Robinhood Markets, Inc. ($HOOD)

I think with the last session of the day. I'm very pleased to have Robinhood. From Robinhood, we have CFO Shiv Verma. Should we've been tough competent, but this is the first time presenting. So welcome to the SEC, and thank you very much for the time.

No thanks for having me excited.

Good stuff. So maybe we'll just start with some news that you guys announced today around Agentic trading and some Agentic Commerce. Give us a sense of exactly what was announced, how you think about the potential opportunity and any differentiation of the product versus what's out there today?

Yes. So we're super excited to share it, and we're glad we want to get out of it at the conference so we can talk about it. We teased at the last earnings call that we're going to have a series of Agentic products coming out throughout the year. And today, we announced our first 2. So -- to your question, what did we announce? The first 1 is agent trading and the second is Agentic commerce. What did we build -- on the Agentic trading side is just an MCP. So everyone in here, if you use cloud code or Kodak or your favorite LLM, you can have an MCP that connects directly to Robinhood. You create a separate Agentic account. So on my phone today, I have my brokerage account, I have retirement. I have my joint account with my wife and now a custodial account for my kid, and I have an injected trade income. You fund it with whatever you like. and then you just go. And so I was telling Chris before we started, what are people doing? Why gamut. It can be the simplest from, I know I want to buy Apple, go execute the trade for me. We're seeing people do research. So Show me stocks are growing 20% per year compounding with EPS positive and show me a list of screeners. We're seeing some people say, create a portfolio for me. This is my risk preferences. This is what I like. We had someone internally who said, go through 13F of these particular fund managers and see if you can create new portfolio there. So the sky is the limit. It's really fun to see what's being built. This is just our first one. This is for AI native were developers. So this is people who are already Techno focus who already use AI. This is not in the app. You have to actually physically connect through the MCP. Later on this year, you should expect that we will continue to have more features that are more for the novice investor. This is more for those that are there. The second thing we announced was Agentic Commerce. So we have a credit card platform today, very similar in that you create a virtual card. So in the Robinhood banking app, you can create a virtual card already. People use it all the time if they're traveling abroad or if they have onetime purchases, -- you can create a specific limit, so you can say, I want it to be $1,000 on this card and then you give it to your agent and you say go. And what have we seen people do? Some examples I'll give you is if you're a sneaker head, and you say, "Hey, the next time the sneakers drop, go purchase them for me." We've seen people use it for restaurant reservations. This is my favorite restaurant in New York, they're always booked, monitor the site when something opens up, to book it for me. People have used it to price compare. This is a coat that I like to go to Amazon and Walmart, tell me which 1 is cheaper, as soon as it goes below $100 go buy it. So again, these are for people that are AI native. They already have the tooling and they're starting to connect to the throughout the rest of the year, we have a couple of product events. So next week, we have our RA conference synergy. You should expect we'll have some more product announcements there. In July, we have our U.K. event. Again, you should expect some more products there. And then in the fall, we typically have our active trader events. So throughout the year, you're going to see us drop more of these. Agents are a buzzword right now. So what does it mean for us? It just means you're solving a customer pain point, like that's all it is. And you abstract away some of the nonsense they want to do. The Carlson Brothers have a great framework they use for Agentic commerce. Everybody goes to the logical end state of the agent is going to go buy me everything. But when you talk to customers, the first thing they want to do is I know what I want to buy. I just want you to go fill the web form. Training is the same thing. Everyone is going to the logical end state. My agent is going to do everything for me. When we talk to our customers, most of them know what they want to buy or they know a sector or they just need some help. There is some group of customers who say, just take over my portfolio, but you have to build for everybody and you have to get them along the way. So that's why we started there. The last thing I'll add is the reason we did payments and investments is we think it's really important to have agents across the entire Robinhood ecosystem. So we kind of group these ones together throughout everything from brokerage to advice, to payments, to international. There's a lot of different ways you can use agents. So you should start to see us with more and more of these products throughout the year.

Okay. That's awesome. Let's stick with that theme and talk about the advice space. It's probably the biggest part of kind of revenue in wealth management. There's always been sort of regulatory constraints, et cetera. You can announce product if you want to now. But if you can't, Give us a sense of what a product will look like in terms of getting rid of that regulatory issue and sort of how you can sort of differentiate.

