Robinhood Markets (HOOD) 8 Feb 232022 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Robinhood Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be questions and answers from retail shareholders provided by Say Technologies, followed by a live question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to and conference Head like Koegel, to now President Vice of would hand over the Chris I Investor Relations. ahead. go Please

Thank and Co-Founder, thank and Tenev; and Robinhood's call. Welcome, Warnick. joining Vlad us Latif. Jason With CEO for earnings fourth you are today CFO, us quarter you, for everyone,

developments our want have remind results that statements factors outlook in we duty plans. Actual today's our other our that getting updates X, required. about could today, call on will cause differences, Before release our filings. unless press SEC Relations to financial we to including the described Potential November started, conference differ regulatory expectations, materially to provide Form are Investor risk from and could slide filed I presentation that no our forward-looking XXXX, monitor, you and contain in issued related certain continue our website, legally and XX-Q

include we our to website also presentation Reconciliations on investors.robinhood.com. non-GAAP Investor measures. comparable will in earnings found most discussion be at consider Today's the financial results Relations GAAP the can

turn over With me it let to Vlad. that,

responded Thanks it's call promised, the company. really of we for everyone first thanks and the we what reflect year a our along to as calendar we evaluate a twists think delivered on marks great full and the year opportunity And what way. end ourselves This joining. I the public intro, and the went, for Chris, earnings to to how how

we launch introducing which funding, hyperextended we we out QX trading necessary; of up March; in also; a which which withdrawals with Card experience, to crypto a we in following adding equities Wallet. lending IRA paid the at in Robinhood and we in the hours, U.S. day-to-day options, launch Looking employer support Stock of match, in card we to and delivered with provided committed open more spending securities money March of which IRAs, platform faster our Crypto. May; back rolling with did December things, delivered launched one internationally, movement we DC fully XXXX Lending built-in earnings and new the we call, no year Cash Robinhood committed product, we panning first Robinhood Noncustodial And Retirement, with to our only and our debit the for which the instant the with providing with Robinhood launch committed delivered hours

prompting in out Fed. the our a seen extraordinary drawdown sharp from anticipate aggressive we've tightening or When to most we year one of winner. navigate. war land inflation a This this and these we XX-year policies presented All ever our for a and laid Europe led didn't to frigid crypto the in high ago, customers at company factors a stocks growth a challenges

to to nine delivered ago, returning and ahead we committed and So was goal, months in of profitability adjusted it quarter costs by both EBITDA QX. schedule aggressive revenues. increasing lowering This we an a

generate more cash, their doubled the the customers interest in among new the launched incredible an And net We income interest our a as X.XX% revamped more highest our out rate also over to that business we course offers Robinhood there. revenues the rates on environment, of year. Gold than customers help diversified

did options XX/X congratulate support. our a products strengthened I live advanced to want we and We a chat some improvements to cash year with and also customer to all trading and difficult the headcount before. more their ended a make of having tremendous execution. like We this core XXXX our for team less third while business accounts, with number charts about than decisions,

for had further the corporate a at mention, a and the discuss that I that in want build full also and million It's has led a action never been and velocity accountability. quality postmortem we Robinhood has We've Jason greater. been product will important culture of talent Our his disappointing. was to processing remediated a issue. to never section higher, done to on This error us expense. really a $XX of

decision event, everything this It's to cash adjust from eliminate the learn happening we following sure bonuses. I like to to ensure So made executive XXXX can prevent that and from processes again. this the and make responsibility we team's this, systems our errors that my do accordingly we

a updates. provide I product map, Before want QX review shareholder I our road couple to of

our value company Baiju by mission, our so, our and founders, been many always been have sacrifice our a in delivers does I goal get position on and and healthy that services people throughout motivated extraordinary to our As tremendous by build today. financial employees, right the took to has to It shareholders. doing XXXX in of for customers, generates Robinhood returns we're healthy to behalf

that I we And and personally. there could Baiju do thinking so And end at were the reflecting the were about whether year, of on more we was this.

million in and X.X%. share cancel lowers costs $XXX compensation. our we of already per decided our QX, reduced operating to starting we nearly This quarter has count up share-based GAAP million So would by $XX it our by combined diluted fully

future shares announced purchasing Board bought last Board our Second, that The to and are Emergent incredibly we that us today of team our Directors the pursue most about business. or also of of the May. Fidelity confident all authorized has management Robinhood Technologies

growth balance very sheet have feel also to with our on fortress well-positioned over a $X billion of plans. and execute We cash

this but shareholders. is appropriate. over and much for for will can’t isn’t So be we we will distraction repurchase keep this time the situations take, as how like we’ll posted these, accretive remove precedent Since you there think predict long

cover business results. I’ll QX Now

for January, by past in due in great billion, XX% in level a from customer under growth stocks portfolios assets customer In the assets $XX rebounded, QX had QX nine X% crypto, to months. down highest grew to to was the valuations lower start XXXX. custody While valuations as

