Robinhood (HOOD.US) Q3 Conference Call: Smart Trading and Perpetual Futures Launching, Predicting Accelerated Market Volume, and Improving Profit Quality Under Cost Discipline

The Zhitong Finance App learned that Robinhood Markets (HOOD.US) announced financial results for the third quarter on Tuesday EST. According to financial reports, the company's revenue for the third quarter of 2026 increased 12% year-on-year to a record US$1.4 billion, and adjusted EBITDA increased 9% to over US$800 million.

Robinhood said during the earnings call that the company has launched 17 new products, including smart trading, perpetual futures, and 7×24 hour stock trading, with the goal of becoming an active trader platform, wallet share, and a leader in the global financial ecosystem.

Additionally, the company's paid membership program, Robinhood Gold, has reached 5 million subscribers, an increase of 30% over the previous year. The company is also investing in banking and credit operations to drive further growth.

The main network of Robinhood Chain was launched in July. It has ranked among the top five blockchains in terms of transaction volume, with decentralized exchanges trading volume exceeding 100 billion US dollars. The company plans to invest more in the developer ecosystem.

Robinhood also revealed that the company has been authorized to expand in Dubai and plans to further expand the international market while continuing to focus on the US market through initiatives aimed at children such as the “Trump Account.”

Looking ahead, Robinhood has an optimistic outlook for the fourth quarter of 2026. Net deposits in October have exceeded the annual growth target, and plans to continue investing in product development and international expansion.

Conference content

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

Thank you all for attending Robinhood's Q3 2026 earnings call. Whether you're watching the live stream or visiting Menlo Park in person, we're with Chairman and CEO Vlad Tenev, Chief Financial Officer Shiv Verma, and Chris Cagle, Vice President of Corporate Finance and Investor Relations. Vlad and Shiv will give opening remarks, followed by a question-and-answer session. In the Q&A session, we'll answer questions from the audience, including institutional research analysts, financial content creators who may hold shares in Robinhood Markets, and institutional and retail shareholders.

As a reminder, today's conference call will include forward-looking statements. Actual results may differ materially from our current expectations, and we may not provide updates unless required by law. Potential risk factors that could lead to discrepancies, including regulatory developments we continue to monitor, have been described in today's press releases, financial presentations, and our SEC filings, all of which are available on the company's website.

Today's discussion will also include non-GAAP financial measures. The reconciliation table with what we believe is the most directly comparable GAAP indicator can be found in the earnings presentation. Please welcome Vlad below.

Vladimir Tenev (Co-founder, Chairman, CEO)

OK, thanks for coming. It was great, and it was great to see so many people on the scene. We went back to our headquarters in sunny Menlo Park. Thanks again to everyone who walked with us and was there in person, and to all the friends who watched remotely. As you probably know, at Robinhood we have a single goal. We believe in ownership. We want everyone to be an owner, and we believe broad ownership is essential to a free, stable, and prosperous society. To implement this vision, we have a three-part strategy. Looking back, in the first part, we want to build the first platform for active traders. We want our clients to be able to own any tradable assets, and active traders should really feel at a disadvantage when trading on other platforms, as we'll explain in more detail later.

The second strategic arc, the next generation wallet has the largest share. We want to build a financial home for our customers, not only for themselves, but for their families. Third, the first global financial ecosystem. Extend the ownership we can achieve and grow in America to all parts of the world. We made significant progress in the third quarter. Product speed continued to increase in three arcs, and we saw strong business and financial results. For active traders, once again, if you're an active trader, you'll be at a disadvantage when trading elsewhere. So what did we do for active traders? Last month we hosted our 3rd Annual Hood Summit in Houston, Texas, and we launched not one or two, but 17 new products and services.

Let me talk about a few highlights. Smart trading, I really value it. I'm wearing that vest right now. The scope of our smart products has indeed expanded this quarter. If you remember, we started with MCP, which grew quite well, and now we have implemented intelligent transactions directly in the application. You no longer need external tools like Claude Code or Codex. You can do it within the app. We also allow customers to extend MCP connectivity to Robinhood Legend.

So Robinhood Legend now also includes our range of MCP connectors. We continue to make it easier for anyone to trade on our platform, be it yourself or your smart body. While in-app features and toolchains are still in their early stages, we've seen strong early adoption of smart products across the board. The client's assets in smart accounts have exceeded $250 million. Remember, these accounts start from scratch, so you must actively choose to transfer funds into them.

We're watching the adoption curves of usage and transactions, and they're showing an accelerating trend, which makes us very excited about the future of these products. These curves seem to be getting steeper as we continue to add more asset classes and features. Next up are perpetual futures. We became the first US brokerage firm to offer so-called true perpetual futures. These perpetual contracts are backed by our global derivatives exchange Bitstamp and are traded continuously throughout the day. 15 minute settlement. We're also adding earnings contracts to the Forecast Market Center. I think this is particularly relevant to everyone here because they allow you to trade earnings and revenue per share of individual stocks, as well as company-specific KPIs. Of course, this is something I've been excited about for a long time.

We announced that 7×24 hour stock trading will land on Robinhood later this year. Again, I think this will also be our first. These are just a few of the many projects we've delivered, and more. If you haven't seen it yet, I encourage everyone to watch the full keynote on YouTube or X. Now on to wallet shares. Here are a few things I would like to highlight. Trump's account reached a very important milestone in the third quarter — automatic registration. As we said before, there are nearly 70 million children under 18 in the US who are eligible for a Trump account. Now the US Treasury has opened accounts for all of these children. Thanks to Michael and Susan Dell's generous donations through their foundation, 25 million of these children have already been invested $250 by the Dell Foundation.

We're excited about this move. It's the kind of thing that's been snowballing, we're doing more, and there's a lot of work ahead. One thing I'm particularly excited about is that I think it can be the default tool for charitable giving across the country. Right, we've seen the Dell couple and other donors get started. We really don't have a great alternative right now. I think the Trump account could be that solution.

So we'll work with BNY and the US government to do more in this regard. We're also continuing to make progress on Robinhood Gold, which is now one of the largest paid membership programs in the US consumer finance sector. A few years ago, we set out to completely reinvent Gold products. What we want to do is provide mass market clients with something in Gold so you don't have to be an active trader to benefit from Gold. I think we've achieved that. Robinhood Gold reached 5 million subscribers this quarter.

OK. We're seeing that it's actually paying off. We're seeing it pay off. We have 5 million Gold subscribers, an increase of over 30% year over year. This is a 4x increase compared to when we began reinventing the Gold Plan about four years ago. This puts our overall Gold adoption rate at around 18%, but if you look at new customers this quarter, it's 40%. Adoption rates were much higher among customers who joined Robinhood this quarter. It was very reassuring because we saw the path.

As we continue to grow, Gold will only continue to increase, and I think there's actually a lot of room for growth. Our major bets to enhance Gold's value proposition are banking and credit. Although they have reached a large scale, these products are still not fully available. It's still a limited release, and we're always investing in more integration points. For example, when signing up for Robinhood, easy bank and gold card registration, and contextual upselling, so when you use the Robinhood app, we can detect when banks and credit are right for you and present them.

We think there's plenty of room for growth. These could be more meaningful drivers for increasing Gold adoption. Finally, there's the global financial ecosystem. On July 1, just a few months ago, we launched the Robinhood Chain mainnet. In the first quarter, it ranked among the top five blockchains by transaction volume and revenue. To date, we've seen over $100 billion in DEX trading volume, or $100 billion in decentralized exchange trading volume, and over $50 million in on-chain fees. DeFi perpetual contracts are an interesting and innovative product that has also achieved steady growth on the chain.

