Good afternoon, everyone. I'm Devin Ryan, Head of Financial Technology Research, JMP Securities. Thanks so much for joining us. Looking forward to this conversation this afternoon with Robinhood. We have Jason Warnick, who is Robinhood's CFO. Jason, first off, thanks for doing this again with us. Always enjoy our conversations. Maybe just to level set the conversation, Jason, just give a quick intro of what Robinhood does for people that, maybe aren't as familiar, and then we can get into some of the Q&A. Yeah, absolutely. You know, Robinhood is a financial services platform. We have a little over $20 million funded accounts. Our mission is to democratize finance for all, and we started off by offering stock, options and crypto trading, and we've seen millions of customers, you know, enter the financial arena through Robinhood, primarily through a mobile app that's simple and intuitive, with no trade commissions. We really have started the trend of removing barriers for access to the financial system and our vision is to broaden from there and really be the single place where our customers come and engage with the financial system. I wanna start with kind of a reflection. You know, we were here a year ago, had this conversation. The macro backdrop shifted obviously quite a bit over 2022. Robinhood was very early, I think, to understand kind of the moving macro and really, they got ahead of the curve on expenses. You accomplished a lot over the past year. Talk a little bit about some of the things that you did and decisions that were made to get the expense base in the right spot, and then how that's positioned the firm for, I think, a path to being probably very profitable from here as you already have been the last couple quarters. Yeah. You know, leading up to this past year, we just saw incredible growth in new customer accounts, growth in trading, and we were really in this get-big-fast situation to make sure that we would be there for customers and serve them in kind of the market enthusiasm of 2020 and 2021. You know, in late 2021, we saw the market environment begin to change and growth slowed, and we were watching it carefully. In early 2022, it was apparent that, you know, the changing macro environment was going to persist for some time. We were faced with, you know, a decision to make about our cost structure. While on the one hand, we've got an incredibly strong balance sheet, over $6 billion in cash, but on the other hand, we had over-invested for the reality that we were facing with the macro environment. Kinda, early part of 2022, we began a process of really scrutinizing all of our costs. Over the course of 2022, through, you know, reducing our workforce by about a third, as well as looking at every category and scrutinizing every form of cost that the company has, we took out a little over $600 million of annual run rate cost, to kinda rationalize and put Robinhood in a position where we can thrive and grow regardless of the macro environment. Where we are today is, I think, very well-positioned to serve our customers. We're continuing to roll out new products, but we're doing it with a cost structure that I think is a lot more sustainable. Yeah. I think, you know, so on the expense side, it's been very impressive in the ability to, especially in the Q4, kinda get into solid adjusted EBITDA profitability. The growth side, you know, you still have this very ambitious roadmap and were launching a number of new products in 2022. There's more coming in 2023. A lot of investors I talked to are very focused on growth, right? Yeah It's stable, now let's see, like, the acceleration in top line again. What are some of the things that you've done on the, on the growth side where you're maybe most excited and some of the product launches where you're starting to see some of the most traction? Yeah, definitely. Even while we made all that progress on cost, and it was substantial, 2022 was the fastest we've ever as a business delivered new products for customers. It's, it's kinda hard to wrap your head around, and it was one of the things that we were very mindful of, is that even as we reduce cost, how do we make sure we continue to be well-positioned to de-deliver new products for customers? There's a lot to be excited about. Late, late in 2022, we introduced the Robinhood Retirement product. This is really exciting because it's just so aligned with our mission, to make it possible for millions of people with smaller balances to begin to save over the long term. Simple, intuitive user interface. We also, you know, innovated and offer a 1% match on cash contributions to help customers get started and be excited about making that progress. This is something that's gonna take some time, but we're really excited about that product and seeing it deepen the relationship that we have with our customers. Another area that we're really excited about is Robinhood Gold. In the middle of last year, we began offering higher interest yield on swept cash balances for Gold members. We're now up to 4.15% on that offer, which is at or near the top of market, and our customers have really responded. First, it reduced a trend that we'd been seeing of declining subscribers in the Gold program, so now it's back to growing. We've also been seeing about $1 billion a month of new cash deposits coming into the program, so really excited about that. A couple of other areas, we rolled out fully paid securities lending. It's a great opportunity for our customers to earn some yield on their positions that they hold. It's great for investors as well. The ARR on that, we commented on the call in January, is up to $30 million, so nice early progress, even against kind of a tougher environment for securities lending generally. Then the last thing I would say, really excited about some innovation that we've done in money movement, helping customers move their money faster into and out of