straight quarter of positive adjusted EBITDA.

We're pleased with our results in 2023 and aim to continue delivering profitable growth in 2024.

Let's move to our fourth quarter business results.

Jason: This represents another opportunity for us to diversify our business and introduce new products to our customers, who have a median credit score of about 720 and two-thirds of whom are prime or prime plus. We look forward to sharing more about our plans with you soon. Now, let's turn to financial results. In the fourth quarter, we generated a net income of $30 million.

Assets under custody finished Q4 back over 100 billion for the first time since 2021, we.

We delivered strong Q4 net deposit growth at a 21% annualized rate.

And we're focused on driving net deposits, even higher by improving our user experience and value proposition.

When we look at historical customer cohorts, we see they have consistently added to their net deposits over time, which we think provides a strong foundation for sustainable long term asset growth.

Jason: Total net revenues increased 1% sequentially to $471 million, and total expenses came in better than our outlook. Looking at Q4 revenues, transaction revenues increased as crypto notional volumes nearly doubled, and other revenues grew as we saw early traction in Sherwood Media and added more gold subscribers. These increases were partially offset by the anticipated decline in net interest revenues from lower SEC lending demand across the industry.

And newer cohorts are starting with balances one five to two times higher.

Is even more encouraging.

We're also delivering growth and robinhood gold compared to our average customer gold subscribers in Q4 had more than eight times the assets with an average about $40000 grew net deposits more than twice as fast and have adopted our products at higher rates.

Jason: I'd also note that our monthly metrics now include total SEC lending revenues, so investors have even more visibility into the drivers of our net interest revenues through the quarter. Looking at fourth-quarter expenses, adjusted OPEX was $364 million, performing better than our outlook even while we increased our growth investment. And for share-based compensation, it was $81 million, in line with our outlook. This combination drove Q4 adjusted EBITDA of $133 million, up 62% from a year ago.

Gold subscribers are up 25% year over year to $1 $42 million.

<unk> is multiples of our average customer, which includes Q4 annualized recurring subscription revenue of $85 million.

This gold growth brings our adoption rate up to six 1% and were working to take this even higher as we keep improving the value proposition.

We also have strong momentum to start the year as we added another 60000 gold subscribers in January alone that is nearly three times. The monthly average we saw in 2023.

Our team is also hard at work on new credit cards for Robyn had customers starting with something special for gold customers.

Jason: Now let's move to our 2024 outlook. We aim to deliver another year of revenue growth and margin expansion. Looking at revenues, with the current macro backdrop, we're planning for strong growth in 2024, driven by continued 20-plus percent net deposit growth, increasing gold adoption, double-digit gains in trading market share, exciting new product introductions, and our diversified revenue model. And the year is off to a great start. January net deposits were nearly $4 billion, of which about one-third was net positive transfers in from other brokers.

Currently for funded customers with our historical X one credit card they have an <unk> of over $300 on credit alone. That's nearly four times our current average.

This represents another opportunity for us to diversify our business and introduce new products to our customers who have a median credit score of about 720, and two thirds of whom are prime or prime plus.

We look forward to sharing more about our plans with you soon.

Now, let's turn to financial results in the fourth quarter, we generated net income of $30 million.

Total net revenues increased 1% sequentially to 471 million and total expenses came in better than our outlook.

Jason: That January result was the highest monthly total since the first half of 2021, and we're seeing continued strength in early February. Looking at expenses, we plan to continue investing across new products, features, marketing, and international, while getting more efficient in our existing businesses and managing head count growth all in low single digits. Our 2024 outlook for combined adjusted OPEX and share-based compensation is $1.85 to $1.95 billion, which is up 5% at the midpoint from last year's $1.81 billion, excluding the founder award cancellation. This range includes about $85 million of quarterly share-based compensation, similar to our run rate for the back half of 2023.

Looking at Q4 revenues transaction revenues increased as crypto notional volumes nearly doubled and other revenues grew as we saw early traction ensure with media and added more gold subscribers. These.

These increases were partially offset by the anticipated decline in net interest revenues from lower SEC lending demand across the industry.

I would also note that our monthly metrics now include total SEC lending revenues, so investors have even more visibility into the drivers of our net interest revenues through the quarter.

Looking at fourth quarter expenses, adjusted Opex was 364 million performing better than our outlook, even while we increased our growth investments and for share based compensation. It was $81 million in line with our outlook. This.

This combination drove Q4, adjusted EBITDA of $133 million up 62% from a year ago.

Jason: As for timing, we anticipate Q1 will likely be in the upper half of our implied range as we lean into marketing investments to start the year. We also continue to closely manage our share count. In 2023, our diluted share count decreased nearly 5% due to the purchase of 55 million shares in Q3.

Now, let's move to our 2020 for outlook.

We aim to deliver another year of revenue growth and margin expansion.

Looking at revenues with the current macro backdrop, we're planning for strong growth in 2024, driven by continued 20 plus percent net deposit growth increasing gold adoption double digit gains in trading market share exciting new product introductions and our diversified revenue.

Jason: And in 2024, we expect to manage dilution to 2% or less. We believe this plan positions us to drive profitable growth again in 2024 as we grow revenues and expand margins. We'll have to see how the year plays out, but so far, we like the growth we're driving to start the year. I also wanted to share some perspective on the interest rate backdrop in 2024. First, when we look at the forward curve, the implied average Fed funds rate in 2024 is roughly the same as it was in 2023, making rates a fairly neutral input for revenue year over year. Second, out of our 30 plus billion of interest earning assets, Less than half of that is rate sensitive because we pass the vast majority of cash sweep interest onto our customers. As rates move, we do not anticipate a significant change in the yield we earn on cash sweeps.

Model.

And the year is off to a great start.

January net deposits were nearly $4 billion of which about one third was net positive transfers in from other brokers.

That January resolved with the highest monthly total since the first half of 2021, and we're seeing continued strength in early February.

Looking at expenses, we plan to continue investing across new products features marketing and international while getting more efficient in our existing businesses and managing head count growth all in to low single digits.

Our 2020 for outlook for combined adjusted Opex and share based compensation is 185 to $1 95 billion, which is up 5% at the midpoint from last year's 181 billion, excluding the founder reward cancellation.

Jason: And third, and most importantly, declining interest rates tend to support growth in assets, balances, and trading. So we think 2024 is the year when interest rates will shift from being a headwind for our business growth to being a tailwind. In closing, we had a strong Q4 in 2023, and we have a lot of momentum to start the year. We remain focused on driving profitable growth for shareholders as we work to maximize EPS and free cash flow per share in 2024 and the years to come. Now I'll turn the call back to Vlad.

This range includes about $85 million of quarterly share based compensation similar to a run rate for the back half of 2023.

As for timing, we anticipate Q1 will likely be in the upper half of our implied range as we lean into marketing investments to start the year.

We also continue to closely manage our share count in 2023 diluted share count decreased nearly 5% due to the purchase of 55 million shares in Q3 and.

And in 2024, we expect to manage dilution to 2% or less.

We believe this plan positions us to drive profitable growth again in 2024, as we grow revenues and expand margins, we'll have to see how the year plays out, but so far we like the growth we're driving to start the year.

Vlad Tenev: Thanks, Jason. As we enter the year, I want to highlight some of the areas we're most excited about to drive growth in 2024 and beyond. First, to win the active trader market, we're going to continue to invest in our user experience on mobile, where we're currently number one in market share. In addition, we will be launching a more feature-rich professional offering on the web for active traders. And we're also working on expanding our selection of tradable assets, in particular with index options and futures coming later this year. Second, to grow WalletShare, we're focused on increasing gold memberships and net deposits. We plan to keep investing to make Robinhood Gold even more valuable for our customers and build off the early success of our retirement offering.

I also wanted to share some perspective on the interest rate backdrop in 2024.

First when we look at the forward curve the implied average fed funds rate in 2024 is roughly the same as it was in 2023, making.

Making rates are fairly neutral input for revenue year over year.

