Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today
announced financial results for the second quarter of 2024, which
ended June 30, 2024.
“This quarter, we kept up the pace with rapid
product launches and a relentless drive to provide top value for
our customers,” said Vlad Tenev, CEO and Co-Founder of
Robinhood. “With Robinhood Gold reaching 2 million
subscribers, we're witnessing the flywheel accelerate.”
“I’m encouraged by the progress we’re making as
a business,” said Jason Warnick, Chief Financial Officer of
Robinhood. “In Q2, we set new quarterly records for
revenues and earnings per share as we continue to focus on
delivering another year of profitable growth.”
Second Quarter Results:
- Total
net revenues increased 40% year-over-year to
$682 million.
-
Transaction-based revenues increased 69%
year-over-year to $327 million, primarily driven by options revenue
of $182 million, up 43%, cryptocurrencies revenue of $81
million, up 161%, and equities revenue of $40 million, up 60%.
- Net
interest revenues increased 22% year-over-year to $285
million, driven by growth in interest-earning assets, increased
securities lending activity, and higher short-term interest
rates.
- Other revenues
increased 19% year-over-year to $70 million, primarily due to
increased Gold subscription revenues.
- Net income
increased year-over-year to $188 million, or diluted earnings per
share (EPS) of $0.21, compared to $25 million, or diluted EPS
of $0.03, in Q2 2023.
- Total
operating expenses increased 6% year-over-year to $493
million, primarily due to increased marketing and growth
investments.
- Adjusted Operating
Expenses (non-GAAP) increased 14%
year-over-year to $407 million.
- Share-Based Compensation
(SBC) decreased 21% year-over-year to $86 million.
- Adjusted EBITDA
(non-GAAP) increased 99% year-over-year to
$301 million.
- Funded
Customers increased by 1.0 million year-over-year to
24.2 million.
-
Investment Accounts increased by 1.4 million
year-over-year to 24.8 million.
- Assets
Under Custody (AUC) increased 57% year-over-year to $139.7
billion, driven by continued Net Deposits and higher equity and
cryptocurrency valuations.
- Net
Deposits were $13.2 billion, an annualized growth rate of
41% relative to AUC at the end of Q1 2024. Over the past twelve
months, Net Deposits were $33.0 billion, a growth rate of 37%
relative to AUC at the end of Q2 2023.
- Average
Revenue Per User (ARPU) increased by 35% year-over-year to
$113.
- Gold
Subscribers increased by 750 thousand, or 61%,
year-over-year to 2.0 million.
- Cash and
cash equivalents totaled $4.5 billion compared with
$5.8 billion at the end of Q2 2023.
Highlights
Robinhood accelerates product roadmap
while driving strong business results and delivering increased
value to customers
- Robinhood Gold reaches
record 2 million subscribers - More than 8 percent of
Funded Customers are now Gold Subscribers.
- 1% bonus drives over $3
billion in asset transfers - From April 30, 2024 to June
28, 2024 customers responded to Robinhood’s 1 percent transfer
bonus by bringing over $3 billion, averaging approximately $130
thousand per customer.
- Strategic acquisitions
advance roadmap - In June, Robinhood entered into an
agreement to acquire Bitstamp, Ltd., a globally-scaled crypto
exchange, with over 50 active licenses and registrations
internationally and customers across the EU, UK, US and Asia. In
addition, Robinhood acquired Pluto Capital Inc., an artificial
intelligence (AI) powered investment research platform in
July.
- Delivering even more for
advanced investors - In May, Robinhood launched industry
leading margin rates, ranging from 5.7 to 6.75 percent. Margin
balances grew by over 20 percent in Q2, reaching a two-year high of
$5.0 billion.
- Returning value to
shareholders - In May, Robinhood's Board of Directors
authorized a $1 billion share repurchase program, which we began
executing in July 2024. Management currently expects to
execute this program over a two to three year period.
- Bringing customers together
for Hood Summit 2024 - Robinhood announced it will be
hosting its first-ever customer-focused conference, happening
October 16-18, 2024. Attendees will join Robinhood executives and
other industry leaders to hear about the latest in trading
technology, investing and finance culture.
Additional Q2 2024 Operating
Data
- Retirement AUC
totaled $8.7 billion compared with $0.8 billion at the
end of Q2 2023.
- Cash Sweep increased
76% year-over-year to $20.9 billion.
- Margin Book increased
52% year-over-year to $5.0 billion.
- Equity Notional Trading
Volumes increased 57% year-over-year to
$243.6 billion.
- Options Contracts
Traded increased 38% year-over-year to
389.7 million.
- Crypto Notional Trading
Volumes increased 137% year-over-year to
$21.5 billion.
- Monthly Active Users
(MAU) increased 9% year-over-year to
11.8 million.
Webcast and Conference Call
Information
Robinhood will host a conference call to discuss
its results at 2 p.m. PT / 5 p.m. ET today, August 7, 2024.
The live webcast of Robinhood's earnings conference call can be
accessed at investors.robinhood.com, along with the earnings press
release and accompanying slide presentation.
Following the call, a replay and transcript will
also be available at the same website.
Financial Outlook
Our 2024 expense plan includes growth
investments in new products, features, and international expansion
while also getting more efficient in our existing businesses. Our
outlook for both GAAP total operating expenses and Non-GAAP
combined Adjusted Operating Expenses and SBC for full-year 2024 is
unchanged at $1.85 billion to $1.95 billion.