In recent weeks, we've seen on-chain DeFi perpetual contracts have traded more than $1 billion a day. It's clear that customers are in demand for on-chain tokenized assets. We believe we're not only building the Robinhood Chain to be the best place to own and trade all of these tokenized assets — starting with stock tokens and perpetual contracts, of course — but also expand into a wider range of fields. We're also expanding our brokerage infrastructure globally.

We are pleased to announce that we have been authorized by the Dubai Financial Services Authority to launch Robinhood in the region. This will further expand our international footprint. Everyone has seen that the speed of the product and the focus on the customer experience have brought strong business results. Market share continued to grow, and every major asset class, such as stocks, options, cryptocurrencies, and margin, achieved double-digit year-over-year growth. Revenue increased 12% year over year to a record $1.4 billion. Adjusted EBITDA grew 9% to a record of over $800 million. Net deposits for the quarter were $16 billion. The fourth quarter had a strong start, and Shiv will detail that we have surpassed our target of 20% net deposit growth for the whole year, and there are still two months left.

We are pleased with the strong results we have achieved for our customers and our business. We're working hard to make Robinhood your financial superapp. Next, I'll ask Shiv to take the stage. How are you, sir?

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Very good. OK. Thank you, Vlad. Before we get to the results, I'd like to share three key highlights from the third quarter. First, as Vlad said, the core business is in full swing. This enabled us to achieve our highest quarter of revenue and adjusted EBITDA in history. Very reassuring. The platform's assets are close to $400 billion. Additionally, we have set new records for stocks, options, event contracts, and margins. Good performance in all areas. Second, our products are driving business diversification. We now have 14 growth engines with annualized revenue of $100 million or more. Our forecast market exchange Rothera reached this figure in its first full operating quarter. It's great to see Rothera grow well on a large scale.

Finally, we had another quarter of strong growth, profitability, and scale. We're a “Rule of 80” company, and with annualized revenue of over $5.5 billion, it's very reassuring that we maintain expense discipline even as we invest in growth. Let's take a look at third-quarter results, all of which will compare to the same period last year. Revenue rose 12% to a record $1.4 billion. This is due to strong growth in new and existing products. Trading revenue was record, and trading volumes for stocks, options, and margins all reached record highs. Each item increased by approximately 50% year over year. This is due to increased market share. The event contract continues to be well scaled.

A seven-fold increase over the previous year. Additionally, Robinhood Chain was used very strongly during the first adoption quarter, as Vlad mentioned before. This was another driver of transaction revenue this quarter. In terms of net interest income, margin, credit card portfolios, and Robinhood Banking grew very strongly. These grew to new record balances. The total interest-bearing assets on our platform also hit a new high. It's great to see that trading revenue and interest-bearing assets are performing well.

Finally, in terms of other revenue, as Vlad previously shared, Gold subscribers reached a record high of over 4 million, which is great to see. Additionally, we continue to establish and expand trust accounts for our clients. This has also generated some additional revenue. As a result, although revenue grew to a quarterly record, we maintained cost discipline and controlled adjusted operating expenses and equity incentives at US$664 million. This was within our previous outlook.

Once again, while we are investing in growth, we are still very, very disciplined in terms of expenses. Our productivity also continues to be excellent. Our per capita revenue for the quarter was close to $2 million, which would be a new record. We deliver products to our customers, but we also do it in a lean and self-disciplined manner. Finally, look ahead to the fourth quarter. While we plan to continue to invest in growth, particularly in trust accounts, we are also controlling expenses and driving more efficiency across the business. As a result, we lowered the upper limit of our previous outlook range by $25 million. We now expect adjusted operating expenses and equity incentives for the full year to be between $675 million and $2.75 billion. The median value was $13 million lower than the previous forecast.

Taken together: Very strong revenue growth and expense discipline, which led to a strong profit quarter. Adjusted EBITDA reached a record high of US$808 million. The year-on-year increase was 9%, and the adjusted EBITDA margin continued to remain strong at 57% in the third quarter. Earnings per share for the quarter were $0.51. This includes the market capitalization impact of our holdings — $0.07. As we discuss earnings per share, we are expanding our business into the investment sector, one of which is Robinhood Ventures.

As we launch more and more of these products, we are now seeing some non-operational changes to these investments. Therefore, we are introducing adjusted earnings per share only to better reflect our core operating profitability and exclude investment gains and losses or other non-operating items. At the same time, we are still responsible for all regular ongoing costs. Therefore, we are still including normal equity incentives in our adjusted earnings per share.

As I've said many times before, the number of shares and the denominator are important. Taken together, adjusted earnings per share for the third quarter were $0.60. Looking ahead, we hope investors will find this a useful measure of the profitability of our core business. Another area I'd like to cover is predicting the market. We believe this asset class is still in its early stages, and we're investing to become a leader in this space. We're constantly improving the in-app experience. We now have a vertically integrated Rothera, and as I mentioned before, it's off to a great start. Additionally, we recently announced our partnership with Crypto.com and OG.com. This is very exciting for our customers as well as our business and shareholders.

It's important for customers to have consistent pricing and the best options across exchanges, and through this partnership, we can do that now. And there are no cash outlays. We received an initial 1% stake in Crypto.com and OG.com, and depending on the degree of cooperation over the next few years, we can get up to 10%. Before we get to the Q&A, I'd like to give you a brief overview of how the fourth quarter started. After a record third quarter, net deposits in October surpassed $13 billion/month. Glad to see that. This includes Vlad's previous mention of the Dell family's donation of $6 billion to the trust account. This brings our total net deposit year to date to over $68 billion. This is already a new annual record, surpassing our 20% growth target, and there are only a few months left in the year.

Compared to the third quarter, the average daily trading volume of stocks, options, and cryptocurrencies started well, falling by about 5% compared to the very strong third quarter. The average daily trading volume of event contracts has increased by about 10% at the beginning of the quarter. Looking back, it's great to see another strong quarter in the third quarter, and we're very excited about the momentum going into the fourth quarter. As we've shared before, our financial North Star remains the same: maximizing earnings per share and free cash flow per share for shareholders over the long term.

Q & A session

OK, Chris, Vlad, shall we start asking?

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Shiv.

Vladimir Tenev (Co-founder, Chairman, CEO)

Let's get started.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

In the Q&A session, we will first answer shareholder questions from Say Technologies. After Say's question, we'll turn to the live audience's questions and then go to the phone line. I'll start with the first question on Say, from Bo Shen.

Vladimir Tenev (Co-founder, Chairman, CEO)

How are you, Bo Shen?

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK. I think we're disconnected from Bo. What Bo is asking is how is the expansion of the banking business progressing and when will features such as Zelle alternatives be introduced?

Vladimir Tenev (Co-founder, Chairman, CEO)

That's a great question. Instead of talking about it, I'd rather just show it to you. I try not to release new products during the financial reporting period, but since there are so many people here, I think I might as well share some more. BTW, before we get started, I'd like to say a few words about how banking relates to our vision of super apps. One thing we've been tracking for a long time is what are the main bank withdrawal destinations for our brokerage business.