Second of our 30 plus billion of interest, earning assets less than half of that is rate sensitive because we pass the vast majority of cash sweep interest onto our customers. So as rates move we do not anticipate a significant change in the yield we earn on cash sweeps.

And third and most importantly, declining interest rates tend to support growth in asset balances and trading. So we think 2024 is the year. When we will see interest rates shift from being a headwind for our business growth into a tailwind.

Vlad Tenev: At the same time, we also plan to launch new products like credit cards and add new account types such as joint accounts. And third, for international expansion, after launching crypto in the EU and brokerage in the UK, we have tens of thousands of international customers so far. What we're hearing from customers is that they want more of the full Robinhood product suite, so we're working to build that for them. We're also pursuing opportunities to expand into more jurisdictions.

In closing, we had a strong Q4 and 2023 and we have a lot of momentum to start the year, we remain focused on driving profitable growth for shareholders as we work to maximize EPS and free cash flow per share in 2024 and the years to come.

Now I will turn the call back to flat.

Thanks, Jason.

As we entered the year I want to highlight some of the areas. We're most excited about to drive growth in 2024 and beyond first for winning the active trader market, we're going to continue to invest in our user experience on mobile where we're currently number one in market share. In addition, we will be launching a more feature rich.

Vlad Tenev: Reflecting on the past four years, we've tripled our customer base and grown revenues nearly seven times. And when we look at all that's in front of us, we're excited by the opportunity to continue growing Robinhood significantly from here. And we have a ton of momentum to start 2024.

Professional offering on the web for active traders and we're also working on expanding our selection of tradable assets in particular with index options and futures coming later this year.

Vlad Tenev: I want to thank our customers and team for a great 2023. The team's been working incredibly hard, the roadmap is full, and there's so much to do. Now, let's move on to questions. Thank you, Vlad.

Second to grow wallet share, we're focused on increasing gold memberships and net deposits, we plan to keep investing to make robinhood gold even more valuable for our customers and build off the early success of our retirement offerings at the same time, we also plan to launch new products like credit cards, and add new account types such as joy.

Operator: For the Q&A session, we'll start by answering the top five shareholder questions for today's technology. Langstein asked several questions that we had already addressed on this call or in prior quarters and grouped together questions that shared a common theme. After the questions, we'll turn to live questions from our analysts. So I'll kick it off with our first question from Say. This one's for Jason.

<unk>.

And third for international expansion after launching crypto in the EU and brokerage in the UK, we have tens of thousands of international customers. So far what we're hearing from customers is that they want more of the full robinhood product suite. So we're working to build that for them. We're also pursuing opportunities to expand into more jurisdictions.

Jason: Your stock price is down 70% since the beginning of the year. What do you have in place to get your stock price back up? Is a dividend in the works to at least provide some return on investment? Thanks for the question.

Reflecting on the past four years, we've tripled our customer base and grown revenues nearly seven times and when we look at all of that is in front of US. We're excited by the opportunity to continue growing robinhood significantly from here and we have a ton of momentum to start 2024, I want to thank our customers and team for a great 2023.

Jason: We're hard at work on the inputs to driving value for shareholders. In 2023, we increased revenue by over $500 million and grew adjusted EBITDA even faster, and we're focused on driving revenues and profits higher in 2024. Over time, as we deliver on these inputs to the business, I think the stock price should follow. As for capital returns to shareholders, last year we bought back about 6% of our shares, and we'll continue to look for ways, especially efficient ways, to deploy our capital, including investments in growth, M&A to accelerate our roadmap, or returns of capital to shareholders over time. But right now, to answer your question, we don't have any plans for dividends. All right. Thank you, Jason. The next question's for Vlad.

The team has been working incredibly hard to roadmap is fall. There is so much to do now let's move on to questions.

Thanks very glad.

For the Q&A session, we will start by answering the top five shareholder questions, Hey technologies ranked <unk>.

Several questions that we have already addressed on this call or in prior quarters and grouped together questions that shared a common theme. After the same questions. We will turn to live questions from our analysts.

Pick it off with our first question from say this one is for Jason.

Your stock price is down 70%.

Once you have in place to get your stock price back up it is a dividend as it works to at least provide some return on investment. Thanks.

Vlad Tenev: Vlad, what will it take to get Robinhood to the next level and start competing with Fidelity and the rest of the most common brokers? Thanks for the question. So for starters, I think Robinhood is already competing with Fidelity and the rest of the common brokers. If you look at active traders, we've been growing our trading market share by double digits. So that's not just volume, but market share. We won head-to-head net asset transfers from all the other major brokerages in Q4, and that includes Fidelity. So that means that more assets actually flowed from Fidelity to Robinhood in Q4 than the other way around.

Thanks for the question, we're hard at work on the inputs to driving value for shareholders. In 2023, we increased revenue by over $500 million and grew adjusted EBITDA, even faster and we're focused on driving revenues and profits higher in 2024.

Over time as we deliver on these inputs to the business I think the stock price should follow.

As for capital returns to shareholders last year, we bought back about 6% of our shares and we'll continue to look for ways, especially efficient ways to deploy our capital, including investments and growth M&A to accelerate our roadmap or returns of capital to shareholders over time, but right now to your question we don't.

Have any plans for dividends.

Alright, Thank you Jason next question's for glad.

Ed.

Take to get Robinhood to the next level to start competing with fidelity and the rest of the most common brokers.

Vlad Tenev: And so, to take it to the next level, we're really excited about our strategy. We think there's so much more to do for active traders. The roadmap is full, and that includes investments across a slew of areas.

Thanks for the question so for starters I think Robin Hood is already competing with fidelity in the rest of the common brokers. If you look at active traders, we've been growing trading market share by double digits. So that's not not just volume or market share. We won head to head net asset.

Vlad Tenev: One, making sure that the user experience remains best in class and continuing to invest in it. Adding new product innovations that our competitors don't offer, such as the 24-hour market. New asset classes, like futures, which our active traders have been really excited about and asking for. And new account types, and more of the table stakes features that we just still have to get to.

Transfers from <unk>.

All the other major brokerages in Q4 and that includes fidelity. So that means that more assets actually flowed from fidelity to Robin Hood in Q4 than the other way around.

And so to take it to the next level. We are really excited about our strategy. We think there is so much more to do for active traders.

Our roadmap is full.

And that includes investments across.

Vlad Tenev: So, there's a lot to do. And I should also mention that not a lot of the brokers have adopted new technologies like crypto. And that's an area where we're continuing to invest, and I see us extending our lead throughout 2024 and beyond, increasing WalletShare. We've talked a little bit about the success we're seeing in driving net account transfers from other brokers. We think that there's a lot of headroom

A slew of areas, one making sure that the user experience remains best in class and continuing to invest there, adding new product innovations that our competitors don't offer such as 24 hour market.

New asset classes like futures, which are active traders have been really excited about and asking for.

Vlad Tenev: There's a lot of improvements in our passive offerings like retirement. The roadmap there is full, and we're very excited about the credit card. And international, we did launch in the UK for brokerage and crypto for the EU. That expands the addressable market quite dramatically. Not a lot of the common brokers even have an international presence to note.

New account types and more of the table Stakes features that.

We just still have to get to so there is a lot to do and I should also mention not a lot of the brokers have adopted new technologies like crypto and Thats, an area, where we're continuing to invest in Ics extending our lead throughout 2024 and beyond.

Jason: And I think over the next few years, we're making significant investments there. So I think if we're successful executing on our strategy, you could see Robinhood winning by even larger margins going forward. All right. Thank you, Vlad.

Increasing wallet share we've talked a little bit about the success, we're seeing in driving net account transfers from other brokers, we think that Theres a lot of headroom. There is a lot of improvements in.

Vlad Tenev: The next question is for Jason. Jason, Robinhood has been profitable off and on. Do you see Robinhood joining the S&P 500 by qualifying and being profitable for four quarters in a row? We'd love to join the S&P 500, and I think we're focused on the right things to do that. Delivering consistent profitability and growing revenues even higher. You know, remember, though, there are only 500 spots for this, and this is a committee decision, so it's not completely in our control, but we'll keep focused on our business, and over time, it would be great to be part of that industry. All right. Thank you, Jason. The next question for you is for you, Vlad.

