Robinhood Markets, Inc. · NASDAQ:HOOD
Robinhood Markets — Q1 2024 Earnings Presentation
41 slides from Robinhood Markets's earnings presentation, May 8, 2024
Slide 1: Earnings Presentation First Quarter 2024
Robinhood Markets, Inc. Earnings Presentation First Quarter 2024 May 8, 2024 investors.robinhood.com 1
Slide 2: Disclaimers
Disclaimers This Presentation Relates to Robinhood’s Broader Earnings Announcement Disclosures This presentation accompanies the first quarter 2024 earnings announcement webcast of Robinhood Markets, Inc. (including its consolidated subsidiaries, “we,” “Robinhood,” or the “Company”) and should be re
Slide 3: Q1 2024 Business Results Highlights
Q1 2024 Business Results Highlights Funded Customers +810k year-over-year +500k sequential Gold Subscribers +500k year-over-year +260k sequential in millions in millions Gold Subscribers Gold Adoption Rate¹ 23.9 23.2 23.3 23.4 1.68 23.1 1.42 1.23 1.33 1.18 7.0% 5.3% 5.7% 6.1% 5.1% Q1'23 Q2'23 Q3'23
Slide 4: Q1 2024 Financial Results Highlights
Q1 2024 Financial Results Highlights Total Net Revenues +40% year-over-year +31% sequential Adjusted Operating Expenses +13% year-over-year +9% sequential in millions in millions $618 $486 $467 $471 $398 $441 $352 $357 $353 $364 $2,042M over the last twelve months $1,472M over the last twelve months
Slide 5: Strong product velocity to start the year
Strong product velocity to start the year Corporate Brokerage Crypto Money Events (1) More than tripled the number of symbols available to trade on 24 Hour Market in February 2024, bringing total to over 900 as of the end of Q1 2024. (2) Rolled all eligible customers off our waitlist and made Robinh
Slide 6: 2024 Product Roadmap
2024 Product Roadmap Winning the Increasing Expanding Active Trader market Wallet Share Internationally Products • Advanced web • Gold and Retirement • UK brokerage enhancements • Index options • EU crypto • Credit card • Futures • Expanded product suite • Additional account types Measures • Equity
Slide 7: Funded Customers increased by ~810 thousand year-over-year to 23.9 million
Funded Customers increased by ~810 thousand year-over-year to 23.9 million in Q1 in millions Year-over-year change +810k Sequential change +500k 24.4 Investment Accounts 23.8 23.6 As of Q1 2024, we had 24.4M Investment 23.3 23.4 23.9 Accounts, up 1.1M year-over-year. 23.0 23.3 23.4 23.1 23.2 22.9 22
Slide 8: Assets Under Custody increased 65% year-over-year to a record $130 billion
Assets Under Custody (AUC) increased 65% year-over-year to a record $130 billion in Q1, primarily due to higher equity and crypto valuations and continued Net Deposits in billions Year-over- Sequential year change change $130 +65% +26% $21 +85% +16% $103 $93 $89 $87 $18 $26 +128% +78% $4 $78 $14 $15
Slide 9: Retirement growth accelerated in Q1, with Retirement AUC more than doubling
Retirement growth accelerated in Q1, with Retirement AUC more than doubling sequentially to over $4 billion Retirement Accounts1 Retirement AUC Retirement AUC per Account2 End of period, in thousands End of period, in billions End of period, in thousands $6.5 ~650 $4.2 ~490 ~390 $3.5 ~300 $2.8 $1.7
Slide 10: Robinhood Gold subscriber growth highest in three years
We continue to add value to Robinhood Gold, and Q1 2024 subscriber growth was the highest in three years Gold Subscribers receive meaningful value for Gold Subscribers $5 per month1 in millions Gold Subscribers Gold Adoption Rate³ 1.68 Cash Sweep 5% APY on uninvested cash 1.42 Q1 2024 1.23 1.33 1.18
Slide 11: Net Deposits were a record $11.2 billion in Q1
Net Deposits were a record $11.2 billion in Q1, translating to a 44% annualized growth rate and contributing to a 30% growth rate over the last twelve months in billions Last twelve months Net Deposits $23.9 Last twelve months growth rate 30% $11.2 $5.7 $5.2 $4.8 $4.4 $4.6 $4.1 $4.0 44% $2.7 30% 29%
Slide 12: Our Net Deposits were broad and diversified in Q1
Our Net Deposits were broad and diversified in Q1 Length of Customer Relationship Sources Uses Retirement Less Than One Year Net Transfers From Other Brokerages1 ~20% ~25% ~25% Cash Sweep3 ~25% Over One Year Customer Contributions2 ~75% ~75% Brokerage4 ~55% (1) Reflects net ACATs into Robinhood. (2)
Slide 13: Average cumulative Net Deposits tend to grow over time across cohorts
Average cumulative Net Deposits1 tend to grow over time across our Funded Customer Cohorts2, and recent cohorts' initial Net Deposits are larger $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $— 0 4 8 12 16 Quarters Customer Cohort Key: Q1'20 Q1'24 2020 2021 2022 2023 Funded Customer Cohort