In other words, people actually transfer money from brokerage accounts to the bank's top institutions. For a long time, these were the big banks that were expected. This isn't too surprising. But as we began launching Robinhood Banking, we actually saw Robinhood Banking rise up the list, and this quarter, for the first time, Robinhood Banking became the number one withdrawal destination for Robinhood brokerage customers. This was actually before it was fully opened.

So in terms of amount, it's the bank where customers withdraw the most money, which I think is pretty amazing. Obviously we love this because the money didn't leave the Robinhood ecosystem; it just stayed in people's accounts. I think this is a major proof point that customers choose Robinhood to meet all of their financial needs. They come in, deposit their wages directly, and have checking and savings accounts.

Of course, they transfer money to invest and trade. They use Gold and now Platinum to spend. So increasingly, you don't actually have to leave Robinhood because we provide a full range of top-notch services. One thing people keep asking about is peer-to-peer payments. Of course we don't want to just do a normal additional peer-to-peer payment feature. We wanted it to be really nice. So if everyone is ready, I can share my screen. This is Robinhood Banking. I've blurred my balance. BTW, this is a new design. We've updated the Liquid Glass UI. There is this button in the bottom right corner, which is your overall trading operation button.

If you turn it on, you'll see this new “send money” feature. Matt, can I transfer some money to you? Would you accept my transfer of a few dollars?

Matt

Of course you can. I'll judge how much you like me based on how many times you turn around.

Vladimir Tenev (Co-founder, Chairman, CEO)

OK, OK. You'll know I like you moderately. It's that simple. I transferred $5 from my joint checking account to Matt — who has always been doing a great job with our investor relations team —. OK. Of course you can add a little message here. This is my favorite. Check this out. I want to send it via SMS. One very annoying thing about peer-to-peer payments. I don't know if you've experienced it. You want to use an app, but the payee doesn't have one, which causes friction.

I don't want them to have to install anything. Then they'll ask you, can you post this way? Can you use a competitor to post it? Then you still have to install it. We've eliminated all of these. Matt, did you get it? I got a text message. OK. If you want to show it. That's it. He can accept funds with Apple Pay or Google Pay with just one click, and he doesn't even need a Robinhood Banking account. Think about how great this is.

Of course, this gave us the chance to upsell Robinhood Banking, and it was a pretty straightforward experience for those who tried it. But you don't have to have it. You can receive it directly from Apple Pay, so you don't have to worry about friction between payees. Currently still being released in limited quantities, Matt transfers money to others and they will receive it. However, it is expected that we will roll it out more widely in the coming weeks. That's another reason, we think everything could be better on Robinhood. If you manage more of your financial life through us, who needs Zelle? Right, I mean, traditional technology, if we build everything in an integrated way, I think we can do better.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

Ok, great demo. OK, the next question comes from Marcus Mike, who asks, how is the global expansion progressing and which countries are next?

Vladimir Tenev (Co-founder, Chairman, CEO)

OK, I'll answer that question. When Shiv and I made plans, we thought, what could Robinhood be in 10 years? We call the third arc: the global financial ecosystem. Our vision — I think this is supported by the size of these markets and the accumulation of wealth; people outside the US are getting richer — our vision is that in the long run, more than half of our business should be outside the US; in other words, more than half should be institutional business.

What we didn't expect was a product like Robinhood Chain. We mentioned that Robinhood Chain started fast during the quarter, with DEX transaction volume of 100 billion US dollars and on-chain fees of 50 million US dollars. Right. Think about how much — we're actually continuing to invest — and frankly, the growth of the chain and related ecosystems and wallets has surpassed our expectations. So now we're spending a lot of time investing in how to make it bigger and how to support the community.

We keep hearing a lot of developers say we can do more to support the community. I think you should look forward to us actually stepping up our efforts because we want it to be the best developer ecosystem and the best global on-chain community. So yes, you should expect us to invest more because you don't often see the growth of this new ecosystem. This is an uncommon thing. Many chains have been launched in the past few months, and their appeal is incomparable to this one. So we're doubling down on our investment. Of course, as I mentioned before, we are expanding to the Middle East and North Africa region through the Dubai license, and we have received approval in principle from the Monetary Authority of Singapore to expand in Singapore, which will be our Southeast Asia/Asia Pacific hub, and we are very excited about this.

Incidentally, we are continuing to cultivate in our more mature markets — the EU and the UK. The UK is now integrating cryptocurrency and brokerage businesses in the same product and is trending towards parity, and you've seen our download share increase and gain more traction there. I want to say — Shiv, I don't know if you agree — I think there was a time when our international business felt like a distant future, and we expected to see meaningful contributions. But we're starting to see it accelerate, I see the strongest appeal I've ever seen, and I feel like it's probably the best I've ever had. Our momentum there is picking up a lot.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

No, I agree. We have a 10-year plan. Glad to see the seeds sprout. There's also Canada, which you forgot to mention.

Vladimir Tenev (Co-founder, Chairman, CEO)

We now have a crypto business there through the acquisition of WonderFi, of course. So soon Robinhood will spread all over the world.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, the next question comes from a special guest. You've probably seen him drive a Robinhood Neon in the past two NASCAR seasons. Three-time Cup Series champion and 23XI Racing Team No. 23 Toyota driver Bubba Wallace.

Bubba Wallace (NASCAR driver)

Are there any new major product plans to increase Robinhood's revenue in 2027?

Vladimir Tenev (Co-founder, Chairman, CEO)

No easy questions, Bubba. You just ask the hard question. By the way, it was fun to watch Bubba race at the Las Vegas Motor Speedway a few weeks ago. Very hot. But I don't know how he could last that long. I'd like to say that one reason people think Robinhood is attractive as a business is that it's a financial compounding machine. Right. Even if you look at the core business of stocks, options, cryptocurrencies, and margin, we continue to gain market share. We get more clients, and these customers get richer as they age. Market appreciation has also increased this. So all of this led to the platform's total assets of around $400 billion this quarter.

I think it won't be long before we'll talk about over 500 billion, and then, hopefully, into trillions of dollars. Right. So the core brokerage business and crypto business alone are very strong. But we're not just complacent about saying we have a strong core business. We're moving at an incredible pace, not only adding all the products and features our competitors have, but I think we're leading the industry in a few key areas. I mentioned smart trading earlier. I don't think there really is another financial company that really invests in smart trading and makes it a first-class experience.

So I think we're just getting started there and we're continuing to invest in making the product experience really great. We've talked a lot about predicting the market. I would also like to add perpetual futures. I mean, we got in very early. Many companies announced plans to make these new assets available, but we announced they were delivered and launched. We saw a strong appeal. This is another asset class we look forward to being a leader and gaining market share. In terms of wallet shares, you've heard me talk about trust accounts. Robinhood Ventures is another — other companies aren't really doing it — they pursue their vision of democratizing the private equity market for retail investors.

So we've launched RV1 and RV2, and you should look forward to more. I mean, we're really investing because we think it's important, and it's a huge business opportunity — a new category I think we can have. Of course, in the long run, tokenization, Robinhood Chain, and Robinhood Wallet are unique products in the global financial ecosystem, and it feels like we've really caught the tiger's tail. So these are a few areas, more than one, and we think betting on the products we're doing can bring an upside surprise.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad. That ended our Say Technologies question. Now I want to turn to questions from the live audience. If you want to ask questions, please raise your hand. Mike, give Hayden the microphone.