Actual results might differ materially from our
outlook due to several factors, including the rate of growth in
Funded Customers and our effectiveness to cross-sell products which
affects variable marketing costs, the degree to which we are
successful in managing credit losses and preventing fraud, and our
ability to manage web-hosting expenses efficiently, among other
factors. The above expense outlook does not include potential
significant regulatory matters or other significant expenses (such
as impairments, restructuring charges, and business acquisition- or
disposition-related expenses) that may arise or accruals we may
determine in the future are required, as we are unable to
accurately predict the size or timing of such matters, expenses or
accruals at this time. See “Non-GAAP Financial Measures” for more
information on Adjusted Operating Expenses and SBC, including
significant items that we believe are not indicative of our ongoing
expenses that would be adjusted out of total operating expenses
(GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP)
should they occur.
About Robinhood
Robinhood Markets, Inc. is on a mission to
democratize finance for all. In the U.S., people can invest with no
account minimums through Robinhood Financial LLC, a registered
broker dealer (member SIPC), buy and sell crypto through Robinhood
Crypto, LLC, and spend and earn rewards through debit cards with
Robinhood Money, LLC and credit cards with Robinhood Credit, Inc.
People can also trade U.S. stocks without commission or FX fees in
the UK through Robinhood U.K. Ltd., trade crypto in select
jurisdictions in the European Union through Robinhood Europe, UAB,
and access easy-to-understand educational content through Robinhood
Learn.
Robinhood uses the “Overview” tab of its
Investor Relations website (accessible at
investors.robinhood.com/overview) and its Newsroom (accessible at
newsroom.aboutrobinhood.com), as means of disclosing information to
the public in a broad, non-exclusionary manner for purposes of the
U.S. Securities and Exchange Commission's (“SEC”) Regulation Fair
Disclosure (Reg. FD). Investors should routinely monitor those web
pages, in addition to Robinhood’s press releases, SEC filings, and
public conference calls and webcasts, as information posted on them
could be deemed to be material information.
“Robinhood” and the Robinhood feather logo are
registered trademarks of Robinhood Markets, Inc. All other names
are trademarks and/or registered trademarks of their respective
owners.
Contacts
Investors:ir@robinhood.com
Press:press@robinhood.com
|
ROBINHOOD MARKETS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited) |
|
|
December 31, |
|
June 30, |
(in millions, except share and per share data) |
|
2023 |
|
|
|
2024 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
4,835 |
|
|
$ |
4,524 |
|
Cash, cash equivalents, and securities segregated under federal and
other regulations |
|
4,448 |
|
|
|
4,584 |
|
Receivables from brokers, dealers, and clearing organizations |
|
89 |
|
|
|
149 |
|
Receivables from users, net |
|
3,495 |
|
|
|
5,040 |
|
Securities borrowed |
|
1,602 |
|
|
|
2,217 |
|
Deposits with clearing organizations |
|
338 |
|
|
|
551 |
|
Asset related to user cryptocurrencies safeguarding obligation |
|
14,708 |
|
|
|
20,643 |
|
User-held fractional shares |
|
1,592 |
|
|
|
2,011 |
|
Held-to-maturity investments |
|
413 |
|
|
|
503 |
|
Prepaid expenses |
|
63 |
|
|
|
65 |
|
Deferred customer match incentives |
|
11 |
|
|
|
67 |
|
Other current assets |
|
196 |
|
|
|
352 |
|
Total current assets |
|
31,790 |
|
|
|
40,706 |
|
Property, software, and equipment, net |
|
120 |
|
|
|
123 |
|
Goodwill |
|
175 |
|
|
|
179 |
|
Intangible assets, net |
|
48 |
|
|
|
45 |
|
Non-current held-to-maturity investments |
|
73 |
|
|
|
2 |
|
Non-current deferred customer match incentives |
|
19 |
|
|
|
159 |
|
Other non-current assets, including non-current prepaid expenses of
$3 as of December 31, 2023 and $22 as of June 30, 2024 |
|
107 |
|
|
|
132 |
|
Total assets |
$ |
32,332 |
|
|
$ |
41,346 |
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
384 |
|
|
$ |
386 |
|
Payables to users |
|
5,097 |
|
|
|
5,789 |
|
Securities loaned |
|
3,547 |
|
|
|
5,091 |
|
User cryptocurrencies safeguarding obligation |
|
14,708 |
|
|
|
20,643 |
|
Fractional shares repurchase obligation |
|
1,592 |
|
|
|
2,011 |
|
Other current liabilities |
|
217 |
|
|
|
220 |
|
Total current liabilities |
|
25,545 |
|
|
|
34,140 |
|
Other non-current liabilities |
|
91 |
|
|
|
84 |
|
Total liabilities |
|
25,636 |
|
|
|
34,224 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value 210,000,000 shares authorized,