Robinhood, and on withdrawals, offering instant withdrawals. We do that at a kind of an industry standard 1.5% fee to get your money instantly rather than wait for the slower ACH rails. As of January, that was $20 million in ARR as well. We're planting seeds, we're innovating, we listen to customers, and we continue to iterate, and we're seeing a lot of progress as we plant these seeds and begin to see them grow. Yep. Towards the end of the year, it felt like the momentum in new subscribers was starting to turn as well. You had this kinda huge influx in late 2020 into 2021, I think we all from the outside knew that wasn't, like, the new run rate and that they'd probably have to eat through some of that kind of accelerated growth. At the same time, it feels like we've kinda stabilized and then are maybe starting to see the early signs of some re-acceleration. I think from the outside, trying to tie it back to how much is being driven by some of these newer initiatives and you're engaging in new ways with customers you haven't before versus just kinda sticking to your knitting and just over time, of course, hopefully the platform continues to grow, any evidence of kinda where you're engaging with some of the new customers, and then also if you feel like that's a fair comment that maybe we're starting to re-accelerate a bit on new customers? We are seeing new customers begin to show up in our metrics. We're up to $23 million funded accounts, which is substantial and positions us, I think, really well to just kinda deepen our relationships with those customers, introducing new product services. We're working on a new metric to watch just how many products per customer our customers are using. I think over time, as we deepen our relationship, we'll be able to see that really come through, you know, in terms of that. I think, you know, retirement is a great example of this. You know, over time, I think that there's a lot of ways to expand on this. One of the areas that we're focused on this year is advisory and beginning to offer advisory services as well. I think there's a lot of potential to kinda build on the progress that we're seeing. Yeah. Just on that last point, the advisory services, I think you've talked a little bit about it. Like, any more sense of, like, what that means, and, like, I don't know how much you can share, but, like? Yeah What that could look like? Yeah, I mean, it's one of the things that we noticed with our customers is oftentimes they would open up an account at Robinhood, and then they wouldn't make a first trade. We innovated with first trade recommendations to help customers kinda take their first step, and we saw great uptake by our customers on that feature. That's a signal to us that, you know, when you welcome, you know, new investors into the market, that they need a little bit of help to get started. While we're offering a retirement product, I think it's a very natural extension to help, you know, our customers think about deploying their capital in a way that makes sense for them over the long term. That's an area that we're focused on this year. Yeah. Great. In terms of the competitive landscape, it's been a, I'd say, a challenging macro environment for virtually anything that touches finance, right? You know, a lot of asset prices are down, engagement on the, both retail and institutional side has really come off of the highs. You know, clearly, Robinhood, we talked about, made those decisions and right-sized the expense base. It's now positioned for growth. What are you seeing competitively? Are competitors still as aggressive? Does it feel like people are as well-funded? Is there, you know, uneconomic marketing that you guys don't wanna compete with? Like, what are you guys seeing from some of your peers? You know, I think everyone is recognizing the macro environment that they're in and taking measures to kinda right-size their costs. You know, over the last few years, we have seen somewhat irrational behavior on things like marketing, and we're seeing a little less of that. You know, but, you know, the thing that we're really focused on is while we stay lean and scrappy on our cost side, continue to push forward on innovation, and we're seeing it. I mean, we'll put our February metrics out next week, but we're continuing to see new account growth. We're continuing to see, you know, assets under custody and net deposits kind of in line with January. Trading has picked up in options as well as equities and a little softer on crypto. All in across the board, we're seeing some signs that, you know, our customers are being resilient through this market. Yeah. That's great. You talked a lot about the Gold adoption, and obviously, you know, your interest rate in the market that you're paying stands out, especially when you compare it to some other, you know, maybe more mature or legacy financial institutions. That dynamic hasn't existed for many years with interest rates at zero, so this is an area where you can. Mm-hmm Can separate yourself. How much is that dynamic driven kind of maybe the new deposits? Are you seeing new customers come in as a result of the Gold program or the interest rate you're offering, or does it feel like it's more existing customers just moving more cash in? Yeah, it's both. It's super encouraging. As I mentioned, you know, from a Gold subscriber count, we reversed a trend that had been going on for a while. It was the first time in over a year that we've seen our Gold subscribers increase about $1 billion a month coming in to the cash sweep program for Gold. Super encouraging, but we are also seeing existing customers deepen their relationship with us. You know, it's, we've positioned it to where we're passing a significant amount of the economics to our customers. We do retain a small spread, which makes it, you know, and we are incented to bring in more money. What'll be interesting to watch over time is