This of good investing reminder January outperformance is cycle. importance through of a the the

deposits entrust to billions customers billion nearly with of us in dollars of QX. including that quarter, encouraged continue we’re each So net $X

our on starting now lot a all our and grow gives products to about continued products, traction And see they the talked confidence product meaningful launched we’re of velocity we time. year. new over can last significant into them, new of to on which us business we’ve several as we’ve lines Now that work

speaking the and improving agent. has QX. we in May, stock reaching lending, some to had customers iterating customers, migrating on holding. to by passive of which product new with revenue stocks making then, the more collateral onboarding, It is launched relentlessly, equities generate early million annualized help lending last lend available results team a First by income Since they’re the about $XX to good kept

over January, enrolled, annualized customers generated we million over end X $XX million of we and the in By had revenue.

even accessible As see more customers. and lots of to we opportunities improve useful more look ahead, to even make we it and product the

rate. Next, reach we more September, X.XX% our X Gold. current has yield times industry-leading customer Robinhood been an X% launched yield In the terrific. to raised response cash on then The and

of and earn more in more opportunities As customers yield the and to to U.S. feel, the we’re access best them easiest one giving

the balances billion since subscribers about up for by also way at increased a QX up. the launch. – first month Promoter at to year, $X have billion That’s $X cash in gold Net Gold the We’ve end the and sweep grow Scores per time seen over gold start moved January. of in

and relationships our We’re deepening this these excited offering to keep investing year. in gold

who faster needs a money to for money a we new In option want movement help instant fee. launched to withdrawals, access also competitive their at QX, X.X% customers everyday

of $XX from We’re translating million early X% to growing total to launched about January, seeing when strong we here, withdrawals adoption annualized in X% of October in revenue.

are These here. are examples how few we’ve we gaining for past a drive And many growth from just revenue year of meaningful products the over a see now the of them path to traction. launched

give preview of product our Finally, I road map. XXXX want a to you

long-term uncertainty cycle While we strategy. investing back, pull the to aggressive is leading macro plan the stay to is we the companies believe through some as right

opportunities So highlight working on. of let a me the few we’re

relationships with deepening our customers. First, existing

As market we is steps a working just as And Retirement users more on driving grow bring net we’re to can our a the in more the customers the good larger, take deposits from advisory, well. to we’re into to to off first future. diversified our adding focus even path shifting company, into which start.

we the features significantly we’ll by higher, that retention. launching advanced experience This for a and new year, tools NPS customer growth best innovate sign really advanced great year, ton advanced go is improved products a drove of and our destination several for progress Second customers. and customers. Last becoming beyond made for and

have show excited We’re in you store. to what we

the which Third, recently world to crypto. Robinhood launched international. own around their custody customers empowers We Wallet,

international brokerage from excited TD We’re getting I’m services in brokerage a Mackenzie, set an Ameritrade UK XXXX. veteran more end have industry and goal that the to this and we hired our JB of lead the to offer Schwab also by year efforts. aggressive

excited do. The is so and to really full, map there’s year the We’re ahead. about much road

that, turn Jason. to it I’ll With over

Thanks, to fourth speak growing our value. we stayed Vlad. long-term business It’s shareholder driving good on quarter, the everyone In with focused serving today. and customers,

last product XXXX. row. a of and to I’m EBITDA we team proud on continued Our in look map, we and the generated to quarter positive for road forward year second deliver adjusted what our accomplished

hundreds stock our we company, controls. day-to-day both Vlad and corporate and Before mentioned. one we provide its part I December, to quarter, our actions error a of through irregular, process Each discuss was XX our QX operations. a Inc., XX. reverse want action of notification a timing split context on around affected December NASDAQ-listed format the results, for I in corporate received got of that unfortunately that Health as In Cosmos

of to as these it quickly, processing we a shares rising the price. A stock loss against market. And sell bought a detected was million error caused short $XX into back although it shares in resulted us

was do have said, an this made and won’t Vlad again. necessary taking we’re the seriously changes can we happen it event this to While as ensure very everything to outlier,

the that, with fourth starting results. let’s look With at business quarter,

to about from add up customers, accounts XX net We funded continue million, QX. to new growing XX,XXX

definition, well doesn’t funded We’re note start benefit from in in net users also good a accounts. in adding to QX accounts that existing XX,XXX about as only so our by metric customers this I’d unique include account retirement we January. opening off

show on our additional of many using. how So we’re products are working customers disclosure to

the they every users, customers over were For roughly they XX.X continue MAUs from to our if note monthly increased of engage that down back in to though month. million, majority vast even XXX,XXX QX, million active aren’t I’d time January. also active XX

last that XX if look XX over And over of figure over we the unique at last XXXX, six the grows if we For million active. look three million customers customers. example, were to months months,

under assets custody. to Turning

While January they growth quarter, billion X% $XX recovered. were as about in billion to QX, $XX stocks they down rebounded in from crypto and last

translates year full rate and the Looking annualized to at for growth in brings were billion quarter a to XX% which XX%. deposits, $X.X they QX, net the

rise markets encouraged time. We’re over of as by customer really which deposits, positions for net well the resiliency us growth

results. which Now financial let’s was to $XX XX% EBITDA brought in our million up EBITDA to which from from look at up $XX QX This million, grew We is QX, nine QX. margin points adjusted quarter. adjusted last

forward, delivering and Going remain we focused positive margins a driving over EBITDA attractive time. on adjusted

QX. Looking $X.XX. from $X.XX, $X.XX combined at and our an improvement processing was This prior impairment EPS from these $X.XX QX Ziglu. included negative of the EPS error a results. QX was an charge negative GAAP on to impact impacts negative

