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Speaker 1: Talk to us about the launch in the UK and

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Speaker 1: your ambitions for Europe. What are the timings that we're

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Speaker 1: thinking about.

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Speaker 2: Yeah, so we are launching imminently to the initial set

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Speaker 2: of customers in the UK, and what we're launching is

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Speaker 2: commission free share trading of US stocks, and we're also

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Speaker 2: launching twenty four hour trading, which is a unique proposition.

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Speaker 2: We launched a product in the US earlier this year

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Speaker 2: called twenty four Hour Market, which was the first We

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Speaker 2: became the first major broker to allow round the clock

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Speaker 2: trading of individual stocks. I think that's particularly useful for

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Speaker 2: consumers here because there's just less overlap between waking hours

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Speaker 2: and US East Coast working hours, so that'll just make

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Speaker 2: it a lot more usable and a lot more welcoming

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Speaker 2: for customers to invest here. We are also launching five

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Speaker 2: percent a we are on uninvested cash. So the intention

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Speaker 2: is for the UK market Robinhood to be the best

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Speaker 2: place to invest in US stocks and US dollars and

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Speaker 2: we believe we can fill that need better than anyone else.

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Speaker 1: And this is happening imminently, so in the new year.

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Speaker 1: Is that fair to say in terms of the timeframe

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Speaker 1: for this.

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Speaker 2: Launch where the waitlist is coming out, and we will

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Speaker 2: plan to roll out to the initial set of customers

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Speaker 2: in the coming days, actually.

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Speaker 1: In the coming days. What is the market opportunity for

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Speaker 1: robin Hood here in the UK.

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Speaker 2: Well, I think that if you look at how we've

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Speaker 2: done in the US, after less than ten years, about

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Speaker 2: eight years of general availability, we've brought on board over

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Speaker 2: twenty three million customers, So twenty three million customers with

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Speaker 2: money in their accounts on Robinhood, about ten percent of

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Speaker 2: the adult population, which is tremendous. It took competitors decades

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Speaker 2: to reach that number and very few have. So I

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Speaker 2: think if we can get similar success in the UK,

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Speaker 2: I think there's a lot we can do here and

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Speaker 2: there's a lot of value we can add to the market.

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Speaker 2: As you probably know, back in twenty nineteen, the entire

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Speaker 2: brokerage industry in the US replicated our model by going

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Speaker 2: to zero commission and that actually led to savings for

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Speaker 2: tens of millions of people, not just those with Robinhood accounts.

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Speaker 2: Anyone that had an account at a legacy financial institution

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Speaker 2: or discount broker was now not paying commissions or fees

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Speaker 2: for trades and retirement accounts, for instance, And so if

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Speaker 2: we have a similar impact here, I think that could

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Speaker 2: result in lots more money back in customers pockets at

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Speaker 2: a time they needed they needed the most.

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Speaker 1: So I just want to push your bit on the

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Speaker 1: market opportunity. What are the kind of numbers that you're

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Speaker 1: targeting by the end of next year, for example, out

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Speaker 1: of the UK in terms of customer acquisitions, in terms

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Speaker 1: of total numbers or volumes. What are you looking at

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Speaker 1: the targets.

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Speaker 2: I mean, the way we think about it is this

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Speaker 2: is a long term opportunity for us. We've spent time

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Speaker 2: building the platform, a technology platform that'll expand that allow

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Speaker 2: us to expand internationally as a software company. Every time

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Speaker 2: we build new things in the US, they'll accrue to

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Speaker 2: customers in the UK twenty four hour market being a

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Speaker 2: prime example, along with the high yield offering. So that

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Speaker 2: this product that we're launching now is probably the best

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Speaker 2: version of Robinhood and we intend for it to keep improving.

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Speaker 2: And since we are expanding as a technology company and

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Speaker 2: we're building all of this in house organically, the actual

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Speaker 2: cost of making the platform available in each market should

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Speaker 2: continue to decline and we'll be able to get more

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Speaker 2: leverage as a result. So I think over the long

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Speaker 2: run we intend to do quite well. And I'm thinking

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Speaker 2: about it less in terms of like what are the

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Speaker 2: targets in the next couple of months or even one year,

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Speaker 2: But I think I aspire for Robinhood to be a

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Speaker 2: global company. That's been the plan from the very beginning.

