Robinhood Minutes: 'Competitors launch new products with much thunder but little rain, so we are not worried about competition.'

The following is the Robinhood Q2 2025 Earnings Call Minutes organized by Dolphin Research. For financial report interpretation, please visit"Robinhood: With Stock Tokens in Hand, Is the King of U.S. Retail Investors Invincible?"

I. Review of Core Financial Information:

II. Detailed Content of the Earnings Call

2.1, Key Information from Management Statements:

1) Progress around three major goals—namely, number one among active traders, number one in wallet share of the next generation of users, and number one in the global financial ecosystem:

a. Index options trading volume increased by 60% compared to the first quarter, while event contract trading volume more than doubled from the first quarter, reaching nearly $1 billion.

b. New mobile tool features Legend; AI assistant Cortex for Gold members, starting with Stock Digest, have been used by hundreds of thousands of our customers

c. The second annual active trader summit, Hood Summit, to be held in Las Vegas in a few weeks

d. Customer assets doubled year-on-year, exceeding $250 billion

e. The average assets per funded customer exceeded $10,000 for the first time, doubling year-on-year;

f. Robinhood Strategies: Expanded several times, now with over 100,000 funded customers, AUM exceeding $500 million,

g. Robinhood Gold Member Credit Card: Cardholders tripled. Currently, there are over 300,000 cardholders;

h. Retirement assets now exceed $20 billion. This indicates that customers are entrusting us with their longest-term and most important funds, with this asset class more than doubling over the past year.

i. Robinhood Banking: Allows customers to bring more assets to Robinhood, initially launched to internal employees.

g. Cryptocurrency event "To Catch a Token" held in France: European business expanded to 30 countries, serving over 400 million people, including stock tokens. I believe tokenization is the biggest innovation in capital markets in over a decade, akin to stablecoins for fiat currency.

Benefits for users include 24/7 trading, instant settlement, self-custody rights, and it also allows us to expand into other assets, enabling retail investors to trade various assets previously inaccessible, like any crypto asset, 24/7. This certainly includes private markets and many other real-world assets.

k. Robinhood Chain: The first Layer 2 blockchain optimized and built for real-world assets.

l: Gold subscription users increased to a record 3.5 million, 13% adoption rate; new customer adoption rate 35%. Including customers acquired through Bitstamp, we now have over 600,000 international customers.

2) July Progress:

Net deposits were approximately $6 billion, showing a very good recovery compared to May and June.

Stock and options trading volumes are setting new monthly records.

Cryptocurrency trading volumes for both Robinhood and Bitstamp reached a six-month high.

Benefiting from attractive margin rates, margin balances now stand at approximately $11 billion.

2.2, Q&A Analyst Questions and Answers

Q: When will Robinhood Banking services be rolled out to the public?

A: Robinhood Banking was announced a few months ago at the "Lost City of Gold" event in San Francisco. The concept behind Robinhood Banking, and the inspiration for creating this product, is our desire to offer a "private banking experience" typically reserved for high-net-worth individuals to the mass market in digital form.

These high-end experiences include: high yields, estate planning, seamless integration between all other accounts, excellent net worth tracking, and some innovative features like cash delivery, which we have begun testing and piloting in initial markets.

Currently, Robinhood Banking has been rolled out to internal employees, and we are still on track to launch to external customers later this quarter.

Q: Does Robinhood plan to delve deeper into loan products such as personal loans, auto loans, and mortgages?

Lending business aligns with our goals. Existing case: Through collaboration with Sage Home Loans, Gold members can now access very favorable mortgage rates.

One reason we can offer such favorable rates is that we pass all our economic share to the customers, which has been very good early on.

So, if you are looking for a home loan, apply to become a Gold member and check the rates. We currently also offer some forms of credit. We have the Gold credit card, margin, and over time, we have quite ambitious plans across all transaction types.

Q: Strategies regarding net deposits (net inflows) and promotions?

Customers love these promotions, and they are economically beneficial. When we launch these promotions, we often see customers bringing in larger balances, overall ROI kicks in, focusing on customer feedback. The cashback for virtual asset transfers mentioned is 2%, nothing else specific.

Firstly, net deposits as a metric are indeed partly trader-driven. But from the company's perspective, driving factors include ongoing customer engagement, growth of new products, expansion of banking services, and all these rapidly developing new asset classes.