no shares issued and outstanding as of December 31, 2023 and June
30, 2024. |
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value. 21,000,000,000 shares
authorized, 745,401,862 shares issued and outstanding as of
December 31, 2023; 21,000,000,000 shares authorized, 761,554,053
shares issued and outstanding as of June 30, 2024. |
|
— |
|
|
|
— |
|
Class B common stock, $0.0001 par value. 700,000,000 shares
authorized, 126,760,802 shares issued and outstanding as of
December 31, 2023; 700,000,000 shares authorized, 122,991,716
shares issued and outstanding as of June 30, 2024. |
|
— |
|
|
|
— |
|
Class C common stock, $0.0001 par value. 7,000,000,000 shares
authorized, no shares issued and outstanding as of December 31,
2023 and June 30, 2024. |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
12,145 |
|
|
|
12,223 |
|
Accumulated other comprehensive loss |
|
(3 |
) |
|
|
— |
|
Accumulated deficit |
|
(5,446 |
) |
|
|
(5,101 |
) |
Total stockholders’ equity |
|
6,696 |
|
|
|
7,122 |
|
Total liabilities and stockholders’ equity |
$ |
32,332 |
|
|
$ |
41,346 |
|
|
ROBINHOOD MARKETS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) |
|
|
Three Months EndedJune 30, |
|
YOY% Change |
|
Three Months EndedMarch
31, |
|
QOQ% Change |
(in millions, except share, per share, and percentage data) |
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Transaction-based revenues |
$ |
193 |
|
|
$ |
327 |
|
69 |
% |
|
$ |
329 |
|
(1)% |
Net interest revenues |
|
234 |
|
|
|
285 |
|
22 |
% |
|
|
254 |
|
12 |
% |
Other revenues |
|
59 |
|
|
|
70 |
|
19 |
% |
|
|
35 |
|
100 |
% |
Total net revenues |
|
486 |
|
|
|
682 |
|
40 |
% |
|
|
618 |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)(2): |
|
|
|
|
|
|
|
|
|
Brokerage and transaction |
|
39 |
|
|
|
40 |
|
3 |
% |
|
|
35 |
|
14 |
% |
Technology and development |
|
207 |
|
|
|
209 |
|
1 |
% |
|
|
196 |
|
7 |
% |
Operations |
|
36 |
|
|
|
46 |
|
28 |
% |
|
|
44 |
|
5 |
% |
Marketing |
|
25 |
|
|
|
64 |
|
156 |
% |
|
|
67 |
|
(4)% |
General and administrative |
|
159 |
|
|
|
134 |
|
(16)% |
|
|
118 |
|
14 |
% |
Total operating expenses |
|
466 |
|
|
|
493 |
|
6 |
% |
|
|
460 |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
2 |
|
|
|
2 |
|
— |
% |
|
|
4 |
|
(50)% |
Income before income taxes |
|
22 |
|
|
|
191 |
|
768 |
% |
|
|
162 |
|
18 |
% |
Provision for (benefit from) income taxes |
|
(3 |
) |
|
|
3 |
|
NM |
|
|
5 |
|
(40)% |
Net income |
$ |
25 |
|
|
$ |
188 |
|
652 |
% |
|
$ |
157 |
|
20 |
% |
Net income attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
25 |
|
|
$ |
188 |
|
|
|
$ |
157 |
|
|
Diluted |
$ |
25 |
|
|
$ |
188 |
|
|
|
$ |
157 |
|
|
Net income per share
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.03 |
|
|
$ |
0.21 |
|
|
|
$ |
0.18 |
|
|
Diluted |
$ |
0.03 |
|
|
$ |
0.21 |
|
|
|
$ |
0.18 |
|
|
Weighted-average shares used
to compute net income per share attributable to common
stockholders: |
|
|
|
|
|
|
|
|
|
Basic |
|
904,984,863 |
|
|
|
881,076,624 |
|
|
|
|
875,319,407 |
|
|
Diluted |
|
921,269,749 |
|
|
|
904,490,572 |
|
|
|
|
895,779,155 |
|
|
|
ROBINHOOD MARKETS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) |
|
|
|
Six Months EndedJune 30, |
|
YOY% Change |
(in millions, except share, per share, and percentage data) |
|
|
2023 |
|
|
|
2024 |
|
Revenues: |
|
|
|
|
|
|
Transaction-based revenues |
|
$ |
400 |
|
|
$ |
656 |
|
64 |
% |
Net interest revenues |
|
|
442 |
|
|
|
539 |
|
22 |
% |
Other revenues |
|
|
85 |
|
|
|
105 |
|
24 |
% |
Total net revenues |
|
|
927 |
|
|
|
1,300 |
|
40 |
% |
|
|
|
|
|
|
|
Operating expenses(1)(2): |
|
|
|
|
|
|
Brokerage and transaction |
|
|
75 |
|
|
|
75 |
|
— |
% |
Technology and development |
|
|
406 |
|
|
|
405 |
|
— |
% |
Operations |
|
|
78 |
|
|
|
90 |
|
15 |
% |
Marketing |
|
|
51 |
|
|
|
131 |
|
157 |
% |
General and administrative |
|
|
806 |
|
|
|
252 |
|
(69)% |
Total operating expenses |
|
|
1,416 |
|
|
|
953 |
|
(33)% |
|
|
|
|
|
|
|
Other income, net |
|
|
2 |
|
|
|
6 |
|
200 |
% |
Income (loss) before income taxes |
|
|
(487 |
) |
|
|
353 |
|
NM |
Provision for (benefit from) income taxes |
|
|
(1 |
) |
|
|
8 |
|
NM |
Net income (loss) |
|
$ |
(486 |
) |
|
$ |
345 |
|
NM |
Net income (loss) attributable to common stockholders: |
|
|
|
|
|
|
Basic |
|
$ |
(486 |
) |
|
$ |
345 |
|
|
Diluted |
|
$ |
(486 |
) |
|
$ |
345 |
|
|
Net income (loss) per share
attributable to common stockholders: |
|
|
|
|
|
|
Basic |
|
$ |
(0.54 |
) |
|
$ |
0.39 |
|
|
Diluted |
|
$ |
(0.54 |
) |
|
$ |
0.38 |
|
|
Weighted-average shares used
to compute net income (loss) per share attributable to common
stockholders: |
|
|
|
|
|
|
Basic |
|
|
900,977,045 |
|
|
|
878,198,015 |
|
|
Diluted |
|
|
900,977,045 |