Our passive offerings like retirement.

<unk> map there is full and we're very excited about the credit card and international we did launch in the U K for brokerage crypto for EU.

That expands the addressable market quite dramatically not a lot of the common brokers, even have an international presence to note and I think over the couple over the next few years, we're making significant investments there. So I think if we're successful executing on our strategy you could see robinhood winning by even larger.

<unk> margins going forward.

Alright. Thank you will add the next questions for Jason Jason Robinson has been profitable often on D. C. Robinhood, joining the S&P 500 by qualifying and being profitable four quarters in a row.

Vlad Tenev: What kind of progress should we expect from the company in 2024? So I'll break it down into the three areas we're focused on. For winning in the active trader market, there are user experience improvements, new assets like futures and index options, as well as, as I mentioned in my remarks earlier today, we've been doing very well on mobile. We're number one in market share there.

Wed love to join the S&P 500, and I think we're focused on the right things to do that delivering consistent profitability revenues even higher.

Remember, though there are only 500 spots on this and there is a committee decision. So it's not completely in our control, but we will keep focused on our business and over time it would be great to be part of that index alright. Thank you. Jason next question for you glad.

Vlad Tenev: Frankly, on the web, we haven't been doing as well. And so we're making a big investment there, and we're gonna be launching a more professional offering geared toward active traders. So we're very excited about that, and as we continue to execute here, you should be able to track the progress in continued market share gains across all the assets that we offer, including equities, options, and crypto. For increasing wallet share, the credit card is something we're very excited about, including a special, branded credit card for gold customers.

What kind of progress should we expect from the company in 2024.

So I'll break it down into three areas, we're focused on four winning and the active trader market. There is user experience improvements new assets like futures and index options.

As well as I mentioned in my remarks earlier today, we've been doing very well on mobile we're number one in market share there.

Thankfully on web.

Vlad Tenev: There's more to do on Robinhood Gold in general and in retirement, and we'll also be building and offering new account types like joint accounts. And then you should be able to track progress there by looking at our net deposits and our gold subscribers. And then expanding internationally, we launched in the EU for crypto and in the UK for brokerage. Really, what we're focusing on is delivering more features, making those experiences more feature-rich, and building on the initial UK and EU momentum that we've generated. And then what you should see is an increase in the percentage of our funded customers that come from international markets, as well as new funded customer growth over time. All right. Thank you, Vlad.

Haven't been doing as well and so we're making a big investment there and we're going to be launching.

More professional offering geared toward active traders. So we're very excited about.

About that.

As we continue to execute here you should be able to track the progress and continued market share gains across all of the assets that we offer including equities options and crypto.

Four increasing wallet share.

Card is something we're very excited about including.

A special.

Special credit card for gold customers.

There is more to do on Robinhood gold in general and in retirement.

Vlad Tenev: And Vlad, this last question is also for you. Please offer a yearly realized gain and loss tracker showing short and long-term gains. I've asked for this in multiple IRFs and currently have to track it manually in Excel.

We will also be building and offering new account types like joint accounts.

And then you should be able to attract progress there by looking at our net deposits and our gold subscribers.

Operator: Well, thank you for the feedback and thanks for continuing to ask. There is an impact on you asking because this is something that the team has actually been working towards. We're working hard to make great improvements to our tax slot and P&L tracking this year, and we hope you'll like them, so stay tuned. Great. Thank you, Vlad.

And then expanding internationally.

We.

<unk> in the EU for crypto and in.

In the UK for brokerage.

Really what we're focused and focusing on is delivering more features making those experiences more feature rich and building on the initial U K and EU momentum that we've generated and then.

Dan Dolev: That concludes our shareholder questions from Say Technologies. We appreciate our shareholders taking time to ask these questions of Vlad and Jason and look forward to more next quarter. Now I will turn the call over to Jonathan to lead Q&A from our analysts. Certainly, thank you. One moment for our first question. And our first question for today comes from the line of Dan Dolev from Mizzou. Your question, please. Oh, hey, good evening, amazing results. Congratulations team, you did really good and made me proud.

What you should see there is.

An increase in the percentage of our funded customers that come from international markets as well as new funded customer growth overtime.

Alright, Thank you Brad.

And Budd. This last question is also for you.

Yes.

Please offer a yearly realized gain and loss tracker, showing short and long term gains I've asked this in multiple areas.

Trac trac it manually in excel.

Well, thank you for the feedback and thanks for continuing to ask there is an impact you asking because this is something that the team has actually been working towards we're working hard to make great improvements to our tax law and P&L tracking this year and we hope youll youll like them so stay tune.

Vlad Tenev: Thank you, Dan, course. Yeah, so I was actually really, really impressed by your comments a lot about the 1.3 billion net positive brokerage account transfer. To me, it looks like you're gaining massive share. I know in the past, other brokers have said that they're taking share away from you. Looks like the tide is turning. Where are you seeing?

Thank you Brad that concludes our shareholder questions from say technologies. We appreciate our shareholders taking time to ask these questions of when Jason and look forward to more next quarter now ill turn the call over to Jonathan to lead Q&A from our analysts.

Certainly thank you one moment for our first question and our first question for today comes from the line of Dan <unk> from Mizuho. Your question. Please.

Vlad Tenev: Yeah, I mean, we've been investing a lot in the user experience, we've been investing in the service, the product, and the results speak for themselves. In Q4, we were net positive, so positive on a net basis for account transfers from every one of our major competitors, and these are big accounts coming in. So what's really amazing is I think the new functionality that we've been offering and the service quality improvements have led to people being comfortable moving hundreds of thousands of dollars into Robinhood, which people wouldn't really talk about as much, but now it's becoming a destination for people's serious money. We're going to continue to double down on that.

Hey, good evening.

As a result.

Congratulations team really good making me proud.

Thank you Dan.

Yes, so I was actually really really impressed by your comment a lot about the $1 3 billion of net net positive brokerage account transfer to <unk>.

It looks like Youre, gaining massive share I know in the past other brokers have said that theyre taking share away from you. It looks like the tide is turning but where are you seeing now.

Yes, I mean.

We've been investing a lot in the user experience we have been investing in this service.

Products results speak for themselves in Q4, we were net positive.

So positive on a net basis for account transfers from every one of our major competitors.

Vlad Tenev: Again, I want to emphasize... We're not getting complacent; there's a ton of work that remains to be done. And to be able to deliver these types of results and see customers coming to us from all of our major competitors in Q4. And, you know, from what we've announced so far in Q1, it's just been really positive. And it's taken a ton of work from the team to both improve the product and service and get to where that's happening. Amazing stuff.

They are big accounts coming in so what's what's really amazing is I think the new functionality that we've been offering and the service quality improvements have led to people being comfortable moving in hundreds of thousands of dollars into into robinhood, which.

People wouldn't really talk about as much but now it's becoming a destination for people serious money.

We're going to continue to double down on that again I want to emphasize.

We're not getting complacent, there's a ton of work that remains to be done.

Vlad Tenev: Can I squeeze in another quick question? I know it's early days, but how, you know, can you talk a little bit about progress, accounts, and traction you're getting in the UK because, you know, this is... to get a huge opportunity for Robinhood. Black.

And to be able to deliver these types of results and see customers coming to us from all of our major competitors in Q4.

And from what we've announced so far in Q1 has just been really positive and it's taken a ton of work from the team to both improve the the product and service and get to.

Vlad Tenev: Yeah, no, we're very excited about that. A big part of our strategy is making Robinhood available to hundreds of millions of additional customers. And so I think we've talked about tens of thousands of customers in the EU and the UK already. The UK is still rolling out.

Where that's happening.

Yeah.

Can I squeeze in another quick question.

I know, it's early days, but.

Can you talk a little bit about progress in terms of.

And traction you're getting in the UK.

I think a huge opportunity for Robin Hood. So I just wanted to see how the traction.

And congrats again.