Now by net ARPU our from revenues. higher from Total were revenues QX lower was driven net revenues. quarter. primarily was transaction million, by last $XX let’s revenues, interest X% QX. This partially $XXX offset up a review QX $XX, increase

we crypto in volumes, were notional averages. primarily and Next, roughly million QX line equity, QX, sequentially, option saw XX% transaction-based down and January, crypto in all equity with $XXX to due volumes. In revenues lower

rates interest primarily Moving growth was increase $XXX XX% in of high They interest-earning and driven XX% by QX, million to new QX. from revenues. higher a up interest reached short-term The net assets. in

and macro factors activity lower margin These the environment. partially offset were by given balances securities lending

net to Looking growth. likely are to what of another interest quarter looks by ahead encouraged we like be revenue QX,

securities roughly revenues what consider deposit million curve, QX up $XX today QX. the will from Fed customer be see balances activity, net we as we by rates some forward for pickup interest as well lending and As in anticipate we

on Fed wanted reduce the our hiking to sensitivity, Additionally, rate strategies you in to when and as later interest more have note be to share that we updated exploring appear cycle, the of rate we we’ll we’re keep to now this. I stages

member. sequentially, other about increased so on $XX more They that in customers Moving to gold subscribers find of XX,XXX investing QX, plan our revenues. in becoming we from value Gold X% million were to by keep QX. and up a

QX, to similar to ahead be levels. Looking we revenues other QX expect to

party ahead, a further QX Technologies third revenue. increase transferred little a drives to And season, a from services proxy is Looking last late our proxy year, Say in which team. our we seasonal

sequential a see to expect QX of we increase about from QX, levels. in So $XX million

our our look $XXX some minor total SBC, XX% These million, a as improvement were from we QX cost processing XXXX QX an $X.XX OpEx Now to and to year billion. structure. error moved which carryover at year brought let’s prior the expenses. restructuring, Prior results was the full leaner to versus

by Looking forward growth. to cost plan improve our to investing another as for to XXXX, X% lean, we on costs we’re planning while future keep average our

to Our basis, that I’d to our business this is XXXX note range a year. about provided this SBC outlook a a OpEx $X.XX this think range to is as for $X.XX billion. I zone quarterly we XXXX prior the outlook the same operate as good QX billion on last quarter, is of

full to total $XXX Turning SBC, was brings to our it year million. in QX, $XXX which million

we half market-based year. about $XXX non-cash rules, pre-IPO Looking back lowers ahead, record full Baiju’s a of of acceleration decision for awards our million the significantly this the Vlad and outlook of canceled accounting cancel awards. the will QX for Under charge their XXXX to

year, We a $XXX charge be on SBC range from average million, which XX% million $XXX expect improvement also of this will the excluding is a year. last to in

XXXX is range billion. outlook million a SBC of Including to our full charge, $X.XXX the $XXX year

million For $XXX charge. accounting QX, mostly million the from to of SBC we $XXX expect

net the Given half our past SBC get positive to much and to costs now over income expect of progress on GAAP outlook, year. we back this closer the in improved year

there it’s with flexible our focused a as for by invest drive our a GAAP backdrop. to think getting business costs timeline scrappy specific leverage said, profitability we market keeping early long-term. staying that, Beyond lean to we’re little our for predict revenues the grows, on That and while as vary operating the reaching to

a QX. Ziglu charge $XX booked the deal Now couple we Robinhood to on capital first, careful areas, management. in After on consideration, terminated a I deal. touch want and to the million

shares purchase Technologies subject Second, our as Vlad us final May our authorized Emergent that to to in Board mentioned, year. Fidelity last bought approval of

the we million the be excess think our invest to our of balance of business, have a continuing buy use corporate or XX so sheet roughly a for in future most confident to of growth. while We’re smart cash strong to it all would shares,

delivering In EBITDA XXXX, really of a scrappy on with pleased and profitability. that accomplished all to product and with closing, we lean I’m cost in the our year adjusted two ending moving structure, quarters roadmap, straight

value a to large grow we ahead, look see As we opportunity shareholder from here.

to move let’s Q&A. Chris, that, with And

session, answering already questions that pass we’ll our from Thank theme. you, share Jason. from top together some were answered ranked by that turn we’ll Technologies in of group by Leading number into call the After live the this questions votes. common quarter’s Say start prior quarters, Q&A of a We’ll and or analysts. questions over to that, on questions any

off some kick from with it of we’ll top our So questions Say.

to asks, look what Vlad, product roadmap first, So John P one? XXXX? does so you like do want the for that take

the for always, Thank good as questions. you Sajan Yes.

roadmap, to things plan leading to on stay focused be environment So And companies some three bit I providing you’ve the while we’ve very that aggressive, product. be the in with seen less first we’re there’s our existing relationships interest the successful mentioned aggressive. in macro higher terms been that a And value terms call, little our thing, cash of in product might on we with of in Gold deepening customers.

economy employer to with particularly Retirement IRA and very We needed. workers for a built excited in useful no freelancers. out also and rolled offer it’s think match the first are other We gig

advisory point that. gives customers. to think entry going sort towards we’re a us to continue in that So and that to invest of grow services offering great We

the advanced best for place becoming Second, customers.