|
|
|
900,026,613 |
|
|
________________(1) The following table presents
operating expenses as a percent of total net revenues:
|
Three Months EndedJune 30, |
|
Three Months EndedMarch 31, |
|
Six Months EndedJune 30, |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
Brokerage and transaction |
8 |
% |
|
5 |
% |
|
5 |
% |
|
8 |
% |
|
6 |
% |
Technology and
development |
43 |
% |
|
31 |
% |
|
32 |
% |
|
44 |
% |
|
31 |
% |
Operations |
7 |
% |
|
7 |
% |
|
7 |
% |
|
8 |
% |
|
7 |
% |
Marketing |
5 |
% |
|
9 |
% |
|
11 |
% |
|
6 |
% |
|
10 |
% |
General and
administrative |
33 |
% |
|
20 |
% |
|
19 |
% |
|
87 |
% |
|
19 |
% |
Total operating expenses |
96 |
% |
|
72 |
% |
|
74 |
% |
|
153 |
% |
|
73 |
% |
(2) The
following table presents the SBC on our unaudited condensed
consolidated statements of operations for the periods
indicated:
|
Three Months EndedJune 30, |
|
Three Months EndedMarch
31, |
|
Six Months EndedJune 30, |
(in millions) |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
Brokerage and transaction |
$ |
2 |
|
$ |
3 |
|
$ |
2 |
|
$ |
4 |
|
$ |
5 |
Technology and
development |
|
56 |
|
|
52 |
|
|
44 |
|
|
110 |
|
|
96 |
Operations |
|
1 |
|
|
2 |
|
|
2 |
|
|
3 |
|
|
4 |
Marketing |
|
1 |
|
|
1 |
|
|
2 |
|
|
2 |
|
|
3 |
General and
administrative |
|
49 |
|
|
28 |
|
|
12 |
|
|
588 |
|
|
40 |
Total SBC |
$ |
109 |
|
$ |
86 |
|
$ |
62 |
|
$ |
707 |
|
$ |
148 |
|
ROBINHOOD MARKETS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
Three Months EndedJune 30, |
|
Six Months Ended June 30, |
(in millions) |
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
Operating activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
25 |
|
|
$ |
188 |
|
|
$ |
(486 |
) |
|
$ |
345 |
|
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
15 |
|
|
|
18 |
|
|
|
35 |
|
|
|
35 |
|
Provision for credit losses |
|
6 |
|
|
|
18 |
|
|
|
15 |
|
|
|
34 |
|
Share-based compensation |
|
109 |
|
|
|
86 |
|
|
|
707 |
|
|
|
148 |
|
Other |
|
(5 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Securities segregated under federal and other regulations |
|
— |
|
|
|
145 |
|
|
|
— |
|
|
|
(547 |
) |
Receivables from brokers, dealers, and clearing organizations |
|
(5 |
) |
|
|
58 |
|
|
|
(41 |
) |
|
|
(60 |
) |
Receivables from users, net |
|
(168 |
) |
|
|
(742 |
) |
|
|
(111 |
) |
|
|
(1,538 |
) |
Securities borrowed |
|
(116 |
) |
|
|
(110 |
) |
|
|
(443 |
) |
|
|
(615 |
) |
Deposits with clearing organizations |
|
24 |
|
|
|
34 |
|
|
|
(37 |
) |
|
|
(213 |
) |
Current and non-current prepaid expenses |
|
7 |
|
|
|
(20 |
) |
|
|
9 |
|
|
|
(20 |
) |
Current and non-current deferred customer match incentives |
|
(4 |
) |
|
|
(122 |
) |
|
|
(6 |
) |
|
|
(196 |
) |
Other current and non-current assets |
|
(46 |
) |
|
|
(45 |
) |
|
|
(52 |
) |
|
|
(128 |
) |
Accounts payable and accrued expenses |
|
33 |
|
|
|
20 |
|
|
|
51 |
|
|
|
(26 |
) |
Payables to users |
|
125 |
|
|
|
(285 |
) |
|
|
410 |
|
|
|
692 |
|
Securities loaned |
|
373 |
|
|
|
876 |
|
|
|
1,148 |
|
|
|
1,544 |
|
Other current and non-current liabilities |
|
(3 |
) |
|
|
(64 |
) |
|
|
(1 |
) |
|
|
(23 |
) |
Net cash provided by (used in) operating activities |
|
370 |
|
|
|
54 |
|
|
|
1,198 |
|
|
|
(569 |
) |
Investing activities: |
|
|
|
|
|
|
|
Purchases of property, software, and equipment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Capitalization of internally developed software |
|
(4 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(14 |
) |
Purchases of held-to-maturity investments |
|
(88 |
) |
|
|
(131 |
) |
|
|
(575 |
) |
|
|
(302 |
) |
Proceeds from maturities of held-to-maturity investments |
|
90 |
|
|
|
135 |
|
|
|
92 |
|
|
|
289 |
|
Purchases of credit card receivables |
|
— |
|
|
|
(41 |
) |
|
|
— |
|
|
|
(70 |
) |
Collections of purchased credit card receivables |
|
— |
|
|
|
37 |
|
|
|
— |
|
|
|
48 |
|
Business acquisition |
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
Asset acquisition, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Other |
|
1 |
|
|
|
1 |
|
|
|
10 |
|
|
|
1 |
|
Net cash used in investing activities |
|
(1 |
) |
|
|
(12 |
) |
|
|
(482 |
) |
|
|
(59 |
) |
Financing activities: |
|
|
|
|
|
|
|
Proceeds from issuance of common stock under the Employee Stock
Purchase Plan |
|
9 |
|
|
|
10 |
|
|
|
9 |
|
|
|
10 |
|
Taxes paid related to net share settlement of equity awards |
|
(3 |
) |
|
|
(59 |
) |
|
|
(5 |
) |
|
|
(99 |
) |
Payments of debt issuance costs |
|
— |
|
|
|
— |
|
|
|
(10 |
) |
|
|
(14 |
) |
Draws on credit facilities |
|
10 |
|
|
|
11 |
|
|
|
10 |
|
|
|
11 |
|
Repayments on credit facilities |
|
(10 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
|
|
(11 |
) |
