Q2 2025 Robinhood Markets Inc Earnings Call

Jason Warnick: Thank you to everyone for joining Robinhood's Q2 2025 earnings call, whether you're tuning into the livestream at home or here with us in person. With us today are Chairman and CEO Vlad Tenev, CFO Jason Warnick, and VP of Corporate Finance and Investor Relations, Chris Koegel. Vlad and Jason will offer opening remarks and then open the call to Q&A. During the Q&A portion of the call, we will answer questions from institutional research analysts, and we will also answer questions from finance content creators who may hold an ownership position in Robinhood. As a reminder, today's call will contain forward-looking statements. Actual results could differ materially from our current expectations, and we may not provide updates unless legally required.

Thank you to everyone for joining Robin Hood's Q2 2025 earnings call whether you're tuning in to the live stream at home, or here with us in person.

With us today are Chairman and CEO of Vlad Tennis, CEO Jason Warnick, and VP of Corporate Finance and Investor Relations Chris Koegel.

Vlad and Jason will offer opening remarks and then open the call to Q&A.

During the Q&A portion of the call, we will answer questions from institutional research analysts and we will also answer questions from Finance content creators who may hold an ownership position in Robin Hood.

Jason Warnick: Potential risk factors that could cause differences, including regulatory developments that we continue to monitor, are described in the press release we issued today, the earnings presentation, and in our SEC filings, all of which can be found at investors.robinhood.com. Today's discussion will also include non-GAAP financial measures. Reconciliations to the GAAP measures we consider most directly comparable can be found in the earnings presentation. With that, please welcome Vlad and Jason.

As a reminder, today's call will contain forward-looking statements. Actual results could differ materially from our current expectations, and we may not provide updates unless legally required.

potential risk factors that could cause differences including regulatory developments that we continue to monitor are described in the press release, we issued today, the earnings presentation and in our FCC filings, all of which can be found at investors robinhood.com

Today's discussion will also include non-gaap Financial measures reconciliations to the Gap. Measures we consider most directly comparable can be found in the earnings presentation.

With that, please. Welcome Vlad and Jason.

Vlad Tenev: Thank you. All right. Greetings and salutations. Hey, Jason.

Jason Warnick: Hey, Vlad.

Vlad Tenev: It's great to see everyone today. We're actually back in New York City at the NASDAQ, where we had Investor Day in December. I see some familiar faces. Also, great to have institutional analysts and some finance content creators. I see some finance content creators as well with us today. So that's Robinhood live audience for the first time, always innovating across every aspect of the business, and the earnings is no exception, right? So let's get right into it. Second quarter, I think we really kept raising the bar with industry-leading product velocity across our three focus areas: number one in active traders, number one in wallet share for the next generation, and the number one global financial ecosystem. So why don't we dive in a little bit? Our active trader offering just keeps leveling up.

All right, greetings and salutations. Hey Jason. Hey Vlad.

Uh, it's great to see everyone. Today, we're actually back in New York City at the NASDAQ, where we had Investor Day in December. I see some familiar faces.

Also great to have, uh, institutional analysts and some Finance content creators. I see some Finance content creators as well with us today. So, uh, that's Robin with live audience for the first time always innovating across, uh, every aspect of the business and the earnings is no exception, right?

So let's get right into it. Uh, second quarter,

Vlad Tenev: Record trading volumes in Q2 across equities, options, prediction markets, index options, and futures. And by the way, pretty awesome that index options volumes grew 60% from Q1, and event contracts more than doubled from Q1 to nearly a billion in Q2. I think these results were driven by relentless innovation, including in Q2 new tooling capabilities for mobile, Legend, the team's rapidly shipping updates, Cortex for gold members, starting with stock digests, which have been used by hundreds of thousands of our customers. And the best is yet to come. After three great product events so far this year, we're hosting the second annual Hood Summit for Active Traders. That's going to be an event in Las Vegas in just a few weeks, and it's going to be much bigger than last year. Last year's event was pretty big, but this one should be twice as big.

I think we really kept raising the bar with industry-leading product velocity across our 3, Focus areas number 1, in active Traders, number 1 in wallet, share for the next generation and the number 1, Global Financial ecosystem. So why don't we dive in a little bit? Our active Trader offering just keeps leveling up record trading volumes in Q2 across equities options, prediction markets, index, options and future. And by the way, pretty awesome. That index options volumes grew 60% from q1 an event contracts, more than doubled from q1 to nearly a billion in Q2.

I think these results were driven by Relentless Innovation, including in Q2 new tooling capabilities for mobile.

Legend the team's rapidly shipping updates.

For Gold members, starting with stock digest, which have been used by hundreds of thousands of our customers.

Vlad Tenev: So that's very exciting. We're also working to serve far more of our customers' assets, which have doubled year over year to more than a quarter trillion. How amazing is that? A few highlights there. Average assets per funded customer was over $10,000 for the first time, nearly doubling from a year ago. So a lot of people thought, you know, Robinhood's always going to be in the low single-digit thousands per account, but we just keep compounding and that assets per customer keeps marching upward. Robinhood Strategies, we've grown that by multiples. Now over 100,000 funded customers and over half a billion in assets. So just a few months after launch there. We've tripled Robinhood gold cardholders year to date. So over 300,000 cardholders. We continue to like what we're seeing, and we're going to keep accelerating the rollout from here.

And the best is yet to come after Q3. Great product events. So far this year, we're hosting the second annual Hood Summit for active traders. That's going to be an event in Las Vegas in just a few weeks, and it's going to be much bigger than last year. Last year's event was pretty big, but this one should be twice as big, so that's very exciting.

We're also working to serve far more of our customers assets, which have doubled year-over-year to more than a quarter trillion. How amazing is that uh, a few highlights their average assets were funded customer was over 10,000 dollars for the first time nearly doubling

From a year ago. So a lot of people thought, you know, Robin Hood's always going to be in the low single digit, thousands per account. But we're just keep, we just keep compounding. And, and that assets per customer keeps marching upward.

Robin Hood strategies. We've grown that buy multiples now, over 100,000 funded customers and over half a billion in assets. So, uh,

Vlad Tenev: Retirement assets are now over $20 billion, over $20 billion in assets. So this is customers entrusting us with their most long-term serious money, and that's more than doubled in the past year. And we're excited to launch Robinhood Banking in the fall so customers can bring even more of their assets in Robinhood. Now, actually, with banking, we just rolled this out internally to the full employee base. It's really good. I think we're putting the finishing touches on it. I think you're really going to like it and very innovative offering. So plenty more there. Global financial ecosystem, we've been pushing even harder there. So I'm sure many of you saw our crypto event in France to catch a token.

just a few months after launch there, we've tripled Robin Hood, gold card holders year to date. So, over 300,000 card holders, we continue to like what we're seeing. And we're going to keep accelerating the roll out from here.

Retirement assets are now over 20 billion, over 20 billion, uh, in assets. So, this is customers and trusting us with their most long-term serious money, and that's more than doubled in the past year and we're excited to launch Robin Hood banking in the fall. So customers can can bring even more of their Assets in Robin Hood.

Now actually, with banking, we just rolled this out internally to the full employee base.

It's really good. I think, uh, we're, we're putting the finishing touches on it. Uh, I think you're really going to like it and, uh, very, very Innovative offering so plenty more there,

Vlad Tenev: We expanded our European offering to 30 countries, serving over 400 million people, including stock tokens, which I think tokenization is the biggest innovation in capital markets in over a decade. Stock tokens will do for stocks what stablecoin did for fiat currencies. Benefits to users including 24/7 trading, instant settlement, the power of self-custody, and also gives us the ability to expand to other assets, make all sorts of assets that previously were inaccessible to retail, tradable 24/7, just like any crypto asset. So that includes, of course, private markets and lots of other real-world assets. Perpetual futures coming soon in Europe, and that's been very, very well received, actually, when we announced that. So very excited to roll that out. The US is not far behind. A ton of legislative progress. You guys know the Genius Act just passed.

Global Financial ecosystem, we've been pushing even harder there, so I'm sure many of you saw our crypto event in France, to catch a token.

We expanded our European offering to 30 countries serving over 400 million people.

Including stock tokens, which I think tokenization is the biggest innovation in capital markets in over a decade. Stock tokens will do for stocks what stablecoin did for Fiat. Currencies benefits to users, including 24/7, trading instance, settlement, the power of self-custody, um, and also gives us the ability to expand to other assets. Make all sorts of assets, that previously, weren't inaccessible to retail tradable 24/7, uh, just like any crypto asset. So that includes, of course, private markets and lots of other real world assets.

Perpetual futures are coming soon in Europe, and that's been very, very well received, actually, when we announced that. So, I'm very excited to roll that out.

Vlad Tenev: We've launched staking in the US with over 750 million staked in just the first month. So pretty, pretty incredible progress for staking in the US. Bitstamp exchange by Robinhood, that acquisition closed. So we now have a growing institutional business, and we think that's going to be a big one over time. And of course, the Robinhood chain, to my knowledge, the first layer two blockchain that's optimized and built with real-world assets in mind. So wrapping it up, as a result of this strong product velocity, great business results, revenues up 45% year over year to nearly a billion. The third highest quarter of net deposits ever, sixth straight quarter, over $10 billion, actually, for net deposits. And that's continued through July.

The U.S. is not far behind in terms of legislative progress. You guys know the GEnIuS Act just passed. We've launched staking in the U.S. with over $750 million staked in just the first month. So, pretty incredible progress for staking in the U.S.

Bitstamp exchange by Robin Hood. Uh, that acquisition closed. So we now have a growing institutional business and, and we think that's going to be a big 1 over time. And of course, uh, the Robin Hood chain. Uh, to my knowledge, the first layer 2 blockchain, that's optimized and built with real world Assets in mind. So,

Wrapping it up as, as a result of this strong product, velocity great, business results. Revenues up, 45% year-over-year to nearly a billion. The third highest quarter of net deposits ever 6, Straight quarter over 10 billion, actually, for net deposits.

Vlad Tenev: The strong July for net deposits puts us on track to exceed last year's total, which was $50 billion in net deposits, which was again a record. Gold subscribers up to a record $3.5 million. The gold team's been doing a very, very nice job. That's 13% adoption when you look at our overall customer base. But if you look at new customers that joined in quarter, north of 35% adoption. So that's been really good to see. And we now have over 600,000 international customers when you fold in the customers we get via Bitstamp. So that's becoming a bigger and bigger part of the business. So we feel great about Q2 product velocity and results. I'll turn it over to you, Jason, to talk about financials before taking some Q&A.

And that's continued through July, the strong July, uh uh for net, deposits. Puts us on track to exceed last year's total uh which was 50 billion in net deposits, which was again a record

Gold subscribers are up to a record 3.5 million. The Gold team's been doing a very, very nice job. That's 13% adoption when you look at our overall customer base, but if you look at new customers that joined in Q1, the adoption rate is 35%. So, that's been really good to see. We now have over 600,000 international customers when you fold in the customers we get via Bitstamp. So, that's becoming a bigger and bigger part of the business.

Jason Warnick: Sounds good. Thanks, Vlad. Q2 was another great quarter as we drove market share gains, closed the acquisition of Bitstamp, and remained disciplined on expenses. As a result, we grew revenues 45% year over year, drove 81% incremental adjusted EBITDA margins, and doubled EPS from a year ago. Let's take a closer look at Q2 compared to last year. Revenues were $989 million. It's driven by strong year-over-year business growth. Trading volumes were up double to triple digits across all categories. Looking at some of our newer products, Q2 contract volumes were $11 million for futures, $17 million for index options, and nearly $1 billion for prediction markets. So a lot of good momentum there on the new products. Interest-earning assets were up over 50%, driven by Cash Suite, margin, and strong securities lending activity.