Slide 14: Total net revenues up 40% year-over-year to a record $618 million
Total net revenues were up 40% year-over-year to a record $618 million in Q1; ARPU was $104 in millions, except for ARPU Year-over- Sequential $104 year change change $84 Average Revenue per User (ARPU) $77 $80 $81 $618 +40% +31% $63 $66 $35 +35% —% $53 $56 $486 $467 $471 $441 $59 $31 $35 $254 +22%
Slide 15: Transaction-based revenues were up 59% year-over-year to $329 million
Transaction-based revenues were up 59% year-over-year to $329 million in Q1 in millions $10 Year-over- Sequential year change change $329 +59% +65% +11% (9)% $1 $2 $2 $9 $11 $2 $10 $11 $126 +232% +193% $218 $208 $207 $202 $193 $200 $54 $186 $185 $51 $38 $58 $39 $31 $43 $23 $154 +16% +27% $127 $124 $
Slide 16: Net interest revenues were up 22% year-over-year to $254 million
Net interest revenues were up 22% year-over-year to $254 million in Q1 in millions Year-over-year change +22% Sequential change +8% $4 $6 $5 $251 $254 $234 $17 $236 $15 Credit card, net Securities lending, net $208 $27 $35 $9 $39 Cash Sweep $37 $26 $29 $167 $22 Interest on segregated cash, $13 $59 $
Slide 17: Adjusted Operating Expenses increased 13% year-over-year to $398 million
Adjusted Operating Expenses increased 13% year-over-year to $398 million in Q1 in millions Year-over-year change +13% Sequential change +9% $460 $419 $398 $130 $352 $357 $353 $364 $104 $335 $319 $106 $27 $24 $110 $100 $107 $92 $108 $87 $90 $65 $82 $24 $27 $41 $18 $25 $28 $35 $38 $42 $52 $40 $38 $40
Slide 18: Diluted share count decreased by ~5% year-over-year
Diluted share count decreased by ~5% year-over-year in Q1; we continue to anticipate dilution of 2% or less in 2024 Basic and Diluted Share Count Share-Based Compensation Expense in millions in millions Year-over- year change 975 975 924 (5.1%) SBC ex 2021 Founders Award Cancellation 75 65 917 915 2
Slide 19: On track for 2024 expense outlook of $1.85 billion to $1.95 billion
We are on track for our 2024 expense outlook of $1.85 billion to $1.95 billion of combined Adjusted Operating Expenses and SBC in billions • Our 2024 expense outlook of $1.85B to $1.95B of combined Adjusted Operating Expenses and SBC was built to drive Down ~17% Up ~5% another year of profitable gro
Slide 20: GAAP net income was a record $157 million in Q1
GAAP net income was a record $157 million in Q1 and EPS was $0.18 in millions Year-over-year change +$668 LTM Net Income Sequential change +$127 $127M $157 $25 $30 ($85) ($175) ($166) ($295) ($392) ($511) Q1'22 Q2'22 Q3'22 Q4'22 Q1'23¹ Q2'23 Q3'23² Q4'23 Q1'24 Diluted Earnings per Share (EPS) ($0.45
Slide 21: Adjusted EBITDA was a record $247 million in Q1
Adjusted EBITDA was a record $247 million in Q1 and Adjusted EBITDA Margin increased 14 points year-over-year to 40% in Q1 in millions Year-over-year change +$132 Sequential change +$114 LTM Adj. EBITDA $668M (33% margin) $247 $151 $137 $133 $115 $82 $47 ($80) ($143) Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2
Slide 22: Over $5B in corporate cash and investments
With over $5B in corporate cash and investments, we are well positioned to continue deploying capital in billions Year-over-year change ($0.7) Sequential change ($0.1) • Our balance sheet remains strong with over $5 billion of corporate cash and $6.2 $6.0 $6.2 $6.3 $6.3 investments1 today, as well a
Slide 23: Appendix
Appendix investors.robinhood.com 23
Slide 24: March 2024 Monthly Metrics
March 2024 Monthly Metrics See the Appendix for definitions. Monthly percentage change represents the most recent calendar month as compared to the immediately preceding calendar month. Yearly percentage change represents the most recent calendar month as compared to the same month of the prior year
Slide 25: March 2024 Monthly Metrics Dashboard
March 2024 Monthly Metrics Dashboard investors.robinhood.com 25
Slide 26: March 2024 Monthly Metrics Dashboard (Continued)
March 2024 Monthly Metrics Dashboard (Continued) investors.robinhood.com 26
Slide 27: Changes in Funded Customers and Assets Under Custody
Changes in Funded Customers and Assets Under Custody Funded Customers in millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Beginning Funded Customers 22.7 22.8 22.9 22.9 23.0 23.1 23.2 23.3 23.4 New Customers 0.5 0.4 0.3 0.2 0.3 0.2 0.3 0.3 0.5 Resurrected Customers 0.1 0.1 0.1 0.1 0.1
Slide 28: Net Cash Held by Users Reconciliation
Net Cash Held by Users Reconciliation in billions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Gold Cash Sweep $— $— $1.5 $4.8 $8.0 $11.1 $12.9 $15.7 $18.2 Non-Gold Cash Sweep 2.3 2.4 1.5 1.0 0.9 0.8 0.7 0.7 0.8 Total Cash Sweep 2.3 2.4 3.0 5.8 8.9 11.9 13.6 16.4 19.0 Free Credit Balances a