Yes. So the way we think about it is wherever the customer is in their journey, you want to be able to meet them. So if you're fully self-directed, you want to do everything yourself, what we did today, the MCP is for you. If you want a little bit of help that's our strategies product. I know what I should do. I should be in the market, but you help me, that's the strategies with an active overlay. The last end of the spectrum is, I know I want to be in markets. I don't know what to do, please help. That's a human. So everywhere along the way you want to be able to do that. with the product we did today, this is fully Reg BI. So this is not advice. This is not under an RIA. The differentiation is you have to take intent. So you can tell the agent what you want to do. If anyone in here uses cloud code, you go through it, you give it instructions. There's a lot of things it can do. But if there are certain things that need to take an intent, it asks for your permission. This is the same concept. You the user are taking in action. On the advice space, where do I think that's going. The end user in advice is not the customer, it's the RIA. So if you make it really easy for the RIA, that's powerful for them. So when we talk to RRAs we have an RA custodian has about $40 billion of assets, hundreds of thousands of advisers. What they want to spend their time doing is talking to customers, meeting their clients, more sales focused on relationship driven. They don't want to do the back office stuff, which is most of what they spend their time on. If you could have agents help them in a regulated way, that is really powerful. So I wouldn't say it's as simple as I get asked, are agents going to disrupt advisers. You're not going to have them. We actually think there's room for both. Because when we talk to customers, some people want to do it themselves, some still want a human. If you want a human, let's go make their life easier, which then they can in turn serve the customers more.

Okay. Just talk about maybe the broader sort of AI strategy. You've been very specific with numbers around cost savings in 9 figures in '25, very significant benefits on the customer service side. Let me just talk to what you're doing that's different from peers, why are you seeing so much productivity benefits so early?

Yes. It's a great question. So internally, we have kind of 2 work streams. One is what do we do for employees and what are we doing for customers? So if we start with the employee side, where do we start? -- customer service, software development. That's the easiest piece. A couple of data points we've shared about 75% of our tickets are answered through AI. And as you mentioned, over 9 figures of software development savings. The more powerful thing is our commit velocity. So what I shared on earnings is our commit velocity and measure of how much code we produce is up 50% since the start of last year, which is up even the year before. That has a secret sauce of Robinhood. You're constantly shipping, you're constantly doing more -- it's not by accident. So it starts with some of these AI toolings and starts with training. It starts to make sure you were using the most for interior model as soon as they come out. When enterprise chat GPT came out in 2022, Vlad was on the phone was Sam, the first weekend. Like we were an early adopter same when OPUS 47 came out, you have to constantly be training your employees. Where are we focused on now? We are making sure that not just developers, but everybody internally has these tools. So it's no longer optional to use cloud code or codecs favor LLM, but you also have to train people. And so we start with developers now we're going to nondevelopers. I'll give you example that I like to use on the marketing side. We challenged the marketing team -- can you build an ad entirely using AI, no humans involved. And so from the sigma design to actually creating the video using Avatar actors using 11 labs for the voice to the postproduction to actually putting it out to the different channels we put it on. Start to finish took about 4 hours that usually after many tweaking and rounds that usually would take 2 to 3 weeks to do that. And we then ask them, can you create 10 versions of this at AB test it and see which 1 resonates with customers. They did that. We said, can you create another 10 versions of each one. Now you have 100 versions of the original ad, all that was done in a single afternoon. So it really comes from like, do you give people the tools, do you give them the training and it has to come from the top -- why do I think we're succeeding? One, we've been early. Two, we are an engineering culture. We are a technology company that happens to be in financial services. Our engineers of Silicon Valley based plot is an engineer by training. So it starts from the whole thing. -- and then you have to make sure that you're giving people the tools from day 1. So another thing that's really popular right now is harnesses. What does it harness? It's just a way to make it easier for your employees to interact with all of these different tools. So we built our own internal harness. Now if I want to go create an agent, I can interact with that and it will abstract everything else in the back and everything I need to log in to Okta, all the different security profiles and I can just go. That is really powerful. As you do that, you can ship faster you can deliver more products, then you can pass on more value to the customers. So it kind of creates that same cycle. But yes, it's been something we've been fully focused on for basically the past 4 years. What changed was when OPUS 47 came out in December. That's the logarithmic change point. Codex is very close now. Like they go neck and neck depending on where they are. But these models are getting to the point that if you're not using them, you're going to be a disadvantage for your peers.

Okay. Let's step back a little bit on the broader business, $300 billion in platform assets, impressive, but pretty meaning scale relative to the size of the U.S. wealth market, which is over $70 trillion. Kind of what's the path to more meaningful wallet share over time?