So, we feel great about Q2 product velocity and results. I'll turn it over to you, Jason, to talk about financials before taking some Q&A.

Closed the acquisition of bitstamp and remain disciplined on expenses. As a result, we grew revenues. 45% year-over-year, drove 81% incremental, adjusted evida margins and doubled Epps from a year ago.

Uh, let's take a closer look at Q2 compared to last year. Revenues were $989 million, driven by strong year-over-year business growth. Trading volumes were up double to triple digits across all categories. Looking at some of our newer products.

Q2 contract volumes were 11 million for futures.

17 million for index options, and nearly 1 billion for prediction markets. So a lot of good momentum there on the new products.

Jason Warnick: And it's great to see our gold Cash Suite balances have crossed $30 billion, up more than 10 times since we started the high-yield offer less than three years ago. And for Robinhood Gold, we grew it to 3.5 million subscribers. That's up over 75% year over year as we continue to broaden the value proposition. We also stayed disciplined on expenses in Q2. Adjusted OpEx and SBC was up just 6% year over year, leading to 56% adjusted EBITDA margins. Now for Bitstamp, as I've said previously, we expect about $65 million of costs in 2025. So we're layering that onto our full-year outlook for adjusted OpEx and SBC, bringing it to $2.15 to $2.25 billion. As a reminder, this outlook does not include costs from our anticipated acquisition of Wonderfi or provisions for credit losses. As we enter Q3, we're off to a fast start in July.

Uh interest earning assets were up over 50% uh driven by cash Suite, margin and strong Securities, lending activity and it's great to see our gold cash sweep. Balances have crossed 30 billion up more than 10 times since we started the high yield offer less than 3 years ago.

And for Robin Hood gold. We grew it to 3 and a half million subscribers. That's up over 75% year-over-year as we continue to broaden the value proposition.

We also stayed disciplined on expenses in Q2 adjusted Opex and SBC was up just 6% year-over-year leading to 56% adjusted. Evida margins now for bitstamp, as I've said previously we expect about 65 million of costs in 2025, so we're layering that onto our full year. Outlook for adjusted Opex and SBC bringing it to 2.15 to 2.25 billion.

As a reminder, this Outlook does not include costs from our anticipated acquisition of wonderfi or Provisions for credit losses.

Jason Warnick: Net deposits are around $6 billion. It's a really nice pickup from May and June. Equity and options trading volumes are setting new monthly records. And crypto volumes for both Robinhood and for Bitstamp are at six-month highs. So really great start to Q3. And we continue to see customers responding to our great margin rates with margin balances now around $11 billion. So our momentum is strong entering the second half of the year, and we remain focused on driving another year of profitable growth in 2025. With that, Chris, let's turn to Q&A.

As we enter, Q3 we're off to a fast start in July. Uh, net deposits are around 6 billion. It's a really nice pickup from May and June, uh, equity and options, trading volumes are setting new monthly records and crypto volumes for both Robin Hood. And for bitstamp are at 6-month highs, so really great start, uh, to to Q3, uh, and we continue to see customers responding to our great margin rates with margin. Balances, now around 11 billion.

So, our momentum is strong entering the second half of the year, and we remain focused on driving another year of profitable growth in 2025.

Chris Koegel: Thank you, Jason. For the Q&A session, I start by answering two top questions from shareholders on SEI Technologies, ranked by a number of votes. We passed over questions that we already addressed on this call or in prior quarters and grouped together questions that shared a common theme. After the SEI questions, we'll turn to questions from our live audience. All right, so the first question is from Tarun K., who asks, "When will Robinhood Banking be broadly available to customers?

Uh, with that, Chris, let's turn to Q&A.

Ranked by number of votes, we passed over questions that we already addressed on this call or in Prior quarters and group together questions that shared a common theme.

Vlad Tenev: Awesome. Yeah, I'll field that one. Thanks for the question, Tarun. As a reminder, we announced Robinhood Banking at our Lost City of Gold event in San Francisco a couple of months ago. And the idea behind Robinhood Banking, which is what inspired us to create this product, was that we wanted to deliver the private banking experience, which has typically been a high net worth experience in digital form to the mass market. And so you have the best of private banking, which is high yield, things like estate planning, seamless integration between all of your other accounts, really nice net worth tracking, along with some innovative features like cash delivery, which actually we've started testing and piloting in the initial markets. So as I mentioned earlier, we've rolled that out internally, Robinhood Banking. It's making good progress. It's looking really, really good.

After the say questions, we'll turn to questions from our live audience, all right? So the first question is from uh terun K who asks what will Robinhood banking uh when will Robinhood banking be broadly available for customers.

Awesome. Yeah, I'll feel that 1. Thanks for the question to run. Uh, as a reminder, we announced Robin Hood banking at our Lost City of Gold Event in San Francisco, a couple months ago and the idea behind Robinhood banking, which is what inspired us to create this product, was that we wanted to deliver the private banking experience which has typically been a high net worth experience.

Um, in digital form to the mass market. And so you have the best of private banking which is high yield. Uh things like estate planning, seamless integration between all of your other accounts. Really nice net worth tracking along with some Innovative features like cash delivery, which actually we've started testing and piloting in the initial markets. So, uh,

Vlad Tenev: And it's still on track for rollout to customers later in the quarter.

Chris Koegel: All right. Thank you, Vlad. The next question is from Louis H., who asks, "Does Robinhood have plans to step more heavily into lending, such as personal loans, auto loans, mortgages, and other products?

As I mentioned earlier, we've rolled that out internally: Robinhood Banking. It's making good progress; it's looking really, really good, and it's still on track for rollout to customers later in the quarter.

Jason Warnick: I'll start, and Vlad, feel free to jump in. As we've said, over time, we want to be the place to custody all of our customers' assets and process all of their financial transactions. And I think lending plays right into this. You may have seen that through a partnership with Sage Home Loans, gold members now have access to really great rates on mortgages. And one of the reasons they're able to deliver such great rates, and we're able to deliver such great rates to customers, is we're passing all of our share of the economics onto customers. And the early feedback has just been really tremendous. So if you're looking to buy a home loan, please become a gold member and check out the rates. We're also already providing some forms of credit. We've got the gold card. Vlad mentioned 300,000 cardholders.

All right, thank you Vlad. The next question is from Lewis H who asks, does Robinhood have plans to step more into more heavily into ending such as personal loans, auto loans, mortgages, and other products.

Jason Warnick: We have margin, and over time, we've got pretty big ambitions across all transaction types.

Chris Koegel: All right. Thank you, Jason. All right, so we're going to now go to questions from our live audience. And we're going to start with Stephen Schuback from Wolf Securities. Let's get him a mic.

Now, have access to, uh, really great rates on mortgages and 1 of the reasons they're able to, uh, deliver such great rates and we're able to deliver such great rates to customers, uh, is we're passing all of our share of that uh, of the economics onto customers. And the, the early feedback has just been really tremendous. So, if you're looking to to buy a home loan, please uh, become a gold member and and check out uh the rates we're also um already providing uh some forms of credit, we've got the gold card uh Vlad mentioned 300,000 card holders, we have margin and uh you know over time uh we've got pretty big Ambitions uh across all transaction types.

All right.

Thank uh, thank you, Jason. All right, so we're going to now go to questions from our live audience and we're going to start with Stephen chuback from Wolf Securities. Let's get him a mic.

Steven Chubak: Jason, Vlad, thanks so much for hosting this event.

Vlad Tenev: Stephen, good to see you.

Steven Chubak: Good to see you too. Maybe just to start on net deposit momentum, because in the second quarter, we did see a bit of a moderation. I know Steve Quirk spoke to some adjustments to promotional activity. You launched some promotions again alongside the crypto event, and then we're seeing a re-acceleration in net deposits in July. I wanted to get a better sense as to how the strategy is evolving around net deposits and promotional activity more specifically. And given the attractive payback economics, why not lean into promotional activity a bit more? Why retrench or pull back any of the promotions at all?

Jason Vlad thanks so much for hosting this event. Um, even good to see you. Good to see you too. Um, maybe just to start on net deposit, uh, momentum. Because in the second quarter, we did see a bit of a moderation, I know Steve Quirk spoke to, you know, some adjustments to promotional activity. You launched some promotions again alongside the crypto event and then we're seeing a react in that deposits in July and wanted to get a better sense as to how this strategy is evolving around. Net deposits and promotional activity more specifically and giving the attractive.

Jason Warnick: Yeah, do you want me to--I'll go ahead and--

Payback economics. Why not? Lean into promotional activity? A bit more. Why retrench or pull back any of the promotions at all?

Vlad Tenev: Yeah, why don't you take it?

Jason Warnick: Yeah, I'll go ahead and start. So first of all, we love the promotions, and what's great is customers love these promotions. As you mentioned, the economics are incredibly compelling. And when we launch these promotions, we tend to see larger balances from customers come in, and that's showing up in our overall averages. Promotions are part of our playbook. We intend to continue to do it. We measure the economics on all of these promotions, and we watch the customer response. We had a really good promotion around crypto deposits where the community reached the goal, and we doubled the match rate to 2%. So really, really good opportunity there. I wouldn't read too much into the activity of promotions in Q2. Like I said, it's part of our playbook, and we really like that.

Vlad Tenev: Yeah, and maybe I would just say two things. One is net deposits as a metric do have some volatility that's driven by traders. So if the market is moving in crypto or in other asset classes in a particular direction, traders deposit money to take advantage of those opportunities, buy the dips, so forth. So there is a component that's going to fluctuate up and down. But if you look over the long run and you sort of like smooth out the interquarter, the trajectory for net deposits in this business has been quite strong. And I think if I look at the tailwinds coming up, continued customer engagement, growth in new products, expansion into banking, and all these new asset classes that are just ramping, all of that we believe will make the long-term trend of net deposits grow.

Yeah, do you want me to? I'll go ahead and yeah, why don't you take it? Yeah, I'll I'll go ahead and start. Um, so first of all, we love the promotions and and what's great is customers, love these promotions. Uh, as you mentioned, uh, the economics are incredibly, uh, compelling. Uh, and when we launched these promotions, we tend to see larger balances, uh, from customers come in and that's showing up in our overall, uh, averages. Um, you know, promotions are part of our Playbook. Uh, we intend to continue to do it. We we measure the, uh, economics on all of these promotions and we watch the, the customer response. We had a really good, uh, uh, promotion around uh, crypto deposits where uh, the community, uh, reached the goal and and we uh, doubled the uh, the match rate to 2%. So, you know, really, really good opportunity there. Um, you know, I wouldn't read too much into uh, the activity of promotions in Q2. Uh, you know, like I said, it's part of our Playbook and, and we really like that.

Yeah, maybe I would just say 2 things 1 is net deposits as a metric does have some volatility that's driven by Traders. So you know, if if if the market is moving in crypto or in other asset classes, in a particular direction, Traders deposit, uh,

Vlad Tenev: And I think we're in a position where we've gotten more sophisticated about how we look at all marketing activities, and we're increasingly looking at these promotions alongside performance marketing and our other tools in one bucket. And I think we're fortunate to just see high ROI opportunities across the board. So we've scaled marketing quite a bit already this year, and it's been looking good. So we have to balance scaling it with making sure that we keep costs in line and we deliver that profitable growth that the team's been doing such a good job in delivering.