internationally. use progress customers year customers. equities this options, launched And a for our working be to advanced internationally. functionality innovative more our Wallet, brokerage welcome even trade and third our take new who services then working also And Robinhood trading. brokerage deliver year in recently the to engage to excited we’re harder bit this of we’re the leading made actively, So international, a we to efforts lot bring so we’re aggressively is We’ve more this JB will that little

global will you, over Robinhood asks, buy exchanges? allow Jason Great. from listed All questions individual shares who users the R go from right, Vlad. when world and thank all next The to

one. to that Happy Sure. field

So there’s really two there. questions

all, our very for you best to place U.S. for being expanding trade. we’re in focused the selection customers, First on of and invest

today In terms platform foreign can to ADRs our free, gives of customers access trade that and to exposure via foreign securities, commission traded stocks. investors

to can our huge second we access so Robinhood part open of U.S. investing in thing, internationally accessible customers more based a The to A work up other the expanding countries of make our mission, access that think lot great we’ve people to done and operations services. in that

U.S. is parts good market relative world. the mature access is pretty to where of a comparatively some

So of globally customers it available a overseas. mission no have all our which the we allow fees. Robinhood think to take control their and great over and it’s a I technology business and natural and with talked crypto opportunity trade over about self-custody, and our make extension Wallet, network world swap available to will is

more and start On the the year. we’re brokerage brokerage this aggressive side, goal UK in a being to operations set

So for that. look out

We’re excited make very available the very, to world. Robinhood over all

implemented an new All asks, Thanks, directly and comes question Awesome. relationship What’s links from official between The the who Vlad. to next app. the that partnership users there’s Twitter Twitter? right. Robinhood a by feature forthcoming? Is that there was Robinhood GC

is customers Yes, to democratizing need sure. access of finance best wherever you, whenever giving it. Part the Thank information mission for G. of all and the

experience a and it deep over we’ve makes and and And stock that to easier gives the were at they got pages app. their at the on heard So Twitter link their doing investing while to to crypto we platform. pages the folks to create a for with been customers Robinhood what speaking an excited value about

things experimenting us more see time. like over you’ll this with So

plans an have with Twitter. don’t any we now, expand of or to official As form partnership

Thank right. you. All

order Okay, is so What the SEC happens bans the if next question for C. payment William from flow?

this field I’ll one. Sure,

as seen we’ve And to is, business, the through we made we’ve thing got we’re here and to the well continuing first you’ve a note and feel The grow. progress business are diversified in incredibly positioned. diversifying quarterly results our like

now. and the tools we in payment great of been it have never structure the have SEC of functionality for proposals, order terms all investors right costs and investing, market accessibility, In think flow the better. The

many take and quality think pass worse work And form. we’re to worried really potential are Ultimately to complex time long current a give these It’ll are proposals through in them. the to proposals. that have And execution prices higher these investors unlikely they instances. in we their

So to continuing and receive with best the we’re we to SEC, make sure our going letter make sure the working trading deal have access right our we’re coming to what for customers keep and including think is customers. for and equities continue advocate to comment soon

All question right. you, is Thank Vlad. The related. next

member So Exchange the Mark of Will from it and – for Robinhood York asks will reduce NASDAQ a its reliance on New become and D. payment flow? Stock order

are actually already a of We NASDAQ. member

portion We orders routing the orders have there. routed The about are based That’s really factor. of a we routing quality. connection way and quality is is and that the think customer execution deciding a there, execution on

statistics orders best are we customer website send and we execution publish execution quality quality. of where And proud the to it. on very So actually aim getting our they’re

pace? information next question Robinhood companies faster The to a right. at to with Jason. like is get tax ever TurboTax work for All Will clients tax

We’ve upload who in TurboTax. for Thanks. the both TurboTax. And crypto. to number experience consolidated and year, making get customers of if discount for the already equities are been a This with we We changes trading $XX fact to they customers form tax tax customers. work a

their deadline makes single a already makes software tax the And have soon. to to also out these choice. from millions their then easy we’ve a which should the ones of remaining And well that ahead forms more customers sent out year, data and also we’re customers upload of in really lot form really this it the it of receive a form for to sending they So tax Robinhood convenient.

of for lot doing for making front tax a of team progress we’re on that. proud customers the and So the

analysts. right, let’s open All more one the Great. do before we Thanks, call Jason. to

users asks, any and data GC on chat more live – creating the a Robinhood staying strict Pro with app on tools, strictly Vlad, thoughts keep advanced charts, advanced So streaming newsfeeds and rooms more Robinhood? to

G. Thanks,

So customers we think advanced is incredibly important. serving our

actually it’s improving And Robinhood working we’re a earlier, hearing I into As a progress we make able experience of things year along spent flexibility we’re three trade things to customers. time a holdings lot are and the what and made the things their their for simple be they really year. with when outlined them, and of talking need portfolio to on flexibility to. tools advanced of to and see they with one be we our love love of they lot able to they bit and And and Robinhood last top to easy is simple a use. very the to the because like and overview features stay charts dive this We advanced simply

the So for customers existing right an within now app. awesome advanced we on we Robinhood think deliver can experience

we’re separate so a focused but be the advanced tool Robinhood necessarily going on best not creating we’re our for And customers. making app, to

open for really it’s up endless All now to We Vlad. thank and appreciate the And customers. time questions. questions. your thoughtful right, our for everyone line from engagement the thanks, all for And shareholders you