Yes. It's about $350 billion today, actually. But a point we'll take it. We love where we're at. We're only about 10 years old. But to your point, U.S. discretionary brokerage accounts, about $20 trillion today. Retirement accounts in the U.S., about another $20 trillion. Financial advice about $7 billion to $10 trillion. -- that doesn't even include banking or the adjacent field. So while we love 350, we have a long way to go, and our competitors have shown you can get to tens of trillions of assets. There's no structural reason. So how do we do that? -- kind of 2 things. One, you gain wallet share with your new customers -- with your existing customers to you compound with new customers. So with our existing customers, when you look at our cohort charts, there's 2 things I obsess over. Where are they starting? And how does it slope and how does it ask them to? And everything we see is our customers are starting with larger balances. Our average account size today is about 12,000 when I joined, that was closer to 2,000. And they're as intuiting later, meaning they're depositing more and more. So that's really healthy. But why is that happening? That's the more fun part it's because we're building a product that we didn't have before. So who is our prototypical customer today? And I've shared this with some other folks in the room, so apologies if you heard this before. But our meeting customer day is 36. They tend to be educated, some discretionary income relative to the national average, widely distributed across the U.S. They tend to be married, want to do kids or a cat or dog. You need to build for them. When I joined the average customer age was 28. Now they're 36. What do they want today? They wanted custodial accounts. We didn't have those before. Trust accounts. We said that's coming out very soon. Now they want mortgages. They want banking accounts, checking and savings. So as you round out the feature set, that's how you grow the net deposits, that's how you get into the $1 trillion. The second thing we're focused on is the new customers. So I shared at the last earnings call, we're going to start spending a little bit more of our resources on top of funnel growth. In 2022, we switched to completely focusing on net deposits and gold subscribers. We acquired a large customer base, more than 20 million believe a really small wallet share. So everything we did was focused on that. We still believe we can compound 20% per year on net deposits. That's the goal, and that's not changing. But we're turning the dial a little bit more on top of funnel growth, which will also help that deposits compound.

Okay. Can you talk more about that? -- lot to deposits is my favorite metric. -- guys are growing 5x your peers. But how do you get account growth, which has lagged a little bit to move up?

Yes. Excellent question. So organic account growth is roughly 7 to 10 per tier right now. We've spent 0 marketing dollars on it, and we have spent very little product side on it. So what are the different vectors you can do? The first thing is products. So we're starting with products that can get customers who are younger and in different phases of life. So I mentioned custodial accounts. Another one is Trump accounts. it came out that we are the sole custodian on that. There is news today that it's actually coming out tomorrow and over 5 million people have already signed up. That's a great way to get your technology in front of people very early on banking. Banking is a great product because when you talk to Gen Z or 18 to 22-year-olds, many of them actually start with the bank account for an investment account. You think about the 18-year-old you go to college, what's the first thing you do I need a checking accounting, you savings account a credit card. So we actually decoupled the banking product from the main app, so customers can onboard that way as well. International, that's another vector. The last number we shared is we had a little under $1 million funded customers overseas, small relative to the 27 million customer base, but that's a vector there. And then the last lever we have is we're starting to turn some of our marketing promotion dollars to that. So we pivoted entirely to net deposits in gold subs. That's not changing. I would just view it as a dial -- and if we can get the same LTVs and the same ROIs that we underwrite to, but put a little bit more towards NFA growth, we think that will compound in the longer term. So those are some of the levers that we're focused on.

Maybe talk about your gold accounts a little bit more. subscribers, something like 56% penetration, I would argue maybe your most loyal customer base. Talk through the ceiling for that sort of like product and how much petition you can get there. And any sort of products or features over the next couple of years that can drive better penetration?

Yes. So as you mentioned, gold, in 2023, we made a strategic shift to really focus on gold. And the vision was everything should be better with gold on Robinhood. So the first product we built was the high-yield savings account. That's when interest rates were high, you were getting 4% to 5% interest rate. We took a risk. We said hypothesis, we're going to gate it really resonate with customers. So today, that product is $30 billion roughly in sweep deposits. Now what you're seeing is every new product that we build, we're saying, is there something better with gold. And you grow across all 3 of our arcs. In the active trader arc, if you're an index options trade futures trader, you have better commissions with gold. In the wallet share arc, if you're a saver, you get the high-yield savings account rate -- if you're a strategy's customer, you don't pay any fees after $100,000 in assets. So you keep adding more products in there. About 40% to 50% of new customers sign up for gold. So while it's a 15% total attach rate, that's because we had a very large base at start. We're now getting customers earlier in their journey. So if you think about the prototypical customer journey, I come to Robinhood to do something. I want to trade my first equity, my retirement account, I want a bank account, I want a credit card. You then discover gold. Well, it's $5 a month. There's all of these great features. You sign up for gold, then you use other products. We don't view it as a subscription product. We view it more as a loyalty product. One customers are on it. they tend to deposit 5x more on average and they tend to use more products than non-Gold members. So that's a little bit of a thesis behind it. Where do we think we can go? So everyone uses Amazon Prime, that's the canonical subscription model. The ones I really look to are the consumer mobile subscriptions that have done really well, Uber, Uber 1, Spotify, DoorDash. They have shown that you can get tens of millions of consumer subscribers in a mobile product app, and so we're roughly 4.5 million subscribers today and continuing to grow. So there's no structural ceiling why you can't have more, but you have to have good products in there. The other question I get asked a lot is, are you going to change the pricing. It's $5 a month, $50 a year. We like to say it's the best deal in financial services. We are not allergic to raising pricing, and we've experimented, but we want to make sure that it grows and it has a lot of value before we do that. The mental model we use internally is the into Costco. Costco rarely raises their rates, but they do. It doesn't happen very often. But when they do it, nobody complains because they're getting so much value and it's so much there. And so there will be a point where the value will be so rapid that we're comfortable doing that. But for today, we're really focused on just adding more products to it.