Traders deposit money to take advantage of those opportunities, by the dip so forth. So, there is a component that's going to fluctuate up and down, but if you look over the long run, uh, and you sort of like Smooth out the inter quarter, the, the trajectory for net deposits in this business, uh, has been quite strong and and I think if I look at the Tailwind coming up, uh, continued customer engagement, growth in new products, expansion into banking. Um, and you know, all all these new asset classes that are just ramping. All all of that, we believe will make the long-term trend of net deposits grow. And I think we're in the, we're in a position where we've gotten more sophisticated about how we look at all marketing activities and we're increasingly looking at these promotions alongside Performance Marketing and, and our other tools in 1 bucket. And um,

Chris Koegel: All right. Thank you, Vlad. Thank you, Jason. All right, the next question is from Dan Dilla from Mizuho.

I think we're fortunate to just see high Roi opportunities across the board, so um, we've scaled marketing, quite a bit already this year. Um, and it's it's it's been looking, it's been looking good. So we have to balance scaling it with making sure that we keep costs in line. And, and we deliver that profitable growth that the team's been doing such a good job in delivering

Speaker 5: Thanks, guys. Dan, amazing quarter, as always. And so my question is more broader. You had this really nice event in the south of France recently. And can you maybe talk a little bit about the long-term strategic opportunities with tokenization of private assets and some of the feedback you're getting from the market on all these great announcements that you've had just like 20 days ago or so? Thank you.

All right. Thank you Vlad. Thank you, Jason. All right. The next question is from Dan Doha from mizuho.

Thanks guys. Uh, Dan amazing quarter as always. Um,

Vlad Tenev: Yeah, I mean, if you look at the To Catch a Token event, I'd say it exceeded our expectations. I think for an event in Europe, to have it watched 25 million plus times, I mean, we were just talking about, we were just talking a little bit earlier. That's more than many movies, right? So I think the team did a very, very nice job. I think it did two things. One is it was sort of a blueprint to the rest of the world of what can happen when you have clear regulatory clarity around crypto assets. And what's going to happen is a lot of the criticisms about crypto assets being sort of like not tied to anything of fundamental value or mostly meme-based goes away because you can actually tie the technology to things that have fundamental utility.

I, I'd say it exceeded our expectations. So I think for, for an event in Europe to have it watched, uh,

25 million plus times. I mean, we were just talking about, uh,

We were just talking a little bit earlier. That's, that's more than many movies, right? Um so I think I think the team did a very, very nice job. I think it did 2. Things 1 is it was sort of a a blueprint to the rest of the world of what can happen when you have clear regulatory Clarity around crypto assets and

What’s going to happen is?

Vlad Tenev: We've seen that a little bit with stablecoin in the US. And I think tokenization of real-world assets just extends that concept. And we've delivered it for exposure to public equities in Europe. But we've also demonstrated it with private stocks in Europe in the form of the giveaway. And I think the reception to that was very positive. I mean, it's clear customers want this. They not only want it in Europe, but they want it in the US as well. And I think it's currently a big problem, a big iniquity that more and more companies are staying private longer. And a lot of the big gains are reserved to private investors that are high net worth or institutional. So we are working to not just create a giveaway, but to turn this into a real product that's usable both in the EU and in the US.

A lot of the criticisms about crypto assets being sort of like not tied to anything of fundamental value or mostly you know, Meme based goes away because you can actually tie the technology to things that have fundamental utility. We've seen that a little bit with stablecoin in the US and I think tokenization of real world assets just extends that concept. Um, and we delivered it for exposure to public equities in uh in Europe. But we've also demonstrated it with with private stocks in in Europe in the Forum of the giveaway. And and I think uh, the reception to that

Was, was very positive. I mean, it's clear customers want this. They not only wanted in Europe, but they wanted in the US as well. And I think it's, uh, it's currently a big problem, a big iniquity that, you know, more and more companies are staying private longer and a lot of the, the big gains are reserved to private.

Investors that are high. Net worth or institutional. So we we are working to

Vlad Tenev: And we're excited to do that. I think we see a path to actually make that happen. Well, yeah, I think two things: demonstrate the power of crypto technology and show a roadmap to what Robinhood could be if it was rebuilt from the ground up on crypto rails. And I think there's a ton of benefits there. And also solve some pain points for European customers. I think since that event, we've seen an acceleration in our European business. And we think we see a path to that being a bigger and bigger piece of Robinhood over time.

not just create a giveaway but to turn this into a real product that's usable both in the EU and in the US. Um, and and we're excited to do that. I think we, we see a path to, to actually make that happen. Um,

Jason Warnick: I think the event also is a nice highlight to our product velocity. We've had a number of pretty successful customer events this year. In September, we have one for Active Traders at Summit. But really proud of the team for how quickly we're building.

Chris Koegel: All right. Thank you. The next question is from Ed Engel at Compass Point.

Well, yeah, I think 2 things demonstrate the power of crypto technology and show a roadmap to what Robin Hood could be. If it was rebuilt from the ground up on crypto rails. And I think there's a ton of benefits there and also solve some pain points for European customers. I think since since that event, we've seen an acceleration in in our European business. And and we think we we see a path to that being a, a bigger and bigger piece of Robin Hood over time. I think the event also is a nice highlight to our product velocity. Um we know we've had a number of uh pretty successful Customer Events this year uh in September. We have 1 for active Traders at Summit, but uh really proud of the team for for how quickly we're building.

Speaker 5: Hey, thanks for taking the question. We've seen a couple more fintech companies start to apply for with the OCC for banking licenses. Curious whether your mindset has changed on that, especially just given some of the recent rollouts you've had on the banking side.

All right, thank you. The next question is from Ed angle at compass point.

Vlad Tenev: Yeah, maybe I'll field that. Feel free to jump in. I would say, first of all, we're always looking at the landscape and sort of like making decisions about where we see opportunities. You might remember 2019, we applied for a national bank charter with the OCC. And the impetus for that was we wanted to get into high-yield products to allow customers to generate more yield on their cash. And what we found was we were at this interesting inflection point where the partnership ecosystem around banking improved to the point where you could produce an even better savings product, the partnership route. And you could see that not just with the yield, but also the multiplicative FDIC protection. So by partnering with banks and creating this FDIC product, we could actually offer you a very high yield and multiples of the FDIC protection.

Hey thanks for taking the question. Um, we've seen a couple more fintech companies start to apply for um with the OCC for banking licenses curious, whether your mindset has changed on that, especially just given some of the recent, um, roles you've had in the banking side.

Yeah, um, maybe I'll feel bad, feel free to to jump in. Uh I I would say first of all we're always looking at the the the landscape and sort of like making decisions about where we see opportunities uh

I you you might, you might remember 2019, we acquired, uh, we applied for a National Bank Charter with the OCC and uh the impetus for that was we wanted to get into high yield products um to to allow customers to generate more yield on their cash.

Vlad Tenev: And you know, Jason mentioned that's grown to over $30 billion in our cash sweep. So that's been very, very successful. And now with our partnership with Coastal through Robinhood Banking, we're going to be able to offer a very competitive rate on actual savings accounts as well as checking. So basically, we found that thus far, we've had all the capabilities available through the partnership model. And so the kind of cons have outweighed the pros of getting a charter. But we're always open to reevaluating it if the balance shifts and there's something that's much easier to do with the banking charter, especially as we get into more of these lending products. We're nimble and we can reevaluate quickly.

And what we found was, we were at this interesting inflection point where the partnership ecosystem around banking improved to the point where you could get you could produce an even better savings product, the partnership route and and you could see that not just with the yield but also, the multiplicative FDIC protection. So, by, by partnering with banks and creating this FDIC product, we could actually offer you. Um, a very high yield and multiples of the FDIC protection. And, you know, if you add Jason mentioned, that's grown to over.

30 billion in our cash sweep. So so that's been very, very successful. And now with our partnership uh, with Coastal through Robin Hood banking, we're we're going to be able to offer a very competitive rate on actual savings accounts as well as checking. Um, so basically we found that thus far

Chris Koegel: All right. Now let's take a question from one of our finance content creators, Ahmed from AhmedIsInvesting.

Vlad Tenev: All right. Finance content creator. Good to see you.

All right. Uh, now, let's take a question from 1 of our finance content creators. Uh, Ahmed from Ahmed is investing,

All right.

Speaker 5: Congrats on a great quarter and congrats on innovating on the live event experience for earnings. Currently, right now, you guys have about 3.5 million gold subscribers, which seems to be the least cyclical part of the business because it's reoccurring SaaS revenues on that yearly subscription. More broadly, how are you guys thinking of protecting the business from cyclicality in the face of market volatility, rate cuts leading to a loss of net interest income, and anything else that could keep that type of growth going as sustainable as possible, given one of the biggest criticisms I've heard is that Robinhood is a very cyclical business?

Flat Finance content creator. Good to see you. Congrats on a great quarter, and congrats on innovating on the live event experience for earnings.

Uh, currently right now, you guys have about 3.5 million Gold subscribers, which seems to be the least cyclical part of the business because it's recurring SaaS revenues on that yearly subscription.

Jason Warnick: Yeah, I mean, first of all, compared to just a few years ago, Ahmed, we're far more diversified. If you take just even the crypto business, that's diversifying. We launched a number of products. Staking in the US is now taking off. Tokenization of US equities in international locations. But what we're seeing in crypto is happening across our business. And you've heard me say that we have nine businesses with over $100 million of revenue, and we have a number of businesses that have a lot of momentum towards being the 10th and beyond. The other thing that I would say about kind of in the topic of protecting your business against cyclical movements, well, really two things.

More broadly, how are you guys thinking of protecting the business from cyclicality? In the face of market volatility, rate cuts leading to a loss of net interest income, and anything else that could keep that type of growth going as sustainable as possible? Given one of the biggest criticisms I've heard is that Robinhood is a very cyclical business.

Jason Warnick: The first is that the way we manage our business, and we talk about being lean and disciplined, positions us in a place where when cyclicality hits, we aren't like some companies that really have to pull big on levers because all along we've been disciplined. And you saw that we grew revenues 45% year over year, and adjusted OpEx plus SBC was up 6%. And so it's really kind of shining through, and I think it positions us in a position of strength should those kinds of situations happen. The other thing that I would say is I would caution us from not overreacting to those situations. The market opportunity and the TAM that we talked about in this, actually in this venue back in December, is massive.

Yeah, I mean, first of all, compared to just a few years ago, um, at um, we're we're far more Diversified. Um, if you take just even the crypto business, uh, that's diversifying. We we launched a number of, uh, products staking in the US is now taking off tokenization of us equities in international locations. But that, that, uh, what we're seeing in crypto is happening across our business, and you've heard me say that we have, um, you know, 9 businesses with over hundred million dollars of uh, revenue. And we have a number of businesses that have a lot of momentum towards uh, being the 10th and and Beyond. The other thing that I would say about kind of uh in the topic of like protecting your business against cyclical movements. Um well really

Jason Warnick: We have a massive TAM ahead of us, and I wouldn't want to over-rotate in a moment of cyclicality when the market opportunity in front of us is so big.

Vlad Tenev: Yeah, and I would just add that I think that was a legitimate criticism of the business in 2021 when we went public. I mean, it was just a retail boom driven by multiple things, including zero interest rates. We've been able to diversify our business in a high-rate environment, and we've been talking about the natural hedge of like as rates go up, interest income goes up, but transaction revenue goes down. So we've been able to drive these results in what's been historically still a pretty high-rate environment. And nine business lines with 100 million or more in annual revenue, and we've got some that are on deck in kind of like the 50 million range. And there's a whole bunch more little seeds that we've either just launched or are going to launch in the future.

