Robinhood(US:HOOD)2021-08-19 02:38Financial Data and Key Metrics Changes - In Q2 2021, Robinhood reported net cumulative funded accounts of 22.5 million, a 130% increase year-over-year [20] - Monthly active users reached 21.3 million, growing 109% year-over-year [20] - Assets under custody (AUC) reached $102 billion, up 205% year-over-year [20] - Total net revenues were $565 million, up 131% year-over-year [21] - Transaction-based revenues were $451 million, up 141% year-over-year [21] - Net loss for Q2 was $502 million compared to net income of $58 million in the prior year [30] Business Line Data and Key Metrics Changes - Crypto revenues surged to $233 million in Q2, up from $5 million last year [21] - Options revenues increased to $165 million, up 48% year-over-year [21] - Equities revenues decreased to $52 million, down 26% year-over-year [21] - DARTs for crypto set a record with 63% of funded accounts trading crypto, up from 11% in the same quarter last year [22] Market Data and Key Metrics Changes - 62% of crypto trading volume was in Dogecoin in Q2, compared to 34% in Q1 [22] - Payment for order flow for equities and options as a percentage of revenue declined to 38% from 64% in the prior quarter [23] Company Strategy and Development Direction - The company aims to become the most trusted and culturally relevant money app worldwide, focusing on expanding access for customers [8][13] - New products like IPO Access and Cash Management are designed to enhance customer engagement and participation [14][15] - The company is investing heavily in customer support and educational content to retain customers [11][12] Management's Comments on Operating Environment and Future Outlook - Management expects seasonal headwinds and lower trading activity in Q3, resulting in lower revenues and fewer new funded accounts compared to Q2 [31] - The company is optimistic about its long-term product roadmap and opportunities in the market [31] Other Important Information - The company plans to introduce new account types, including tax-advantaged accounts like IRAs and Roth IRAs [39] - A one-time cumulative charge of $1 billion in stock-based compensation for RSUs will be recorded in Q3 [29] Q&A Session Summary Question: Will HOOD payout a dividend in the future? - Management stated that the best use of capital is to deploy it in the business, with no plans to issue dividends at this time [34] Question: Is Robinhood getting a crypto wallet? - Management acknowledged the demand for crypto wallets and is working on it, emphasizing the importance of security [35][36] Question: What are Robinhood's plans for IRA 401(k) and HSA accounts? - Management indicated that multiple account types are on the radar, including tax-advantaged accounts [38][39] Question: Are there any plans to launch Robinhood in other countries? - Management expressed interest in global expansion but did not provide specific timelines [41][42] Question: How does Robinhood ensure HOOD's price is not manipulated? - Management monitors trading activity and shares information with regulators when necessary [45] Question: What are the plans if payment for order flow is regulated? - Management believes payment for order flow is unlikely to be banned and is prepared to explore internalization of order flow as an alternative [46][66] Question: What are the plans to maximize shareholder value over the next year? - Management emphasized long-term growth through new products and features, particularly in the cash management space [48][49] Question: What are the future steps to make Robinhood a better app? - Management highlighted ongoing product development and customer feedback as key to improving the app [54] Question: What is the strategy to address graduation risk? - Management noted that about 50% of customers are new to investing and plans to grow with them through product development [71][74]