Perfect. Let's talk about some near-term trends. A lot of discussion on second quarter call around take rates in crypto on options. Just talk through kind of what happened in 1Q April and May, sort of what trends are you seeing? And then maybe how business think about sort of pricing dynamics in your business over time? .

Yes, great question. So on last earnings, we shared that crypto, for example, the take rate was down. That was mainly due to the mix shift of traders. So if you look at our pricing model in crypto, it's tiered pricing. The more you trade, the lower your commission all the way down to $0.03 for the most active trader -- and for the casual trader, it was 85 basis points. Now it's more recently 95%. What we are seeing in Q1 and what's starting in April and May is very similar, the casual traders stepped away, the active trade on institutional trader is still there. And so they tend to be active throughout market cycles. During these periods of lower volatility or crypto winter, you tend to see less casual. So that hasn't really changed. I shared on the earnings call that relative to Q1, April was down about 7, 8 basis points on a take rate for quarter-to-date roughly at the same spot as where we are today. So starting to stabilize, maybe slight improvements, especially with the 95 rates, but think roughly kind of that 7 to 8 basis points is still where we are. On the option side, a little bit different. Options and equities volumes are really healthy. So April, we shared was our second highest trading month ever. May is off to a very good start. The reason the take rate came down was the mix shift of assets. So we went from more single-name stocks to ETS. ETS have lower spreads, so the take rate you get there is more. It has nothing to do with volumes or the type of traders, just which asset class they're choosing to see. So what we're seeing right now quarter-to-date is that the take rate is roughly where we were in Q1. So it stabilized. It's come back up, because I said in the Q1 earnings call to tick down a little bit now with April and May volumes is starting to come back up. And so for that, we still feel really good there. in general, take rates an output metric. What we focus the team on is market share. They are gold of market share and profits. Whatever the take rate goes it's going to go. Crypto is a great example. The counterfactual is if we didn't have the tiered pricing, we would have lost market -- and we saw that in prior winters. When crypto winter started and the active trader stayed, but they're more price sensitive, they want a way to other platforms. That didn't happen this time. They were still engaged on Robinhood. The other thing it changes we didn't have an institutional platform before. Now we have Bitstamp the exchange. They tend to be more active during these periods of lower volatility. So that's why even though the take rate came down from our standpoint, that's okay, like that's an output metric. If we keep building and market share is holding steady or growing, which is what we're seeing on crypto, that's really what we're focused on. And then on the brokerage side, as I mentioned, the volumes are really healthy and the market share continues to grow.

And on the crypto side, how do you think about long-term pricing? I guess is this tension, some of the newer players that have come in, like e-trade, et cetera, have been quite low. -- your crypto-native plays are still quite high. So how do you think about just the intermediate term in terms of the pricing? .

Yes. The way we thought about it when we redesign our pricing is you need to have the best pricing for every type of trader. Before, when we were at 75 or 85 basis points, we were kind of a tweener. For the most active traders, actually, our pricing wasn't that competitive. But for the more casual trader, we were probably under monetizing. And so now what we did is we went across every tier -- and we said for that particular segment of Traber, -- we still want to be the best in the market, but we need to go lower for the active traders, and we need to monetize a little bit more on the casual trader. And what we're seeing is that's generally working well. We're still tinkering with it. We actually just raised the pricing a little bit on the highest tier. It went from 85 to 95 basis points a few days ago. Pricing is 1 component of why customers come to the platform. It's great that our other peers have finally caught up and realized this is a real asset class. We welcome that. But they have 2 or 3 coins. They may be listing. What do customers want? They want selection. We also have staking. We have a noncustodial wallet. They want all the features in 1 place. And pricing, 1 size fits all, I don't think is exactly what people are looking for. And so we spend a lot of time thinking about this. Again, we're open to experimenting. But where we are today with the tiered pricing, I think, is working well for active traders. And even for the casual trader, it's still the best deal out there. And that's really what we're trying to solve for.

Okay. On net interest income and securities lending, that obviously also took some pressure in the first quarter feels like the environment is better. I mean it looks like rates are going to be higher for longer, some big IPO pipeline coming through that should help seceding but maybe your views on how you think through that revenue line over the next year or so.