Hayden

Hi there. Hello. I know you guys are active in trading and strategy. What are you doing to focus on customers in the middle zone — people who just want to deposit money and don't care about it?

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, that's a good question. Actually, it's one thing I forgot to mention. I think Robinhood Strategies, our passive digital consulting product — with over $2 billion in assets — is growing very fast year over year. I think it's a bit like a dark horse, because you know, we post too many things, and I think active trading products tend to get more attention and mental share. But we have all these great passive products, and Strategies is one of them, providing a top-notch experience.

So we've been adding stuff to the product suite. We have a tool called Smart Income, which is part of Robinhood Strategies. You can basically easily adjust your time frame and risk tolerance with sliders, and it tells you the expected return on your investment. Then the idea is that you only need to put your money into that account, which is a product that is completely set up and doesn't matter. I think we have something similar and that team has ambitious plans.

We're doing lots of things to make it better. So it's safe to say that Strategies won't stand still. I think it's a dark horse product. I think it might be a pleasant surprise for the year to come.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad. Next, I thought — Aidan, did you raise your hand? Yes. Can you give Hayden a microphone? That's great.

Aidan

Hi guys, thanks for doing this. We are impressed by the speed and appeal of Robinhood's products—all in all, over 100 million. Can you talk about how many products your heavy users and regular users use, and what it would mean for your business if you could turn most of your customers into heavy users?

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, that's a good question. We look at this internally a lot, and we've found that basically the more products one person uses — once you reach three or four products in the Robinhood ecosystem — the average revenue and engagement per user continues to increase, and three or four products are really the sweet spot. We can also look at it by asset class. A lot of people first came to us to trade stocks or cryptocurrencies, but if you look at customers who trade stocks, cryptocurrencies, options, futures, and prediction markets, revenue and platform participation have actually increased.

We've been investing a lot — maybe people who use Robinhood have seen our work — to make the app more coherent and easier to discover. This is what I mentioned on my last earnings call. We have more work to do because we have all these products. How do we ensure the app is coherent and makes you understand what we're doing? I think you're starting to see some progress because of our sharing services, including social, search, homepage — I think we've done a lot better at presenting you with relevant content.

I think the focus has always been on making sure the forecasting market works well because we're doing a unique thing to combine this new asset class with other personal finance-focused tools. But I think you'll see us continue to invest in personalization, making discovery easy, and being able to present relevant content to customers to the extent all rules and regulations allow. I think this is another area where we are top notch and continue to improve.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

If you want to see how big it might be, I think Gold is the best way. Gold, we don't think of it as a subscription product. We think of it as a loyalty product. What you're seeing is that customers are coming for something — whether it's stocks, options, cryptocurrencies, event contracts — they've discovered Gold. Then they use more products, deposit more, participate more, and trade more. So how big it could be, that's great.

We have 5 million customers, which is only an added rate of 18%, and about 40% of people adopted it when they first entered. But there is still plenty of room for growth ahead.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you. Next question.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I think what we really want to do is make the product itself easy to understand and clear within the app. I think through our various learning modules and tools, we've done a great job of utilizing the app's limited space and giving users the information they need when they get started without too much nonsense and stuffing. Now, as we expand into smart products — which is actually one of the reasons I'm excited about smart trading and investing in them — many of our customers use it as an educational tool because these AI agents are so good at it, if you just ask them, “Hey, explain this to me. What is a roulette strategy? What is a typical options trade?” You could say, “Hey, I have this plan, this view. Can you break it down and give me the top three ways to use it?”

So I think there's a lot of potential, and we've actually seen a lot of customers doing this — just explaining things, or even just placing orders or trading completely independently, even though we're moving in that direction too — but breaking down some of the complexity to the customer. So yes, the plan is that each interface has different usability. On mobile, what really matters is how to clearly express what the feature is and what it is for — how to let customers do what they want with as few clicks as possible. On the web, I think you have more space to browse, and I think smart devices are good for back and forth conversations, which is very difficult in all interfaces.

But yes, we have made significant progress in advancing all of these at the same time. Another thing I think we've recognized is that we do produce some first-party educational content — videos, etc. — but we also want to make it easier for you to discover all the great content out there. There are so many content creators and influencers making YouTube videos, which is quite interesting. One thing we've been trying to do is: can we make it easier for you to get some of this content the right way through the experience?

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

You also have Robinhood Social, and you can learn from the community—each other—. So it's another interface for customers to communicate with each other.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, that's a great point. I think I'm more optimistic about our ability to present third party user-generated content to you because we have more passionate people who can do it. Some of the content we've seen on Robinhood Social is actually very in-depth investment analysis. We're always trying to give people more tools to share charts and different data sources. Yes, we love what we've seen.

So we'll do more. OK, does the audience have any more questions? Of course. Yes, you know, I talked a little bit about Robinhood Strategies, and I think helping clients spread their holdings centrally and handle them in a tax-efficient manner is something we've been carefully studying. Also, many products offered by existing institutions have very high minimum requirements. So of course, every time we see this, we ask ourselves if there's an opportunity to create a really, really good product and have a lot of people use it?

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, does the audience have any more questions? OK, now let's move on to the Zoom Q&A. I think our first question today comes from Citizens' Devin Ryan.

Devin Ryan (Citizens Analyst)

Hey Vlad. How are you? Glad to see you guys are doing a great job. Question about the Robinhood Chain — clearly happy to see the early appeal. Thanks also to it benefiting from some congestion at the end of August and September, which helped gas fees, so maybe there was some normalization in terms of costs. However, the trading volume is still quite resilient. So my question really is how should we consider long-term financial opportunities and what should we focus on to drive the next real inflection point of activity?

I know you mentioned the appeal of perpetual contracts, so maybe that's an example. But is it just more products being developed? There's something Robinhood can do to support the chain — would love to hear about it. Then the bigger picture, can monetization improve over time without making the chain less competitive? Thank you.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I'll start first. Maybe you could talk about your thoughts on monetization. Another aspect of our chain that we're very excited about is developer activity. The last time I checked, we were ranked number one in terms of on-chain developer activity, so developers actually came to Robinhood Chain because they saw the appeal we had, and they were betting that it was an ecosystem they wanted to invest in for their activities.

I think ultimately, the ecosystem will actually be driven by developer activity, and people don't have much time to build complex on-chain apps. So that's why I think the first app you saw was relatively simple — launchpad, liquidity pool, etc. People are now doing something really interesting, more complicated, connecting stock tokens to crypto assets and technology.

Imagine if you made a stock token fully programmable, just like software, what could you do? I mean, can you have tokenized options contracts? Can you have a product we haven't seen before? So that's why we're investing in the developer ecosystem. What I think is interesting is — expenses, congestion, and revenue. When Johan, our general manager of crypto, discussed this, we all basically agreed that the most important thing is to prioritize the user experience. I really don't want to do the business of charging high fees for on-chain usage. I prefer to gain market share, let developers choose us as the best chain, and give them more products. I think we have a pretty clear roadmap of what first-party products are needed.

The idea is: anything you can trade on Robinhood in the US should be available on-chain for our international customers whenever possible. So more stock tokens, then expand to other asset classes to ensure that these things become LEGO bricks that developers can incorporate into their on-chain apps. Because of the primitives we provide, one of the reasons why stock tokens are so successful is that people know Robinhood supports them, which makes it more likely that they trust them in apps than third parties. So we're going to keep implementing that. I think our way of tracking long-term sustainability is that we obviously love seeing DeFi TVL rise, but we're paying particular attention to the stock token TVL to ensure it's on a healthy track and we have a path.

