Robinhood Markets, Inc. Earnings Presentation Second Quarter 2021 investors.robinhood.com 1 Disclaimers This Presentation Relates to Robinhood's Broader Earnings Announcement Disclosures This presentation accompanies Robinhood's second quarter 2021 earnings announcement webcast and should be read together with Robinhood's earnings announcement press release and Quarterly Report on Form 10-Q. Please refer to the Form 10-Q for more complete explanations of the results highlighted in these slides. Hyperlinks t ...

Financial Performance - Total net revenues for the three months ended June 30, 2021, were $565.3 million, a 132% increase from $244.2 million in the same period of 2020[16] - Transaction-based revenues for the six months ended June 30, 2021, reached $871.6 million, up 208% from $283.0 million in the same period of 2020[16] - Net loss for the three months ended June 30, 2021, was $501.7 million, compared to a net income of $57.6 million in the same period of 2020[16] - Operating expenses for the three months ended June 30, 2021, totaled $500.7 million, a significant increase from $186.2 million in the same period of 2020[16] - Total net revenues for the six months ended June 30, 2021, reached $1.1 billion, up from $371.8 million in the same period of 2020, representing a growth of 192%[38] - Total transaction-based revenues increased from $187.4 million in Q2 2020 to $451.2 million in Q2 2021, representing a growth of 140%[38] - Cryptocurrency transaction-based revenues surged from $5.3 million in Q2 2020 to $233.1 million in Q2 2021, a remarkable increase of 4,287%[38] - Net interest revenues grew from $40.0 million in Q2 2020 to $67.7 million in Q2 2021, a growth of 69.9%[38] - The company reported a net income of $5,082,000 for the year ending December 31, 2019[27] Assets and Liabilities - Cash and cash equivalents as of June 30, 2021, were $5.1 billion, up from $1.4 billion as of December 31, 2020[14] - Total current assets increased to $17.9 billion as of June 30, 2021, compared to $10.9 billion as of December 31, 2020[14] - Total liabilities as of June 30, 2021, were $17.9 billion, a substantial increase from $8.9 billion as of December 31, 2020[14] - The company experienced a change in fair value of convertible notes and warrant liability of $2.0 billion for the six months ended June 30, 2021[21] - Total financial assets amounted to $3,727,287 thousand as of June 30, 2021[46] - Total financial liabilities reached $7,003,540 thousand, with convertible notes at $5,189,783 thousand and warrant liability at $382,513 thousand[46][50] Stockholder Equity and Shares - As of June 30, 2021, Robinhood's total stockholders' equity was $2,179,739,000, with a net loss of $1,946,468,000 for the year[27] - The total number of common shares outstanding as of June 30, 2021, was 232,609,957[27] - The company issued 3,581,521 shares in connection with employee stock plans, raising $6,579,000[27] - The balance of redeemable convertible preferred stock increased to $2,179,739,000 as of December 31, 2020, reflecting a net issuance of $557,297,000 from Series F convertible preferred stock[27] - The company has a total of 412,742,897 shares of redeemable convertible preferred stock outstanding as of June 30, 2021, with a carrying value of $2,179,739,000[78] Employee Compensation and Stock Options - Share-based compensation expenses amounted to $10,222,000 for the period ending June 30, 2021[27] - Share-based compensation expense for the six months ended June 30, 2021 totaled $10,134,000, compared to $3,777,000 for the same period in 2020[104] - The total intrinsic value of stock options at June 30, 2021 was $632,774,000, with 17,685,650 options remaining[96] - The weighted-average grant date fair value of Time-Based RSUs unvested at June 30, 2021 was $26.12, with a total of 68,864,590 RSUs unvested[97] - The 2021 Employee Share Purchase Plan allows eligible employees to purchase shares at a discount of 15% of their eligible compensation, with no participants as of June 30, 2021[102] Regulatory and Legal Issues - The company faced a $65 million civil penalty from the SEC in December 2020 related to best execution and payment for order flow practices[123] - Robinhood Financial (RHF) reached a settlement with FINRA involving a fine of $57.0 million and customer restitution of approximately $12.6 million due to various investigations, including system outages and options trading issues[130] - The New York State Department of Financial Services (NYDFS) reported deficiencies in Robinhood Crypto (RHC) related to anti-money laundering and cybersecurity, leading to a proposed monetary penalty of $30.0 million[131] - Approximately 1,600 customers may pursue arbitration claims against Robinhood related to the March 2020 outages[126] - The SEC's Enforcement Division is investigating Robinhood's "For You" feature, which is no longer active on the platform[147] IPO and Acquisitions - The company completed its IPO on August 2, 2021, raising approximately $1.9 billion from the sale of 55 million shares at a price of $38.00 per share[151] - A total of 412,742,897 shares of convertible preferred stock and 137,305,156 shares of convertible notes automatically converted into Class A common stock upon IPO completion[151] - The company recognized a one-time cumulative share-based compensation expense of $1.0 billion related to RSUs as part of the IPO[152] - The company acquired Say Inc. for approximately $140 million in cash on August 13, 2021, enhancing its investor communications and shareholder engagement capabilities[153] Operational Challenges - The company experienced significant growth in user engagement and trading activity during the COVID-19 pandemic, leading to an increase in first-time retail investors[30] - Robinhood's operational challenges during the pandemic included additional costs related to business continuity initiatives as the workforce transitioned to remote work[30] Lease Obligations - The company had $74.7 million of operating right-of-use assets and $86.7 million of operating lease liabilities as of June 30, 2021[115] - Total lease costs for the six months ended June 30, 2021, amounted to $11.9 million, compared to $6.8 million for the same period in 2020[116] - Future minimum lease payments under non-cancellable operating leases total $114.8 million as of June 30, 2021[118] Interest Rate Exposure - The company had no outstanding borrowings under its credit facilities as of June 30, 2021, indicating limited financial exposure to interest rate changes[219] - A hypothetical 100 basis point increase or decrease in interest rates would not have a material effect on the company's financial results as of June 30, 2021[220]