Robinhood Markets, Inc. · NASDAQ:HOOD
Robinhood Markets — Q4 2021 Earnings Presentation
30 slides from Robinhood Markets's earnings presentation, 2022
Slide 1: Earnings Presentation Fourth Quarter 2021
Robinhood Markets, Inc. Earnings Presentation Fourth Quarter 2021 investors.robinhood.com 1
Slide 2: Disclaimers
Disclaimers This Presentation Relates to Robinhood’s Broader Earnings Announcement Disclosures This presentation accompanies the fourth quarter and full year 2021 earnings announcement webcast of Robinhood Markets, Inc. (including its consolidated subsidiaries, “we,” “Robinhood,” or the “Company”) a
Slide 3: A year of incredible accomplishments
A year of incredible accomplishments Key business milestones New products and features in 2021 Net cumulative funded 10M+ Added in 2021 22M+ Total on the platform Increased service 24/7 live phone accounts reliability and uptime support Assets under custody $35B+ Added in 2021 $98B+ Total on the pla
Slide 4: Delivered on product development in Q4 2021
Delivered on product development in Q4 2021 First trade recommendations Started rolling out ACATS In Crypto • Helps new customers get started with a • Early results have been promising • Crypto Wallets → expect full roll out by end of Q1 diversified ETF portfolio based on their risk • Expect to comp
Slide 5: We believe everyone should be an investor
We believe everyone should be an investor We plan to create an ecosystem of financial products and services Long-term Spending Payments International investing & Saving that will enable people across the world to invest for the long-term investors.robinhood.com 5
Slide 6: Charting ambitious plans for 2022
Charting ambitious plans for 2022 Long-Term Investing • Plan to roll out more offerings that make investing routine, give people more ways to build wealth for the future, and bring them closer to the companies they invest in • Teams are already hard at work on tax-advantaged accounts Spending & Savi
Slide 7: Net Cumulative Funded Accounts
Net Cumulative Funded Accounts in millions 22.5 22.4 22.7 18.0 12.5 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 investors.robinhood.com 7
Slide 8: Monthly Active Users (MAU)
Monthly Active Users (MAU) in millions 21.3 18.9 17.7 17.3 11.7 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 investors.robinhood.com 8
Slide 9: Assets Under Custody (AUC)
Assets Under Custody (AUC) in billions Refer to the Appendix for details of AUC and net cash held by users, which represents cash held by users in their accounts, $102 net of receivables from users. $95 $98 $81 $63 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Equities Options Cryptocurrencies Net cash he
Slide 10: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) Quarterly ARPU amounts are presented on an annualized basis, see definition in Appendix. $137 $112 $106 $65 $64 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 investors.robinhood.com 10
Slide 11: Total Net Revenues
Total Net Revenues in millions Refer to the Appendix for details of total net revenues. $565 $522 $365 $363 $318 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Transaction-based revenues Net interest revenues Other revenues investors.robinhood.com 11
Slide 12: Total Net Revenues — Transaction-Based Revenues
Total Net Revenues — Transaction-Based Revenues in millions Refer to the Appendix for details of transaction-based revenues. $451 $420 $267 $264 $235 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Equity Options Crypto Other investors.robinhood.com 12
Slide 13: Total Net Revenues — Net Interest Revenues
Total Net Revenues — Net Interest Revenues in millions Refer to the Appendix for details of net interest revenues. $68 $63 $63 $63 $62 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Securities lending Margin interest Interest on segregated cash and securities Other interest revenue Interest expenses relate
Slide 14: Operating Expenses
Operating Expenses in millions 1 Q3 and Q4 2021 include $1,245 million and $318 million in share-based compensation. Refer to the Appendix for details of operating expenses. 1 $1,708 1 $783 $464 $501 $298 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Brokerage and transaction Technology and development Op
Slide 15: Net Income (Loss)
Net Income (Loss) in millions 1 Q1, Q2, and Q3 2021 included losses of $1,492 million, $528 million, and $25 million for changes in fair value of our convertible notes and warrant liability due to mark-to-market adjustments. Q3 and Q4 2021 also included $1,245 million and $318 million in share-based