We are working to consider promotions alongside performance marketing and other tools, and we now see opportunities for a comprehensive high return on investment (ROI).

Therefore, we have significantly expanded our marketing scale this year, and it has been effective. So we must ensure cost control while scaling up and achieving the profit growth that the team has consistently excelled at.

Q: Discuss the long-term strategic opportunities of private asset tokenization and some feedback you have received?

The "To Catch a Token" event exceeded expectations. The event held in Europe garnered over 25 million views:

Firstly, it provides a blueprint for other regions: showing what happens when crypto assets have a clear regulatory framework. This way, much of the criticism about crypto assets lacking fundamental value support and being purely speculative meme stocks will disappear. We have already seen a bit of this with stablecoins in the U.S., and I believe tokenization of real-world assets just extends this concept. We have already achieved tokenization of public stocks in Europe, and demonstrated primary market stock tokens in a giveaway form, with positive feedback.

Secondly, it addresses customer needs, not only in Europe but also in the U.S. The market is too unfair, with many primary assets not going public for a long time, high valuations, all given to high-net-worth or institutional clients.

We are not only giving away gifts but also truly achieving products that can circulate in both Europe and the U.S., with two ways to achieve this:

Firstly, increase investment in crypto technology;

Secondly, demonstrate what Robinhood would look like if rebuilt from scratch based on crypto rails.

The benefits are numerous: addressing the pain points of European customers. And I believe our European business has accelerated since that event.

This press conference highlighted our product iteration speed.

Q: Some fintech companies have started applying for a banking license with the U.S. Office of the Comptroller of the Currency (OCC), what is the company's stance?

A: In 2019, we applied for a national banking license with the OCC. The motivation at the time was our desire to enter the high-yield product space, allowing customers to earn more from cash. We found ourselves at an interesting inflection point, namely the collaborative ecosystem around banking services, launching better savings products through collaborative pathways, not only with good returns but also with FDIC protection.

Now, Cash Sweep accounts have grown to over $30 billion, and through the collaboration between Robinhood Banking and Coastal, we can offer very competitive rates for actual savings accounts and checking accounts.

Currently, the downsides of obtaining a license outweigh the benefits, but a banking license would also allow us to offer other products, such as loan products.

Q: With 3.5 million Gold subscription users, the SaaS revenue it brings is stable income, how to protect it from cyclical impacts?

A: The business is sufficiently diversified. Even just looking at the cryptocurrency business, the content is becoming increasingly rich, such as staking services in the U.S., launching tokenized U.S. stock services internationally.

We now have nine businesses with annual revenues exceeding $100 million, and many businesses are poised to become the tenth and more.

Regarding how to protect the business from cyclical fluctuations, I have two points to make:

First, the way we manage the business, we emphasize streamlining and discipline, which means that when cyclical events occur, we don't need to make drastic adjustments like some companies because we have always maintained discipline. For example, our revenue grew by 45% year-on-year, while adjusted operating expenses (OpEx) plus stock-based compensation (SBC) only grew by 6%.

Another point: the market opportunities and huge TAM we discussed here last December. We have a huge TAM in front of us, and I don't want to overreact when cyclical fluctuations occur, the opportunity is significant.

When we went public in 2021, we faced criticism, which was reasonable. Including the retail market boom driven by zero interest rates. We have been able to diversify our business in a high-interest-rate environment, and we have always talked about a kind of natural hedge, that is, when interest rates rise, interest income increases, but trading income decreases.

Therefore, we have been able to achieve these results in a historically relatively high-interest-rate environment. And nine business lines have annual revenues reaching or exceeding $100 million, with some businesses at a $50 million revenue level, and many new projects just launched or about to be launched.

Therefore, when we went public in 2021, I felt we were much more vulnerable than now. Product development speed was hindered by COVID to achieve revenue scale. But now, if you look at the product roadmap we expect to deliver in the short, medium, and long term, it is quite full.

Q: How will the regulatory approval of equity tokenization develop in the U.S.?

Tokenization in the U.S. should be interesting, with the current token's 24/7 trading experience, self-custody, and on-chain advantages (collateralized lending, etc.). Our profitability is already very high, and it will be even lower in the future after going on-chain (public infrastructure).

Many overseas customers cannot invest in U.S. stocks, and what we can cover later is a market worth billions of dollars. Additionally, there are stablecoins, which are not yet popular in the U.S. but are now spreading.