in changing market and rate environment, conditions, how those customers evolve their engagement with us. They bring in a lot of cash, you know, as rates come down over time. Will that convert into more trading or other investing activities? We've seen signs from past behavior. I, you know, I reflect back on late 2019 where our customers were accumulating cash and not trading as much. What we heard from them at the time was that it felt like the valuations were a bit high, and they were waiting for an entry point. You know, we're obviously in a different situation now. Valuations have come way down. What happened in early 2020 was that cash converted into trading. We're optimistic that as we deepen this relationship with customers, as the market evolves, and as we roll out products to serve customers regardless of the market environment, that we'll have kind of a deeper relationship with them and the cash will be put to work. Yeah. I just wanna touch on the retirement offering for a moment. It seems like a pretty interesting value prop that you guys are coming to market with, but still very, very early days... Yeah What's the feedback so far been? Clearly, I'm sure there was a lot of market research before you guys came out with this. At the same time, you know, on the addressable market side, some customers have employee-sponsored. How do you think about the, I guess, the addressable market for that? What's the early feedback been with that product? Yeah. Millions of people are out there that do not have 401(k)s or employer sponsored... You know, plans more generally. This is really a no employer necessary and Robinhood will contribute 1% on your cash, contributions. The early feedback has actually been, excellent. You know, we'll provide some updates. It is incredibly early. Yeah. It is a long game, but for our customers as well as for us, that we just wanna be in a position to help our customers accumulate wealth over the long term and hopefully position themselves to be better off than the generations before them as it comes to retirement savings. Terrific. wanna touch on the crypto side a little bit. The wallet's now available for everyone. Yeah Talk about the crypto strategy and some of the things that you guys are most focused on there. It's obviously a complicated environment that we're in right now with some of the regulatory noise. At the same time, you've kind of progressed, and I think in the Robinhood fashion, you wanna do things the right way. Yeah With this crypto wallet, kind of what has the feedback been there, and how are you thinking about the broader crypto opportunity for the firm today? Yeah. I mean, It's obviously a, an incredibly challenging macro environment. You know, exogenous events, and just kind of the press cycle and just what we've been seeing in the crypto market. We've seen some pickup, you know, in crypto trading, kind of post the FTX situation, but we're also paying close attention to the market participants. You referenced just the way that Robinhood, you know, invests in crypto. We're a safety-first company, and at times, over the past couple of years have been, I think, criticized about or at least questioned about the pace of our innovation in crypto, wanting to see us move even faster. I do think the events that we've seen over the last several months kinda have proved out that a careful and deliberate approach to innovation in this space, particularly given a lot of the regulatory uncertainty and lack of guidance, that it's just been important for us to do this in a careful way. We've been slowly adding coin selection for our customers. We're very careful in the way that we scrutinize the coins that we offer, you know, to our customers. Robinhood Wallet it's a separate app from the Robinhood app and enables customers to custody the coins themselves, trade and swap, and, you know, without gas fees on the Polygon network. Early indication has been incredibly positive. We had about a million individuals on the wait list for the product. It's super exciting to see customers in over 130 countries already signed up creating wallets. It's early, as many of our investments are, but I think a lot of promise there. Yeah. Great. Wanna shift a little bit to the, to the year ahead. Yeah, I think you guys have laid out a pretty ambitious path of new products and, and engagement. What are some of the areas that you're most excited about and some of the biggest, I guess, product, launches that we should expect to come here over the next year or so? Yeah. Last year, we gave a pretty detailed roadmap. Yep You know, delivered against it. This year, we're talking about three kinda big areas that we're investing in. The first, and this continues off of an area of focus from 2022, is we want Robinhood to be the absolute best place for advanced traders to trade. Mm-hmm. We made a lot of progress in 2022. In 2023, we're gonna just continue to focus on that. That's, if not our top priority, one of the absolute top priorities that we have at the company. The second is just deepening the relationship with our customers and ultimately diversifying the revenues that we generate. We want more of our customers to be meaningfully contributing to the economics of the business and to their benefit as well. That's gonna be building off of retirement, moving towards advisory, and offering more products and services to our customers. Really kinda diversifying revenue as an outcome but deepening the relationship with customers is the primary focus. Lastly, we wanna be a global company. This year is a year that we're gonna make that a reality according to our goals. Yep. just want to stay there on the international opportunity. Take the business international by the end of the year. What are some of the areas that we should think about? Will it mimic the U.S. strategy, or are there the things that you feel like are maybe different in the opportunity internationally? Then