Because I think the differentiator of our chain, and what has always worked for us, is a real-world asset. Therefore, we should expect the adoption of real-world assets to continue to increase.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, the only thing I would add about monetization is that the total revenue for the quarter was around $50 million. You know, we've shared timelines before — we shared some with Arbitrum, around 50%. So even in net terms, it's about $25 million, or $100 million annualized. We haven't called it a growth engine; we want to give it more time to mature. You should expect that under normal circumstances, our monetization will probably be a few basis points of nominal value.

But as Vlad said, the team isn't currently focused on revenue — but rather growing TVL, satisfying developers, and growing stock tokens. If we do this, a few basis points can add up to a very large number over time.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes. I know that for outside developers, we have many passionate Robinhood Chain developers making products. Please trust us as we discuss what we can do for the community. I think you'll see — because it caught us off guard and we had to form a team here — I think you'll see us supporting the builders even more in the near future.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

Very good. Thank you, Vlad and Shiv. Our next question comes from Wolf and Loid's Steven Check.

Steven Check (Analyst)

Hi there. Good afternoon. Thanks again for answering my questions.

Vladimir Tenev (Co-founder, Chairman, CEO)

Hey Steven.

Steven Check (Analyst)

So I want to ask about net deposit growth. I know that the third quarter is often slightly less seasonal. Right now, I'm really evaluating this KPI on a core basis, but as the denominator gets bigger, you've been slightly below the 20% target, and I want to better understand how much of the 20% expected comes from new account growth or new store growth, versus same-store growth when we break down some of the building blocks.

Specifically, I'd like to better understand how these efforts might help close the gap as you continue to expand internationally.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, I'd love to get started.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, say it.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

As we said before, we're aiming for 20% annualization, and we gave some October colors on the phone — we've surpassed it. So just over October; we've completed over $68 billion last year, surpassing our growth target. Now, as you mentioned, it's not going to be linear. Growth was high in the second quarter and declined in the third quarter. But we've said it over and over: I don't pay too much attention to any month, week, or quarter.

However, on an annualized basis, we are still seeing compound interest growth in the business. The best driver for net deposit is a new product. So as we continue to deliver new products faster, customers come, they adopt us more, and they keep saving more. As far as new store sales and existing customers are concerned, it's both. Recently, there have been a few more current customers. We gained a lot of customers very fast in previous years, and now as we launch new products, we're gaining wallet shares, and they're starting to trust us more.

However, as we said before, we started turning the knob to try to speed up the net fund account again. The third quarter was similar to the first quarter; we saw a good increase in the second quarter because of some market background and some IPOs. But the big picture is that our current customers are still using us more, and we think there are some great products next year that should also drive the top of the funnel.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I would add that we worked quite hard on the Trump account to make it a great product. As you'll see, this isn't just an app. It will increasingly be an ecosystem. We are now connecting to employers. Employers will be able to fund Trump accounts on behalf of employees. Then we'll connect donors. Donors are now a bit of a one-off. But as you can imagine, if you're a corporate donor or a wealthy charitable individual, we'll make getting into a Trump account very easy and enjoyable.

We've already seen a meaningful net deposit impact in this area. Also, I think it can be much bigger. Many people agree that this number is higher. Of course, we think if we continue to serve these customers well, as we anticipated, there is an opportunity to make these compounding assets. What are the numbers? 70 million, Michael and Susan Dell alone funded 25 million dollars. I mean, if we serve these customers well over time, I think a big part of them should be Robinhood customers.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad and Shiv. The next question comes from Morgan Stanley's Michael Cyprys.

Michael Cyprys (Morgan Stanley analyst)

Great, thanks for the answers. I'd like to ask you about peer-to-peer payments that you just launched on the phone. I hope you can expand your vision for this new product and how you view its contribution over the next few years, possibly including a funnel for new customer acquisition, or even revenue monetization. So if you could talk about your expectations and how you see it growing. Thank you.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, our starting point is really just that, you know, we have a lot of customers who say they want to transfer money to friends through — the questioner asked Zelle or something else — can we make it a little easier? Then we thought, what's the easiest and most seamless thing we can do, you don't even need to type anything, just send money via SMS. I think we've delivered that experience. Transferring money from Robinhood is as easy as texting someone.

So the first thing we focused on when we launched it was, are our existing customers using it? Is it solving their problems? I think once we do that, by its very nature, the product should be viral. Right. As they continue to transfer money to friends, if they use it, then we have to give our payees — if they don't already have Robinhood — a compelling reason to enter that ecosystem. But that gave us another chance, another potential touchpoint to become customers.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad. The next question comes from Alex Marggraf at KeyBank. No Alex. OK, we probably disconnected from Alex. Next question comes from Barclays' Ben Budish.

Ben Budish (Barclays Analyst)

Hey, good evening, thanks for answering my questions. A question for Shiv about fees. I think this quarter's numbers are slightly lower than many expected, and your guidance for the whole year is lower. I'm curious if you can talk about the variables. I know Trump's expenses are expected to have some schedule in the second half of the year, and I'm curious what you can share about the operating rate going into 2027. I know you haven't given any guidelines yet. Obviously Trump's expenses are probably not recurring; you've talked about the current business's probably low single-digit growth rate before.

But beyond that, there are new initiatives. So I'm curious if you can talk about recent changes and how we should consider operating rates entering next year. Thank you.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, great question. What really excites me is that even as we launch all these new products, we're still lean and self-disciplined. As you mentioned, we lowered our outlook cap by $25 million in the fourth quarter. Specifically, there are a few things we're launching and investing in. First, we're doing more for the Trump account, so you should expect more fees there. Next is a credit card. We continue to expand the size of credit cards, Gold and Platinum, so there will be some investment there.

Finally, we're now in the process of planning for the year, but there are a few projects we're really excited about, so we've advanced these and started making some investments there. In particular, the Trump account you asked about is that for the full year, I previously shared that we expect to invest around $100 million. It's still roughly in that range throughout the year. So there are a few things scheduled during the quarter, but that's what I expected. For next year, it's still early; we'll complete the planning process, and we'll be back in January and February to share the full plan. So there's nothing to share yet, but as Vlad said, it's progressing very well.

They're asking us to do more, so I expect we'll continue to invest there. Then in terms of our overall philosophy, very similar to previous years, we asked every team to be more efficient during the planning process. In those core businesses, we take those efficiencies and then invest in them. As you can see, we have so much to do. So it will be very, very similar to previous years.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Shiv. The next question comes from Piper Sandler's Patrick Moley.

Patrick Moley (Piper Sandler Analyst)

Thank you, everyone. Thanks for answering the questions. I have one. Regarding Crypto.com and OG.com, you now own shares in two prediction market places and operate your own exchange with Susquehanna. How do you coordinate routing decisions between different locations, and what is the strategic logic of holding shares in Rothera's competitors? Thank you.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, maybe I can start. We want to give our customers the best predictive market experience, and we want them to have choices. I don't think we can send all of our traffic to one location. So we believe that the combination of Rothera and Crypto.com allows us to serve our customers well, with excellent execution quality and wide coverage of all assets our clients want to trade. Maybe you could talk about the financial side.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes. As Vlad mentioned, it's good to have a resilient second exchange. You should expect Rothera to be our main exchange, Crypto.com, OG.com will now be our main second exchange, and we will get rid of most of our competitors by the end of the year to the beginning of next year. You should expect the vast majority of our traffic to go through these two. From a financial perspective, what we're doing now is in addition to sending them traffic, we also become owners.