Of course, the real opportunity in the U.S. is to tokenize assets that American investors cannot purchase, and we are currently working with regulators.

Q: The securities lending business is developing very well, this type of growth usually occurs when capital markets become active again, IPOs and hard-to-borrow securities accelerate, how do you view this opportunity?

A: June revenue set a record, and July was equally strong, if not stronger. The market backdrop is certainly very strong. First, the securities lending team is excellent, consistently bringing in a large number of customers. Fully paid lending is growing rapidly, and margin lending is also increasing, which similarly creates inventory for the securities lending department.

Additionally, in the current market environment, scarce securities (hard to borrows) have brought substantial returns, and this trend continued into July. We still need to observe the remaining time of this quarter and the future.

Q: Cryptocurrency monetization issues, has smart exchange routing had any impact on Robinhood?

A: Customers can trade cryptocurrencies on Robinhood in two ways. The first is our long-standing method, the market maker model. Through this method, we can obtain rebates. Gradually adjusting pricing, while user rebate rates are also adjusted to 85 basis points.

The second way: trading directly with exchanges through smart exchange routing, which is essentially a volume-based tiered discount. Although still in its early stages, progress is good, and customers trading directly with exchanges bring more volume and better rates. We want Robinhood to be very attractive to high-volume traders.

Even with better rates, high-volume trading brings more revenue. In the second quarter, we saw blended or average rates at 58 basis points for the quarter. Throughout July, this rate was around 65 basis points, rising slightly.

Q: Credit card business: Cardholders tripled, but balances only grew by about 45%, what's the situation?

A: The revolve rate is in line with expectations. The business expansion is performing very well in its early stages. Typically, balances take some time to increase with revolving usage, and the credit balance is not linearly related to cardholders, often with a lag.

Q: Can you introduce Robinhood Chain? Can you talk about its advantages for real-world assets and its competitive advantages compared to other Layer 2 blockchains?

A: Since our event in France, we have received a large number of calls from developers, some wanting to tokenize equity, others wanting to collaborate on tokenizing real-world assets.

Robinhood Chain has the advantage of having over 25 million U.S. customers, capable of creating an excellent developer ecosystem, and we also want to be developer-friendly, with a platform ecosystem and user acquisition cycle that others find hard to replicate.

Many chains want to build the best chain for degen traders. But I believe the opportunity for real-world assets and their unique necessity to be on-chain is a relatively unique direction, and others have not focused on this direction as we have.

Q: Besides the nine business lines with annual revenues of $100 million, what are the ones with $50 million, and when will staking and tokenized stocks in Europe reach $500 million annually?

A: $50 million business lines: TradePMR and Bitstamp. The scaling of prediction markets is also very good. There are also other businesses following closely—index options, Robinhood Gold Member Credit Card, and desktop Legend, etc.

Q: A competitor launched a tokenized stock product in Europe this week, although with a different structure. The question is, how do you view the SPV contract model, and the ultimate goal of running on the Bitstamp rails, and your own advantages?

A: Our product is divided into three different stages. We are currently in the first stage. The advantage is that every minting and burning transaction of tokens has a corresponding transaction in the traditional market, which minimizes the risk of decoupling, meaning the asset price you trade is far from the traditional asset price.

I think this is important because for customers to gain confidence in the technology and experience, they must get a very good price.

In the first stage, as token supply increases, we can establish a close connection with the traditional market.

In the second stage, to be achieved in the coming months, tokens will be traded on Bitstamp, unlocking 24/7 trading, currently 24/5 trading, in line with the U.S. market.

In the third stage, we will unlock the full power of DeFi, allowing users to self-custody and trade on-chain. We have the technical capability to achieve all this. It's just a matter of going through the regulatory process.

Q: Based on the disclosed fee model, how to achieve low cost and low spread?

A: Early feedback is positive, customers really like the price and value of stock tokens. The price is very competitive. The only fee incurred when customers trade stock tokens in Europe is a 10 basis point foreign exchange transaction fee, Robinhood does not profit from the spread.

Q: Will tokenized stocks affect the price of the underlying stock?

A: We offer both services, and we have not seen this trend, stock tokens compared to spot cryptocurrencies have no impact, for users it's just a way to invest in assets they couldn't before.

They don't care what technology is driving it behind the scenes, as long as they can buy it. By analogy: index options, futures, stocks, and options all have different pricing, each asset class has its own space in terms of pricing.