Slide 29: Trading Volumes for Q1 2024
Trading Volumes for Q1 2024 Equity Notional Volume up Options Contracts Traded up Crypto Notional Volume up 35% Q/Q, driven by: 16% Q/Q, driven by: 183% Q/Q, driven by: Customers placing trades Customers placing trades Customers placing trades +18% Q/Q +30% Q/Q +77% Q/Q Notional volume per trader Co
Slide 30: Monthly Active Users increased by 1.9 million year-over-year
Monthly Active Users (MAU) increased by 1.9 million year-over-year to 13.7 million in Q1 in millions Year-over-year change +1.9 Sequential change +2.8 13.7 11.8 10.8 10.3 10.9 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 investors.robinhood.com 30
Slide 31: Annualized revenue per employee was $1.1 million in Q1
Annualized revenue per employee was $1.1 million in Q1, up 47% year-over-year Year-over-year Sequential Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 change change End of period Employee Count 2,327 2,320 2,145 2,157 2,189 2,228 (4%) +2% Total Net Revenues (in millions) $380 $441 $486 $467 $471 $6
Slide 32: Net interest revenues were $254 million in Q1
Net interest revenues were $254 million in Q1, up 22% year-over-year in millions Year-over- Sequential Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 year change change Interest on corporate cash and investments1 $1 $10 $29 $63 $68 $74 $75 $71 $70 +3% (1%) Margin interest2 3
Slide 33: Total interest earning assets grew to ~$34B in Q1
Total interest earning assets grew to ~$34B in Q1, and average yield decreased by 24 bps sequentially, primarily due to an increased mix of cash sweep balances in millions Interest expense Cash sweep Total interest Securities lending, Net interest Margin book Cash and deposits(1) Credit card, net(2)
Slide 34: Total securities lending revenue decreased 7% year-over-year to $42 million
Total securities lending revenue decreased by 7% year-over-year to $42 million in Q1, and fully paid securities lending grew to 38% of total securities lending in millions Year-over-year Sequential Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Total securities lending revenue, including interest on cash c
Slide 35: Fully diluted shares decreased by nearly 9% year-over-year
Fully diluted shares decreased by nearly 9% year-over-year as we continue to closely manage share-based compensation and purchased 55M+ shares in Q3 2023 Price per Class A Share (End of period) $9.71 $9.98 $9.73 $12.74 $20.13 March 31, 2024 (in millions, except prices and percentages) March 31, 2023
Slide 36: Financial Outlook for Adjusted Operating Expenses and SBC Reconciliation
Financial Outlook for Adjusted Operating Expenses and SBC Reconciliation Current Financial Outlook Year Ended December 31, Year Ended December 31, for the Year Ending 2022 2023 December 31, 2024 (in millions) (in millions) (in millions) Total operating expenses (GAAP) $2,369 $2,401 $1,850 - $1,950 L
Slide 37: Adjusted Operating Expenses and SBC Reconciliation
Adjusted Operating Expenses and SBC Reconciliation in millions Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Total operating expenses (GAAP) $690 $610 $535 $534 $950 $466 $540 $445 $460 Less: SBC SBC Excluding 2021 Founders Award Cancellation 220 164 110 160 113 109 83 81 6
Slide 38: Adjusted Operating Expenses Reconciliation
Adjusted Operating Expenses Reconciliation in millions Operating expenses (GAAP) Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Brokerage and transaction $31 $30 $33 $85 $36 $39 $39 $32 $35 Technology and development 268 245 185 180 199 207 202 197 196 Operations 91 86 65 43 42 36 41 40 44 Ma
Slide 39: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations in millions Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net income (loss) ($392) ($295) ($175) ($166) ($511) $25 ($85) $30 $157 Net margin1 (131%) (93%) (48%) (44%) (116%) 5% (18%) 6% 25% Add: Interest expenses re
Slide 40: Definitions
Definitions Performance Metrics Daily Average Revenue Trades (“DARTs”) For information on changes to our key performance metrics, see 'Key Performance Metrics" in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results We define DARTs for any asset class as the total
Slide 41: Definitions (continued)
Definitions (continued) Non-GAAP Financial Measures Impairment of Ziglu equity securities: Partially as a result of the termination of the stock purchase agreement, which occurred in February 2023, the advances made to Ziglu Limited accounted for as non-marketable equity securities were impaired to