So Latif. I’ll with that, turn it to

question Thank JMP first Ryan Our of Please Securities. you. from Devin line comes Instructions] of proceed, Devin. [Operator the

so Good Thanks Vlad Jason. afternoon, much. and

Devin. Hi,

driven adjusted Obviously, more First on by see to solidly the acceleration question. getting nice been which expenses. and EBITDA has positive leaner the

further are operating comfortable so re-ramp you at new that newer kind the speed to as certain then of imply you would do investment? can engagement growth on GAAP want want bottom in you in kind start would the execute should from just eventually of initiatives, is, an And profitability expect that expanding it the you you would potentially then you how to the profitability? more over some you time to we there, And or your or fall growth investments? broader re-lean the if really that question environment, a acceleration see of happy in get at obviously And kind on Or to this Is line. from you to model? to of business improvement manage leaner the

Thanks, a This over color. as achieve he lot leverage has additional add think take And of can grow I’ll we Jason. it. We that business time. Devin. can our is Vlad in then if there’s we

to We’re to to guidance our the a that That ones flexibility we’ll going manage that we’ve our things continue we that But plan right are on said, make. cost in we’re in lean. bit think the little the lean investments this talked for to more and the that to investments some stay have we’ve given about have incorporates year. planning for

So range we OpEx plans. given our feel that given really good growth on about we’ve the

in would mentioned a in ARR get to last customers. had. a relatively we’re double-digit add Yes. The in have lots the terms our products, XXXX, of out I And best I as of. thing We’ve call, one we’ve like earlier new incredibly amount rolled of two years only millions in of of to year year to the products time was recent short of proud products in is

withdrawals a million rate, Stock as So launch, we a couple $XX of getting million. run mentioned, getting months to Lending, instant to $XX of within

able new year aggressive. have that I be keep we out investing to a we’re and we roll in and businesses position great think were to So this

crypto. on just Follow-up Terrific. Okay.

we year, crypto in the saw At are in obviously seeing valuations engagement customer So FTX-related some some improvement following the contagion of valuations. pressure the and as after really start well.

like you primarily track just the just feel move so to it versus exiting can customers the curious altogether? internally. Does what space And guys sidelines from

from at about And developing related, those fourth you're just offering budgeting for the how quarter map, did and all? you're the effect? more the road thinking How events broadly? if crypto Thanks. How

a seen with part Devin, year levels the on first kind that have QX. of par So of we for are to average in the pickup the

February. bit it encouraged So the the But in December. particularly a I'd into definitely the little and bit, seeing we're on was of with a what the first in say part sideline, really of step watch month year we're of a

to is and crypto really We this stay, continue to to here space continuing think we're optimistic. and in that invest are

really a improvements Yes, self-custody Robinhood gives make you continuing we we're launched of offering to the to saw core throughout to and probably our power utility which And recently as customers. well. Wallet, year Robinhood crypto the

it, so Got terrific. much. okay, Thanks

Devin. Thanks

Thank you.

Sachs. Our of of comes the Will question line Goldman go Please Will. next Nance from ahead,

Hey, taking the Appreciate you guys. question. Good evening.

couple sensitivity of bring think some remarks you kind on I about what that interest tools thinking rate little asset level around can things a the and that prepared that to could of wondering you you the I'm bit made of down. expand sensitivity, the use comments types in if are And in how is instance, situation you next rates you just For approach over if framework you we positive might through it? thought remain see you a a or where for contemplating? even breakeven maybe think fall the years? there could of EBITDA Thanks. interest significant

important that that implementing we it's really forward shareholders part a to, signal strategies It's to. us we're little that decrease revenue we're look close is about the talk attention and wanted and have just it's to we're at. the and specific will mix, something strategies of paying to that a really Well, Yes. not our sensitivity net on a great question. we some that to rising lost something there. interest Look, early it's that But looking to paying it's attention that

we'll So I'd be the time. But update unfortunately, shouldn't probably far into you over too myself. ahead of get getting I details

maybe a on And for M&A that. then question Understood. Vlad Appreciate strategy.

in out release, You today's of things a expansion, international laid retirement. more handful

aggressive map? seems where of retirement like think you any kind far. around the M&A role of road how of product the any thoughts change your for thus about internal you guys It you securities products, just But mentioned front? route I approach thinking your about think advisory. I I in M&A the or in new gone on are lending, if get you have that guess, the more majority

opportunities. and in the ability sheet. very That products have create balance going a that out Yes, you're that lost features confident sort environment And our some we now not to that serve independently upon of is right, us build new feel we large our Will, roll customers. said, it's to

done fit. map, So about like we're very we past. consider team the M&A have our opportunities considering. quality of things and We're We deliberate that acceleration in road the

And we're thus Jason proud of mentioned done Say the M&A Technologies. we've far. that

driving team I very integrated well think in has impact considerable is of business revenue and that to terms Robinhood.

with we've see forward. I balance a going think deliberate approach, we good do So sheet had our opportunities and

taking questions. Got it. you. you my Thank Appreciate

Thanks Will.

you. Thank

next of line Chubak the Our Research. Steven comes Wolfe of question from

Your question please, Steven.