So before we sent traffic to other exchanges, we didn't get any financial incentives. There was no conflict. To be clear, a product is listed on a specific exchange. That depends on where you can get the product experience. So there's no route like stocks or options. They are not interoperable. You must list it on Rothera or Crypto.com. But now, in addition to getting a great customer experience, we can also provide some monetization for our shareholders.

So that's why we're excited to both build and deliver a great product experience for our customers, and now bring some financial upside to our shareholders.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you. The next question comes from Deutsche Bank's Brian Bedell.

Brian Bedell (Analyst at Deutsche Bank)

Hey. Hey guys. Hope everything is ok. Thanks for answering the questions. If I could ask two parts: First, now that the CBOE has finally approved it, the timing of the launch of the company's KPIs. Second, Shiv, can you talk more about the trading volume from October to now. I think stocks, options, and cryptocurrencies are down 5%. Can you make a distinction between these fields. Still have reviews about cryptocurrency rates?

I know that tends to fluctuate a lot.

Vladimir Tenev (Co-founder, Chairman, CEO)

If you want to talk about KPIs, let me--

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Why don't you go all-inclusive? Of course. Regarding KPIs, we are still discussing them with the general managers this morning. Steve Quirk and Johan, they're all coming soon, so the team is working hard. We are in the process of getting final approval. We announced them at Hood Summit, so you should expect it in the near future. We're just waiting for all the approvals to go through, but we're ready and excited for our customers. About the colors of October. As a reminder, the third quarter was a record quarter, so everything was our highest quarter ever, stocks, options, and margin. As a result, stocks, options, and cryptocurrencies were within plus or minus 5% in October. I've grouped them in one category, but they all have similar trends. At the beginning of this quarter, it can be said that it was within 5% of the high water mark for the third quarter. Then I mentioned the event contract in particular because it was a bit different and increased about 7 times over the previous year.

So started to see some more growth there. Regarding rates, we saw slightly tight spreads at the beginning of the quarter, so we'll see how the results are throughout the quarter. However, early signs are that the spread is slightly tight, and we'll see how it develops over the next two months.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

Very good. OK, next question comes from Wolf Financial's Gav Blasberg.

Gav Blasberg

Hey how is it? Nice to meet you, Vlad and Shiv. I'm going into an area that I don't think has been discussed much, and that is Robinhood Social. Vladimir, I've talked to you about this. I've been using this platform heavily. I really like it. I spend about an hour on it every day. I talk to more and more people, and people ask, what's the plan for this? What's the goal? How does it generate revenue? How does it drive the platform and create value for shareholders?

I'd also love to hear how it's prioritized and balanced with so many other things. Building social media is no small thing. So I'd like to hear some visions and how this will ultimately lead to revenue generation and increased shareholder value.

Vladimir Tenev (Co-founder, Chairman, CEO)

Have you always loved it? Do you have any critical feedback? Where could we do better?

Gav Blasberg

I've been chatting with Anna Tork and the rest of the team, giving lots of feedback, and trying to talk to and contact other heavy users to get feedback. I think it continues to progress very well. Sure -- listen, if you want feedback, I can give it to you sometime, but I don't know if that's

Vladimir Tenev (Co-founder, Chairman, CEO)

It's best to use your time now. Yes, that's great. You don't want to do too much when reporting your earnings. He's a tough customer. Yes. Look, I think the reason we're excited about Robinhood Social is, yeah, I mean, frankly, I believe it's the best way to learn. Am I more optimistic that Robinhood makes all the content that teaches people how to invest and gives them all the tools? Or are you more optimistic about 28 million customers who use our products and bring us the best ideas they've found around the world?

So it's definitely the latter. Yes, I think if we do it right, we can present really good content to our customers that they can use to learn something new. We've seen a community formed around this. So we have a lot to do. We make it possible for people to share things outside of the platform. We're also continuing to grow the types of content you can share on social media. At first it was just trading, but now you can share profits and losses, share charts, and make your investment portfolio.

We also have creator products. A lot of creators keep asking creators about monetization, so this is obviously something we want to look into, and I think at that point, yes, it becomes a line of business for us. But for now, I think we're considering it in the context of the broader Robinhood experience. We think if we do a really good job, it just gives people one more reason to not only execute trades at Robinhood, but also stay behind the ideas and context behind getting deals at Robinhood.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

OK, thank you, Vlad. The next question comes from Goldman Sachs' James Yarrow.

James Yarrow (Goldman Sachs Analyst)

Thanks for answering the questions. I'd like you to update your current Rothera strategy. How do you plan to gain market share? Maybe you can talk about your current pricing strategy, and finally maybe update how you're considering adding other FCMs to the platform, not just Robinhood brokers.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, that's a good question. Again, we're significant shareholders in Rothera, you know, we and SIG, but we don't actually run Rothera ourselves. I mean, of course I hope they like it. Tom and the team occasionally listen to our opinions about retail investors, but it's an independent business. Yes. So I don't want to talk too much about their strategy to get FCM, but I know they're very motivated, and I think Rothera can be FCM's default neutral gateway because many other first-party products in the prediction market are trying to acquire customers while providing services to others. I think when we talk to a lot of other FCMs, they don't like the potential conflict of their providers running first-party businesses at the same time. So I think the great thing about Rothera for any FCM that wants to connect is that it works purely with FCM.

So you don't have to worry about your provider competing with you in the market too. At least from our perspective, we've been investing heavily in non-sports contracts. You've seen us announce the KPI prediction market. We're seeing a lot of growth in cryptocurrency contracts and commodities. I think over time we see opportunities to integrate these financials. I think we can have the finance category because that's a unique advantage we have.

Rothera can support more complex financial contracts and be a leader there because I think we're less excited about doing what everyone else is doing — all sports, all the time — because I think that would be quickly commercialized and, quite frankly, less differentiated from my point of view.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

I would like to add two points. In terms of non-sports, if you look at this quarter, about 30% is actually non-sports, compared to 15% in the previous quarter. So as Vlad said, we're starting to see the adoption of a few other asset classes, and it's great to see it. In terms of pricing, we're very excited that our pricing is now official. But we lowered our customer pricing when we bought Rothera. What we're doing is building a dynamic pricing model. What we've heard from customers is that if you're trading something relative to the edge of the center, you actually pay a higher rate. So instead of just increasing monetization, we decided to redo the pricing model. We made it dynamic, we listened to our customers, but we didn't affect our rates because we were able to share some with them and get some back.

Other than that, we made it better with Gold. We talked a lot about Gold. But now if you're a Robinhood customer and a Gold member, you can also get better pricing. So there are a few different things happening at the same time.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes. If you look at the experience, those in the Robinhood trading prediction market can see that we have done a good job in refining the experience, with specific modules for different types of prediction markets. The Midterm Elections Center is particularly special; I think it looks great. So not just if you want to trade them, but as a way to explore and discover what might happen in the midterm elections. I think we did a very, very good job.

The 15 minute rise and fall market for cryptocurrencies looks good. So yeah, I think you can see the polishing going on on the product to make it more usable.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

OK, thank you. The next question comes from someone who just got off the plane: Dan Dolev from Mizuho. Dan Dolev.