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Speaker 2: Beiju and I started this company as immigrants and children

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Speaker 2: of immigrants, and so the idea of making our services available,

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Speaker 2: making really the best of financial services from anywhere in

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Speaker 2: the world available to anyone anywhere in the world with

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Speaker 2: a smartphone is just the vision I've had in mind

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Speaker 2: from the very beginning. And it starts with the UK.

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Speaker 1: And you talked about about ten percent of the US

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Speaker 1: population that is now, is that correct? About ten percent

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Speaker 1: that are using we.

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Speaker 2: Have We've got over twenty three million customs because roughly

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Speaker 2: ten percent of adults of.

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Speaker 1: Adults, so about ten percent of adults here in the

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Speaker 1: UK would be something you'd be looking at.

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Speaker 2: I mean, I think that would be that would be

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Speaker 2: a great outcome. And I don't think my next account

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Speaker 2: that will take a year, But we're going to build

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Speaker 2: towards serving every individual in the UK.

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Speaker 1: Okay, you mentioned the fact you're a decade old. Twenty

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Speaker 1: thirty was when you founded why is it taking a

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Speaker 1: decade to break into the UK market?

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Speaker 2: But I mean, I think the reality of it is

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Speaker 2: the US is so big and there's so much to

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Speaker 2: build that it's always sort of a tricky proposition what

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Speaker 2: do you prioritize? And we were about to launch in

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Speaker 2: the UK a couple of years ago, it was March

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Speaker 2: of twenty twenty, and then we had a little bit

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Speaker 2: of a curve ball, didn't we with a global pandemic,

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Speaker 2: and at the time, we didn't know exactly how things

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Speaker 2: were going to shake out, how long it was going

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Speaker 2: to last, how disruptive it would be to the economy.

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Speaker 2: But what we did see was basically a tripling of

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Speaker 2: activity in Robinhood within a very short amount of time.

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Speaker 2: So we had to make the difficult decision to postpone

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Speaker 2: this launch because we were putting in all of the

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Speaker 2: resources we possibly could to dealing with the surge and

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Speaker 2: demand and making sure our infrastructure was scaling in the

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Speaker 2: way we needed. And we've made those changes, made those improvements,

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Speaker 2: invested dramatically in the service quality the infrastructure offering. Now

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Speaker 2: We're in a much stronger place to actually serve the

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Speaker 2: market with not just a better product with all the

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Speaker 2: new features I mentioned, but also much stronger infrastructure.

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Speaker 1: And how do you expect to be turning a profit

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Speaker 1: in the UK ninero percent fees? You're doing five percent

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Speaker 1: ADR as you mentioned. Is it going to be partly

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Speaker 1: subsidized by the US customer base or are you focused

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Speaker 1: on turning a profit in the again? How do you

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Speaker 1: do that?

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Speaker 2: Well, there's two ways I think about it. First, since

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Speaker 2: this is leveraging our core platform from the US, the

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Speaker 2: cost of servicing additional customers in the UK is lower

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Speaker 2: than when we launched in the UK. In the US

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Speaker 2: initially because we already have the core infrastructure and platform

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Speaker 2: capability and the technology and everything we build in the

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Speaker 2: US a cruise to the UK. On the revenue side,

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Speaker 2: even though payment for order flow is not permissible in

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Speaker 2: this market, we've diversified the business tremendously, and so in

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Speaker 2: the US you've seen US launch Robinhood Gold with five

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Speaker 2: percent APY. We've launched stock lending, which is good for customers.

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Speaker 2: It allows them to earn passive yield on their stocks

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Speaker 2: even when they're not trading and is also a revenue

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Speaker 2: source for the firm, to the point where now more

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Speaker 2: than half of the revenue of the firm is actually

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Speaker 2: interest income payment for order flow for equities is right

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Speaker 2: around five percent, and so we believe that that will

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Speaker 2: allow us to continue that path on the UK. We

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Speaker 2: have a diversified business. We can offer tremendous value to

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Speaker 2: customers here while also building a sustainable, growing, profitable business

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Speaker 2: leveraging the technology that we've built and.

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Speaker 1: Told to us about your conversations with UK regulators, how

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Speaker 1: welcoming or not have they been to your presence here.