Yeah, No. We're very excited about that a big part of our strategy is making robinhood available to hundreds of millions of additional customers and so.

Operator: So we're working towards the app being generally available to any customer in the coming months, and we know we've got a lot of work to do. There are a lot of features that exist in the US that our customers expect in these markets. And, you know, especially on the crypto side, there are going to be things that we can deliver in those markets that are not available in the US. So the roadmap is full, and both of the teams have been grinding exceptionally hard to improve the product at a very fast clip. Thank you. Thank you.

I think we've talked about tens of thousands of customers in the EU and the UK already.

K is still rolling out.

So we're working towards the app being generally available to any customer in the coming months.

We know we've got a lot of work to do there is there is a lot of features that exist in the U S that our customers expect in these markets.

Devin Ryan: One moment for our next question. Our next question comes from Devin Ryan from JMP Securities. Great. Thanks so much. Hi, Vlad. Hi, Jason. How are you?

And especially on the crypto side, there is going to be things that we can deliver in those markets that are not available in the U S. So the roadmap is full and both of the teams have been grinding exceptionally hard to improve the product at a very fast clip there.

Jason: Great. Hey Devin. I have a question just on interest rates and trading, and I appreciate kind of the inverse correlation that you talked about. Obviously, we are sitting here today with materially higher customer cash balances, and as you mentioned, you're passing along the majority of that benefit to clients. So if rates eventually start to move lower, how are you guys thinking about the magnitude of what could move back into the market from kind of those cash balances? And then just what the implications are on ARPU? Is that a net positive for ARPU, or how should we think about the interplay? Yeah, Devin. This is Jason.

Thank you.

Thank you one moment for our next question.

And our next question comes from the line of Devin Ryan from JMP Securities. Your question. Please.

Great. Thanks, so much I bought hi, Jason how are you.

Hey, Devin.

A question just on kind of interest rate trading and appreciate kind of the inverse correlation that you talked about.

Obviously sitting here today with materially higher customer cash balances as you mentioned, you're passing along the majority of that benefit the clients. So if rates eventually do start to move lower how are you guys thinking about the magnitude that could move back into the market from kind of those cash balances and then just what the implication.

Jason: You know, when we've looked at kind of the movement of trading activity relative to interest rates moving up and down, we've seen a pretty strong inverse correlation there. And so we feel really good that we've got a nice, natural hedge in the business between, you know, interest rates falling and interest in trading picking up. And so, you know, in my comments, I talked a bit about passing along a big portion of the interest rates to customers on gold sweep, looking at the average interest rates expected for 24 being roughly in line with 23. So we feel really good about that.

These are on <unk> is that a net positive to <unk> or how should we think about the interplay to revenues.

Yeah, Devin this is Jason when we when we've looked at kind of the movement of trading activity.

Relative to interest rates, moving up and down we've seen a pretty strong inverse correlation there.

And so we feel really good that we've got a nice natural hedge in the business.

Between.

Interest rates falling and interest in trading picking up and so.

In my in my comments I talked a bit about.

Devin Ryan: And then, as I mentioned, kind of most importantly, we think that falling interest rates create a tailwind for the business. So, overall, we feel really good about delivering strong revenue growth in this current macro environment. Okay, terrific.

<unk>.

Passing along.

A big portion of the interest rates to customers on gold sweep.

Looking at the average interest rates expected for 'twenty four being roughly in line with 23. So we feel really good about that and then as I as I mentioned kind of most importantly, we think that falling interest rates create a tailwind for the business. So so overall, we feel really good about delivering strong revenue growth.

Operator: And then just a follow-up here, just on expenses. Obviously, I think the expense guide, 5% of the midpoint, is very good. And you guys sound confident that you can still fund all of your growth initiatives. So how do you guys think about maybe core growth and expenses over the intermediate term, maybe the next three to five years? I would assume that would be higher than that 5%.

Yes in this current macro environment.

Okay.

Okay terrific and then just a follow up here just on expenses, obviously I think the expense guide 5% at the midpoint is very good.

You guys sound confident you can still fund all of your growth initiatives. So how.

How do you guys think about maybe core growth and expenses over the intermediate term maybe next three to five years I would assume there would be higher than that 5%.

Alex Markraff: Maybe just walk us through some of the moving parts there. And then the second part of the question is just thoughts on leaning in more on marketing spend. I mean, you had a fantastic quarter.

Walk us through some of the moving parts there and then just the second part of the question is just thoughts on leaning in more on marketing spend I mean, you had a fantastic quarter South of you having a lot of success with these promotions and I'm just curious if maybe it makes sense to even lean in more there because it would seem to pay off.

Jason: Sounds like you're having a lot of, you know, success with these promotions. And I'm just curious if maybe it makes sense to even lean in more there because it would seem the payoff is very good with all the momentum you have there. Thank you.

Very good with all the momentum you have there. Thank you.

Great Great questions. So first of all when we look at.

Alex Markraff: So first of all, when we look at core expense growth this year, we actually have a plan to take that down to high single digits, perhaps even 10%, and redirect that spend to fund new growth initiatives. And then, kind of looking out over the mid to longer term, in terms of core growth, you know, we think that could be low single digits, perhaps even lower. There's still a lot of opportunity for us to drive efficiency in this business, and we think we can, you know, maintain our core business and redirect the savings into growth initiatives over time. On your question about leaning more into marketing, you're on the same page as the management team. That is the plan this year.

Core expense growth. This year, we actually have a plan to take that down high single digits, perhaps even 10% and redirecting that spend to fund new growth initiatives.

And then kind of looking out over the mid to longer term in terms of core growth.

We think that could be low single digits, perhaps even lower theres still a lot of opportunity for us to drive efficiency in this business and we think we can.

Maintain our core business and redirect the savings into growth initiatives over time on your on your question about leaning more into marketing Youre on the same page as the management team that is the plan. This year and we are planning to spend up to about $100 million more in marketing.

Operator: And we are planning to spend, you know, up to about $100 million more in marketing in 2024, which is baked into this guidance. The team is really focused on bringing in high-LTV customers with that spend, and we're liking kind of the early signals that we're seeing. And so we want to lean in more there. Okay, that's really great color.

In 2024, which is baked into this guidance.

The team is really focused on bringing in high LTV customers with that spend and we're liking kind of the early signals that we're that we're seeing and so we want to lean in more there.

Yes.

Okay.

Will Nance: Thank you. Thanks for our next question. And our next question comes from the line of Alex Markraff from KBCM. Hey, team.

Really great color. Thank you guys I appreciate it.

Thanks, Kevin.

Thank you one moment for our next question.

Okay.

And our next question comes from the line of Alex Mcgrath from <unk>. Your question. Please.

Hey team. Thanks for taking my question just wanted to come back to the.

Jason: Thanks for taking my question. I just wanted to come back to the average balance, 100,000 kind of stacked up again with their expectations for that campaign. And then Vlad, with some of your comments earlier, I mean, is that... Directionally, kind of the new normal?

Account transfer and some of this disclosure around the 1% bonus offering.

Just wanted to understand how the average balance transfer I think it was 100000 kind of stacked up against your expectations for that campaign and then.

With some of your comments earlier, I mean is that directionally kind of the new normal and some of these transfer campaigns or how should we think about that.

Will Nance: Transfer Campaigns, or how should we say it? Yeah, so I would just say. Looking back over the past 10 years, we've taken market share of the trading activity. Now we're coming for the assets too. So our focus is increasingly going to be on driving asset growth. We just completed the 1% promo for ACATs in taxable brokerage accounts. We saw over $3 billion in ACATs from that. And now we're turning our focus on the 3% retirement promotion on rollovers and transfers for retirement accounts that runs through tax season. On average, as you pointed out, the customers transferring assets over are much larger than the average account size.

Yes, so I would just say.

Looking looking back over the past 10 years, we've taken market share of the trading activity now we're coming for the assets too. So our focus is increasingly going to be on driving asset growth. We just completed the 1%.

Promo for Acas and taxable brokerage accounts, we saw over $3 billion in cats in from that and now we are turning our focus on the 3% retirement promotion on rollovers and transfers for retirement accounts that runs through tax season on average as you pointed out the customers transferring an.