Dan Dolev (Mizuho Analyst)

Hey Vlad. Hey Shiv. How are you guys? Are you at the airport? I'm in Munich. Oh, that's great. I just got back to New York from Israel today. Good performance as always. You know, we did some work. I'm very interested in perpetual futures. It sounds like you guys are moving towards something really big there. I think we're getting a lot of questions. I just wanted to know how big do you think this could be? Because it sounds like there's a huge opportunity here, we'd like to know more colors.

Thank you.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I think if you look at the leaders in perpetual futures, perpetual futures are a huge market by trading volume, with a daily trading volume of billions. In fact, some global platforms have tens of billions of dollars in futures trading volume. Then we saw that even on Robinhood Chain, it's only been a few months, and we're seeing over $1 billion in nominal value of on-chain perpetual contracts. So I can't see why our products can't reach a scale similar to or even larger than DeFi products over time.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

OK, next question comes from Truist's David Smith.

David Smith (Truist Analyst)

Hey, good afternoon. Hey, can you elaborate on the rate drivers since the third quarter was lighter than many of us expected, and it sounds like the decline continued in the early fourth quarter. Of course, different asset classes are different, but is this a mixed issue on the user side or sub-asset class side? Deal size, transaction volume, and other trends, what would you point to?

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, I'd be happy to answer this. When it comes to stocks, it's usually a mix between a single name and an ETF, and it also depends on the spread. Options are similar. Depends on trading volume and spread. Then are they trading index options more? More transaction order names? More indices? That's often the bigger driver. On the cryptocurrency side, the main driver is our Robinhood Earn, our stablecoin product. That product did a great job. It now has more than $500 million in assets. But because it's a stablecoin, we monetize it less than normal platforms. So that lowered it. If you exclude stablecoins, it's basically in the same range as the previous quarter. So that's the main driver there.

Then the event contract, as I mentioned, we updated the pricing, so it depends on what the customer is trading. Are they trading win/loss orders? Are they trading on the edge? Do they use Robinhood Gold? So that's why we're seeing it change a bit. So I'd say each one is slightly different. What we saw in October was, as a start, similar to what we saw, maybe slightly lighter because the spreads were slightly tight.

But again, this quarter is only three weeks away, so we'll see how the whole quarter turns out. That's great, thank you. The next question comes from Dr. Crossroads.

Dr. Crossroads

Hey guys, thanks for taking my call. I want to ask, given that you gave us some information about the impact of rate hikes last year, and we are in a very different situation with interest rate hikes. I wonder if there will be a similar impact on the ecosystem. I believe every rate cut you guide has a negative impact on net interest income of $50 million, especially now that banks are part of your ecosystem. Credit cards are also an important part.

Vladimir Tenev (Co-founder, Chairman, CEO)

By the way, do you remember that about a year ago, everyone said, what? What will happen to your business? You're doing so well with all this interest income in a high interest rate environment. How can you survive in a low interest rate environment? Now it's interesting; every few years the problem reverses. Oh, you did such a good job with these falling interest rates. How are you now? Interest rates are about to rise again.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

But I'm happy to answer. Very good. I mean, first of all, by the way, nice to meet you. Hope you're doing well. The first thing we love, as Vlad said, is business diversification. Some products perform well in a low interest rate environment, such as trading products, while others perform better in a high interest rate environment, such as net interest income products. The actual math is that interest rates are raised or cut every 25 basis points, which changes income by about 1.5%. So the other conditions are the same. If the Federal Reserve raises interest rates by another 25 basis points, that should be a boost.

The simple math is that we have about 80 billion interest-bearing assets. About half of this, $40 billion, is an interest-rate sensitive asset because cash scan programs and others are not interest rate sensitive. So a 25-base-point DV01 of 40 billion is about a change of 100 million US dollars. Then 100 million US dollars is about 1.5% of the operating rate of about 5.5 to 6 billion US dollars. So the overall situation is, we like diversification, and interest rate hikes are a breeze.

But regardless of the interest rate environment, we have a business that performs well in both environments. Thank you, Shiv. The next question comes from Adam, who just started Evercore.

Adam (Evercore Analyst)

Hey everyone, good afternoon, and thanks for the answers. I'd like to follow up on net deposit growth and monthly activity as a percentage of fully funded accounts. Both were slightly weaker this quarter. So I'm hoping to understand the drivers for this quarter. Should we be aware of any new or incremental steps you're considering or are already taking to reverse, or is this just a 90-day period that doesn't necessarily reflect the overall trend and what you've seen since the fourth quarter.

Thank you.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, I'd say it's more of the latter. We focus too much on any month or quarter; the best way is to look at October. As we mentioned, October was already a record net deposit of over $13 billion. The average daily trading volume was very similar to or slightly lower than the record third quarter. So things will change. The time we launch new products, the time of promotions. There are seasonal events, there are macro events, and there is an IPO market.

All of this comes together. But if you look at it on a yearly basis, or just October, you've seen very healthy participation in trading and net deposits.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Shiv. The next question comes from Cantor's Ramsey Ellis.

Ramsey Ellis (Cantor Analyst)

Hi, thanks so much for answering questions tonight. I was wondering if Vlad could elaborate on the reasons for partnering with Ripple. How does this benefit you guys? I know there are several different dimensions, internal capital operations, external benefits of Bitstamp, etc. Where do you think the immediate opportunities are, the biggest immediate opportunities, and the rationale for expanding the overall strategy.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I mean, yeah, I love Brad and the Ripple team, and I think we're excited to do more business together. I think there are lots of ways we provide complementary things, and, you know, we're never afraid of more integrations... I think more integrations, more products, more choices from the Robinhood Markets ecosystem, whether within the app or on-chain, are strictly better. I think we brought something complementary, their institutional business and our more retail oriented business.

In fact, another example today is Ondo's integration into Robinhood Chain. Ondo also has tokenized products, but our idea is that we want our chain to be the best home for tokenized products. They don't have to be our own. In fact, it's important for us to ensure that everyone has an equal opportunity to list our customers on our chain and our platform because that brings out the best products.

So of course we want our own first-party products to always be used, but they also have to be better than the competition.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad. The next question comes from Compass Point's Ed Engel.

Ed Engel (Compass Point Analyst)

Hey, thanks for answering the question. After the SEC Innovation Exemption, how do you consider introducing stock tokens to the US? Then is there any chance of regulation unlocking private equity tokens — the ones you announced last year — on your radar?

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, that's a good question. We are very passionate about private companies. We basically have two bets, one is Robinhood Ventures, in the form of US fund products, then overseas stock tokens, and we have the ability to tokenize individual companies. In a sense, through our will, we benefit from these two things, and they help each other. Because through Robinhood Ventures, we have a relationship with the company.

We've been investing in a lot of companies, we have active pipelines, and many of those companies actually ask what tokenization is and if they can join. We have relationships, and we've always been leaders in this field. So I'd say we have a path to do it overseas. We know how to do it, and we've shown the technology and capabilities. So it's just a matter of putting all the regulatory stuff in place. But we do intend to launch these products overseas.

Now, when it comes to US private equity, specifically, there is another layer, which is the requirement for qualified investors. So we're working hard to find a path that meets current requirements for qualified investors and provides a great customer experience. I think Robinhood Ventures is an example of a fund structure. But of course, many customers also want individual names to be exposed. So we're trying to do that with restraint.