What do we do? We focus on the inputs. And so all the inputs that I'm looking at look very healthy. So if I look across the different areas of NIM, margin book, $18 billion plus highest it's ever been. Our Sweeps program, still around $30 billion, continuing to do well. Securities lending. The input metrics are how many people are opting in and how much EUC is opted. And I think the last numbers we shared were about 25% of customers and 50% of assets were opted in. So very healthy rates there continuing to grow. What is lower? It's the specials, the rebates rate. The reason for that is IPOs are lower and volatility was lower in that particular asset class. If IPOs come back, I think that's a nice tailwind to the business. Why is that helpful for sec lending? When you think about what securities lending is what are the names people want to borrow. It's named with high volatility and low float and when there tends to be a directional thesis. That is the prototypical IPO. It comes out with a lot of volatility and we'll move around and people have different views, and it's a very low float. So as that comes up, that tends to drive a lot of the specials rebate rate, if that comes back up, that's a nice coiled spring for us because the rest of the inputs are there. It's nice to see that a lot of the mega cap IPOs have either filed or rumored to file and so we'll see where that goes. But right now, balances are increasing. Customers are opting into the program. If rebate rates start to rebound, I think that will be a nice win as well.

Okay. Good stuff. If we talk to prediction markets, pretty impressive growth from 0 to $400 million in under 2 years. You are not launching talk through how you think about how that changes your competitive or strategic optionality in that business? And also from an economic perspective, how do you think about monetization.

Yes. So as a reminder, Rothera is our joint venture with Susquehanna. And what we did is we bought a DCM exchange. So today, previously, we were just the FCA, meaning we can onboard the customers, but we have to partner with a third-party exchange we are now vertically integrated. The history of Robin is we usually partner for speed to market and then we like to vertically integrate because you control the whole product and engineering, you also control the better economics. So on Rothera specifically, a couple of things we're super excited about. First, it's going to launch very soon. We said it's going to be operational by mid this year. I don't want to steal the product team's thunder, but it is getting close, and we'll be able to share that. When we do that, there is no reason in the fullness of time that most of our flow should go through our own exchange. It doesn't mean we won't have a backup exchange or someone else there, but you should expect in the near to medium term that we migrate our flow over there. You control the product and engineering experience, which means you can launch faster, you also control the modernization. So the way it works today is the customer pays $0.02 per contract, $0.01 goes to Robinhood, $0.01 goes to the exchange. When you control the entire piece, there's a lot of things you can do. So we spend a lot of time thinking about it. And what you should see when the product comes out is we're going to make sure that customers have the best pricing in the market. So we're going to take some of the monetization that we made. We're not going to hurt our take rate, but we're going to take most of the value and passing on to customers and that's going to allow us to have the best pricing in the market. We are also exploring what the pricing structure should look like. You should expect that the $0.02 per contract is not going to stay, that we're going to come out with a more innovative pricing that makes sure it addresses some of the customer pain points and will also be 1 of the best pricing on the market. So that's the part that's coming soon. Again, it should be out in the very near term, but we're going to use that extra monetization to redo the pricing model and to also make sure we can pass on more back to the customer.

Okay. What's the next frontier for that market for friction markets? Obviously, it's mostly sports and politics today. What do you came from your customers in terms of what sort of products they want and what's the restrictions or holdbacks and launching those?

Yes. So great question. So what are we focused on? And where do we think it's going Today, there's no doubt, sports has found product market fit. If you look at NFA data or any of the exchanges, it's about 85% of most of the volumes. When I look overseas, take poly market, for example, actually, most of their volume is non-sport. So it's definitely possible, and we've seen product market fit overseas. So what do we focus on? First, just building a better product. If you look at our app relative to 18 weeks ago -- 18 months ago, when it came out, every week, it's getting better and better. We're making the product more intuitive to design. So that's a big change. We're adding new assets. So we have about 2,000 to 3,000 contracts in the app today, a lot more than last year, still lower than our competitors. We don't list everything. So we have a couple of constraints. We want to make sure it has good liquidity. If it doesn't have good liquidity and customers won't be able to get out, we don't think it's suitable. We also don't list work contracts, depth contracts, things like that. But in general, we stand for access, and we want to list more and more contracts. The fun part is we're starting to see use cases that we didn't even imagine. And so I've given a couple of these examples before, but I think it's fun to share. during travel season, we noticed a lot of people were training weather contracts. And we asked and talk to customers what we were doing, they were hedging their flight risk. They were worried their flights. We get canceled said at least I'll have a good train, my event contract. -- in certain parts of the country, people were trading contracts to hedge their insurance. So in a high hurricane season in Florida, for example, we saw some customers supplementing their insurance by buying bank contract. These are use cases we didn't even think about. And so as we look forward and more of these organic usages come up, we think this is going to be a larger piece of the platform. The other piece we're super excited about is how do you interact with traditional brokerage. And so the advantage we have to some of our peers is we have all of our asset classes in 1 place. So equities, for example. You go to the stock detail page for Apple, you can trade Apple the equity. You could put an event contract on the KPIs, how many iPhones are going to trade. -- you could do an event contract on their actual earnings, the revenue and EPS. Today, some of our competitors have that. We will list that as soon as we can. The only thing we're waiting for is regulatory clarity. It's unclear if KPIs and financial contracts are a SEC security swap or if there's a CFTC event contract, the SEC and the CFTC are working together, and I think they'll get that sorted out pretty soon. But as soon as we have that, we'll do that there. And so when I look around, it's fantastic that sports has found product market fit earnings, we shared over 1 million customers have used event contracts. The most recent number is actually 1.5 million customers of now used event contracts. So it's continuing to find more traction there. but we're also seeing some of these nonsports use cases around financials or weather or other things like that. The last piece I'll add where it's going is today, it's a U.S. retail product. With the exchange, it can become an institutional product. We're already getting inbounds from other FCM saying, "Hey, can we use your exchange? We don't want to use the existing third parties out there, we want to migrate off of them. It can also become an international product. We're talking to other jurisdictions where we already have licenses throughout the world to see if we can offer that as well. And they're constructive. I think they'll get there. And so if I look out in the future, it's great that sports on product market fit. But I think it will be more assets -- it will be institutional and it will be global and we'll find use cases that we haven't even thought about before.