afternoon. good Hey,

encouraging subdued regard I those peaking, of some NII XXXX commentary seeing given XXXX certainly better some revenues the year that If starting XQ engagement was growth arguably the tailwinds, to brokerage exit with well guidance think controlled, improve, positive versus of inflection the certainly the around it retail full in about for metrics. XXXX, So fundamentals engagement, rate it still sensitive growth, rate. to retail some control. modest And to narrative hear the was expense cost to close implies but are that in

It is that a profitability sense help is And closer to how first, The low have to just path moderates, levers or GAAP And on billion. the to XQ that guidance contingent Certainly, the better if can to you to retail Xs. engagement KPIs the get understand, the curve? but growth this on you to profitability path what but understand $X.XX really to model guide close better almost more to want year metrics. second, reconcile as much cost are and for as in we expense full the well. pull revenue revenue nuanced, X does feel can improving, then flex just profitability, like implies bend exclusively engagement wanted wanted I you gap? to the is the how GAAP

Yes.

what on lean of a XXXX towards getting kind and levers part marked your have shift first the So of we big being productive. just is cost. question

in I there's to able kind good efficient a were should our good serve customers wouldn't I being think opportunity the more the great to in of opportunity ways that But to we level expect more really the that to you it's feeling we're say super-efficient. us across there. to think level there's company that be We realize at at. find operate even XXXX. and XXXX. continue while We're

team engineering And finance there's the optimize constantly said, be the others ways ways I to our company and to across know costs. efficient. are that But the looking always for team, more

into last question be business, get low third second on all the doing part we new as few in of talk takes growing so about kind about highlight I you rolled our costs of to XXXX us of Vlad we're revenue And them certainly, think traction the out which basis. kind rate growth initiatives growth? run drive your are a of right year I say that into And and we increase pursuing could a about as now. and that are starting we wouldn't the are a possibly And the is initiatives heard what some to of

We want nine-figure its each and can of right to like contributions. build own in growing become that businesses services a time over portfolio and revenue

for but than just a going seeds, get our them will including it's offering keep to keep faster going by investing of the us. others, experience existing long-term Some we're businesses. that improving effort And on planting and we're

we that's – a great on when initially way business. in securities And paid first great. we lending, fully an about million. kind ARR rate the few of take example, rolled get That's of for to had out, started new we had run you $XX that a months, If

going But to the a million line finding ways of and adopt, iterating. $XX people on efficient stop. at now They kept in And launch. kept the all trading the ARR. And been didn't desk. to and to the get a more They work between all iteration we're running better get there's tools since team direct hands more that's our

to going revenue to And see those to over you improvement. together, time. you're I growth leads it us that on think just going products, when and us driving for add all you're so keep see products And launch iterate

squeeze question. doubles, and I one If could just it. got in singles modeling ticky-tack just more, of Lots

that You mentioned contemplate Founder any the you're less reaffirmed planned there the or shares? of given buybacks in the of terms dilution initiate buybacks appetite seeing? X% the of improved XXXX the or Does that And share just count. EBITDA profitability to buybacks, any is FTX of in

for repurchase doesn't Emergent Thanks your any Fidelity No, question. Technology Yes. anticipated those shares. of it incorporate

terms and point, the at just had talked ongoing in for about repurchases clarification of shares focused So there. we'll later. on that this a kind save good And we're of we buying

M&A thinking would be in through management, for be think the order repurchases. we about to things that and investing growth, priority third option business to want really like As organic kind to about in growth of returning capital shareholders flexibility complement having we then value a through as

to So and nothing nothing either. to announce signal there

so Great much you color. Jason. Thank for questions, taking Vlad and my

you. Thank

Thank you.

you. Thank

Our next question comes from the line of Richard Repetto of Piper Sandler.

please, question Richard. Your

and evening, Good Yes, Vlad. good Jason team. evening,

evening. Good

last on right year. first, the the – congrats rightsizing company And quickly

the on your two we I to January. all the We in that of guess, given thank across in balances, And questions. the sort rebound include I the, deleveraging engagement want saw drop. color but of just for sort also U.S., the – not industry in you brokerage. saw I guess, Does margin So

of margin half are And the us balances? how engagement. picture gave the So you

think of I you’re at of – from flows capture people the of spreads, payment the give are investors? January? how it wondering that rates retail they in qualitatively could just Can as the improved lot are determine sort profitable a making you what et these cetera, have well you [indiscernible]

Yes.

the have it January, terms wouldn’t the has big moved margin I we in a slightly at in end up. say of book, saw So the of that was year. levels the but it we seen it from up move right up move

they’re on and with as take what the that rate on and well PFOF, equity buying of has the It the In as of nothing of level structurally mix are moves customers terms changed our there. the things buying kind spreads selling. of selling

rate. probably So I take color that’s have the on really the all

Okay. And follow-up. my one

the new at revenues and done product diversifying a You’ve the rollout. great job

hikes probably So can you coming. a still more few given I give think just – there’s –

next to sensitivity, hike? Fed So what’s the Jason, rate the

Yes.

million QX. for interest we next is $XX we will what said in we about quarter move think what revenues versus that up saw So

providing lays at interest-earning of that in interest-earning to And of kind cash pass that regard, those that billion the offset in through customers. our investor the presentation flow We’re schedule assets, $XX that when we good out you should that against a a gold anything of our is along expect those by majority rates come What sweep. primarily assets. we look

right X.XX. our now is rate And

the Fed So there to the roughly relative effective points. basis XX is funds take rate

points over by our We’re to giving XXX basis customers. comparison

of is kind and of just want we customers. of on near pricing to. to majority be market the when customers we going seeing we’re offerings, reacting top good comparable And to about which really that that, think or a we doing with vast really, at are the the in think So or and job

very Okay. it. Thanks Got much.

