Robinhood Reports Second Quarter 2022 Results

Robinhood Reports Second Quarter 2022 Results

MENLO PARK, Calif. ? August 2, 2022 ? Robinhood Markets, Inc. ("Robinhood") (NASDAQ: HOOD) today announced financial results for the second quarter of 2022, which ended June 30, 2022.

? Total net revenues increased 6% sequentially to $318 million. ? Transaction-based revenues decreased 7% sequentially to $202 million.

Options decreased 11% sequentially to $113 million. Cryptocurrencies increased 7% sequentially to $58 million. Equities decreased 19% sequentially to $29 million. ? Net interest revenue increased 35% sequentially to $74 million. ? Net loss was $295 million, or $0.34 per diluted share, compared with net loss of $392 million, or $0.45 per diluted share in the first quarter of 2022. ? Operating expenses decreased 12% sequentially to $610 million. Operating expenses excluding share-based compensation decreased 5% sequentially to

$446 million, which included $17 million of restructuring charges related to the reduction-in-force announced in April 2022. Share-based compensation expense decreased 25% sequentially to $164 million. The decrease was primarily driven by a $24 million reversal related to our April workforce reduction and our reduced pace of hiring this year. ? Adjusted EBITDA (non-GAAP) was negative $80 million, a sequential improvement of $63 million. We continue to challenge ourselves to reach a positive run-rate for Adjusted EBITDA by the end of 2022. ? Net Cumulative Funded Accounts were 22.9 million, an increase of 100 thousand sequentially. ? Monthly Active Users (MAU) decreased 1.9 million sequentially to 14.0 million for June 2022, as customers navigated the volatile market environment. ? Assets Under Custody (AUC) decreased 31% sequentially to $64.2 billion, primarily driven by lower market asset valuations. ? Net Deposits were $5.2 billion, which translates to an annualized growth rate of 22% relative to prior period AUC. Over the past twelve months, Net Deposits were $17.5 billion, which translates to a growth rate of 17%. ? Average Revenues Per User (ARPU) increased to $56 from $53 in the first quarter of 2022. ? Cash and cash equivalents totaled $6.0 billion at June 30, 2022, compared with $6.2 billion at March 31, 2022.

"In the second quarter we continued to make strong progress on our roadmap and delivered products that will help our customers navigate an environment marked by higher interest rates and rising inflation," said Vlad Tenev, CEO and Co-Founder of Robinhood Markets. "With the introduction of Stock Lending, extended hours for trading, improved options offerings, new coins, and the announcement of our non-custodial wallet, we've built an even better and more robust customer experience in the first half of the year and look forward to bringing our customers additional products and services throughout the remainder of 2022."

"This quarter saw Robinhood make important strides on both our business and financial goals," said Jason Warnick, Chief Financial Officer of Robinhood Markets. "In the second quarter, we were encouraged to see our customers continue to engage with us through the volatile environment. We saw Net Deposits of $5.2 billion, representing a 22% annualized growth rate. Revenues in the quarter were up 6% and we managed our costs down 5%, leading to a $97 million sequential improvement in net loss and a $63 million improvement in Adjusted EBITDA. While the decision to make an additional reduction in force was a difficult one, we believe that it was the right decision and positions us to deliver on our mission of democratizing finance for all."

Highlights

Robinhood delivers enhanced user experience for all brokerage customers ? In the first half of 2022, Robinhood has launched several new products focused on delivering the top feature requests and addressing pain points for more advanced customers.

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? This quarter, Robinhood rolled out Stock Lending to give customers an additional source of income on their stocks, with over $3 billion of equity value already enrolled and available to lend.

? Robinhood has also made improvements to its options offering, including introducing options in cash accounts, the top requested feature among advanced customers.

? In the back half of the year, Robinhood plans to further enhance the customer experience by introducing advanced charting and screening tools, delivering improvements to the core trading flow, and rolling out retirement accounts.