2 things. Um, the first is is that the way we manage our business and we talk about being lean and disciplined positions us in a, in, in a place where when cyclicality hits, we aren't like some companies that really have to pull big on levers because all along, we've been disciplined. Um, and you saw that we grew revenues, 45% year-over-year, and adjusted Opex, plus SBC was up 6% and so it's really kind of shining through. And I think it positions us uh, in a position of strength, uh, should those kinds of uh situations happen. The other thing that I would say is I would I would caution us from not overreacting, uh, to those situations, the market opportunity and the Tam that we talked about and this actually, in this venue back. In December is massive. We have a massive Tam ahead of us and I wouldn't want to over, uh, rotate in a moment of cyclicality uh, when the the market opportunity in front of us is so big.

Yeah, and I I would just add that, you know, I think that was a legitimate criticism of the business in 2021 when we went public. I mean, it was just uh, uh, a retail. Boom, uh, driven by multiple things including zero interest rates. Um, we've been able to diversify our business in a high rate environment and we've been talking about, you know, the the natural hedge of like,

As rates go up uh interest income goes up. But transaction Revenue goes down. So we've been able to drive these results in what's been historically, still a pretty high rate environment and you know 9 Business lines with a 100 million or more in annual revenue. And we've got some that are on deck in kind of like the 50 million range. Um,

Vlad Tenev: So in 2021, when we went public, it felt to me like we were much more fragile than today. I mean, product velocity was a little bit gummed up with all the work that we did to deliver for that scale that we saw during COVID. But now, you know, the roadmap, if you look at things that we expect to deliver in the short term, medium term, and long term initiatives is pretty packed. So this is probably the least diversified you should ever see Robinhood.

And there's a whole bunch more little seeds that we've either just launched or are going to launch in the future. So in 2021, when we went public,

it felt to me like we were much more fragile than today. I mean product velocity was a little bit gummed up with all the work that we did to to to deliver for that scale that we saw during Co. But now, you know,

The road map. If you look at things that we expect to deliver in the short term, medium term, and long-term initiatives, it is pretty packed. So this is probably the least diversified you should ever see Robinhood.

Chris Koegel: All right. Next question from Gautam Chigani from Bernstein.

All right, next question from Gotam Chagani from Bernstein.

Speaker 5: Talk about the tokenization opportunity in Europe. But obviously, there's a regulatory path in the US to make tokenization, particularly equity tokenization, relevant for US. How do you see that playing out when it comes to regulatory approval for equity tokenization, particularly in view of the comments that came from the SEC post your event?

Spoke about the tokenization opportunity in Europe.

Vlad Tenev: Yeah. So I think that tokenization in the US is interesting. If you think about the relative delta between the tokenized equities experience and untokenized, which we've already built to scale here in this market, you get 24/7 versus 24/5. You get some access to self-custody and all the benefits of on-chain, which could mean things like collateralized lending and borrowing, which are a nice benefit. But we already have industry-leading margin rates. And then you have sort of like the cost aspects. Obviously, if more and more of the infrastructure goes from centralized legacy counterparties to blockchain, where it's essentially public infrastructure, the cost of operating the business would go down, which would accrue eventually to customers in the form of more value.

Uh, but obviously there's a regulatory path in the US to make tokenization at particularly Equity, tokenization, relevant for us. Uh, how do you see that playing out when it comes to regulatory approval for Equity organization? Uh, particularly in view of the comments that came from the SEC, post your event,

Yeah, um, so I think that tokenization in the US is interesting. Um, if if you think about the relative Delta between, you know, the the tokenized equities experience and un tokenized, which we've already built to scale here in this market. Um,

Which could mean things like, collateralized, lending and borrowing, um, which are a nice benefit but we already have industry-leading margin rates. Um,

And and then you have sort of like the the cost aspects. Obviously if more and more of the infrastructure goes from, you know, centralized uh, Legacy counterparties to blockchain, where it's essentially public infrastructure.

Vlad Tenev: So I think the opportunity, there are benefits, but we're already offering customers very, very close to sort of like what they would get in the US. Overseas, a lot of customers don't even have access to US equities. So we think that we're going from zero to a great experience that we can scale globally to not just hundreds of millions, but potentially billions in addressable market over the coming years as it gets more widespread. So I think it's different. And in the same way, stablecoins among retail have been largely an ex-US phenomenon. And of course, they're coming into the US, but the US already has the benefit of pretty robust payment and banking systems. I think the real opportunity in the US would be tokenizing assets that were previously inaccessible. And I think we're working with regulators to make that possible.

The cost of operating, the business would go down which would acrew eventually to, to customers in the form of, uh, in the form of more value. Um, so so I think the, the opportunity there are benefits

But we're already offering customers very, very close to sort of like what what they would get in the US overseas. They would a lot of customers don't even have access to us. Equities. So we think that we're going from zero to a great experience that we can scale globally. To not just hundreds of millions but you know potentially billions in addressable Market over the coming years as it gets more widespread. Um

so I I I think it's it's different and in the same way, stable coins among retail

Vlad Tenev: I think those are like private markets and related real-world assets are opportunities that don't exist up until now. So some things need to happen. We need to look at accreditation laws. We also are on a good path with securities tokenization, but that has to continue. And we think we can unlock that opportunity.

Have been largely an xus, uh, phenomenon and and of course, they're coming into the us. But the US already has the benefit of pretty robust payment and banking systems. I think the real opportunity in the US would be tokenizing assets that were previously uh inaccessible. And I think we're working with Regulators to make that possible. I think those are like private markets and related, real, world assets are opportunities that don't exist. Uh,

Chris Koegel: All right. The next question is from Devin Ryan from the Citizens.

Up until now. So some some things need to happen. We need to look at accreditation laws. We also are on a good path with Securities tokenization, uh, but that has to continue and we think we can unlock that opportunity.

All right.

Speaker 5: Thanks so much. Hi, Vlad. Hi, Jason. Excellent results. Would love to ask one on tokenization, but I'll ask something different here. SEC lending really ramping nicely, $54 million in June alone. I think it was up 160% year over year, becoming actually a material revenue line item. And historically, we've seen that kind of ramp as capital markets turn back on and IPOs and hard-to-borrows kind of accelerate. So can you maybe frame that how you're thinking about the opportunity there? The book today is so much bigger. The IPO market is literally just turning on. So it would seem like there's potential acceleration there. So is that June number a jumping-off point if IPOs continue, or how should we think about that?

The next question is from Devin Ryan from the citizens.

Thanks so much. Hi, glad hi Jason. Excellent results. Um

Would love to ask 1 on tokenization but I'll, I'll ask something different here. Uh, SEC lending, uh really ramping nicely, uh, 54 million, uh, in June alone. I think it was up 160% year-over-year becoming actually material Revenue line item. And, and historically, we've seen that kind of ramp as capital markets, turned back on and IPOs and hard to borrows kind of accelerate. So, can you maybe frame out how you're thinking about the opportunity? There is the book today so much bigger. The IPO Market is literally just turning on so it would seem like there's potential acceleration there so it was that June number

Jason Warnick: Yeah, great question. You know, June was a record, and July is equally as strong, if not stronger. There are definitely strong market backdrops. First of all, great job by our securities lending desk. I thought the team did a really nice job. We've been onboarding a lot of customers. Customers have been adding a lot of assets into our fully paid program. At the same time, our margin book is growing, and that creates inventory for the SEC lending desk as well. And with the market backdrop, what I'd say is that there were a handful of hard-to-borrows that had attractive returns in the quarter as well. So that continued into July, as I mentioned. We'll have to see how that goes for the rest of the quarter and beyond.

A jumping off point if IPOs continue or or how should we think about that?

Jason Warnick: But I really love the strong inputs of adding customers, a growing book, adding assets into the fully paid program as well.

Yeah, a great. Great question, you know, June was a record. Um, and July is um, equally as strong, if not stronger. Um, they're definitely strong Market backdrops. Uh, first of all, great job by our Securities, lending desk. Um, I thought the team did a really nice job. We've been onboarding, um, a lot of customers. Uh, customers have been, uh, adding a lot of assets into our fully paid program at the same time. Uh, our margin book is growing and that, uh, creates inventory, uh, for the, uh, for the SEC lending desk as well. Um, and um, you know, with the market backdrop what I'd say is that they're um, or a handful of hard to borrows that had attractive returns in the, in the quarter as well. So that continued into July, as I mentioned we'll have to see, you know, how that how that goes uh, you know, for the rest of the quarter and Beyond. But uh I really love this. The strong inputs of adding customers, uh, a growing book adding assets into the um, the fully paid uh program as well.

As well.

Chris Koegel: All right. Our next question is from Alex Markgraf from KeyBank.

All right, our next question is from Alex. Mark graph from KeyBank.

Speaker 5: Thanks for taking my question, Jason. Maybe on crypto monetization. Thank you for the Bitstamp disclosure. But just on the core Robinhood monetization, can you talk a little bit about what you saw in the quarter and any effects you're seeing from smart exchange routing so far?

Jason Warnick: Yeah, so just as a reminder, so customers have two ways to engage with crypto trading at Robinhood. First is the method that we've had for a long time, which is a market maker method. That's where we get a rebate. We've been experimenting with pricing for some time, and you've seen us taking that up. And we watch closely to make sure customers are continuing to get a great deal. Just last week, we moved the rebate rate to 85 bips. So that's in place. The second way that customers can engage is direct with the exchange through the smart exchange router. And that's really opening a volume tier discount. And based on volume, traders can achieve a 10 basis point commission on direct-to-exchange trading. And so far, it's early, but we like what we're seeing there.

Jason Warnick: Customers are bringing, as they adopt direct-to-exchange, they're bringing more volume, and they're achieving more competitive rates, which is great. And we want Robinhood to be super attractive to high-volume traders. But what's great to see also is that revenue per trader is going up for those that are choosing to engage with the exchange. So more revenue on the higher volume trading as well, even though it's a better rate. So that's what we're seeing so far. In Q2, we saw the blended rate or the average rate at 58 basis points in the quarter. In July, through the month of July, it was kind of in the mid-60s. So it has moved up a little bit.

Change, uh, trading and so far, it's it's early, but we we like what we're seeing their customers are bringing as they adopt a direct to exchange. Uh, they're bringing more, uh, volume. Um, and they're achieving uh, more competitive rates, uh, which is great and we want Robinhood to be super attractive to high volume Traders. But what's great to see, uh, also is that, uh, Revenue, uh, per Trader is going up for those that are are choosing to engage with the exchange. So, uh, more Revenue. Um,

Chris Koegel: All right. Thank you, Jason. We're now going to branch out to the audio queue. And so the first question we have on the line is from Patrick Moley at Piper Sandler.

Uh, on the on the higher volume trading as well, even though it's a a better rate. So um, that's what we're seeing so far. Uh, in Q2 we saw the Blended rate or the average rate, um, at 58 basis points in the quarter, uh, in July through the month of July, it was kind of in the mid-60s. So uh it has moved up a little bit.

All right. Thank

Going to branch out to the audio queue. Um, and so the first question we have on the line is from Patrick Moly at Piper Sandler.

Patrick Moley: Yes, good evening. Thanks for taking the question. So I just had one on the credit card offering. You noted that you've tripled the number of cardholders year to date, but I think balances are only up about 45%. So I was hoping you could just elaborate on what you're seeing from credit card holders. Are you seeing the economics that you'd like there? And how should we think about you ramping that into the end of the year? I think you said that you plan to accelerate the rollout. So any additional color there would be greatly appreciated. Thanks.