Assets over a much larger than kind of the average account size.

Jason: And we're really excited about the momentum that it's giving us to start the year. And maybe if I could just squeeze in one more, any sort of color observation you could share with us, you know, the interplay, spot, Bitcoin ETFs that were made available in the early part of the year, as opposed to, you know, direct Bitcoin. Alex, this is Jason. I'll go ahead and take that.

And.

We're really excited about the momentum that's giving us to start the year.

And maybe if I could just squeeze in one more.

Any sort of color observation, you could share with us.

The interplay between some of the spot viewpoint Etfs that were made available.

In the early part of the year as opposed to.

Direct decline ownership.

Yeah. Alex This is Jason I'll go ahead and take that.

Will Nance: You know, so we're really pleased to be offering all 11 of the Bitcoin ETFs on the first day of trading. I think that was a great outcome for customers. So far, you know, we're seeing nice interest in the ETFs. But we think it's, we think it's additive. About 5% of our overall trading in crypto is through the ETF, with 95% still being on spot trading through the crypto business. And that's when I stabilized it.

So we're really pleased to be offering all 11 of the bitcoin Etfs on the first day of trading I think that was a great outcome.

For customers.

So far we're seeing nice interest in the Etfs, but we think it's.

I think it's additive about 5% of our overall trading.

In crypto is through the ETF with 95% still being on spot trading through the crypto business and.

And Thats.

Vlad Tenev: So, you know, we feel really good about offering this selection for customers; we think it increases, you know, overall market interest in crypto and also brings liquidity to the market. So, net net, we're really pleased with the Bitcoin ETF. Great, thanks for all the, Thank you.

Stabilized so we feel really good to offer the selection for customers. We think it increases overall market interest in crypto and.

It also brings liquidity to the market. So net net we're really pleased with with the bitcoin Etfs.

Great. Thanks for all the detail.

You bet. Thank you one moment for our next question.

Operator: One moment for our next question. Our next question comes from the line of Will Nance from Goldman Sachs. Your question. Hey guys, I appreciate you taking the time to answer the question. I know in the prepared remarks, we're talking about, you know, continued revenue growth and margin expansion for the year. And it sounds like, you know, that's probably coming on the revenue side more from the trading side than from NII, given the commentary around rates sort of being a push. So, you know, correct me if I'm wrong there, if you're, you know, if there's like an assumption around better earning asset growth.

And our next question comes from the line of will Nance from Goldman Sachs. Your question. Please.

Hey, guys I appreciate you taking the question.

Yes.

The prepared remarks, we're talking about.

Continued revenue growth and margin expansion for the year.

And it sounds like.

The assumption is it's probably coming on the revenue side more from the trading side than from NII, given the commentary around <unk>.

<unk> sort of being a push so.

Correct me, if I'm wrong there.

If there's like an assumption around an earning asset growth, but I guess my thought my question would be.

Stephen Chubut: But I guess my thought, and my question would be, in the earlier response to one of the questions, it sounds like there's actually a lot more growth-related investments happening underneath the surface in this expense guide, and you guys are funding that with continued operational efficiencies and doing what you guys have done an amazing job over the past two years of doing and right-sizing the expense base. So just maybe, could you talk about how much of that growth-related investment is discretionary and if we do see some kind of reduction in either near-term trading activity. I know we saw a very nice increase in things like both options and crypto towards the end of the year. What kind of flexibility is there in those growth-related investments? Yeah, I mean, I think you know, marketing is almost always considered a discretionary spend.

And the earlier response to one of the questions. It sounds like there's actually a lot more growth related investments happening underneath the surface and Thats an expense guide and you guys are funding that with continued operational efficiencies.

Doing what you guys have done an amazing job over the past two years are doing in right sizing the expense base. So just maybe can you talk about sort of how much of that growth related investments and sort of discretionary.

We do see some corner some kind of reduction in either near term trading activity.

I know, we saw a very nice increase and it seems like both options and crypto towards the end of the year.

What kind of flex is there in those growth related investments.

Yes, I mean I think.

Marketing is almost always considered a discretionary spend and so as I mentioned in my earlier response that we're leaning into marketing.

Jason: And so, you know, as I mentioned in my earlier response that we're leaning into marketing, you know, that that is always up for reevaluation, up or down, depending on the macro backdrop, how that changes, and also how effective the marketing spend is. And so we'll continue to see how that plays out and, and, and, and, and update you as we go in terms of, you know, the cost savings that we're realizing in our core business. They said, you know, high single digits, perhaps even 10% of cost reduction there. And we're redeploying that into new areas of our business areas that, you know, Vlad was highlighting earlier. New growth is certainly discretionary, but I'd say that we've decided, though, that we're pursuing these growth opportunities. And so I wouldn't expect us to pull back there, you know, certainly in 2024.

That is always up to reevaluation up or down depending on the macro backdrop and how that changes and also how effective the marketing spend is and so we'll continue.

<unk> see how that plays out in <unk>.

And update as we go in terms of.

<unk>.

The cost savings that we're realizing in our core business I said high.

High single digits, perhaps even 10% of cost reduction there and.

And we're to redeploying that into new areas of our business.

Areas that flat with highlighting.

Earlier, new growth is certainly discretionary I would say that we've decided though that we're pursuing these growth opportunities and so I wouldn't expect us to pull back there.

Yes, certainly in 2024.

Jason: And, yeah, Will, you did say rates are a push, and I agree with that. But I would say that we also continue to see strong double-digit growth in net deposits. And so assets continue to improve year over year, and we're certainly starting with a higher balance at the beginning of 2024 than we saw in 2023. Yes, all that makes sense. And then just questions around the thought process around European expansion over the course of this year. You know, what does that play into expectations, if any?

And will you did you did say rates or greater a push and I agree with that I would say that we also continue to see strong kind of double digit growth in net deposits and so assets continued to improve year over year, and we're certainly starting with a higher balance at the beginning of 'twenty for then then what.

We saw in 'twenty three.

Yes, all of that makes sense and then just questions around.

Thought process around the European expansion over the course of this year.

What does that play into expectations, if any and what's the latest thinking on when this could be a more meaningful part of the story over time, thanks for taking my questions Tonight.

Stephen Chubut: And, you know, what's the latest thinking on when this could be a more meaningful part of the story over time? Thanks for taking the question. Yeah, I'll take that one.

Yeah, I'll take that one.

Operator: While it's still early, we really like the initial traction we're seeing. We're already seeing a healthy portion of our user growth coming from outside of the US. And our focus now is really rounding out the product suite, bringing more services to customers across the globe. We think there's a huge opportunity for international to become a big part of our business. Thank you.

While it is still early we really like the initial traction we're seeing we're already seeing a healthy portion of our user growth coming from outside of the U S and our focus now is really rounding out the products, we are bringing more services to customers across the globe, we think theres a huge opportunity for international to become a big.

Of our business.

Thank you one moment for our next question.

Michael J. Cyprys: And our next question comes from the line of Stephen Chua from Wolf Research. Your question, please. Hey, good afternoon.

And our next question.

It comes from the line of Steven <unk> from Wolfe Research Your question. Please.

Hey, Good afternoon. This is Michael and I must not just filling in for Steven.

Vlad Tenev: This is... I just wanted to stop and check the lend here. Hey, Vlad, I... Good.

Just wanted to ask Michael <unk> land here, Hey, Brian how are you doing.

Good so just wanted to touch on Sakhalin here could you give us an update on where you are in the journey for the fully paid program how much incremental penetration you think you can drive and given the uptake has been obscured by what's challenging backdrop can you remind investors what do you think that business.

Vlad Tenev: I just want to touch on SecLend here. Could you give us an update on where you are in the journey for the fully paid program? How much incremental penetration do you think you can drive given the uptake? on what's a challenging background for MindInvestors.