Robinhood continues to build momentum in crypto ? Despite the challenging environment for the whole crypto ecosystem, Robinhood has continued to build in this space. In the second quarter, Robinhood introduced a number of new coins in a deliberate and considered manner, and customers have been pleased with the offerings to date. ? Robinhood is working to give customers even more control over their crypto. In April, the company rolled out crypto Wallets, allowing customers to move their crypto in and out of Robinhood in a simple, safe, and seamless way. Robinhood also announced its plan to introduce a non-custodial wallet later this year. The standalone app will allow customers to trade and swap crypto with no network fees and maintain full custody of their crypto throughout, all with the simplicity and great user experience they have come to expect from Robinhood.

Robinhood makes progress on its money offering ? In March, Robinhood rolled out the Robinhood Cash Card, a debit card that features spending roundups as well as roundup bonuses and merchant rewards. ? Since launch, the company has been making steady improvements to the user experience. Through the Cash Card, Robinhood sees an opportunity to become the primary place where customers deposit their paychecks and drive additional customer loyalty as well as diversify revenue over time.

Webcast and Conference Call Information

Robinhood will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET tomorrow, August 3, 2022. The live webcast of Robinhood's earnings conference call can be accessed at investors., 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

As a result of the progress we have made on our cost reduction initiatives, including the reductions in force announced April 26, 2022 (the "April 2022 Restructuring") and August 2, 2022 (the "August 2022 Restructuring") we expect:

? GAAP total operating expenses for full-year 2022 to be in the range of $2.46 billion to $2.60 billion, representing a decrease of approximately 25% to 29% from the prior year;

? total operating expenses, excluding share-based compensation, for full-year 2022 to be in the range of $1.70 billion to $1.76 billion, representing a decrease of approximately 7% to 10% from the prior year. (These amounts include severance and other restructuring charges of $17 million in connection with the April 2022 Restructuring and an estimated $45 million to $60 million in connection with the August 2022 Restructuring); and

? share-based compensation for full-year 2022 to be in the range of $760 million to $840 million, representing a decrease of approximately 47% to 52% percent from the prior year. (These amounts include the benefit of share-based compensation reversal of $24 million in connection with the April 2022 Restructuring and an estimated share-based compensation reversal of $40 million to $50 million in connection with the August 2022 Restructuring.)

Actual results might differ materially from our outlook due to several factors, including the rate of growth in net new funded accounts which affects several costs including variable marketing costs, the degree to which we are

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successful in preventing fraud, our ability to manage web-hosting expenses efficiently, and our ability to achieve productivity improvements in customer service, among other factors. In connection with the August 2022 Restructuring, our actual share-based compensation reversal might differ from our estimate due to future changes in our stock price. About Robinhood

Robinhood Markets is on a mission to democratize finance for all. With Robinhood, people can invest with no account minimums through Robinhood Financial LLC, buy and sell crypto through Robinhood Crypto, LLC, spend, save, and earn rewards through Robinhood Money, LLC, and learn about investing through easy-tounderstand educational content.

Robinhood intends to use the "Overview" tab of its Investor Relations website and its blog, Under the Hood, as means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the Securities and Exchange Commission's ("SEC") Regulation Fair Disclosure (Reg. FD). The Overview page can be accessed at investors.overview and Under the Hood can be accessed at blog. and 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@ Press: press@

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ROBINHOOD MARKETS, INC. CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

(in millions, except share and per share data)

2021

Assets

Current assets:

Cash and cash equivalents................................................................................................................................... $

6,253 $

Cash, cash equivalents, and securities segregated under federal and other regulations ..........................

3,992

Receivables from brokers, dealers, and clearing organizations .....................................................................

88

Receivables from users, net .................................................................................................................................

6,639

Deposits with clearing organizations ...................................................................................................................

328

Asset related to user cryptocurrencies safeguarding obligation .....................................................................

--

User-held fractional shares ...................................................................................................................................

1,834

Investments .............................................................................................................................................................

27

Prepaid expenses...................................................................................................................................................

92

Other current assets...............................................................................................................................................

30

Total current assets..........................................................................................................................................

19,283

Property, software, and equipment, net ..............................................................................................................

146

Goodwill ...................................................................................................................................................................

101

Intangible assets, net .............................................................................................................................................

34

Restricted cash .......................................................................................................................................................