Borrowings on Credit Card Funding Trust |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17 |
|
Repayments on Credit Card Funding Trust |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Change in principal collected from customers due to Coastal
Bank |
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
7 |
|
Proceeds from exercise of stock options, net of repurchases |
|
1 |
|
|
|
4 |
|
|
|
2 |
|
|
|
8 |
|
Net cash provided by (used in) financing activities |
|
7 |
|
|
|
(42 |
) |
|
|
(4 |
) |
|
|
(72 |
) |
Net increase (decrease) in cash, cash equivalents,
segregated cash, and restricted cash |
|
376 |
|
|
|
— |
|
|
|
712 |
|
|
|
(700 |
) |
Cash, cash equivalents, segregated cash,
and restricted cash, beginning of the period |
|
9,693 |
|
|
|
8,646 |
|
|
|
9,357 |
|
|
|
9,346 |
|
Cash, cash equivalents, segregated cash,
and restricted cash, end of the period |
$ |
10,069 |
|
|
$ |
8,646 |
|
|
$ |
10,069 |
|
|
$ |
8,646 |
|
Reconciliation of
cash, cash equivalents, segregated cash,
and restricted cash, end of the period: |
|
|
|
|
|
|
|
Cash and cash equivalents, end of the period |
$ |
5,829 |
|
|
$ |
4,524 |
|
|
$ |
5,829 |
|
|
$ |
4,524 |
|
Segregated cash and cash equivalents, end of the period |
|
4,220 |
|
|
|
4,037 |
|
|
|
4,220 |
|
|
|
4,037 |
|
Restricted cash in other current assets, end of the period |
|
— |
|
|
|
69 |
|
|
|
— |
|
|
|
69 |
|
Restricted cash in other non-current assets, end of the period |
|
20 |
|
|
|
16 |
|
|
|
20 |
|
|
|
16 |
|
Cash, cash equivalents, segregated
cash, and restricted cash, end of the period |
|
10,069 |
|
|
|
8,646 |
|
|
|
10,069 |
|
|
|
8,646 |
|
Supplemental disclosures: |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
3 |
|
|
$ |
1 |
|
|
$ |
6 |
|
|
$ |
8 |
|
Cash paid for income taxes, net of refund received |
$ |
2 |
|
|
$ |
4 |
|
|
$ |
2 |
|
|
$ |
6 |
|
|
Reconciliation of GAAP to Non-GAAP
Results(Unaudited) |
|
|
|
Three Months EndedJune 30, |
|
Three Months EndedMarch 31, |
|
Six Months EndedJune 30, |
(in millions) |
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
Net income (loss) |
|
$ |
25 |
|
|
$ |
188 |
|
|
$ |
157 |
|
|
$ |
(486 |
) |
|
$ |
345 |
|
Net margin |
|
|
5 |
% |
|
|
28 |
% |
|
|
25 |
% |
|
(52)% |
|
|
27 |
% |
Add: |
|
|
|
|
|
|
|
|
|
|
Interest expenses related to
credit facilities |
|
|
5 |
|
|
|
6 |
|
|
|
6 |
|
|
|
11 |
|
|
|
12 |
|
Provision for (benefit from) income taxes |
|
|
(3 |
) |
|
|
3 |
|
|
|
5 |
|
|
|
(1 |
) |
|
|
8 |
|
Depreciation and amortization |
|
|
15 |
|
|
|
18 |
|
|
|
17 |
|
|
|
35 |
|
|
|
35 |
|
EBITDA (non-GAAP) |
|
|
42 |
|
|
|
215 |
|
|
|
185 |
|
|
|
(441 |
) |
|
|
400 |
|
Add: SBC |
|
|
|
|
|
|
|
|
|
|
2021 Founders Award Cancellation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
485 |
|
|
|
— |
|
SBC Excluding 2021 Founders Award Cancellation |
|
|
109 |
|
|
|
86 |
|
|
|
62 |
|
|
|
222 |
|
|
|
148 |
|
Adjusted EBITDA (non-GAAP) |
|
$ |
151 |
|
|
$ |
301 |
|
|
$ |
247 |
|
|
$ |
266 |
|
|
$ |
548 |
|
Adjusted EBITDA margin
(non-GAAP) |
|
|
31 |
% |
|
|
44 |
% |
|
|
40 |
% |
|
|
29 |
% |
|
|
42 |
% |
|
Three Months EndedJune 30, |
|
Three Months EndedMarch 31, |
|
Six Months EndedJune 30, |
(in millions) |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
Total operating expenses (GAAP) |
$ |
466 |
|
$ |
493 |
|
$ |
460 |
|
$ |
1,416 |
|
$ |
953 |
Add: SBC |
|
|
|
|
|
|
|
|
|
2021 Founders Award Cancellation |
|
— |
|
|
— |
|
|
— |
|
|
485 |
|
|
— |
SBC Excluding 2021 Founders Award Cancellation |
|
109 |
|
|
86 |
|
|
62 |
|
|
222 |
|
|
148 |
Adjusted Operating Expenses (Non-GAAP) |
$ |
357 |
|
$ |
407 |
|
$ |
398 |
|
$ |
709 |
|
$ |
805 |
|
|
Financial Outlook for the Year Ending
December 31, 2024 |
|
|
Outlook(in millions) |
Total operating expenses (GAAP) |
|
$1,850 - $1,950 |
Significant reconciliation items(1) |
|
— |
Adjusted Operating Expenses and SBC (non-GAAP) |
|
$1,850 - $1,950 |
(1) Actual results might differ materially from
our outlook, see “Financial Outlook” for more information. The
above expense outlook does not include potential significant
regulatory matters or other significant expenses (such as
impairments, restructuring charges, and business acquisition- or
disposition-related expenses) that may arise or accruals we may
determine in the future are required, as we are unable to
accurately predict the size or timing of such matters, expenses or
accruals at this time. See “Non-GAAP Financial Measures” for more
information on Adjusted Operating Expenses and SBC, including
significant items that we believe are not indicative of our ongoing
expenses that would be adjusted out of total operating expenses
(GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP)