Yes, good evening. Uh thanks for taking the question. So I just had 1 on the credit card. Offering you noted that you've tripled the number of card holders year to date but I think balances are only up about 45%. So I was hoping you could just elaborate on what you're seeing from credit card holders. Um, are you seeing you know, the economics that you'd like there and how should we think about?

Jason Warnick: Yeah, we like what we're seeing on the economics. We've been meeting with the team regularly. And when we look at the revolve rate, that's in line with what we would hope for. And the book is performing really well at this early stage. We're gaining confidence and looking forward to putting that in the hands of more and more of our customers.

Vlad Tenev: Yeah, and I would just add that your question about balances, it usually takes balances a little bit of time to increase on the revolve. So it's not like if you increase cardholders by 3x, the balances don't immediately increase by 3x. There tends to be a little bit of a lag. So that's why you're seeing that.

Uh, you ramping that uh into the end of the year, I think you said that you plan to accelerate the rollout so any additional color there would be greatly appreciated. Thanks. Yeah. We we like what we're seeing on the economics. Uh, you know, we've been meeting with the team regularly um and uh, you know, when we when we look at the revolve rate um, that's in line with what we would hope for. And uh and the book is performing really well at this early stage. We're gaining confidence. And and uh looking forward to putting that in the hands of more and more of our customers.

yeah, and I would just add that if your question about balances, it usually takes balances a little bit of time to, uh,

To increase, uh, on the revolve. So, it's not like if if you increase card holders by 3x, the balances don't immediately increase by 3x. There tends to be a little bit of a lag so that that's why you're seeing that

Chris Koegel: All right. The next question is from James Yarrow at Goldman.

All right, uh, the next question is from James yarrow at Goldman.

Speaker 5: Thank you for taking the question. Maybe could you just perhaps preview a bit more on the Robinhood chain? Maybe you could just talk about the advantages of building this for real-world assets. And then maybe just competitive advantages here versus other layer two blockchains. And then finally, just any update on timing?

Vlad Tenev: Yeah, absolutely. And actually, since our event, we've just gotten lots and lots of calls for developers that either want to tokenize the shares of their own companies or otherwise jump on the tokenization of real-world assets revolution and partner with us. I think the big advantage that we have with the Robinhood chain is that we have a captive audience of over 25 million customers in the US with now over a trillion in assets under custody. So obviously, we think that we can build a great developer ecosystem, and we want to be great for developers. But that level of end-user adoption and the user base that trusts us with so many of their assets, I think, are going to be very, very difficult for others to replicate. So we think that that gives us a big advantage. And also, nobody's really going after the specific opportunity.

Oh, thanks for taking the question. Um, maybe, uh, could you just perhaps preview a bit more on the, the Robin Hood chain? Um, you know, maybe you could just talk about, you know, the advantages of building this for real world assets. Um, and then maybe just competitive advantages here versus other layer, 2 blockchains. Um, and then finally, just any update on uh, timing.

Yeah. Absolutely. And actually since our event we've just gotten lots and lots of calls for developers that either want to tokenize the shares of their own companies or otherwise jump on the tokenization of real world assets Revolution and partner with us. Um, I think the big advantage that we have, uh,

With the Robin Hood chain is that we have a captive audience of over 25 million customers in the US with now, you know, over a trillion in in assets under custody. So obviously we think that

we can build a great developer ecosystem and and we want to be great for developers but that level of end user adoption. And and the the user base that trusts us with so many of their assets. I think are going to be very, very difficult for uh, others to replicate. Um, so so we think that

Vlad Tenev: There's a lot of chains out there that want to build the best chain for degen traders. But I think the opportunity for real-world assets and the unique characteristics that they have to be put on chain is a bit of a unique one that I don't think anyone else is tackling as directly.

Chris Koegel: All right. Thank you, Vlad. The next question is from Brian Bedell at Deutsche Bank.

That gives us a big advantage and and also, nobody's really going after the specific opportunity. There, there's a lot of chains out there that want to build the the best chain for djen Traders. But I, I think the opportunity for real world assets and the unique characteristics that they have to be put on chain is uh is a bit of a unique 1 that I don't think anyone else is tackling as directly.

All right, thank you Vlad. The next question is from Brian Bedell at Deutsche Bank.

Speaker 5: Great. Thanks. Good afternoon, guys. Difficult question on the $100 million businesses. You're expanding that. Nice to see the traction moving up from nine businesses. I think you mentioned, Vlad, there are at least a couple of businesses now in the $50 million range. If you could just elaborate on those. And then two ones that are nascent still, staking and the tokenized stocks in Europe. Any sense of when you think those businesses on our annualized revenue run rate could get to say that roughly $50 million marker? Is that a year or two or longer term?

Jason Warnick: Yeah, I'll start, Vlad, and you can fill in. There are several that are moving really up on the revenue run rate. I mean, you've got TradePMR and Bitstamp. You've got Prediction Markets scaling really well. And you've got a number of others that are coming up behind it, whether it's index options and.

um, when you think those businesses on our annualized Revenue run rate could get to say that that, you know, roughly 50 million markers that, uh, you know, a year or 2 or or, or longer term

Yeah, I I'll start Vlad and you can you can fill in. There's there are several that are um, you know, moving really up on the uh, Revenue run rate. I mean, you've got trade, PMR and bitstamp. You've got prediction markets scaling really well, um and you've got a number of others that are coming up behind it, whether it's um, index options. Um,

Vlad Tenev: The Robinhood Gold Car.

Jason Warnick: The Robinhood Gold Car. I was going to say Legend as well. So there's a number of vectors there that are just gaining a lot of steam.

Uh, you know, and uh, and uh, like Robinhood Gold Card, Robinhood Gold Card. I was going to say Legend as well. So, we, you know, there's a number of vectors there that are just gaining a lot of steam.

Chris Koegel: All right. The next question is from Craig Siegendollar at Bank of America.

All right. The next question is from Craig Sean Dollar at Bank of America.

Speaker 5: Hey, good afternoon, Vlad and Jason. Hope everyone's doing well, and I wish I could be joining you there live. But I wanted to start with tokenized stocks. So one of your competitors also launched a tokenized stock product in Europe just this week, although their structure is different. And your launch is also structured under three phases. So I know there'll be progress ahead too. But if you take a step back, how do you think about the advantages with your SPV contract model and your end goal of running on Bitstamp rails versus the ERC20 tokens, which are backed by shares?

Vlad Tenev: Yeah. I think one of the advantages of our offering, and again, it is going to progress in three different stages. We're in kind of stage one right now. But the advantage is every transaction, every mint and burn of a token has a corresponding transaction in the traditional market. So what that means is you minimize the risk of de-peggings, where you're trading an asset that's at a wildly different price than the traditional asset. I think that's a big thing because in order for customers to gain confidence with the technology and the experience, they have to get a really good price. And so the system was designed for that. And in phase one, as the supply of the tokens increases, we can build that up by creating a pretty close tie with the traditional markets.

Hey, good afternoon, Vlad and Jason, hope everyone's doing well, and I wish you'd be joining you there live, but um, I wanted to start with tokenized stocks, so 1 of your competitors. Also launched a tokenized stock product in Europe, just this week, although, their structure is different and your launch is also structured under 3 phases. So I know they'll be progress ahead too, but if you take a step back, how do you think about the advantages with your SPV contract model and your end goal of running on bitstamp Rails versus the erc20 tokens which are backed by shares?

Yeah. Um,

Vlad Tenev: Now, phase two, which we anticipate getting into in the coming months, would be getting the tokens to trade on Bitstamp. And that will unlock 24/7 trading. So we're at 24/5 right now, which matches the US market. But 24/7 would be unlocked when Bitstamp comes online with the stock tokens. And basically, there you'll have the best of both worlds. When we have access to the traditional markets, we'll be able to match or beat the price there. And if the traditional markets are closed, like Saturdays and Sundays or holidays, you'll still be able to transact. And then there's phase three, which we unlock the full power of DeFi, and you'll be able to hold them non-custodianly and transact on chain. And we have the technical capabilities to do all of this. It's just a question of going through the regulatory process.

I think 1 of the advantages of our offering and again, uh it it is going to progress in 3 different stages, where in kind of stage 1 right now but the advantages, uh, every transaction every mint and burn of a token, has a corresponding transaction in, uh, the traditional market. So what that means is, uh, you minimize the risk of the pegging where you're trading an asset. That's at a wildly different price than the the traditional asset. I I think that's a big thing because in order for customers to gain confidence, uh, with with the technology and the experience, they, they have to get a really good price. And so, the system was designed for that and in Phase 1, as the supply of of the token of the tokens increases. Uh, we can build that up by by creating a pretty close tie with the traditional markets.

Now Phase 2, uh, which we anticipate getting into it in the, in the coming months. Uh, would be getting the tokens to trade on bitstamp and that will unlock 24/7 trading. So we're at we're at 245 right now, which matches the US market with 24/7 would be unlocked when bitstamp comes online with the stock tokens. And basically, there you'll have the, The Best of Both Worlds

When we have access to the traditional markets, we'll be able to match or beat the price there. If the traditional markets are closed, like on Saturdays, Sundays, or holidays, you'll still be able to transact.

And then there's phase 3 uh which we unlock the the full power of D5 and you'll be able to hold them non-custodial and and transact on chain. Um and and you know we have the technical capabilities to do all of this. It's just a question of going through the the regulatory process.

Vlad Tenev: And we think that's basically the optimal path to getting customer adoption and counterparty adoption to these products in a way that's usable for the end users.

um,

Chris Koegel: Thank you, Vlad. And even without the chalkboard, I can follow that. All right. The next question is from Ben Budish at Barclays.

and and and we think that's basically the optimal path to getting customer adoption and you know counterparty adoption to these products in a way that usable for for the end users.

Thank you, Vlad. Um, and even without the chalkboard, I can follow that. Um, all right. The next question is from Ben Buddhist at Barkley's.

Speaker 5: Hi, good evening, and thank you for taking the question. I wanted to follow up on some of the earlier discussion and maybe something after the last question on what you see as the benefits of tokenized equities. I'm curious, just given some of your disclosures around the fee model and the potential spreads that traders in Europe may incur for tokenized equities versus sort of your model of offering a very low-cost all-in service, how do you think about ensuring that execution costs stay low, spreads are tight? What are you guys doing to sort of ensure that, or how are you thinking about ensuring that sort of level of execution and keeping it consistent, perhaps, with what you see in your equities business elsewhere? Thank you.

Hi, good evening, and thank you for taking the question. Um, I wanted to follow up on some of the earlier discussion and maybe something after the last question on what you see as the benefits of tokenized equities. I'm curious, just given some of your disclosures around the fee model and the potential spreads that traders in Europe may incur for tokenized equities, you know, versus sort of your, um, you know model of offering a very low-cost all-in service. How do you think about ensuring that, you know, execution costs stay low, spreads are tight? Um, what is, uh, what are you guys doing to sort of ensure that or, or how?

Vlad Tenev: Yeah, yeah, I'll take that one again. So actually, if you look at the early feedback from our European offering, by and large, or I should say far and away, the number one piece of feedback is they love the prices and the value on stock tokens. The prices are very competitive. The only fee that customers incur when they trade stock tokens in Europe is the 10 basis point foreign transaction fee, which is very, very competitive. So there's no other spreads that Robinhood benefits from economically. And the aim is to pass back the full value, again, outside of the foreign exchange transaction fee, which is very competitive to our peers. So we think it's a great offering, great economics. We can scale it. And so far, customers seem to be loving it.