you. Thank

next comes Kenneth Our line from question Worthington of JPMorgan. of the

Your Kenneth. open, line is

taking evening for questions. Thanks the or Hi, good afternoon.

to Cash I outstanding many your follow-up re-launched How number So at card? guys you the of Cash this point? Card, there. new management cash customers And maybe is the it. sort first to of wanted transitioned on have the what Cards of

Card quarter, into last the give Cash it you then if at transactions? think XXX,XXX. size possible, it’s insight of average average in number us like of terms And was the can of any I transactions customer and

this so Jason. and take Vlad jump can Ken, Hey is color. I’ll with any in additional that,

for an it’s opt-in are cash that So than the rather management customers opt-out moving over.

at. seen we’ve far, uptake the Card. kind to opt-in something so slow That’s looking And the of Cash a we’re that in

iterating in my I one responses offering. – just to and of earlier talked our We’re improving

to customers. And so we’re talking

Cash hope on the working Card. onboarding even to We’re we more customers flow. choose optimizing to adopt see the And

we we’ll the over think value on at also really we’ve looking until to Card. get fit. time, a And market got Cash that product just to continue we that the iterate proposition of great We’re point

of XXX,XXX. around of it’s terms on In card users, the update the number of kind

of sure minority XXX,XXX, to that that we proposition of card more top last the up you. something kind top value customers’ in then get Robinhood time stack right And frequently And customers hundred is just that, thousand is there’s of to it’s to also the for a a wallet. engaging couple and that make looking green that the are we’re where with the of our of – up wallets. we that it at since there’s shared that the So of get just moves that

well, make you continue progress there. early, So to it’s we’ll update and as we

thing Yes. we lending to said, only to really is, the The we I we’re the ton the we a funnel, improvements like do continue work and proud stock with of that would made product post-launch, that and of add there.

is it. full. Card, Cash the the got map a story. team coming. things lot The road it’s on of There’s We’ve With exciting a same great

will So we’re near very that much improve excited in the about product future. how

Okay. options the Thank then asset And having to Like options, clients classes. other are in you can crypto? experience been and you. options? volumes What equities why your are resilient Is in in the money experience are in And over if better do think relative Great. your have is trading they options? getting you experience than there making time? is they money the in making better tell,

is cash ago; able we’ve made that the product. we’ve options the amount charts; less a Net months Well, we the of in advanced engaging at the time. of of happy tools chat, and more, our a quite the advanced through characteristics typical things in the then past things options Score, live than launched that’s improvements retention with customers, our aggressively which relatively average the accounts; couple there. customer options were in and and to lot like ones one looking At And on better of bit a XX/X service short support, really reverse the including customer more more little And Promoter beginning of been year. of that XXXX, a we’re were

continue to this lot And with innovative coming features more options we rollout a awesome, year.

the options really, has team So firing on cylinders. been all

We’re to lot market a And work improving there. proud think the the of really of sort I it happy industry-wide. of team of in with there’s lot relative has especially share, in light product. overall a the to But done volumes just down the kind very of comes our relentlessly us decline And I’m do. more

introducing all excited our the not challenging for but macro last And just that’s yield And we’re of the over market to going which one X% it’s to over average frankly, goals. or cost offer over of systematically, customers, why sweep as about just retirement, been, program, customers able dollar so. to being the gold, year know, time really is environment, period long reach for on participants, you just reasons really Ken, a help a their cash of kind

do place that evolve will it. want really, so the you’re its no so matter to trade, to see be Robinhood And going how to Robinhood customers platform

And making but a long-term strategy there. it’s progress so us, we’re for

very you Thank much. Great.

Ken. Thanks, question. Appreciate the

Thank you.

next comes of Our of the Michael question Cyprys Stanley. line from Morgan

Michael. please, question Your

hoping maybe afternoon. not back coming for additional innovating helpful your good just point for today? advanced offered elaborate to could I you evening, Thanks that’s the bit good Hey, could customers. what a Maybe question. earlier was around taking functionality on

seen we’ve options, index point, options that the to not available growth index tremendous smaller-sized of they’re some on And including customers. in the yet. do I believe Robinhood contracts

opportunity about think the Just there? curious how you

that What there hurdles different they’re index adding as settled understand be cash could they a in bit share for net I options? to settle. opposed

the of that does year that XXXX? platform on a up built how Robinhood required? So for And much priorities stack how

the out for field don’t cat I the too let to of one. the I’ll bag early. want question. that Thanks

store. we’ve together. Quirk, some And Steve got and putting think really a great we’re I and exciting things Certainly, new team new teams. awesome in JB at features. looking assets They’re

we I at They lot things TD, in here which can They’ve care we’ve done wonderful advanced innovated got customers. tuned. And a think the with really really advanced stay about Robinhood, another so thinkorswim go customers. year for and past

Any or that comment set? the not of interested customer something your you to interest side? on guys are in Is index option

Again, specific interesting. any certainly but everything. comment I on assets, shouldn’t we’re at I looking think index options are

If could a side. on the just I question expense follow-up ask Great.

the the guidance fourth guys look like is looks progress made of You tremendous at down the pace If bit bringing growth a of relative rate. have quarter run it to expenses. a I little just XXXX,

spend? just you maybe driving headcount could comment all versus how unpack the moving that’s quarter pieces So are maybe pressures, growth, on can of that And I the inflationary expense some hoping it investment you fourth impacting was from growth levels.