Slide 16: Adjusted EBITDA
Adjusted EBITDA in millions Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. Refer to the Appendix for the reconciliations of Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measures, net income (loss) and net margin. $115 $79 $90 $(84) $(87
Slide 17: Appendix
Appendix investors.robinhood.com 17
Slide 18: Changes in Net Cumulative Funded Accounts
Changes in Net Cumulative Funded Accounts in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Beginning balance 11.4 12.5 18.0 22.5 22.4 New funded accounts 1.4 5.7 5.1 0.7 0.8 Resurrected accounts 0.1 0.4 0.3 0.1 0.2 Churned accounts (0.4) (0.6) (0.9) (0.9) (0.7) Ending balance 12.5 18.0 22.5 22.4
Slide 19: Assets Under Custody (AUC)
Assets Under Custody (AUC) in billions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Equities $ 53 $ 65 $ 73 $ 69 $ 72 Options 2 2 2 1 2 Cryptocurrencies 4 12 23 22 22 Net cash held by users 4 2 4 3 2 Assets under custody $ 63 $ 81 $ 102 $ 95 $ 98 investors.robinhood.com 19
Slide 20: Changes in Assets Under Custody (AUC)
Changes in Assets Under Custody (AUC) in billions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Beginning balance $ 44 $ 63 $ 81 $ 102 $ 95 Net deposits 7 11 10 2 4 Net market gains (losses) 12 7 11 (9) (1) Ending balance $ 63 $ 81 $ 102 $ 95 $ 98 investors.robinhood.com 20
Slide 21: Total Net Revenues
Total Net Revenues in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Transaction-based revenues $ 235 $ 420 $ 451 $ 267 $ 264 Net interest revenues 63 62 68 63 63 Other revenues 20 40 46 35 36 Total net revenues $ 318 $ 522 $ 565 $ 365 $ 363 investors.robinhood.com 21
Slide 22: Total Net Revenues — Transaction-Based Revenues
Total Net Revenues — Transaction-Based Revenues in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Options $ 142 $ 198 $ 165 $ 164 $ 163 Equities 80 133 52 50 52 Cryptocurrencies 12 88 233 51 48 Other 1 1 1 2 1 Total transaction-based revenues $ 235 $ 420 $ 451 $ 267 $ 264 investors.robinhood.com 2
Slide 23: Total Net Revenues — Net Interest Revenues
Total Net Revenues — Net Interest Revenues in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Securities lending $ 35 $ 35 $ 39 $ 33 $ 29 Margin interest 27 28 31 34 39 Interest on segregated cash and securities 1 1 1 1 — Other interest revenue 1 1 2 1 1 Interest expenses related to credit faciliti
Slide 24: Operating Expenses
Operating Expenses in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Brokerage and transaction $ 30 $ 41 $ 38 $ 44 $ 29 Technology and development 82 117 156 679 280 Operations 45 67 101 108 98 Marketing 33 102 94 87 44 General and administration 108 137 112 790 332 Total operating expenses $ 298
Slide 25: Operating Expenses Excluding Share-Based Compensation (SBC) Reconciliation
Operating Expenses Excluding Share-Based Compensation (SBC) in millions Reconciliation Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Brokerage and transaction (GAAP) $ 30 $ 41 $ 38 $ 44 $ 29 Less: SBC — — — 6 1 Brokerage and transaction excluding SBC (non-GAAP) 30 41 38 38 28 Technology and development (G
Slide 26: Financial Outlook for Operating Expenses (GAAP to Non-GAAP Reconciliation)
Financial Outlook for Operating Expenses (GAAP to Non-GAAP Reconciliation) Financial Outlook for the Year Ended December 31, Year Ending December 31, 2021 2022 (in millions) (year-over-year change) Total operating expenses (GAAP) $ 3,456 decrease by 5-10% Less: SBC 1,572 decrease by 35-40% Total ope
Slide 27: Net Cash Held by Users
Net Cash Held by Users in billions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 Cash held by users $ 7.9 $ 7.6 $ 9.9 $ 8.8 $ 8.8 Receivables from users (3.6) (5.4) (5.5) (6.2) (6.5) Net cash held by users $ 4.3 $ 2.2 $ 4.4 $ 2.6 $ 2.3 investors.robinhood.com 27
Slide 28: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations in millions Q4'2020 Q1'2021 Q2'2021 Q3'2021 Q4'2021 FY 2020 FY2021 Net income (loss) $ 13 $ (1,445) $ (502) $ (1,317) $ (423) $ 7 $ (3,686) Net margin1 4% (277)% (89)% (361)% (117)% 1% (203)% Add: Interest expenses related to credit faciliti
Slide 29: Definitions
Definitions Key Performance Metrics Assets Under Custody (“AUC”) Net Cumulative Funded Accounts We define AUC as the sum of the fair value of all equities, options, cryptocurrency and cash held by users in their accounts, A Robinhood account is designed to provide a user with access to any and all o
Slide 30: Definitions (continued)
Definitions (continued) 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 Adjusted EB