Jason: Yeah, thanks, Michael, for the question. You know, we're really pleased with the progress that we're making on the inputs of, you know, the security funding business, particularly fully paid security funding; equities enrolled in the program increased from Q3 to Q4 from 10 billion to 14 billion. So really, really pleased with that added 500,000 customers into the program, you know, on a sequential quarter basis. But I still think that there's quite a bit of headroom for us to continue to penetrate and get, you know, securities lending fully paid into the hands of our customers. It's a great way to augment yield, as we all know, and the team's hard at work to make sure customers understand that. I think that's showing up in the progress that we're making, you know, at the moment, the rebate rates that we're seeing are lower across the industry.

Could deliver from a revenue perspective, and a more normal environment. Thanks.

Yes, Thanks, Michael for the question.

We're really pleased with the progress that we're making on the inputs of.

Of.

The securities lending business, particularly fully paid securities lending equities enrolled in the program increase from Q3 to Q4 from 10 billion to $14 billion. So really.

Really pleased with that added 500000 customers.

Into the program.

Sequential quarter basis.

Still think that there's quite a bit of headroom for us to continue to penetrate.

And get <unk>.

Securities lending fully paid into the hands of our customers. It's a great way to augment yield as we all know.

And the team is hard at work to make sure customers understand that I think that's showing up in the progress that we're making.

At the.

At the moment the the rebate rates that we're seeing are lower across the industry.

Jason: But over time, you know, I think as that normalizes a bit, the progress that we're making on inputs is really going to show through from a revenue perspective. Yeah, we think we still have room to run, and we could make meaningful progress towards heightened penetration this year. All right, thank you. And then, I guess on my follow-up, I wanted to briefly hit on expenses again, in a different vein. Now that the head count reductions are largely in the rear view, how should we be... Direction of Travel, and a lot more.

But over time.

I think as that normalizes a bit.

The progress that we're making on inputs is really going to show through from a revenue basis.

Yes, we think we still have room to run and we could make meaningful progress towards heightened penetration this year.

Got it. Thank you and then I guess my follow up I wanted to briefly hit on expenses again, maybe.

On a different vein now now that the head count reductions are largely in the rear view, how should we be thinking about the direction of travel for expense per head given the scalability of robinhood, coupled with the investments you are making particularly international where I imagine that may drive some incremental head count head count growth. Thanks.

Jason: So thank you for watching. We'll see you next time. Scalability of Robinhood, investments you're making, particularly international. Yeah, so the plan on headcount is to be, you know, roughly flat to slightly up this year. So we feel really good about the headcount posture that we have in terms of the expense per head.

So the plan on head count is to be.

Roughly flat to slightly up this year. So we feel really good about the head count posture that we have in terms of the expense per head.

Jason: You know, there does continue to be opportunity for us to get even more efficient, you know, today, the vast majority of our, of our headcount is in higher cost US geographies, and, and there's opportunity there over time, I think the real opportunity for us on headcount is really just increasing revenue per per employee. And, and there, we feel like we're just getting started, there's a lot of opportunity for us to leverage the fixed cost infrastructure that we have at the company as we grow the business over time. Great.

There does continue to be opportunity for us to get even more efficient today, the vast majority of our.

Of our head count is in higher cost U S geographies and there is opportunity there over time I think the real opportunity for us on head count is really just increasing revenue per employee.

And there we feel like we're just getting started there is a lot of opportunity for us to leverage the fixed cost infrastructure that we have at the company as we grow the business over time.

Michael J. Cyprys: Thanks for taking my question. You bet. Thank you.

Great. Thanks for taking my questions.

You bet.

Operator: One moment for our next question, and the next question comes from the line of Michael Cyprys from Morgan Stanley. Your question... Hey, good evening. Thanks for taking the time to ask me that question. I wanted to ask about crypto, an area you guys continue to invest in. I was hoping you could elaborate on the investments you're looking to make here in 24 and beyond, as well as how you imagine crypto contributing to your business as you look out over the next three to five years. Yeah, I mean, we're investing a large amount into crypto, both in the EU and domestically. I think there's a ton of improvements left to make.

Thank you one moment for our next question.

Okay.

And our next question comes from the line of Michael Cyprus from Morgan Stanley. Your question. Please.

Hey, good evening. Thanks for taking the question I wanted to ask about crypto an area you guys continue to invest in I was hoping you could elaborate on the investments you're looking to make here in 'twenty four and beyond.

As well as how you're envisioning crypto contributing to your business as you look out over the next three to five years.

Yeah, I mean, we're we're investing.

We're investing a large amount into crypto both in the EU and domestically I think there is a ton of improvements.

John Totoro: Last year, we were really focusing on the trader experience and providing clarity, which we believe we've made significant progress on, in just how much better our pricing is than that of our competitors. And we've seen that reflected in... crypto trading market share. We've also seen, and you probably caught this announcement just in the past couple of days, our on-ramp technology, Robinhood Connect. We've been making meaningful progress there.

Left to make last year, we were really focusing on the trader experience.

And providing clarity, which we believe we've made significant progress on and just how much better our pricing is then.

One of our competitors and we've seen that reflected in.

Crypto trading market share.

We've also seen and you've probably caught this announcement just in the past couple of days.

Our on ramps technology Robinhood connect.

We've been making meaningful progress there.

Vlad Tenev: And so if you think about all that we have to be really, really good at to power our retail crypto offering, we've gotten really good at quick money movements, getting your fiat dollars into crypto as seamlessly as possible through building out our transfers products, delivering those funds into noncustodial wallets seamlessly. And so Robinhood Connect really leverages that and turns that into a powerful B2B product. We announced a partnership with Metamask a couple of days ago, and that's been one of the market leaders in noncustodial wallets. And they do a really nice thing where you can actually compare the use of different on-ramps, and they sort them by which one is the most cost-effective.

So if you think about all that we have to be really really good at to power our retail crypto offering.

We've gotten really good at.

At quick money movements getting your Fiat dollars into crypto as seamlessly as possible through building out our transfers products.

Delivering delivering those funds into non custodial wallets seamlessly.

So robin Hood connect really leverages that and turn that into a powerful <unk> product, we announced a partnership with meta mask a couple of days ago and Thats been one of the market leaders in non custodial wallets.

And they do a really nice thing where you can actually compare.

The use of different on ramps and they sorted by.

Which one is the most cost effective and when you kind of look on that page, you'll see Robin Hood at the top so I think it really shows the investments that we've made in our platform and it's reflected in us being able to offer lower cost not just for our consumers, but for business partners as well and I think youll see us chipping away at it bit by bit.

Vlad Tenev: And when you kind of look at that page, you see Robinhood at the top. So I think it really shows the investments that we've made in our platform. And that's reflected in us being able to offer lower costs, not just for our consumers but for business partners as well. And I think you'll see us chipping away at this bit by bit. We think we can be a leading player in bridging the worlds of traditional finance and crypto. So there's a lot more where that came from. Great. And just a follow-up question, if I could.

We think we can be the leading player in bridging the worlds of traditional financing and crypto. So there is a lot more where that came from.

Great just a follow up question if I could on the expense side you guys continue to drive efficiency in the business or do you mentioned, you can reduce underlying costs and 24 by up to 10% or so.

Vlad Tenev: On the expense side, do you guys continue to drive efficiency in the business, or do you mention you can reduce underlying costs in 24 by up to 10% or so, understanding you'd look to reinvest that elsewhere? But, and over the medium term, you could potentially look to grow expenses at a low single-digit pace. I was hoping you could maybe elaborate on the top contributors to that level of efficiency, the specific steps you're taking here in 24 hours, and how those steps may differ as you look out over the medium term to hit those particular targets.

Standing you would look to reinvest that elsewhere, but over the medium term you could potentially look to grow expenses at a low single digit pace I was hoping you could maybe elaborate on the top contributors to that level of efficiency. The specific steps you're taking here in 'twenty four and how those may some steps may differ as you look out over the medium term to hit those.

Particular targets if you will.