Okay. Very helpful. I took some of the new products, 1 is tends you hired private markets, which you've done a lot of work around -- maybe just talk through your offering today. I think you have a fund, maybe 1 or 2, and I think maybe on 2 already. Just talk through your vision for private markets, how you think about just long-term potential and the moderation model.

Yes. So I'm very passion about on the private market and help launch this. So the vision is what we did for public markets, we should do for private markets. So that's the start. The challenge that Vlad gave me was he wants to be the biggest venture capital firm in the world. Now over some time horizon, but we will get there. So we start like we always do, we talk to customers. What were the main pain points of customers. First, they felt like the best technology companies in the world, they didn't have access to. They were thing private for longer and it wasn't fair. There was -- they wanted a liquidity unlike an institutional investor, they're used to that, and that's very important for them, even it's private. Not all customers are accredited. That was a huge barrier. So 85% of Americans aren't accredited. So we needed to build a product that was for everybody, and they wanted competitive fees. And so if you look at what we did, the first product we launched Robinhood Ventures Fund I, that was in a closed-end fund format. So we used the close-end fund Fact fund for a few different reasons. It's exchange-listed -- so then -- anyone can buy it just like an ETF, you don't need to be accredited. It has daily liquidity because it trades, and we did low fees, 2% with no carry, very different than many VCs we charge carry on that. and the resonation has been great. So we shared 150,000 customers participating in the IPO. The fund is now roughly $1.5 billion market cap. We've been able to partner with some of the best-in-class names out there. So OpenAI was when we just announced Stripe, data bricks, ramp. The list goes on and on. And so when we think about it, that was Fund I -- we said we confidentially filed with the SEC for Fund II because we're on file confidentially cancer too much more than that, but you should expect that the more coming. And what we're looking at is all the different pain points. And so what is our vision -- if you're an entrepreneur and you want to raise capital, you can do it from seed through IPO with Robinhood. You're raising your first venture fund, first venture around, great. We have a platform to do that. You're doing your growth rounds, great. Your pre-IPO, Ventures Fund I can invest in you. By the way, we can help take you public. We've done 50 IPOs on our platform. Then after you go public, you can use Rabinhood to talk to your shareholders. We have safe technology where you can ask questions. So that's a little bit the vision. That's how we did the private markets in the U.S. Overseas, we use tokenization. So tokenization, we have the MiFID licenses in Europe. We've tokenized public stock, we also did 2 private stocks over there. We think that's a very good infrastructure to do it in the non-U.S. In the U.S. side, until tokenization comes legal, we're going to continue to focus on these 40 Act funds because we think that's the best way to provide customers access to private assets.

Since you put up of Europe, let's go to international. For the most part, it's been a U.S. story, a very impressive 1 here. But the brand is fairly global. There's always like a Robinhood of XYZ country. Just talk through what you need to do to be more meaningful globally.