As for the innovation exemption, I think this is a very positive step. We support it. We think it's clear that America needs to be a leader in this new technology. I do think more needs to be done to give people some certainty because when we talk to customers, I think the uncertainty of what will happen in five years may be a barrier to investing serious assets into this technology. So I still think some rulemaking or legislation is needed, although this is certainly a positive step, and we hope to share more about our own US tokenization plans soon.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Vlad. The next question comes from Needham's John Todaro.

John Todaro (Needham Analyst)

Hey guys, nice to meet you guys. Thanks for answering the questions. I'm hoping we can get some reviews about the health of retail traders, especially in terms of stocks. AI stocks have declined quite a bit over the past few weeks, and many of them have been heavily traded by retail investors. So was wondering if we could get some reviews on post-sell-off engagement.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, I'd be happy to answer this. Engagement continues to be very strong. I mean, the best way is to look at the average daily trading volume and net deposit, both were very strong at the beginning of October. So, as we said before, our customers tend to be younger, often tech-optimists, and often technologically avant-garde, and they use sell-offs as buying opportunities. So when you see AI stocks or chipmakers or semiconductors sell-off, our customers move closer and keep buying more.

On downside days, we often see some of the strongest net buys. But the best indicators I'll look at are net deposit and average daily trading volume, both of which were very strong in early October.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, thank you, Shiv. The next question comes from BTIG's Andrew Hardy.

Andrew Hardy (BTIG Analyst)

Hey, thanks for answering the question, Shiv. You talked about turning the knob at the top of the funnel. Wonder if you can share some details of the strategy and any appeal you see. Then follow up on the MAU question. You know, I realise this is just a period, but we've been in the 13 to 14 million MAU range for the past year. Curious, what can you guys do to push that number higher?

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes. Can you repeat the first part of the question? Sorry, anything about the top of the funnel before MAU...

Andrew Hardy (BTIG Analyst)

You guys are at the top of the funnel and then similar questions, how do you increase the MAU numbers?

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, there are two things about the top of the funnel. The first is the product, and the second is marketing. We've been focusing mainly on products this year. We've tested a little bit on marketing but haven't done it yet. But if you look at a lot of the content Vlad shared, whether it's P2P or banking or other products, we think those might be quite meaningful drivers. So we're making some investments, we're developing and building them a bit ahead of schedule this year, and you'll see them launch in 2027.

But the big drivers are usually just products and a little bit of marketing. The honest answer about MAU is that we don't target it. The team's goal: are our customers involved? Are they using the platform? Do they trust us? Are they depositing money? All of these are very healthy. MAU is an output metric. It will change slightly depending on the market. As I mentioned before, it may be seasonal, and it may be macroscopic. What matters is what they do. All we've seen is that customers are very healthy, and if they deposit more, participate more, and use our products more, we call it a win.

Then MAU just changes. Yes.

Vladimir Tenev (Co-founder, Chairman, CEO)

I think, you know, we've been making some bets in the long run. I think it's clear that there's an opportunity to serve up to 70 million children's Trump accounts and partner with BNY as the program's broker and initial trustee, and I think it's a huge opportunity to put us in front of the next generation. We've also been thinking about how to invest. I mean we have an escrow account, which is a nice addition to the platform, but how can we really invest in getting customers when they're younger and building a better experience?

Because we're starting to see some signs. So yeah, I think we'll be making a few bets next year, which I believe will not only increase net funding account growth at the top of the funnel, but MAU growth as well. I mean, the two are related to each other at a high level, so you should see them change. That's outside of marketing, and beyond what I think is a long-term opportunity as a trustee of the Trump Account Program.

Andrew Hardy (BTIG Analyst)

Yes. I told you last quarter that my son was about to be born, I registered him, and I can confirm that his Trump account onboarding process was very easy. So good job there.

Vladimir Tenev (Co-founder, Chairman, CEO)

Oh, thank you. It warms my heart. Hope you have more.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Also, you can now check if your employer matches and put a little more for your son.

Andrew Hardy (BTIG Analyst)

Yes, yes, great idea.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

Ok, next question from Alex Marcraft from KeyBank.

Alex Marcraft (KeyBank Analyst)

Hey guys, thanks for the answers. It sounds like the banking business is progressing quite well. I'm of course grateful to you for sharing the withdrawal destination data points. What should we focus on to determine when a product is in a state worthy of more deliberate marketing effort, or do you know when to add fuel to the fire, so to speak? Thank you.

Shiv Verma (Vice President of Finance, Strategy and Investor Relations and Treasurer)

Yes, great question. That will be linked to the full opening of the product. So now you have to be a Robinhood brokerage client to be eligible to use the bank, which basically means that the banking app hasn't signed up independently — sorry, my hair makes this difficult — yet. Of course, we're planning to launch it, and once we get hired independently, that unlocks the possibility of performance marketing, which will be a new ability for us because now we're marketing multiple things.

So we're still very early. But I think we have a great team in marketing, and we're going to invest more in this area. But we do believe banks will actually bring growth to brokerage, not just the other way around. So this is a green space opportunity for us, and it will also affect net fund account growth and MAU. Banks are slightly different from credit cards. We are more careful when introducing credit cards because you have to get the unit economy right and credit risk right. Banks are just like any other product we launch. You make sure your customers love it, and you address their pain points. Once you find a market fit for the product, it will be more like a regular software product and will take longer to launch than a credit card.

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I would also add that it is a more predictable balancing factor since trading products are dependent on the market and season. But banks, people just get paid, they spend, and they're in the ecosystem week after week, which balances the trading business very well.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, strong end. Our next question comes from J.P. Morgan's Ken Worthington.

Ken Worthington (JP Morgan Analyst)

OK. Hi, good afternoon. Thanks for the last chance to ask a question. Stay at a high level. ARPU has doubled to around $1 million in new product roadmap and cross-selling in the past two years. What do you think of ARPU evolving from here? If I pick an ARPU number such as $300, do you think that's possible? What does Robinhood need to do right to reach numbers like that given all the stuff you guys are doing?

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I think this is an interesting question. I mean, the reason I don't want to give you our ARPU goals directly is that we also see a great opportunity to grow customers and grow downward in the market. I mean, if we get more young customers, you might see, for example, ARPU drop, but the overall size of the customer base increases dramatically, especially depending on how you count Robinhood Chain users and international customers. As we continue to step on the accelerator of international expansion, I think we're still relatively early — we've crossed 1 million international customers — and it's easy to imagine that itself is growing exponentially on the path to a long-term majority of our customers being international. So this is a complex optimization. Our existing customers continue to become more valuable and wealthy, and their ARPU should continue to increase, but there will be a balancing effect of getting more and younger customers from the international market.

Chris Cagle (Vice President of Corporate Finance and Investor Relations)

OK, that concludes the Q&A part of the call. Vlad, would you like to make any closing remarks?

Vladimir Tenev (Co-founder, Chairman, CEO)

Yes, I just wanted to tell you guys again, thank you for being here. For those present and those watching remotely, we're here to build a community not only for customers, but also for shareholders, investors, retail investors, and institutions. There are some content creators on the phone, and you should know we're far from finished, we're not complacent, and the roadmap continues to be very full. So launch all of the Hood Summit stuff, and of course a bunch of others in the pipeline, to make this your financial superapp and transfer the power of ownership to people all over the world. So thank you for walking with us and thanks for listening.