Robinhood(US:HOOD)2021-08-17 16:00Financial 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]