should they occur.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking
statements regarding the expected financial performance of
Robinhood Markets, Inc. and its consolidated subsidiaries (“we,”
“Robinhood,” or the “Company”) and our strategic and operational
plans, including (among others) statements regarding that with
Robinhood Gold reaching 2 million subscribers, we’re witnessing the
flywheel accelerate; that we continue to focus on delivering
another year of profitable growth; that management currently
expects to execute a $1 billion share repurchase program over a two
to three year period; that Robinhood will be hosting its first-ever
customer-focused conference, happening October 16-18, 2024; and all
statements and information under the headings “Financial Outlook”
and “Reconciliation of GAAP to Non-GAAP Financial Outlook.”
Forward-looking statements generally relate to future events or our
future financial or operating performance. In some cases, you can
identify forward-looking statements because they contain words such
as “believe,” “may,” “will” “should,” “expect,” “plan,”
“anticipate,” “could,” “intend,” “target,” “project,”
“contemplate,” “estimate,” “predict,” “potential,” or “continue,”
or the negative of these words or other similar terms or
expressions that concern our expectations, strategy, plans, or
intentions. Our forward-looking statements are subject to a number
of known and unknown risks, uncertainties, assumptions, and other
factors that may cause our actual future results, performance, or
achievements to differ materially from any future results expressed
or implied in this press release. Reported results should not be
considered an indication of future performance. Factors that
contribute to the uncertain nature of our forward-looking
statements include, among others: our limited operating experience
at our current scale; the difficulty of managing our business
effectively, including the size of our workforce, and the risk of
continued declining or negative growth; the fluctuations in our
financial results and key metrics from quarter to quarter; our
reliance on transaction-based revenue, including payment for order
flow (“PFOF”), and the risk of new regulation or bans on PFOF and
similar practices; our exposure to fluctuations in interest rates
and rapidly changing interest rate environments; the difficulty of
raising additional capital (to provide liquidity needs and support
business growth and objectives) on reasonable terms, if at all; the
need to maintain capital levels required by regulators and
self-regulatory organizations; the risk that we might mishandle the
cash, securities, and cryptocurrencies we hold on behalf of
customers, and our exposure to liability for processing,
operational, or technical errors in clearing functions; the impact
of negative publicity on our brand and reputation; the risk that
changes in business, economic, or political conditions that impact
the global financial markets, or a systemic market event, might
harm our business; our dependence on key employees and a skilled
workforce; the difficulty of complying with an extensive, complex,
and changing regulatory environment and the need to adjust our
business model in response to new or modified laws and regulations;
the possibility of adverse developments in pending litigation and
regulatory investigations; the effects of competition; our need to
innovate and invest in new products, services, technologies, and
geographies in order to attract and retain customers and deepen
their engagement with us in order to maintain growth; our reliance
on third parties to perform some key functions and the risk that
processing, operational or technological failures could impair the
availability or stability of our platforms; the risk of
cybersecurity incidents, theft, data breaches, and other online
attacks; the difficulty of processing customer data in compliance
with privacy laws; our need as a regulated financial services
company to develop and maintain effective compliance and risk
management infrastructures; the risks associated with incorporating
AI technologies into some of our products and processes; the
volatility of cryptocurrency prices and trading volumes; the risk
that our platforms and services could be exploited to facilitate
illegal payments; and the risk that substantial future sales of
Class A common stock in the public market, or the perception that
they may occur, could cause the price of our stock to fall. Because
some of these risks and uncertainties cannot be predicted or
quantified and some are beyond our control, you should not rely on
our forward-looking statements as predictions of future events.