Yes. It's a great question. So where are we today? We're in the U.K. We have a brokerage product there. We're in the EU with a crypto product in stock tokens. And then we have a couple of pending acquisitions that are closed. Canada, we announced Wonder 5s coming pretty soon. In Europe -- excuse me -- in Indonesia, we announced we brought Buana, crypto and Brokerage exchange, and then we announced from Singapore and the MAS, we got principal approval to go there. So we're continuing to expand. What's my very simple model for how we expand overseas? I use a 2 x 2 matrix brokerage and crypto and 1 axis organic and inorganic on the other. If you look at those 4 boxes, we have used every single 1 for going into different places. So for U.K., it was organic brokerage. For EU, it was organic crypto. For the other countries I mentioned, it was through M&A, either brokerage or crypto. So we're indifferent to which way we get there. The reason we pick certain ones is we talk to customers and we say, where do we have a right to win. In the U.K., for example, we found out that customers wanted a good way to buy U.S. stocks at low cost. So we start with that. In the U, customers wanted another trusted platform to buy crypto at low fees. So we started there. When you talk to customers today, they want the full product suite. So the U.K. customers want crypto, the EU customers want brokerage. So we're going to build that out. These are just beachheads. We get asked a lot, "Hey, you only -- you only have crypto here, you only have brokerage here. The mental model is you start a beachhead, you find product market fit. You find the first customers who love you and evangelize the brand, then you expand -- so that's something we've been working on. What do you need to expand? Because you're a software company, it's actually not that hard. The main restriction tends to be licenses and landing teams. And so that's why sometimes we use M&A. We have capital and distribution. But if we can buy a great landing team that has licenses or some product market fit or a small amount of assets, that's generally what we do. And so that's how our acquisitions have been. And so that should also help us accelerate. But yes, it's a long journey. This is why we put it in the 5- to 10-year arc, but we started this a few years ago, and we're nearing 1 million customers today, and we're going to keep focusing on it.

Okay. Let's talk to competitive dynamics. I would say you guys have been very good at understanding that it needs to be multi-asset class. -- in every asset class, you've been very good -- and that's helped you grew quite a lot. -- peers have realized that. I want to be very big cases, it starts to do the same thing. And they've gotten some traction on production markets. They want to equities as well. How do you think about Robinhood maintaining competitive advantages as folks essentially just copy your strategy?

Yes, it's a good question. So the way we think about it is we obsess about customers, but we make sure we're aware of what the competitors are doing. You can't ignore them, you have to benchmark and do intelligence, but if you start with the customers, a good thing happens. And so it is a feature and a bug that people copy you. When you're successful. We've seen this for the design of the app. We've seen our features. How do you stay ahead? You keep innovating. And so you have to come out with some of these newer and newer products. So take fractional shares or 245. A few years ago, we were the first to do that. Now everyone has that. So you have to keep pushing the boundaries. We talked about the Agentic that MCP is earlier. -- have to be the first to market and there you have to keep innovating on there. So the way you stay ahead of your peers is you just talk to customers for what they're looking for and you keep doing that. We are not naive. This is a competitive space. Many people are coming for us. We like to say we're going to be the financial super app. We started saying that we were when we IPO-ed 5 years ago, to be honest, we were still figuring it out. I think today, we have a much better view of what customers want. They want all their assets in 1 place, and they want to be able to for you to custody and do all their transactions in 1 place. If you keep rounding it out, that's how you win. I don't think it will be a winner take all, but I do think it will be a few take most -- and so right now, I think we are 1 of the folks that have the right to win in this space, but there's a lot of people coming for everybody else. But if we keep shipping for customers, if you listen to what they're doing, if you keep your product velocity high, I like our stance. The other thing that's different relative to some of our peers is we start with the asset side. It's much different to start with the asset side relative to the lending side. Customers trust you with your assets, they're depositing -- it's very easy to give someone money. It's very hard to get it back. And so that's another advantage that we have. We started with something a little bit harder. But again, like we're going to other people's space that are coming to ours. The only thing you can really do is just keep innovating and then the rest will take care of itself.

Okay. Since the CFO can help, but as a couple of margin and capital real questions here. There's a lot going on Robinhood. Sometimes even hard for us to just keep track like today, not a new product. How do you think through investing for growth versus margin expansion? Because you've kind of done both fairly well -- so just walk us through your thought process and how you think about that?