Competitive. The only, uh, fee that customers incur when they trade stock tokens in Europe, is the 10 basis point foreign transaction fee, which is, uh, very, very competitive. So, uh, there's no other spread that Robin Hood benefits from economically and that the aim is to pass. Back the full value again, outside of the foreign exchange transaction fee, which is very competitive to our peers. Um, so so we think it's a great offering. Great economics, we can scale it and so far customers seem to be loving it.

Chris Koegel: All right. The next question is from John Tadaro at Needham.

All right, um, the next question is from John Todaro at NAMM?

Speaker 5: Hey, can you guys hear me OK?

Vlad Tenev: Yeah, we hear you.

Hey, can you guys hear me, okay? Yeah, we hear you.

Speaker 5: Great. So congrats on the quarter, phenomenal quarter. I guess just kind of coming back on some of the earlier questions, but the tokenized stocks, does it eventually invite a world where we see fee compression in crypto? We've historically haven't really seen that. But I guess if we see tokenized stocks kind of have similar pricing to equity markets, does crypto kind of eventually follow in that? It's just obviously another asset that's tokenized.

Vlad Tenev: Interesting question. I don't think that we're likely to see any impact on spot crypto prices merely because of the presence of tokenized securities. I don't know if you have a different view, but I mean, Robinhood has been offering in the US market spot crypto alongside traditional equities and options. And we just don't feel like there's much of a connection between how customers are even thinking about pricing in these various asset classes. So I don't know if there's anything that would fundamentally change with tokenization. I don't expect it to. I think at the end of the day, the customer just thinks of it as getting exposure to the asset and the underlying mechanism or technology. They don't really want to know about that.

Great. Um, so congrats on the quarter of phenomenal quarter. Um, I guess just kind of coming back on on some of the, the earlier questions, but the token that I stalked. Um, did eventually invite a world where we see fee compression in crypto? Um, it, you know, we've historically haven't really seen that. Um, but I guess if if we see tokenized stocks, kind of uh have similar pricing to equity markets because crypto kind of eventually follow in that it's just obviously another asset that's tokenized.

Interesting question. Um,

I don't think that.

We're likely to see any impact on spot crypto prices merely because of the presence of tokenized Securities. I I don't know if you have a different view, but I mean, Robin Hood has been offering. Um,

In in the US market spot crypto alongside traditional equities and options and we we just don't feel like there's much of a connection between how customers are even thinking about pricing in in these various asset classes. So I, I don't know if there's anything that

would fundamentally change with tokenization. I don't expect it to. I think at the end of the day, the customer just thinks of it as getting exposure to the asset and the underlying mechanism or technology.

Vlad Tenev: I mean, if you can make it feel as simple as possible and hide the blockchain process complexities so they don't have to be a computer scientist to have to understand how everything works, that's what the customer wants. So they're generally agnostic about what's powering it behind the scenes as long as it works and it gives them the exposure that they're looking for.

They don't really want to know about that. I mean, if you can make it feel as simple as possible and hide the...

Jason Warnick: Yeah, I would agree with that. And just looking at some analogies, like the pricing is different for index options versus futures versus equities versus options. So I think that there's room for each asset class to kind of stand on its own from a pricing perspective.

Blockchain process complexity. So they don't have to be a computer scientist to have to understand how everything works. That's that's what the customer wants. So they they're they're generally agnostic about what's powering it behind the scenes as long as it works and it gives them the the exposure that they're looking for. Yeah, I, I would agree with that and and just looking at some analogies like the pricing is different for index options or versus future.

Vlad Tenev: And our goal is to be competitive and give customers great value across the board so that we continue to grow our market share and not just among casual traders and investors, but also the advanced traders that tend to be a little bit more price-sensitive.

Versus equities versus options. Um, so I I think that there's room for, uh, you know, each asset class to kind of stand on its own from a pricing perspective and our goal is to be competitive and give customers Great Value across across the board so that we continue to grow our market share and not just among

Chris Koegel: All right. The next question is from Brett Knoblach at Kenter Fitzgerald.

You know, uh, casual Traders and investors, but also the advanced traders, that tend to be a little bit more price sensitive.

All right, the, uh, the next question is from Brett Knobloch at Kerr Fitzgerald.

Speaker 5: Hi, guys. Thanks for taking my question. Maybe just on staking, quite impressive you guys have kind of reached $750 million within a month. Curious what percentage of kind of crypto assets are currently being staked and how are you thinking about kind of growing that over time?

Okay. Thanks for taking my question. Maybe just on staking quite impressive. You guys have kind of reached 750 million within a month.

Jason Warnick: Yeah, we've got about $6 billion of stakable assets. The majority of those are in states where it's allowed. So customers have really responded quickly to the opportunity. And I think the opportunity more broadly is to continue to win market share in the crypto space.

I'm curious what percentage of crypto assets are currently being staked, and how are you thinking about growing that over time?

Yeah, we we've got about 6 billion of uh stable uh assets. The majority of those are in states where it's allowed. So you know, uh customers have um, you know, really responded uh quickly uh to the opportunity and I think the opportunity more broadly is to continue to win. Uh, win market share in the crypto space.

Speaker 5: Awesome. And then just on crypto pricing, it looks like another kind of quarter where takeaway kind of ticked up a bit. Could you maybe just talk about the pace of those maybe pricing gains that you guys have been taking and how we should expect that over the next few quarters?

Jason Warnick: Yeah, I think we're in a place where we like the pricing and we'll settle in for a little while. We're continuing to experiment, but we feel pretty good where we're at at the moment.

Awesome. And then just on crypto pricing, it looks like another kind of quarter where, um, taker kind of ticked up a bit. Could you maybe just talk about the pace of those pricing gains that you guys have been taking and how we should expect that over the next few quarters?

Yeah, I think we're in a place where, you know, we like the pricing and we'll settle in for a little while. We're continuing to experiment, but we feel pretty good where we're at at the moment.

Chris Koegel: All right. Thank you. The next question is from Kyle Voigt at KBW.

All right, thank you. Uh, the next question is from Kyle Voight at KBW.

Speaker 5: Hey, good evening, everyone. So Vlad, you've executed on a number of bolt-on deals over the past couple of years, including Bitstamp, X1, TradePMR, which have all gotten you new product capabilities or helped to expand your geographic reach. I guess when you take a step back and think about the platform as it exists today, do you still think there are opportunities for bolt-ons to add on new product capability and accelerate geographic expansion, or have you filled most of those obvious product holes? And in terms of the size of deals, you have a valuable currency now. Would you be comfortable executing on larger scale M&A going forward versus the smaller bolt-ons we've seen over the past couple of years?

Vlad Tenev: Yeah, yeah, I'm happy to take a stab at that. And Jason, feel free to jump in. Our corp dev team has been actively looking at opportunities continuously. And we have a very strong team, a very disciplined team. They take a look and they want to make sure that they're executing on our strategy, where with every deal, we not only get a team that we believe can help us and is aligned with us, but that we get significant acceleration, 18-month acceleration at minimum over building ourselves. So even though we tend to bias towards building in-house, we've certainly made a number of acquisitions, the TradePMR, X1, Bitstamp you mentioned, but also WonderFi, which gets us access to a scaled user base in the Canadian market. So we remain excited about that one.

So glad you, you've executed on a number of bolt-on deals over the past couple years, including Bitstamp, X1, Trade PMR, which have all gotten you new product capabilities or helped to expand your geographic reach. I guess when you take a step back and think about the platform as it exists today, do you still think there are opportunities for bolt-ons to add on new product capability and accelerate geographic expansion? Or have you filled most of those obvious product holes? And in terms of the size of deals, you have a valuable currency now, but would you be comfortable executing on larger scale deals going forward versus the smaller bolt-ons we've seen over the past couple years?

Yeah, yeah. I mean, happy to take a stab at that, and Jason, feel free to jump in. Um.

our Corp Dev team has been

Actively looking at opportunities continuously and, you know, we have a we have a very strong team, uh, very disciplined team. You know, they, uh, they, they take a look and they want to make sure that they're executing on our strategy where

With every deal, we not only get a team that we believe can help us and and is aligned with us. But that we get, we get significant acceleration, you know, 18 month acceleration at minimum over building ourselves. So, even though we tend to buy us towards building in-house, we we've certainly made a number of Acquisitions. You know, the trade PMR, X1.

Vlad Tenev: Certainly, with the change in market cap over the past year, I think that opens up more opportunities for us. I mean, the Bitstamp one was a significant deal back when we entered into it over a year ago. But we're still going to be disciplined and make sure that we follow the playbook and that every company that we would acquire gives us acceleration, a great team with great DNA, and really makes sense with the thesis of building the number one global financial ecosystem.

Bit stamp you mentioned, but also wonderfi which uh, gets us, uh, access to a scaled user base in the Canadian market. So we remain excited about that 1 C, uh,

With the change in market cap over the past year, I think that opens up more opportunities for us. I mean, the Bitstamp deal was significant. Back when we entered into it over a year ago, um,

But we're still going to be disciplined and make sure that we, uh,

Jason Warnick: Yeah, the only thing I would reiterate is the disciplined approach. We feel like we've done a really nice job of selecting companies that accelerate our roadmap, but also are a great deal for shareholders and will continue to be disciplined from that perspective. It's really just a broader question about capital allocation. And we've been allocating capital to grow organically. You see that with a lot of the new product announcements that we've made. We've been doing that through M&A as well. And look, our roadmap is full, and we're always looking for ways to accelerate. I do tend to like smaller, more efficient businesses that we can take and run with. But we're always looking.

Follow Follow The Playbook, and that every company that that we uh, would acquire gives us acceleration a great team with great DNA and uh, really makes sense with the thesis of building the number 1 Global Financial ecosystem. Yeah, the only thing, um, you know, I would, I would reiterate the disciplined approach. Um, you know, we feel like we've we've done a really nice job of selecting companies that accelerate, um, you know, our road map but also, uh, are a great deal for shareholders and and we'll continue to be disciplined from that. Uh, perspective. It's really just a broader question about Capital allocation and and we've been allocating Capital to grow organically. You see that with a lot of the, uh, new product announcements that we, that we've made, we've been doing that through, um, uh, m&a as well. And and look, our road map is full and, and we're always looking for ways to accelerate. Um, I, I do tend to like, um, you know, smaller more efficient,

Chris Koegel: All right. Thank you. The next question is from Matt O'Neill at FT Partners.

Businesses that we can um, take and run with. But um, we're always, we're always looking

All right. Thank you. The, uh, the next question is from Matt O'Neal at FT Partners.

Speaker 5: Hey there. This is Zach Gunn on for Matt. I just wanted to ask on gold subscribers. So it continues to grow, and it's at a 13% adoption rate. My question is, how should we think about the upper bound of that or kind of a target of what you're trying to get to over the medium term? And just what are the main gatekeeping factors that are limiting growth in that gold subscriber number? And then just lastly, how should we think about the cadence of the growth there? You're doing half a million, I think, in ads the last two quarters. It stepped down a little bit this quarter. So just curious about how we should think about that. Thank you.

Hey there. This is Zach Gun on for Matt. I just wanted to ask about gold subscribers. So it continues to grow, and it's at a 13% adoption rate. My question is, how should we think about?