More information about potential risks and uncertainties that could
affect our business and financial results can be found in Part II,
Item 1A of our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2024, and in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2024, which we expect to be available on
August 8, 2024, as well as in our other filings with the SEC, all
of which are available on the SEC’s web site at www.sec.gov.
Moreover, we operate in a very competitive and rapidly changing
environment; new risks and uncertainties may emerge from time to
time, and it is not possible for us to predict all risks nor
identify all uncertainties. The events and circumstances reflected
in our forward-looking statements might not be achieved and actual
results could differ materially from those projected in the
forward-looking statements. Except as otherwise noted, all
forward-looking statements are made as of the date of this press
release, August 7, 2024 and are based on information and
estimates available to us at this time. Although we believe that
the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee future results, performance, or
achievements. Except as required by law, Robinhood assumes no
obligation to update any of the statements in this press release
whether as a result of any new information, future events, changed
circumstances, or otherwise. You should read this press release
with the understanding that our actual future results, performance,
events, and circumstances might be materially different from what
we expect.
Non-GAAP Financial Measures
We collect and analyze operating and financial
data to evaluate the health of our business, allocate our resources
and assess our performance. In addition to total net revenues, net
income (loss) and other results under GAAP, we utilize non-GAAP
calculations of adjusted earnings before interest, taxes,
depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA
margin, Adjusted Operating Expenses, and Adjusted Operating
Expenses and SBC. This non-GAAP financial information is presented
for supplemental informational purposes only, should not be
considered a substitute for or superior to financial information
presented in accordance with GAAP and may be different from
similarly titled non-GAAP measures used by other companies.
Reconciliations of these non-GAAP measures to the most directly
comparable financial measures calculated and presented in
accordance with GAAP are provided in the financial tables included
in this release.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss),
excluding (i) interest expenses related to credit facilities, (ii)
provision for (benefit from) income taxes, (iii) depreciation and
amortization, (iv) SBC, (v) significant legal and tax settlements
and reserves, and (vi) other significant gains, losses, and
expenses (such as impairments, restructuring charges, and business
acquisition- or disposition-related expenses) that we believe are
not indicative of our ongoing results.
The above items are excluded from our Adjusted
EBITDA measure because these items are non-cash in nature, or
because the amount and timing of these items are unpredictable, are
not driven by core results of operations, and render comparisons
with prior periods and competitors less meaningful. We believe
Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our results of operations, as well
as providing a useful measure for period-to-period comparisons of
our business performance. Moreover, Adjusted EBITDA is a key
measurement used by our management internally to make operating
decisions, including those related to operating expenses, evaluate
performance, and perform strategic planning and annual
budgeting.
Adjusted EBITDA Margin
Adjusted EBITDA Margin is calculated as Adjusted
EBITDA divided by total net revenues. The most directly comparable
GAAP measure is net margin (calculated as net income (loss) divided
by total net revenues). We believe Adjusted EBITDA Margin provides
useful information to investors and others in understanding and
evaluating our results of operations, as well as providing a useful
measure for period-to-period comparisons of our business
performance. Adjusted EBITDA Margin is used by our management
internally to make operating decisions, including those related to
operating expenses, evaluate performance, and perform strategic
planning and annual budgeting.
Adjusted Operating Expenses
Adjusted Operating Expenses is defined as GAAP
total operating expenses minus (i) SBC, (ii) significant legal and
tax settlements and reserves, and (iii) other significant expenses
(such as impairments, restructuring charges, and business
acquisition- or disposition-related expenses) that we believe are
not indicative of our ongoing expenses. The amount and timing of
the excluded items are unpredictable, are not driven by core
results, of operations, and render comparisons with prior periods
less meaningful. We believe Adjusted Operating Expenses provides
useful information to investors and others in understanding and
evaluating our results of operations, as well as providing a useful
measure for period-to-period comparisons of our cost structure.
Adjusted Operating Expenses is used by our management internally to
make operating decisions, including those related to operating
expenses, evaluate performance, and perform strategic planning and
annual budgeting.
Adjusted Operating Expenses and SBC
Adjusted Operating Expenses and SBC is defined
as GAAP total operating expenses minus (i) significant legal and
tax settlements and reserves and (ii) other significant expenses
(such as impairments, restructuring charges, and business
acquisition- or disposition-related expenses), that we believe are
not indicative of our ongoing expenses. The amount and timing of
the excluded items are unpredictable, are not driven by core
results, of operations, and render comparisons with prior periods
less meaningful. Unlike Adjusted Operating Expenses, Adjusted
Operating Expenses and SBC does not adjust for SBC. We believe
Adjusted Operating Expense and SBC provides useful information to
investors and others in understanding and evaluating our results of
operations, as well as providing a useful measure for
period-to-period comparisons of our cost structure. Adjusted
Operating Expenses and SBC is used by our management internally to
make operating decisions, including those related to operating
expenses, evaluate performance, and perform strategic planning and
annual budgeting.
