Robinhood Markets, Inc. · NASDAQ:HOOD
Robinhood Markets — Q3 2021 Earnings Presentation
27 slides from Robinhood Markets's earnings presentation, 2021
Slide 1: Robinhood Markets, Inc. Earnings Presentation Third Quarter 2021
Robinhood Markets, Inc. Earnings Presentation Third Quarter 2021 investors.robinhood.com 1
Slide 2: Disclaimers
Disclaimers This Presentation Relates to Robinhood’s Broader Earnings Announcement Disclosures This presentation accompanies Robinhood’s third quarter 2021 earnings announcement webcast and should be read together with Robinhood’s earnings announcement press release. Hyperlinks to our third quarter
Slide 3: Q3 2021 Highlights
Q3 2021 Highlights Crypto wallets are on the way 24/7 phone support is here Robinhood opened the waitlist for crypto wallets, one of its Quality customer service is a key differentiator as Robinhood most heavily requested products. seeks to become the most trusted financial institution 100% of logge
Slide 4: Q3 2021 Highlights
Q3 2021 Highlights Participation is Power - continuing to Educational content is expanding expand access for our customers - with more content in-app IPO Access and Say Connect both attracted additional issuers Helping first-time investors become long-term investors 12 IPOs 23.3M To date, Robinhood
Slide 5: New products on the way
New products on the way Highlighted products include... Recommendations Engine ACATS-In Retirement Accounts investors.robinhood.com 5
Slide 6: Net Cumulative Funded Accounts
Net Cumulative Funded Accounts in millions 22.5 22.4 18.0 12.5 11.4 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 investors.robinhood.com 6
Slide 7: Monthly Active Users (MAU)
Monthly Active Users (MAU) in millions 21.3 18.9 17.7 11.7 10.7 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 investors.robinhood.com 7
Slide 8: 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, net of customer margin balances. $102 $95 $81 $63 $44 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Equities Options Cryptocurrencies Net cash
Slide 9: 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 $102 $106 $65 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 investors.robinhood.com 9
Slide 10: Total Net Revenues
Total Net Revenues in millions Refer to the Appendix for details of total net revenues. $565 $522 $365 $318 $270 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Transaction-based revenues Net interest revenues Other revenues investors.robinhood.com 10
Slide 11: 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 $235 $202 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Equity Options Crypto Other investors.robinhood.com 11
Slide 12: 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 $62 $50 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Securities lending Margin interest Interest on segregated cash and securities Other interest revenue Interest expenses relate
Slide 13: Operating Expenses
Operating Expenses in millions 1 Q3'2021 includes $1,244 million in share-based compensation of which $1,008 million was recognized upon our IPO. Refer to the Appendix for details of operating expenses. 1 $1,708 $464 $501 $280 $298 Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Brokerage and transaction Te
Slide 14: Net Income (Loss)
Net Income (Loss) in millions 1 Q1, Q2, and Q3 2021 included $(1,492) million, $(528) million, and $(25) million for changes in fair value of our convertible note and warrants due to mark-to-market adjustments. Q3 2021 also included $1,244 million in share- based compensation of which $1,008 million
Slide 15: 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 $59 $(84)
Slide 16: Appendix
Appendix investors.robinhood.com 16
Slide 17: Changes in Net Cumulative Funded Accounts
Changes in Net Cumulative Funded Accounts in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Beginning balance 9.8 11.4 12.5 18.0 22.5 New funded accounts 1.9 1.4 5.7 5.1 0.7 Resurrected accounts 0.1 0.1 0.4 0.3 0.1 Churned accounts (0.4) (0.4) (0.6) (0.9) (0.9) Ending balance 11.4 12.5 18.0 22.5 2
Slide 18: Assets Under Custody (AUC)
Assets Under Custody (AUC) in billions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Equities $ 38 $ 53 $ 65 $ 73 $ 69 Options 1 2 2 2 1 Cryptocurrencies 1 4 12 23 22 Net cash held by users 4 4 2 4 3 Assets under custody $ 44 $ 63 $ 81 $ 102 $ 95 investors.robinhood.com 18
Slide 19: Changes in Assets Under Custody (AUC)
Changes in Assets Under Custody (AUC) in billions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Beginning balance $ 33 $ 44 $ 63 $ 81 $ 102 Net deposits 9 7 11 10 2 Net market gains 2 12 7 11 (9) Ending balance $ 44 $ 63 $ 81 $ 102 $ 95 investors.robinhood.com 19
Slide 20: Total Net Revenues
Total Net Revenues in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Transaction-based revenues $ 202 $ 235 $ 420 $ 451 $ 267 Net interest revenues 50 63 62 68 63 Other revenues 18 20 40 46 35 Total net revenues $ 270 $ 318 $ 522 $ 565 $ 365 investors.robinhood.com 20
Slide 21: Total Net Revenues — Transaction-Based Revenues
Total Net Revenues — Transaction-Based Revenues in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Options $ 127 $ 142 $ 198 $ 165 $ 164 Cryptos 5 12 88 233 51 Equities 69 80 133 52 50 Other 1 1 1 1 2 Total transaction-based revenues $ 202 $ 235 $ 420 $ 451 $ 267 investors.robinhood.com 21
Slide 22: Total Net Revenues — Net Interest Revenues
Total Net Revenues — Net Interest Revenues in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Securities lending $ 28 $ 35 $ 35 $ 39 $ 33 Margin interest 21 27 28 31 34 Interest on segregated cash and securities 1 1 1 1 1 Other interest revenue 1 1 1 2 1 Interest expenses related to credit faciliti
Slide 23: Operating Expenses
Operating Expenses in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Brokerage and transaction $ 31 $ 30 $ 41 $ 38 $ 44 Technology and development 55 82 117 156 679 Operations 41 45 67 101 108 Marketing 39 33 102 94 87 General and administration 114 108 137 112 790 Total operating expenses $ 280 $
Slide 24: Operating Expenses Excluding Share-Based Compensation (SBC) Reconciliation
Operating Expenses Excluding Share-Based Compensation (SBC) in millions Reconciliation Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Brokerage and transaction (GAAP) $ 31 $ 30 $ 41 $ 38 $ 44 Less: SBC — — — — 6 Brokerage and transaction excluding SBC (non-GAAP) 31 30 41 38 38 Technology and development (G
Slide 25: Net Cash Held by Users
Net Cash Held by Users in billions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Cash held by users $ 6.6 $ 7.9 $ 7.6 $ 9.9 $ 8.8 Customer margin balances (2.3) (3.6) (5.4) (5.5) (6.2) Net cash held by users $ 4.3 $ 4.3 $ 2.2 $ 4.4 $ 2.6 investors.robinhood.com 25
Slide 26: Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations in millions Q3'2020 Q4'2020 Q1'2021 Q2'2021 Q3'2021 Net income (loss) $ (11) $ 13 $ (1,445) $ (502) $ (1,317) Net margin1 (4)% 4% (277)% (89)% (361)% Add: Interest expenses related to credit facilities 1 1 3 5 6 Provision for (benefit from)
Slide 27: Definitions
Definitions Key Performance Metrics Non-GAAP Financial Measures Net Cumulative Funded Accounts 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