Jason Warnick: Yeah, I mean, I'll start, Vlad, and please feel free to jump in. We want it to be obvious that if you're a Robinhood customer, you're a gold customer. And so we continue to broaden the value proposition. And we're seeing customers respond. Really nice growth rate. Vlad mentioned in his prepared remarks that new customers are joining at multiples. The rate, I think it was 35% of our Q2 new customers joined gold. In terms of upper bounds, one of the things that we like to do is benchmark, and some of the best subscription products out there, whether it's Amazon or others, are substantially higher than where we're at today. And it inspires us as an opportunity to keep investing in the program and then continue to work on making sure customers are aware of the value proposition.

The upper bound of that kind of target of what you're trying to get to of the medium term, and just what are the main gatekeeping factors that are limiting growth in that gold subscriber number? And then just lastly, how should we think about the cadence of the growth there? You're doing half a million, I think, in ads the last two quarters; it's stepped down a little bit this quarter. So, just curious about how we should think about that. Thank you.

Yeah, I mean, I'll I'll start Vlad and please feel free to to jump in. Um, we want it to be obvious that if you're a Robinhood customer, you're a gold customer. And so we continue to, um, you know, broaden the uh, value proposition. Um, you know, and we're seeing customers respond, really nice growth rate, uh, Vlad mentioned in his prepared. Uh, remarks that new customers are joining at at multiples the rate. I think it was 35% of our Q2 new customers joined, uh, join gold in terms of, you know, upper bounds 1 of the things that we

Jason Warnick: And I'm personally really excited about the banking product that's about to come out. And that'll be another great addition to the gold proposition.

Vlad Tenev: Yeah, the only thing I'd add is you should think about gold as if you're a gold member, then you're a member of a really high-quality, exclusive financial club, but it's also available to everyone. So we're trying to toe the line between it being premium, but also accessible to the mass market. And I don't think anyone, I don't think very many people can toe that line. I think it's been working very, very well. And a couple of the products that are very, very nascent are ones that we're very excited about. Jason mentioned banking. We also have the gold card. Cortex, I mean, Cortex has gotten amazing reviews in its first iteration. That's a gold-only offering. And we're just going to keep iterating on that and making that better and better.

Vlad Tenev: So I think we see tons of tailwinds to continuing to make gold better and making the subscriber account increase as a result of that.

The banking product that's about to come out and and that'll be another great addition to the, to the gold proposition. Yeah, the only thing I'd add is you should think about gold as, uh, if you're a gold member, then you're a member of uh, a really high quality exclusive Financial Club, but it's also available to to everyone. So we're trying to toe the line between it being premium but also accessible to uh the mass market. And and I don't think anyone, I don't think very many people can tow that line. I think it's been working very very well and a couple of the products that are very very nent are ones that were very excited about Jason mentioned banking. We also have the gold card, um cortex I mean cortex has gotten amazing reviews in its first iteration that's a gold only offering and we're just going to keep iterating on that and making that better and better. So uh I think we see tons of Tailwind to

Jason Warnick: Yeah, at $5 a month, Robinhood Gold is just the best deal in finance. So if you're not a gold member, jump on that.

Chris Koegel: All right. The next question is from Ken Worthington at JP Morgan.

Continue to make gold better and making, uh, the subscriber count increase as a result of that. Yeah, at at 5 dollars a month, Robin that gold is just the best deal in finance. So if you're if you're not a gold member, uh, jump on that,

All right, uh, the next question is from Ken Worthington at JP Morgan.

Speaker 5: Hi, good afternoon. Thanks for taking the question here. I wanted to talk about the build-out of the active trader, furthering your comments in the prepared remarks. How are the ranks of the active traders building? Like, it's a great market to make people making money. It's a great market to build this sort of active trader base. So how is that going? And then in terms of transfer of assets, you're positive or have been positive against all the major brokerage competition. Is Robinhood TOA positive in the same way with the active trader client as well? Or is there any sort of differences between sort of money coming in and money going out in that particular segment?

Hi, uh, good afternoon. Thanks for taking the question here. Um, wanted to talk about the build-out of the active trader, furthering your comments in the prepared remarks.

How were the ranks of the active traders building? Like the great market to make, you know, people are making money. It's a great market to build this sort of active trader base. So how is that going? And then, in terms of transfer of assets, you're positive or have been positive against all the major brokerage competition, is Robinhood positive in the same way with the active trader client as well? Or is there any sort of differences between sort of money coming in and money going out in that particular segment?

Vlad Tenev: Yeah, we don't have a breakdown available in that way, but we can share that we're positive again this quarter against all of the major competitors. And we kind of track progress on the active trader arc of our business by looking at market share, market share across all traded assets, equities, options, futures now, prediction markets, and of course, crypto. And it's like growing really nicely across the board. So we really like what we're seeing. Of course, that's somewhat of a lagging indicator because new products lead to greater market share. But the leading indicators are the product velocity. And we've been doing really well with a number of things thus far this year. And we haven't even had Hood Summit, which is our active trader event. That's in a few weeks. And we're going to be unveiling even more that we're excited about.

Yeah. Um,

Uh, we don't have a breakdown available uh, in that way, but we can, we can share that we're positive again, this quarter against the all of the major competitors.

And uh, we we kind of track progress on the active Trader Arc of our business, by looking at market share market share across all traded assets. Uh, equities options. Futures now uh, prediction markets and of course crypto. And it's like growing really nicely across the board. So we we really like, what we're

Vlad Tenev: So I would say looking backward, market share, which is sort of like how we track progress, very strong. Medium term, we've had things with Legend that we're very, very positive on. And the things that are about to come, I think you'll see in a couple of weeks, but I think you guys are really going to like them.

Jason Warnick: Another metric that we track internally is Net Promoter Score. And we've been seeing that move up overall, but also with our active traders. And we're reaching levels that's like a high watermark over the last four-plus years. So feeling really good about that. And it also tends to be a leading indicator for increased market share over time.

Of course, that's somewhat of a lagging indicator because new products lead to, uh, greater market share. But the leading indicators are the product velocity. And we've been doing really well with a number of things thus far this year, and we haven't even had Hood Summit, which is our active Trader event, that's in a few weeks. And we're going to be unveiling even more, that, that we're excited about. So, I, I would say, Looking Backward, market share, which is sort of like how we track progress, very strong medium-term. We, we, we've had things with legend that were very, very positive on and the things that are about to come. Um, I, I, I think you'll, you'll see in a couple of weeks, but, uh, I, I think you guys are really going to like them. Another metric that we track internally is net promoter score and we've been seeing that move up, um, overall but also with our active Traders and, um, you know, we're we're reaching levels, it's like a high water mark.

Vlad Tenev: Yeah, and it's great you mentioned that. I mean, that's a big part of why we're confident in the business. We're looking at how happy our customers are. Customers keep getting happier. And we've seen in the past that leads to them growing their wallet share with us, putting more assets into Robinhood, becoming gold subscribers at an increasing rate, adopting our products. So we think we still see significant tailwinds to that.

Over the last 4 plus years. So feeling really good about that and and and it's, it's also tends to be a leading indicator for um, you know, increased market share over time. Yeah. And I, I, it's great. You mentioned that, I mean, that that's a big part of why we're confident in in the business, we're looking at how, how happy our customers are customers keep getting happier. And we've seen in the past that leads to them, growing their wallet share with us, putting more assets into Robin Hood becoming gold subscribers.

Is at an increasing rate, adopting our products. So we we think, uh,

Chris Koegel: All right. Thank you. The next question is from Mike Cypress at Morgan Stanley.

We think we we still see significant Tailwind to that.

All right, thank you. The next question is from Mike Cyprus at Morgan Stanley.

Speaker 5: Great. Thanks for taking the question. Maybe just following up on the active trader commentary there. Just hoping you could elaborate a little bit on what sort of uptake you're seeing with Legend, how that's contributing on 24/5. I guess how much of your volume are you seeing in the overnight session? And then on prediction markets, if maybe you could just elaborate on the success there and what sort of mix you're seeing between sports and other types of contracts.

Tracks.

Jason Warnick: Maybe I'll start on prediction markets and then.You can chat about, legends. So Prediction Markets is, cumulative now, at about 2 billion contracts. we're nearly 1 billion in the quarter. in terms of the mix, you know, since we launched, customers have engaged in over 100 million economic contracts, so really nice. you know, a a large, percentage of the, transactions, in Prediction Markets are with sports, and, and, we love to see our customers engage in that way as well. I think, you know, over time, what you're going to see is we'll continue to, you know, add selection, across, you know, all elements of, you know, culture, whether it's things that would be on the front page to the business section to the sports page. And, and, I think we can tell by the, engagement by customers that it's a, it's a product that, is resonating.

Vlad Tenev: Yeah, and I I would tell you, yeah, I mean, a a good chunk of it is sports, but we've also been focused on that because that's an area where not a lot of our competitors are, are, are present. So we see that as a big opportunity, and we've been investing, but we've also been building the capability to list lots of different types of contracts, and, and we anticipate broadening the suite to multiple categories. on Robinhood Legend, volumes continue to grow nicely overnight as well. We don't have specific numbers to share there, but everything's looking very positive, and we like what we're seeing.

Maybe I'll start on prediction markets and then you can chat about. Um, Legends. So, prediction markets is, um, cumulative. Now, um, at about 2 billion contracts, uh, we were nearly 1 billion in the quarter, uh, in terms of the mix. Um, you know, since we launched, uh, customers have engaged in over a 100 million economic contracts. So, really nice, um, you know, a a large uh, percentage of the, uh, transactions, uh, in prediction markets are with sports and and uh, we love to see our customers engage in that way as well. I think, you know, over time what you're going to see is, we'll continue to, um, you know, add selection uh, across. Um, you know, all elements of um, you know culture, whether it's things that would be on the front page to the business section to the sports page and and uh, I think we can tell by the, uh, engagement by customers that it's a it's a product that uh, is resonating

Yeah and I I would tell you yeah. I mean a good chunk of it is sports but we've also been focused on that because that's an area where not a lot of our competitors are are are present. So we see that as a big opportunity in and we've been investing. But we've also been building the capability to list lots of different types of contracts and and we anticipate broadening the suite to multiple categories. Um, on Robin Hood, Legend volumes continue to grow nicely overnight as well. We don't have specific numbers to share.

Jason Warnick: And it's great. We keep getting feedback from customers. The team's hard at work, and they're they're literally rolling out improvements week over week. So, a lot of momentum there in improving the product experience.

Are there but everything's looking very positive and we like what we're seeing and it's great. We keep getting feedback from customers, the team's hard at work and they're they're literally rolling out improvements week over week. So, um,

Chris Koegel: Alright. since this is our last, or sorry, we've now, gotten through the audio queue, and since we're, we are here in person, I think we have time for a couple more in-person questions if anybody has any other questions they'd like to ask. Alright, Steven, you're back. You started us off.

Uh, a lot of momentum there and improving the product experience.

All right. Um, since this is our last— or, sorry, we've now gotten through the audio queue. And since we are here in person, I think we have time for a couple more in-person questions if anybody has any other questions they'd like to ask.

All right. Stephen, you’re back. You started us off.

Steven Chubak: So maybe going back to the pricing discussion, you guys have done a really nice job of demonstrating the value prop. You've been able to increase price, or take rate on crypto, without seeing any meaningful impact in terms of market share. In fact, it's been reflecting steady market share gains.

Vlad Tenev: Yeah.