Key Performance Metrics
In addition to the measures presented in our
unaudited condensed consolidated financial statements, we use the
following key performance metrics to help us evaluate our business,
identify trends affecting our business, formulate business plans,
and make strategic decisions.
Funded Customers
We define a Funded Customer as a unique person
who has at least one account with a Robinhood entity and, within
the past 45 calendar days (a) had an account balance that was
greater than zero (excluding amounts that are deposited into a
Funded Customer account by the Company with no action taken by the
unique person) or (b) completed a transaction using any such
account.
Assets Under Custody (“AUC”)
We define AUC as the sum of the fair value of
all equities, options, cryptocurrency and cash held by users in
their accounts, net of receivables from users, as of a stated date
or period end on a trade date basis. Net Deposits and net market
gains (losses) drive the change in AUC in any given period.
Net Deposits
We define Net Deposits as all cash deposits and
asset transfers from customers, as well as dividends, interest, and
cash and assets earned in connection with Company promotions (such
as account transfer and retirement match incentives and free stock
bonuses) received by customers, net of reversals, customer cash
withdrawals, margin interest, Gold subscription fees, and other
assets transferred out of our platforms (assets transferred in or
out include debit card transactions, Automated Customer Account
Transfer Service transfers, and custodial crypto wallet transfers)
for a stated period. Prior to the second quarter of 2024, Net
Deposits did not include inflows from cash and assets earned in
connection with Company promotions and prior to January 2024, Net
Deposits did not include inflows from dividends and interest or
outflows from Robinhood Gold subscription fees and margin interest,
although we have not restated amounts in prior periods as the
impact to those figures was immaterial.
Average Revenue Per User (“ARPU”)
We define ARPU as total revenue for a given
period divided by the average number of Funded Customers on the
last day of that period and the last day of the immediately
preceding period. Figures in this release represent ARPU annualized
for each three-month period presented.
Gold Subscribers
We define a Gold Subscriber as a unique person
who has at least one account with a Robinhood entity and who, as of
the end of the relevant period (a) is subscribed to Robinhood Gold
and (b) has made at least one Robinhood Gold subscription fee
payment.
Additional Operating
Metrics
Retirement AUC
We define Retirement AUC as the total AUC in
traditional IRAs and Roth IRAs.
Cash Sweep
We define Cash Sweep as the period-end aggregate
balances in our brokerage sweep program (i.e., the period-end total
amount of participating users’ uninvested brokerage cash that has
been automatically “swept” or moved from their brokerage accounts
into deposits for their benefit at a network of program banks).
This is an off-balance-sheet amount. Robinhood earns a net interest
spread on Cash Sweep balances based on the interest rate offered by
the banks less the interest rate given to users as stated in our
program terms.
Margin Book
We define Margin Book as our period-end
aggregate outstanding margin loan balances receivable (i.e., the
period-end total amount we are owed by customers on loans made for
the purchase of securities, supported by a pledge of assets in
their margin-enabled brokerage accounts).
Notional Trading Volume
We define Notional Trading Volume for any
specified asset class as the aggregate dollar value (purchase price
or sale price as applicable) of trades executed in that asset class
over a specified period of time.
Options Contracts Traded
We define Options Contracts Traded as the total
number of options contracts bought or sold over a specified period
of time. Each contract generally entitles the holder to trade 100
shares of the underlying stock.
Monthly Active Users ("MAU")
We define MAUs as the number of unique persons
who, using one or more accounts with a Robinhood entity, meet one
of the following criteria at any point during a specified calendar
month: a) executes a debit card or credit card transaction, b)
transitions between two different screens on a mobile device while
logged into their account or c) loads a page in a web browser while
logged into their account. A person need not satisfy these
conditions on a recurring monthly basis or be a Funded Customer to
be included in MAU. MAU figures in this release reflect MAU for the
last month of the relevant period presented. We utilize MAU to
measure how many customers interact with our products and services
during a given month. MAU does not measure the frequency or
duration of the interaction, but we consider it a useful indicator
for engagement. Additionally, MAUs are positively correlated with,
but are not indicative of, the performance of revenue and other key
performance indicators.
Glossary Terms
Investment Accounts
We define an Investment Account as a funded
individual brokerage account or a funded individual retirement
account ("IRA"). As of June 30, 2024, a Funded Customer can have up
to three Investment Accounts - individual brokerage account,
traditional IRA, and Roth IRA.
Growth Rate and Annualized Growth Rate with
respect to Net Deposits
When used with respect to Net Deposits, “growth
rate” and “annualized growth rate” provide information about Net
Deposits relative to total AUC. “Growth rate” is calculated as
aggregate Net Deposits over a specified 12 month period, divided by
AUC for the fiscal quarter that immediately precedes such 12 month
period. “Annualized growth rate” is calculated as Net Deposits for
a specified quarter multiplied by 4 and divided by AUC for the
immediately preceding quarter.
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