Yes.

end very, the number at positions the We a open So growth. headcount year. very of modest had of

very, incremental investments We’re primarily modest funding top that in growth. on very and to of fill planning for growth then those

$X.XX to QX, for was the billion rate year. excluding our for If you billion. gets about then to roughly the compensation, $X.X that you share-based run think $X.XX guidance billion And

bit, third for fourth that three really rate so the a unpack third, a Each a categories. versus represent there’s growth third to and from the categories following a of them So run third, roughly a quarter. the incremental of

we’re seasonality funded well is XXXX, company’s to how went than first, XXXX, first we for kind our for just paying got program fund macro in bonus much like the you spend year the environment things fully as given normalize of, as The less QX and fully that assuming in whereas us. we’re

roughly seasonality QX’s And and take bonus rate. that if third of incremental you that’s of you the the run – effect, a off so kind

Pull-through that The also, regularly is growth, that the of expenses existing get new happens late existing on we that started on second the continuing year It kind of just the for effect. third And just like I to an includes basis. things products have. as investing annual business deliver compensation improve increases and incremental employee then the in category is year mentioned, growth. for you the and roughly full business a thirdof merit

And so that really guidance. bridges the the to baseline

much. Thank you very Great.

Thank you.

Benjamin Barclays. from line of Our the comes of question next Budish

line open, Your Benjamin. is

understand about for you deal with the kind thinking you are happening, environment kind there? share so be ask to of but UK I it’s of little I Hey, understood was question. no wanted about the leading do and of go-to-market launch. taking guys. much thoughts point we sort expected over year, the that of more on to that And longer your off think launching competitive bit Ziglu – Robinhood any if of strategy? is Wallet? the about Or for end the the a the with that a target how could Thanks you

that. field to Happy Yes.

that global fees. offers network Robinhood self-custodial Wallet Wallet the So no by and with default. Web swapping X It’s is trading a

we’re And be goal UK live So brokerage of year about. year. this end the for will the the very app offers services. the by services getting A the brokerage app, in from which main separate excited that Robinhood

Okay, sneak as in well. Thanks If great. so one could much. I

you the revenue, be outperformance, where most you you likely thinking nicely are would expect from? we’re in Just quarter, on net of most a your were come the think I if beat your interest guess, about own – to quarter. kind that if And similar would guidance of where there where would to you the pretty sort first surprised?

Movements definitely outperformance area our lending margin a in betas that come In outperformance to than that to the on sensitive the things where interest-earning might book Thank we you. QX, Certainly, that little that, asset lever did the the quarter. it’s expectations we model. a carry. don’t forecast I securities want predict be another bit could outperform the in like assets the might and be and surprise. to would we growth had mostly just deposit into nice better owed following

much. Thank great. so you Okay,

Thanks, Ben.

Thank you.

next Capital Markets. Alex Markgraff question line from KeyBanc of the Our comes of

Alex. please, question Your

to, first, Hey, Vlad. Jason. just questions. A guess, back I I of to wanted Hey, Wallet. couple Robinhood jump

at understand initiatives parity XXXX any side? this on how keep planned to you feel then peers the global the offering about wanted kind to And wallet completeness international markets sort mind? for marketing versus of just and in in Just of point of the

Yes.

is functionality to and And There better. from bunch relentlessly. the wallet the I we’re looking and are great of even things pretty executing we’re pretty place, On side, road add feedback a getting the in team that full, make to they’ve map core think is customers. been that it for

that. sorry, the I’m beyond had to team question international kudos you So a about that… wallet for then – And

International marketing.

Marketing? Yes. It’s really early us. for

as marketing product as doing from the we’re out possible. on feedback to now, on future. much the wait right in rolling and list course, focused Of open getting But the we’re users the

look be what you to key launch that then of should And maybe I are mileposts I operational Awesome. question. to year-end? mean, expand some on on just brokerage, by UK of guess, just as earlier kind the thinking that we

product all shape, to like things for with infrastructure sure different we we will conversions It’s made any money we possible the years. in sure the past our we technology customers do couple them. the as really Yes. adhere big for and the requirements But think that that UK-specific making improvements experience and think and make really the the in that making of making great Forex We’ve just and the market, and seamless mainly is over a we useful foundation. technology adaptations have as to UK talking good

anticipate be a getting So it scaling, will up about the and don’t there. just problem. experience we getting set It’s more user everything

Jason. is this So

any is affecting stock. our clear a reporting of is I one to news We’re hearing PR have. from It’s is factually want on just that, incorrectly we that not Robinhood accurate. outlets be our split super that that plan team that not the

news, And so Thank be for spread all correct can would that fantastic. those you. listening, if the you

you. Thank

back for We I would don’t the more turn closing Tenev remarks. conference Vlad have now any to to questions. like

everyone. will see of some Really appreciate you, you next we Thank you quarter, questions, the all sooner. and

Thanks, everyone.

you. conference today’s time. Please concludes your lines disconnect at Thank This this call.