Steven Chubak: We know that some of your larger competitors are going to be entering the crypto trading space, maybe not necessarily with as broad or robust of an offering, but wanted to get your perspective on how much you, to what extent you can protect that pricing advantage as the Schwabs and Morgan Stanley with eTrade, via eTrade, actually look to enter this space as well.

Vlad Tenev: Maybe, maybe I'll try the the crypto pricing this time. so, a couple of things. One is you mentioned the market share gains in crypto. I, I think that, maybe one thing that hasn't really been talked about very much is the rollout of smart exchange routing and what that does with tiered pricing for high volume traders. I mean, frankly, before we rolled that out, if you were a high volume trader trading, you know, tens of millions of dollars in Notional a month, our offering wasn't very competitive for you, because you were getting great advanced pricing elsewhere. And, and so, our our offering was too expensive for these customers. and I think we've done a a good job in addressing that. Of course, smart exchange routing continues to be adopted, but we think that now we have a competitive offering for customers trading higher volume.

So maybe going back to the pricing discussion, you guys have done a really nice job of demonstrating the value prop, you've been able to increase price, uh, or take rate on crypto, um, without seeing any meaningful impact in terms of market share. In fact, it's been reflecting steady market share gains. Yeah, we know that some of your larger competitors are going to be entering the crypto trading space, maybe not necessarily with as broad or robust of an offering but wanted to get your perspective on how much you to what extent you can protect that pricing Advantage as the Schwabs and Morgan Stanley with e-rated uh via trade. Um actually look to enter this space as well. Maybe maybe I'll try the the crypto pricing this time uh

So, a couple of things. One is, you mentioned the market share gains in crypto. I think that...

Uh, maybe 1 thing that hasn't really been talked about very much is the roll out of smart exchange routing and what that does with tiered pricing for high volume Traders. I mean, frankly before we rolled that out, if you are a high volume Trader trading, you know, tens of millions of dollars in notional, a month are offering wasn't very competitive for you, um, because you were getting great Advanced pricing elsewhere and and so

Vlad Tenev: And as you see more and more Bitstamp integration, as we continue to bring that onto the fold, the experience for a crypto, high volume trader will become even better on Robinhood. So, you know, a lot of these gains that you've seen are without us actually fully serving, the the active traders on the crypto side. in terms of, so, so I think we we feel good, and and I think the numbers will speak for themselves there. In terms of large, I think you're referring to incumbent brokerage competitors getting into crypto. I mean, I I don't know. We've been hearing that question for quarters, and they still haven't gotten into crypto. So I I don't know how long it's gonna take. I tend to not really worry about competitors unless they have a product in market that's actually beating us.

Uh, our our offering was too expensive for these customers. Uh, and I think we've done a, a good job in addressing that. Of course, smart exchange routing continues to be adopted, but we think that now we have a competitive offering for customers, trading higher volume and as you see more and more bitstamp integration, as we continue to bring that onto the fold, the experience for a crypto, uh, high volume Trader will become even better on Robin Hood. So, you know, a lot of these gains that you've seen or without us actually fully serving, uh, the, the active Traders on on the crypto side. Um, in terms of

So, I think we feel good, and I think the numbers will speak for themselves. In terms of large, I think you're referring to incumbent brokerage competitors getting into crypto.

I mean, I don’t know. We’ve been hearing that question for quarters and...

Vlad Tenev: And I just think we're we're gonna continue to move ahead. We've added staking now. we're sort of like continuing to add assets and different blockchains across the board. I know we added some some new ones last week. and and I think the velocity of the crypto team's been really, really good. So, again, tend tend not to worry about competitors until they actually have products in market that are beating our products.

Jason Warnick: Yeah, and I think I think the point that Flat is making that I'd reiterate is that in crypto, pace of innovation is a competitive advantage. And, and, I see Johan here, he and his team, you know, I I would bet on their, they're moving at an incredible pace as we demonstrated, at the, to catch a token event.

Chris Koegel: Alright. We got one last question. So, Devin Ryan from Citizens.

And I think the velocity of the crypto team has been really, really good. So, again, 10, 10 not to worry about competitors, until they actually have products and Market that are beating our products. Yeah. And I think, I think the point that flat is making that I'd reiterate, is that in crypto pace of innovation is a competitive advantage. And, and uh, I see Johan here, uh, he and his team, uh, you know, I I would bet on their, uh, they're moving in an incredible Pace as we demonstrated, um, at the to catch a token event.

Speaker 5: thanks for letting me wrap it up here. So, Jason, a lot of credit for the expense management here because 56% adjusted EBITDA margins in the in the quarter is, you know, pretty amazing given the level of growth you guys are putting up. So, I know you've committed to this kind of theme of driving, and and and revenues can bounce around, but this theme of driving kind of faster top line growth than expense growth. But as we start to kind of look ahead and and maybe not to get too far ahead of ourselves for 2026, but just talk about the relationship and the commitment to continuing to drive kind of top line faster than expenses, especially with all the initiatives you guys have underway. And I'm sure there's, no lack of areas to spend money on.

All right, we got 1 last question. So, Devin Ryan from Citizens.

Uh, thanks for letting me wrap it up here. So, Jason, uh,

a lot of credit for the expense management here because 56% adjusted via do margins in the in the quarters, you know, pretty amazing. Given the level of growth you guys are putting up. So I know you've committed to this kind of theme of driving and and and revenues can bounce around but this theme of driving, kind of faster Topline growth than expense growth. But as we start to kind of look ahead and maybe not to get too far ahead of ourselves for 2026 but just talk about the relationship and the commitment to continuing to drive.

Speaker 5: So just the relationship and maybe also areas where you're finding to save some money to then reinvest back into, growth. Thanks.

Jason Warnick: Yeah, you bet. And I'll I'll just kind of tell you how, we think about it more generally. you know, there's, we have a large business, and, large businesses present, opportunities to be more efficient, more productive. and so when we think about deploying capital for organic growth, what we do is we look at our existing businesses and ask them, to improve process and use technology, so that their, cost growth stays in the low single digits. And in some cases, our GMs would would assert that we've asked them to actually decrease costs. And and there's a lot of opportunity, I'm sure, talk a lot about AI and just process improvement more generally. And we've done a really nice job of being able to grow those existing businesses, but do it in a way that's, costs are growing at a very slow percentage.

Kind of topline faster than expensive with all the initiatives you guys have underway. And I'm sure there's, uh, no lack of areas to spend money on. So just the relationship and maybe also areas where you're finding to save some money to then reinvest back into, uh, growth. Thanks. Yeah, you bet, and I'll just kind of tell you how, uh, we think about it more generally. Um, you know, there's, um, we have a large business.

Jason Warnick: And so that's a big part of our business that's growing at a really small percentage. And what that does is it frees up the incremental dollars to put in areas that drive growth, whether that's new business initiatives or it's things like marketing. And we love marketing, and we're constantly debating about putting more marketing dollars to work because the ROIs are so good and the payback is, so short. So what I what I tell you is, even though we're delivering such incredible leverage on the business, the debates inside the company aren't, come on, Jason, like, loosen up on the purse strings. it's it's really been focused on finding ways to be more efficient, and it frees up a lot of capital and a lot of, costs that we can then deploy into into other areas.

And, uh, large businesses present, uh, opportunities to be more efficient, more productive. Uh, and so, when we think about deploying capital for organic growth, what we do is we look at our existing businesses and ask them, uh, to improve process and use technology. Uh, so that their, uh, cost growth stays in the low single digits. And in some cases, um, our GMS would would assert that we've asked them to actually decrease costs and, and there's a lot of opportunity, I'm sure, um, talk a lot about Ai and just process Improvement, more generally, and we've done a really nice job of being able to grow those existing businesses, but do it in a way that's, uh, costs are growing at a very slow percentage. And so that's a big part of our business. That's growing at a really small percentage. And what that does is it frees up the incremental dollars to put in areas that drive growth? Whether that's new business initiatives or it's things like marketing and we love marketing. And we're constantly debating about putting more marketing dollars to work because the rois are so good and the payback is

Jason Warnick: And that's not to say that we don't have these debates and and periodically add, you know, 5 headcount here or 2 headcount there. but it isn't a situation where we're choking the business. And I think you can see that with the growth that we're, able to deliver. So, I'm not always the most popular person in the room, and and Shiv, who's here with me, is probably even more so because I make him say no more than I do, but,

Is um, uh, so short. So what I what I tell you is, um, even though we're delivering such incredible leverage on the business. Um, the debates inside the company aren't come on Jason like loosen up on the purse strings. Um it's it's really been focused on finding ways to be more efficient and it frees up a lot of capital and a lot of uh costs that we can then deploy into into other areas. And that's not to say that we don't have these debates and and periodically, add you know, 5 head count here, or 2 head, count there. Um, but

Vlad Tenev: Incredibly unpopular.

Jason Warnick: Incredibly. But, but I'll tell you, we have a D a DNA at the company, and it's in our culture to be lean and disciplined, and, and I think it's really showing up in our results.

Vlad Tenev: I I would also just add that, 2 2 of the areas that have just been critical to our business, sustaining the rate of innovation and kind of customer adoption of our products, have been, engineering and customer service. And both of those areas are probably of, like, very, very, I mean, we've we've invested early and aggressively in using AI for for both of those, and it's it's having tremendous results. I mean, I would venture to say we're world class across both of those, and of course, other areas as well, and we're looking at everything, but those are the 2 that, like, really move the needle for our business. I think that's why we've been able to demonstrate, I mean, that's a big part of why we've been able to demonstrate this growth while keeping, you know, OPEX relatively flat up a little bit.

But it isn't a situation where we're choking the business, and I think you can see that with the growth that we're, um, able to deliver. So, um, I'm not always the most popular person in the room and, and shiv who's here with me, uh, is probably even more so because I make him say no more than I do, but, um, incredibly unpopular incredibly. But, uh, but I I'll tell you it. Uh, we have a d, a DNA at the company, and it's in our culture to be lean and disciplined. And um, and I think it's really showing up in our results. I, I would also just add that, um, to 2 2 of the areas that have just been critical to our business sustaining, the rate of innovation and kind of customer adoption of our products.

I've been in engineering and customer service, and both of those areas are probably like...

Very, very I mean we've we've invested early and aggressively in using AI for for both of those and it's it's having tremendous results. I mean, I would venture to say we're world class across both of those and of course other areas as well. And we're looking at everything but those are the 2 that like, really move the needle for our business. I think that's why we've been able to demonstrate. I mean, that's a big part of why we've been able to demonstrate this growth while keeping, you know, Opex.

Chris Koegel: Alright. That concludes the Q&A of our call. Vlad, any any closing remarks?

Relatively flat, up a little bit.

Vlad Tenev: Yeah. I mean, thank thank you guys for listening and to not just our retail shareholders, but institutional analysts, the finance content creators in this room, for the engagement. really, hope hope this was informative, but also fun. And, yeah, maybe maybe we'll do it again. Thank you again. And watch out for Hood Summit, in Las Vegas in the next few weeks. So we're we're not slowing down. The the innovation will continue.

Jason Warnick: Thanks so.

All right, that concludes the Q&A of our call Vlad any, any closing remarks? Yeah, I mean, thank thank you guys for listening and to not just our retail shareholders, but institutional analysts the finance content creators in this room, uh, for the engagement. Um, really, uh, hope hope, this was informative, but also fun and uh, yeah, maybe maybe we'll do it again. Thank you again and watch out for Hood Summit, uh, in Las Vegas in the next few weeks. So we're, we're not slowing down. The, The Innovation will continue.

We'll see. I'll never let you go. I'll never let you go. I'll never let you go.

Mhm.