Yes. So capital allocation is something I spend a lot of time on as this lot and we debate a lot of these things. Our mental model is we want to invest for growth. Anything that's extra we use for M&A to accelerate speed to market and then extra we return capital to shareholders. We're in a fortunate position where we can preferably have our cake and need it to. We are investing in growth in a lot of different vectors, and we've shared some of those and we've talked about those at earnings. We are also doing M&A. A lot of those M&As are done to get small landing teams or speed to market. And then we still have excess capital. And so we just announced $1.5 billion share repurchase program to continue to return that there. So across all 3 of our vectors we're doing this, to be really clear that we are a growth company. We're going to invest for growth, we're going to keep doing it. But the reason we're doing it profitable, you talked about margins, our check metric is profitable growth, just meaning very simply, in every given year, we want revenue to grow faster than expenses. It won't be linear. There will be some where it's a little bit less and some where it's a little bit more, but we want to take the cash flows that we're growing every year and keep reinvesting in the business. But I get asked all the time, hey, why don't you invest even more. You have so much to build so many TAMs, -- why don't you go more. The reason we use profitable growth is a check metric is 2 reasons. One, it produces financial discipline, and so it really makes you rationalize and make sure using our resources properly to it's for the focus of the team. If you think about our model, we ship incredibly fast. We went to a GM model so we decentralized all of our teams. So we don't have a CPO or a CTO. We have GMs and engineers and product and ops compliance, we're reporting to them. They have to build for the core business. They have to scale the products that launched and then you have to plant new seeds for the future. In any given year, if the GM is planting more than 2 to 3 new seeds, they won't be able to do amazing products. And so it's the old Steve Jobs at it, you have to say no to a lot of good things so that you can ship great things. So that's why we do that discipline. It's worked out pretty well for us. We don't set a margin target. So we don't say this is where we expect margins to be. We look at each individual product, every product has been economic positive, it has to be written to a good ROI, and then we build it up. And then you take the check metric of profitable growth, and that's kind of how you end up where we are today. So the algorithm is working for us. The last thing I'll mention is I am a big proponent of the denominator matters. And so managing our SBC is something that we've been doing for a long time. We try to be best-in-class there. So -- last year, we bought back all of our dilution. This year, we're already ahead of that pace. Our North Star financial metric is growing free cash flow per share and earnings per share. I'm a fintech nerd and a history but, as you know this, and I've looked at many of the best companies in the world that have reached $1 trillion valuations. What are the 2 things they all have in common, they consistently grow EPS per share -- EPS and free cash flow per share. So -- those are some of the things that we think about as we're going into it. How do you invest for growth, but also making sure you're doing right by shareholders.

Okay. Just to follow up on the buyback point, you're right, $1.5 billion buyback authorization and also a fairly sizable credit facility of north of $3 billion in March. So a lot of balance sheet capacity. How are you thinking about maybe the pacing of ship is.

Behind Europe already has regulation. We're building overseas as are others. We think it's really important for that to come back home. And so we think -- and SEC is making great progress. They've been really good partners on this. So as others, but that's 1 that we're focused on. Another 1 is the accreditation rules. We actually get asked about this less, but a lot of myself are actually very passout this similar to private markets. The rules today are antiquated. They equival wealth with, are you able to invest in some of these assets. We think there should be other ways to make sure customers have the ability to do this through education or certification, think about options, you have to go through certain requirements that should not be tied just to well. And so the administration has been receptive and feedback on there. So every way we look, we're hearing positive feedback. The other thing is on the use of technology. So the SEC and FINRA have actually been really good partners on this. This is new technology. It's unchartered ground, how are you going to deal with it? -- they're actually coming to us and say, "Hey, can you help us think about this as 1 of the largest players in the space and 1 of the technology leaders. And so we like working with them. Again, we're agnostic to what administration. This 1 has been more friendly to technology companies and financial services in particular. So that's great. But in general, we think we can build across different cycles and different regulatory environments.

Okay. We have a bunch of questions here from the audience. I'll just try and summarize them because we don't have a lot of time. Maybe 1 theme is -- we've done a very good job on the trading side. Clearly, a lot of product market fit, good ARRs in terms of some of the products. On the nontrading side, 1 could argue it's choppier. What do you think that is? And where do you think you will have sort of nontrading products that are at least comparable in size to the trading side?

Yes. So the -- if you look at our 3 pillars, active traders is the first pillar. And so we want to win there and you should goal us on market share. That's why you should have success. And today, we're #1 in options and getting very close on equities. On the non-trading side, we're continuing to compound pretty nicely. So we shared at our last earnings that about 40% of our assets are what you would call more long-term retirement, ETFs, cash and a few other items. Those products are more nascent. People forget retirement has only been around for a couple of years, and it's already at $30 billion. Banking has been around for 3 months, and it's at $2 billion. So in the fullness of time, we're going to continue to round out the suite I think the reason Active Traders has more traction is it's just we've been at it longer, and we've been focused on it. We have the early customers there. But what we've shown is if you build a great product like banking, it took us 5 iterations to get here. But once you nail it, then you can scale it really fast. And so those are the ones that get us most excited in kind of that 3- to 5-year arc.

Okay. And then just a final one. I just going to think about revenues going forward, any way to think about your view on what is -- or how growth will evolve between, say, uplift in more monetization per customer versus just growth in units or customers?

Yes. I think the best way to look at revenue growth is the chart we have from the 2024 Investor Day, which is just correlated to assets on the platform. And so why is net deposits are North Star net deposits is the measure of do our customers trust us, that correlates to higher assets, that correlates to higher revenue yield. How you get more net deposits could be both ways. It could be through new customers who start to deposit. It could be through existing customers depositing more -- it could be through launching new products with pulls in new customers and get you deposit more. We're agnostic to how we get there, you need to do both. But -- if I think about our revenue model going forward and if I was trying to model it out, I would just say, what do you think is going to happen to assets under custody over time as that's the best lever of what's going to happen to revenue growth as well?

Fantastic. With that, I think we'll call it a day. Thank you very much, Shiv.

Thanks for having me.