John Totoro: Yeah, sure. We've been really kind of fine-tuning our skills over the last couple of years in terms of efficiency; we have been focused on business process efficiency using technology. We have a team that we've spun up that helps the business find opportunities to improve efficiency. One project we just finished was on recruiting, and we think we can save, you know, 20 to 40% of our time just on the recruiting process from optimizing our business steps that are involved. You know, as I mentioned earlier, I think there's an opportunity for us over time in terms of place of work, with the vast majority of our employees working in high-cost locations within the US. That's something that we can make progress on in 24 hours as well as beyond. So those are the big levers that I'd point to.

Yes, sure I mean.

We've been.

Really kind of fine tuning our skills over the last couple of years in terms of.

Efficiency, we were focused on business process efficiency using technology.

A team that we have spun up that helps the business find opportunities to improve.

<unk> one.

One project. We just finished was on recruiting and we think we can save.

20% to 40% of our time just on the recruiting process.

Optimizing our business steps that are involved.

As I mentioned earlier I think there is opportunity for us over time in terms of places of work with the <unk>.

Vast majority of our employees working in high cost locations within the U S.

That we can make progress on in 'twenty, four as well as beyond so.

Those are the big levers that I would point to.

Operator: Great, thank you. Thank you. One moment for our next question, and our next question comes from the line of John Totoro from Needham & Company. Your question... Great. Thanks for taking my question and congratulations on the beats.

Great. Thank you.

Thank you one moment for our next question.

And our next question comes from the line of John <unk> from Needham <unk> Company. Your question. Please.

Great.

Thanks for taking my question and congrats on the beat.

Patrick Moulton: I guess I have two here, both on the crypto components. On the Bitcoin ETF versus buying Bitcoin directly on the platform, you'd mentioned earlier about 5% of overall crypto you thought was flowing into the ETF. So was that 5% that migrated away from buying Bitcoin directly? Or was that an added bonus?

I guess I had two here both on the crypto components.

On the bitcoin ETF versus buying good calling directly on the platform. You had mentioned earlier about 5% of overall crypto you thought was flowing into the Etfs.

<unk>, 5% that migrated away from buying bitcoin directly or was that an additive 5%.

Jason: Yeah, we thought we saw it was mostly additive. There were some traders that sold out of spot and got to ETF, but that was really more of an exception. And we also offer ETFs in our retirement accounts, which accounts for, you know, some of the pickup as well. So overall, we don't view this as cannibalization; it's additive, and we think it's really good for customers as well. Great, thanks for that. And then just one more on Metamask integration.

Yes, we thought we saw it was mostly additive there were some some traders that sold out of spot and got to ETF, but that was really more of the exception.

And we also offer the Etfs and our retirement accounts, which accounted for some of the pickup as well. So overall, we don't view this as cannibalization, it's additive and we think it's really good for customers as well.

Great. Thanks for that and then just one more on the Meramec integration think Thats really interesting it does kind of.

Jason: I think that's really interesting. It does kind of pivot Robinhood to be more of that fiat on-ramp to the ecosystem, DeFi, and on-chain stuff. Just curious, though, what is the monetization strategy with that integration, short term and then long term? Yeah, so we collect fees on the activity of the on-ramp.

Robin that would be more of that Fiat on ramp to the ecosystem <unk> unchanged.

Just curious what is kind of the monetization strategy with that integration short term and then longer term.

Yes so.

We collect fees on the on the activity of the on ramp. So that's the primary source of monetization and then any trading.

Vlad Tenev: So that's the primary source of monetization. And then any trading on our platform for that on-ramp would also show up in our transaction-based revenue.

On our platform.

For that on ramp also would show up in our transaction based revenues.

Patrick Moulton: Understood. Thanks. Thank you. One moment for our next question, and our next question comes from the line of Patrick Moulton from Piper Sandler.

Got it understood. Thanks.

Thank you one moment for our next question.

Yes.

And our next question comes from the line of Patrick <unk> from Piper Sandler Your question. Please.

Jason: Yeah, thanks for taking the question. I just had one on Robinhood Gold. I was just hoping you could give us kind of an update on how you think about pricing there. You know, the expanded offerings that you're adding $5 a month seems, you know, like somewhat of an inexpensive price to pay. So just hoping you could update us on your thoughts there. And then maybe, as we look internationally, how you sort of think about taking the subscription model overseas and how you see that playing out with a different kind of geographic customer mix. Thanks. Yeah, this is Jason. I'll start, and we'll see if Vlad has any additional color.

Yes, thanks for taking the question I just had one on.

Robinhood gold just hoping you could update us on how you think about <unk>.

Pricing there.

The expanded offerings and youre, adding $5 a month seems like some would've been inexpensive.

Price to pay so just hoping you could update us on your thoughts there and then maybe as we look internationally, how you sort of think about taking the subscription model overseas and how you see that playing.

Playing out with a different kind of geographic customer mix. Thanks.

Yes. This is Jason I'll start and we'll see if that has any additional.

Jason: You know, we love the gold program. Gold members have an ARPU that's multiples of our average ARPU. And you're right, the $5 a month is just a screaming deal.

Color.

We love.

The gold program.

Gold members have.

And <unk>, that's multiples of our average <unk>.

And Youre right the $5 a month is just a screaming deal.

Jason: You know, we want it to be obvious for every customer that they should be a gold subscriber, so we're paying close attention to the behavior of gold. They're bringing in more net deposits. They're using more of our products. And, and they do all that with a relatively modest, you know, monthly subscription.

We want it to be obvious for every customer that that they should vehicles.

Subscriber.

So we're paying close attention to the behavior of gold they are bringing in more net deposits there, they're using more of our products and.

And they do all of that with a relatively modest.

Monthly subscription.

Jason: You know, we'll evaluate pricing over time, but all in all, we just love the economics of the gold subscription. And I do think, over time, there's an opportunity for us to take Robinhood Gold internationally. Yeah, I don't have much to add there. I think that, you know, other financial service companies offer these gold perks to their high net worth customers. And usually, there are balance requirements; you have to have millions of dollars in your account.

Evaluate pricing over time, but all in we just loved the economics of the gold subscription.

And I do think over time there.

As an opportunity for us to take Robinhood gold internationally.

Sure.

Yes, I don't have much to add there I think that.

Other financial service companies offer these gold perks to their high net worth customers.

And usually there is balance requirements you have to have millions of dollars in your account.

Vlad Tenev: And so we think it's very mission-aligned to provide those same types of services to any customer for such a small monthly fee. I think it really has the potential to disrupt the wealth management industry just in the same way that we've been disrupting trading. And our focus has been on making the experience even better, getting the adoption rate up, and making it easy for new customers, in particular, to onboard onto the product. We've seen really healthy improvements in sort of like the first week at the hatch rate of gold among new customers. And we think that there are further improvements, and we've got a lot slated for this year to make the gold offering even better. Okay, that's a great color.

And so we think it's very mission aligned to provide those same types of services to any customer for such a small monthly fee I think it really has the potential to disrupt the wealth management industry. Just in the same way that we've been disrupting trading and our focus has been on making the experience even better.

Getting the adoption rate up making it easy for new customers in particular to onboard onto the product we've seen really healthy improvements in sort of like the first week attach rate of <unk>.

Among new customers.

And we think that there is further improvements and we've got a lot slated for this year to make the gold offering even better.

Okay. That's great color and then just a follow up on the equities and options take rate you know those have been coming down for the last couple of quarters options.

Patrick Moulton: And then just to follow up on the equities and options take rate, you know, those have been coming down for the last couple quarters. Capster seemed to stabilize somewhat in the fourth quarter, but equities declined again. So just kind of as we look out to the next year, how do you think, or how do you see the take rates there? Kind of what's the trajectory, or the next couple quarters, I guess, is the question. Thanks. Yeah, you bet. I'm zeroing in on options for that. You know, for the back half of the year, both Q3 and Q4, we were running at 41 cents per contract. And in January, we're in that zone, but the mix is improving a bit.

Capture seemed to stabilize somewhat in the fourth quarter equities declined again, so just kind of as we look out to the next year, how do you think or how do you see the.

The take rates there kind of what's the trajectory.

Next couple of quarters I guess is the question.

Yes, you bet at zero in on options for that for.