24

Operating lease right-of-use-assets ....................................................................................................................

129

Non-current prepaid expenses .............................................................................................................................

44

Other non-current assets.......................................................................................................................................

8

Total assets ................................................................................................................................................. $

19,769 $

Liabilities and stockholders' equity

Current liabilities:

Accounts payable and accrued expenses.......................................................................................................... $

252 $

Payables to users ...................................................................................................................................................

6,476

Securities loaned ....................................................................................................................................................

3,651

User cryptocurrencies safeguarding obligation ................................................................................................

--

Fractional shares repurchase obligation.............................................................................................................

1,834

Operating lease liabilities ......................................................................................................................................

22

Other current liabilities ...........................................................................................................................................

112

Total current liabilities ......................................................................................................................................

12,347

Operating lease liabilities, non-current................................................................................................................

129

Total liabilities..............................................................................................................................................

12,476

Commitments and contingencies

Stockholders' equity:

Class A common stock, $0.0001 par value. 21,000,000,000 shares authorized, 735,957,367 shares

issued and outstanding as of December 31, 2021; 21,000,000,000 shares authorized,

750,301,918 shares issued and outstanding as of June 30, 2022.

--

Class B common stock, par value $0.0001. 700,000,000 shares authorized, 127,955,246 shares

issued and outstanding as of December 31, 2021; 700,000,000 shares authorized, 127,955,246

shares issued and outstanding as of June 30, 2022.

--

Class C common stock, par value $0.0001. 7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2021; 7,000,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022.

Additional paid-in capital ....................................................................................................................................... Accumulated other comprehensive income ....................................................................................................... Accumulated deficit ................................................................................................................................................

Total stockholders' equity.......................................................................................................................... Total liabilities and stockholders' equity.................................................................................................. $

-- 11,169

1 (3,877) 7,293 19,769 $

June 30, 2022

5,962 3,420

89 4,146

289 8,593 1,297

46 88 115 24,045 170 100 30 22 128 37 16 24,548

243 5,795 1,367 8,593 1,297

22 82 17,399 132 17,531

--

--

-- 11,581

-- (4,564) 7,017 24,548

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ROBINHOOD MARKETS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended June 30,

(in millions, except share, per share, and percentage data)

2021

2022

Revenues:

Transaction-based revenues ............................................. $

451 $

202

Net interest revenues ..........................................................

68

74

Other revenues ....................................................................

46

42

Total net revenues .........................................................

565

318

YOY% Change

Three Months Ended March 31, 2022

(55)% $

218

9 %

55

(9)%

26

(44)%

299

QOQ% Change

(7)% 35 % 62 %

6 %

Operating expenses(1)(2):

Brokerage and transaction ................................................

38

Technology and development ...........................................

156

Operations ............................................................................

101

Marketing ..............................................................................

94

General and administrative ................................................

112

Total operating expenses..............................................

501

30

(21)%

244

56 %

86

(15)%

24

(74)%

226

102 %

610

22 %

31

(3)%

266

(8)%

91

(5)%

34

(29)%

268

(16)%

690

(12)%

Change in fair value of convertible notes and warrant liability ...................................................................................

Other income, net ..................................................................... Loss before income taxes........................................................ Provision for income taxes ...................................................... Net loss....................................................................................... $ Net loss attributable to common stockholders:

Basic ...................................................................................... $ Diluted ................................................................................... $

528 --

(464) 38

(502) $

(502) $ (502) $

-- 2 (294) 1 (295)

(295) (295)

Net loss per share attributable to common stockholders: .. Basic ...................................................................................... $ Diluted ................................................................................... $

(2.16) $ (2.16) $

(0.34) (0.34)

Weighted-average shares used to compute net loss per share attributable to common stockholders:...................

Basic ...................................................................................... 232,223,019 874,873,301 Diluted ................................................................................... 232,223,019 874,873,301

NM NM (37)% (97)% (41)% $

$ $

$ $

-- -- (391) 1 (392)

(392) (392)

NM NM (25)% -- % (25)%

(0.45) (0.45)

867,769,168 867,769,168

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