also, what could that cadence look like maybe beyond this year to the extent you guys [crosstalk] Yeah You know, get there formally? We're ambitious. You know, we definitely have, you know, a big appetite to move quickly. I think the reality is that similar to the way that we invest in crypto, we're gonna have to be deliberate. Every geography that we go in will have its nuances, it'll have its certain set of regulators and requirements, and, you know, we've made the necessary investments around legal and regulatory and operations so that we can assess these opportunities and move at the right pace. We're starting with international expansion for brokerage in the UK. One of the things that we did is we hired Steve Quirk, who's an industry vet from that many of you probably know from Schwab and TD Ameritrade, and we've asked him to lead the international brokerage expansion. We already have our license in the U.K. We had a couple of years ago made some strides towards that market, so it's not a cold start. Our goal is to be there live by the end of the year, and it's really to introduce access to U.S. equities, at least to start, to the U.K. population. You know, I think that the team's really excited to kinda take our first steps international, but we're not gonna be done with the U.K. We wanna expand from there. Looking forward to that. You guys probably have a better lens into the retail investor engagement than anyone else. Curious, you know, if you're seeing any shifts, you're still seeing a little bit of acceleration maybe in new customers, but is there anything that's feeling more constructive in the engagement side? What are the other indicators that you're looking at either externally or within your cohorts that maybe give you some insight into that? Yeah. Yeah. It feels more constructive, and I'm cautiously optimistic about where we are. I mentioned some stats, like trading has picked up in January and even more so in February across equities and options. you know, we came off a low on engagement in December of 11.400,000 customers. For February, it's gonna be around 12,000,000 monthly active users. As we look back, and we talked about this at the call, if you go back three months, you know, engagement jumps to like 16,000,000, and over six months it jumps to 20,000,000 unique- Mm-hmm Users. So our customers are continuing to engage. We're seeing signals, net deposits are strong, assets under custody as well. You know, we're cautiously optimistic. That said, the macro environment, there's a lot going on. Yep. You know, it moves on a dime, it feels so. Yeah. We're paying close attention. Yeah, absolutely. just wanna spend a minute here on the balance sheet. you know, I think one of the strengths is clearly just the financial position of the firm and how much liquidity you have and excess liquidity, and you guys have given a lot of detail on that. it does sound like the firm is interested in doing more acquisitions or at least evaluating more acquisitions. You've done some acquisitions. Yeah Just wanna talk about, I guess, one, the appetite, but then two, you know, you've done several and, you know, Say Technologies and some others. Like, what are some of the KPIs from those deals that you feel good about? You know, is there anything you'd share on kinda payback periods which would maybe inform our view of what future acquisitions could look like for Robinhood? Definitely. I mentioned over $6 billion of cash on the balance sheet. We're generating positive adjusted EBITDA, cash flow is turning positive. We're in a really strong position. I'd also say on the macro environment, it also seems like, you know, rational thinking is coming back in from in terms of expectations from various companies that are potential targets and would be potential good fits for the company. You know, when we look at acquisitions, it's how can we, you know, accelerate our roadmap. We're more of a capability-minded acquirer as opposed to a scale-minded acquirer. I wouldn't rule anything out, but. Mm-hmm That's our thinking, is how can we accelerate delivery of product and services to our customers? You know, we've done a couple of acquisitions, smaller ones. You mentioned Say. You know, the primary way that we look at that is, you know, product delivery, certainly economics. Say has been, accretive, you know, contributing to adjusted EBITDA. Mm-hmm. Mentioned on the call, actually the earnings call a few weeks back, that we've transitioned proxy services to Say from a third party. We should see a nice seasonal uptick in proxy-related revenue in Q2. In terms of, you know, looking forward, you know, we're gonna be, you know, moderate in our approach. We're gonna be looking at what can we accelerate for our customers and do it in a way that we think is accretive for shareholders. Yeah. You say like, is financial accretion an important aspect? Absolutely Is a timeframe around, like, how you think about. Obviously, each deal may be nuanced or have its idiosyncrasies to it, but, like, the financial aspect, it sounds like, Say, has been financially accretive in terms. Yeah In addition to strategically accretive. How do you think about that? Just so that if we see something announced that maybe we'll have an insight into your thinking. Yeah. We'll definitely have one of the top priorities of our deal. I mean, it's great technology, it's a great team, they share our culture around compliance. A lot of those things have to fall into place, but also the price has to make sense, and the potential return also has to make sense. You know, it's a different world that we're in, and buying, you know, loss-making companies isn't exactly the strategy we wanna follow. Terrific. Jason, we're at time, but thank you so much for the update, and, please come back and do this again soon. Thanks, Devin. Appreciate it. Thanks so much. Appreciate it. Thank you. Thanks, everyone. Thank you. Thank you.