For the back half of the year, both Q3 and Q4, we were running at 41.

Per contract.

And in January.

In that zone, but the mix is improving a bit so we'll have to see how the year plays out.

Jason: So we'll have to see how the year plays out. And, you know, nothing really to highlight on the equity side. Okay, thank you guys. Thank you. Thank you one moment for our next question. And our next question comes from the line of Ken Worthington from... Morgan, your question.

Really to highlight on the equity side.

Okay. Thanks, guys.

Thank you.

Thank you one moment for our next question.

And our next question comes from the line of Ken Worthington from J P. Morgan Your question. Please.

Jason: Hi, good evening; thanks for taking the question. As you look to election season in the SEC, do you expect the SEC will execute on the market structure changes proposed last year for equity markets? And if so, do you think that equity market structure changes will differ from the original proposals?

Hi, good evening, Thanks for taking the question as you look to election season in the FCC do you expect the SEC will execute on the market structure changes proposed last year for equity markets and if so do you think there.

That equity market structure changes will differ from the original proposals or are they likely to stay on track and which are you are kind of most important to Robin Hood here.

Operator: Are they likely to stay on track? And which are kind of most important to Robinhood? So, we think a fair amount will probably be executed heading up into the election season. I think Best x is an important aspect of that.

So so we think a fair amount will probably be executed heading up into the election season, I think best acts as an important aspect to that we participated in the comment process and we feel like a fair number of our comments were incorporated in.

Ken Worthington: You know, we participated in the comment process, and we feel like a fair number of our comments were incorporated and, and, and that's baked into the expectations that we have for 2024. Great, thank you. And then on TOAs, you mentioned that the TOAs are positive for the major brokers. Are you seeing positive transfers of assets from the major crypto providers as well? Um, So it's a little bit difficult to reconcile the crypto activity in that way because a lot of people use crypto or Robinhood as an on-ramp to transfer, purchase crypto, and then kind of use it in the Web3 ecosystem. So it's a little bit different of a behavior than brokerage ACAT transfers, where those assets tend to sit and accumulate. So I don't think you can really make apples-to-apples comparisons.

And thats baked into really the expectations that we have for 2024.

Okay, great. Thank you and then on <unk>.

Yep.

As you mentioned that the <unk> are positive for the major brokers are you seeing positive transfer of assets from the major crypto providers as well.

Okay.

So, it's a little bit difficult to.

Reconcile the crypto activity in that way because.

A lot of people use crypto or robinhood as an on ramp to transfer to purchase crypto and then kind of use it in the web three ecosystem. So it's a little bit different of a behavior than brokerage a cat transfers, where those assets tend to sit.

And accumulated.

Thank you can make really.

Apples to apples comparison.

Jason: You know, the one thing, Ken, that I'd highlight is that the crypto volume on Robinhood nearly doubled in Q4. So, really, we are seeing strong engagement and increasing market share. Great. Thank you. Thanks again.

<unk>.

Yes.

The one thing Ken that I would highlight is that the crypto volume on on Robinhood nearly doubled in Q4, so really seeing strong engagement and increasing market share.

Okay, great. Thanks, so much.

Vlad Tenev: Thank you. One moment for our next question. And our next question comes from the line of Benjamin Budish from Barclays. Hi, good evening, and thanks for taking the question.

Thanks, Ken.

Thank you one moment for our next question.

Okay.

And our next question comes from the line of Benjamin <unk> from Barclays. Your question. Please hi.

Good evening and thank you for taking the question I wanted to follow up on an earlier question about taking the subscription model overseas. Maybe can you talk a little bit about now that you're rolling out in the U K, what the revenue model looks like over there I mean, I think we all understand it will look somewhat different than the U S. But can you kind of give us.

Jason: I wanted to follow up on an earlier question about taking the subscription model overseas. Maybe you could talk a little bit about, now that you're rolling out in the UK, what the revenue model looks like over there? I mean, I think we all understand it will look somewhat different in the US, but can you kind of give us any kind of color on what that should look like as the platform ramps over there? What are the main sources of revenue? Yeah, Ben, I'd say, you know, in the UK, we know that payment for overflow isn't allowed, but really, all of the other income streams are available there over time. So margin, fully paid securities lending, certainly, you know, interest on cash.

Any kind of color on what that should look like as the platform ramps over there what are the main sources of revenues. Thank you.

Yes, Ben I would say in the U K, we know that that payment for order flow isn't allowed but really all of the other income streams are available there over time, so margin fully paid securities lending certainly.

Interest on cash and so.

Jason: And so, you know, I would say as we look internationally, the revenue characteristics and ARPU, you know, in some jurisdictions will be a little higher than the US, some a little lower, but on average, we think that, you know, the revenue potential is pretty much on par with what we'll, what we're seeing in the US.

I would say as we look internationally.

Yes.

The revenue characteristics and <unk> in some jurisdictions, there will be a little higher than the U S. Some are little lower but on average we think that.

The income potential is is pretty much on par with what we're seeing in the U S and we know that that market. In particular is very used to subscription products. So we're definitely hard at work crafting.

Ken Worthington: And we know that that market, in particular, is very used to subscription products. So we're, we're definitely hard at work crafting a great gold experience for international customers. Yeah, and remember that payment for overflow is actually a pretty modest portion of our revenue for equities trading in the US. And so not having that in the UK is, is not a big concern.

<unk> gold experience for international, Yes, and remember that payment for order flow is actually a pretty modest.

A portion of our revenue for equities trading in the U S and so not having that in the U K is it's not a big concern.

Operator: Got it. That's helpful. And maybe one follow-up, maybe sort of connected.

Got it that's helpful and maybe one follow up maybe sort of connected.

Benjamin Budish: Can you talk about the activity you're seeing in your 24-hour markets? I know some of the appeal is for overseas investors who are far away in different time zones, but you've talked in the past about expanding access outside of the traditional trading hour. So what sort of activity are you seeing there?

Can you talk about the activity Youre seeing in your 24 hour markets I know some of the appeal is for overseas investors, who are far away in different time zones, but you've talked in the past about expanding access outside of the traditional trading hours. So what sort of activity are you seeing there what kind of uplift might do you see as you continue to roll out more more stock to that offering. Thank you.

Jason: You know, what kind of uplift might you see as you kind of continue to roll out more stock to that offer? Yeah, I think the team's done tremendous work making the 24-hour market offering better and better. We started with a pretty limited set of names roughly a year ago.

Yeah.

I think the team has done tremendous work, making the 24 hour market offering better and better we started with a pretty limited set of names roughly a year ago, they've been adding names by the hundreds.

Vlad Tenev: They've been adding names by the hundreds, so we have somewhere around 900 tickers available in the overnight trading session. Hundreds of thousands of our customers have used the product, and we've seen particularly strong activity around earnings when, really, Robinhood is among the only places available to trade some of these tickers. So we're going to continue to invest there. I think there's a lot to do, particularly as we improve the active trading tooling and offerings, because this product is responding particularly well among our key active trader customers.

So we have somewhere around 900 tickers available in the overnight trading session.

Hundreds of thousands of our customers have used the product and we've seen particular, particularly strong activity around earnings when really robinhood is among the only places available to trade. Some of these tickers. So we're going to continue to invest there I think there is there is a.

A lot to do particularly as we improve the active trading tooling and offerings because this product is resonating, particularly well among our.

Our key active trader customers.

Benjamin Budish: Got it. Thank you very much. Fade. This does conclude the question and answer session of today's program. I'd like to hand the program back to Vlad Tenev for any further remarks. Yeah, thank you all. Great questions. And the team is already hard at work getting 2024 started. So not much holiday rest for Robinhood.

Got it thank you very much.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to lead tenants for any further remarks.

Yes, Thank you all.

Great questions and the team is already hard at work.

Getting 2024 started so.

Not much holiday rest here for Robin Hood, we look forward to seeing you next quarter.

Operator: We look forward to seeing you next quarter. Thank you, ladies and gentlemen, for your participation today. If this does conclude the program, you may now disconnect. Good day.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.