Q: Staking reached $750 million in a month, what percentage of crypto assets are being staked, and what is the future trend?

A: $6 billion in stakable assets, mostly in states where staking is allowed. The greater opportunity lies in capturing market share in the cryptocurrency space.

Q: The take rate for cryptocurrencies has risen again, how do you judge the trend?

A: The current pricing is at a level we like, and we will stabilize it for a while.

Q: Recent small acquisitions like Bitstamp, X1, TradePMR to expand product and geographic coverage. Will there be large acquisitions in the future, or continue with such small acquisitions?

A: Acquisitions are about strategic execution, focusing on good teams that can accelerate product advancement. Besides TradePMR, X1, Bitstamp, there is also WonderFi, helping us enter the Canadian market.

Acquisition strategy: With each transaction, we not only want to acquire a team we believe can help us and align with us but also achieve significant acceleration, at least 18 months ahead of building it ourselves.

There have been significant changes in market value over the past year, Bitstamp is an important transaction. We will continue to maintain discipline, follow established strategies, acquire excellent teams, and build the world's leading financial ecosystem.

The target for acquisitions is to accelerate the advancement of the company's strategic goals and create value for shareholders. The purpose of asset allocation is to achieve organic growth, which can be achieved through new products or acquisitions. We like to take over small, beautiful, and efficient companies and are always looking for such targets.

Q: Currently, Gold membership penetration is 13%, what is the future potential?

A: We hope to broaden our value proposition through the membership system, and the growth rate is good. New customer joining speed is several times that of old customers. 35% of new customers in the second quarter joined Gold membership.

In terms of ceiling, we like to do benchmarking, which shows that some of the best subscription products on the market, whether Amazon or others, are far above our current level, which is one of the reasons that motivates us to move forward.

Gold membership, from the user's perspective, is being a member of a high-quality exclusive financial club, but it is also open to everyone. So we are working to strike a balance between being high-end and targeting the mass market.

We are very excited about the upcoming banking products, which will be another highlight of the Gold value proposition; in addition to private banking services, Gold cards, Cortex, etc. The monthly membership is only $5, definitely the best deal in the financial field, join now.

Q: Customer acquisition situation, how is the inflow and outflow of user assets?

A: This quarter, we once again maintained net inflows relative to all major competitors. We observe our active user progress through market share tracking—stocks, options, now futures, prediction markets, and of course cryptocurrencies.
Progress is good so far, but this is a lagging indicator, the leading indicator is the speed of product iteration, new products will bring greater market share.
Another internal tracking indicator is the net promoter score, which is currently at a four-year high.

Q: How is the usage of the desktop Legend in various scenarios? How is the progress of the event prediction market?

A: The cumulative contract volume of the prediction market is now about $2 billion. This quarter we are close to $1 billion. In terms of mix, since our launch, customers have participated in over $100 million in economic contracts. A large part of the trading in the prediction market is related to sports, and there will be more culture, business, etc. in the future.

Robinhood Legend: Trading volume continues to grow well, as does overnight trading volume. No specific numbers to share, but customer feedback is good, and the product is continuously improving.

Q: The take rate for cryptocurrencies continues to rise, what is the market share?

A: The introduction of smart exchange routing and its tiered pricing for high-volume traders, high-frequency trading users get better pricing. After integration with Bitstamp, the high-frequency trading experience will be better, and the current results are achieved without fully serving active cryptocurrency traders.

For existing competitors entering the cryptocurrency space: it has been talked about for several quarters, and it hasn't happened yet, we are not too worried. They need to have a product first, and the product needs to surpass ours. In the cryptocurrency field, the speed of innovation is the competitive advantage.

Q: Adjusted EBITDA profit margin is as high as 56%, maintaining revenue growth faster than expense growth, will there be new investment themes in the future, how to balance cost reduction and investment?

A: When investing in future opportunities, first review existing arrangements, improve processes and utilize technology in existing business lines, keeping cost growth in low single digits.

This releases incremental funds for future growth, whether in new business plans or marketing, etc.. Especially marketing investment has a very high return on investment (ROI), with a very short payback period.

At the same time, there is a culture of striving for excellence and disciplined investment in the company, and performance is a reflection of this culture.

Maintaining the speed of innovation and product promotion is backed by engineering and customer service. We have been early in R&D, applying AI in engineering and customer service, which is also the main reason we can maintain stable Opex while achieving high growth.

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