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Speaker 1: You've been meeting with officials in the UK.

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Speaker 2: They've been very welcoming. I mean, we've been pleased. As

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Speaker 2: we talked a little bit about before the interview, I

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Speaker 2: was pleased to be at the GIS, the Global Investment

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Speaker 2: Summit here earlier this week. And what's been abundantly clear

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Speaker 2: is that the regulators, the lawmakers, the officials here are

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Speaker 2: laser focused on making the UK the best place to

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Speaker 2: do business, and they're making investments, they want to bring

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Speaker 2: in companies. They care very deeply about capital formation. And

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Speaker 2: you know, we were committed to going to the UK

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Speaker 2: many years ago, but I'd say the climate and the

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Speaker 2: optimism has only improved, and we're very optimistic about the

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Speaker 2: market and what the future.

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Speaker 1: Would you say this is the biggest competitive threat. Is

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Speaker 1: it the incumbents like Hargrey's landsdown or is it the

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Speaker 1: startups like Momzou and Revolute.

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Speaker 2: I mean, I don't think there's anyone that's serving the

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Speaker 2: specific need that we believe we can serve better than anyone,

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Speaker 2: which is providing the best access to US stocks and

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Speaker 2: the US dollar in the easiest to use possible interface

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Speaker 2: for retail customers. Our customers are younger, they're early adopters

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Speaker 2: of technology, they're sort of digitally native. They like to

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Speaker 2: be in control of everything. They don't like to be

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Speaker 2: talked down to and told that, you know, you need

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Speaker 2: to talk to an advisor or an expert to manage

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Speaker 2: your finances. And I don't think anyone is addressing that

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Speaker 2: particular niche. Even in the UK.

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Speaker 1: There's a cultural shift as well that maybe you'll have

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Speaker 1: to address, which is that we're more risk averse, we

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Speaker 1: trade less. There's less of a retail investor base.

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Speaker 3: In the UK and Europe, so you're going to have

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Speaker 3: to close that gap, right, we do offer five percent

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Speaker 3: er on an invested catch with my knowledge, is a

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Speaker 3: very very competitive rate here in dollars with over two

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Speaker 3: million in FDIC insurance protection.

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Speaker 2: So we have products for customers who have low risk

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Speaker 2: appetite for financial risk as well, and I think we

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Speaker 2: can serve their needs. But I think there's two things

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Speaker 2: we do exceptionally well in the US that carry over

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Speaker 2: in the UK despite any cultural differences. People in the

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Speaker 2: UK love easy to use, compelling mobile interfaces and they

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Speaker 2: love getting the best possible economics on investing in other

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Speaker 2: financial services. And I think these two things have been

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Speaker 2: the cornerstones of Robinhood product design and development. We have

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Speaker 2: really a beautiful our customers love the beautiful, almost magical

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Speaker 2: quality of the Robinhood experience, and they appreciate the fact

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Speaker 2: that they're getting industry leading economics. And when we talk

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Speaker 2: to customers in the UK, there's a lot of enthusiasm

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Speaker 2: over bringing these things to this market.

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Speaker 1: Has crypto bottom do you think, and is what's still

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Speaker 1: being in the crypto space given what's happened with the

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Speaker 1: likes of Finance and FTX, or is that an opportunity

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Speaker 1: for robin Hood to take market share.

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Speaker 2: I think in the long run, it's certainly an opportunity

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Speaker 2: and it's good for the industry to have unscrupulous actors

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Speaker 2: weeded out and kind of falling off, because I think

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Speaker 2: in order for the industry and the technology to become

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Speaker 2: truly globally accepted, there has to be a foundation of

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Speaker 2: regulatory compliance and it has to be integrated more and

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Speaker 2: more into the traditional financial system and help solve real

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Speaker 2: problems for people. So Robinhood continues to build crypto technology

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Speaker 2: and be a leader there. We've been pleased with the

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Speaker 2: growing market share we've been seeing in the US even

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Speaker 2: through the winter, and as you probably know, in the UK,

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Speaker 2: we're not launching with crypto. We're very focused on US

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Speaker 2: shares and the high interest product with no FX fees,

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Speaker 2: but we are also expanding in the EU and we

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Speaker 2: will have Crypto available in the EU in the coming weeks.

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Speaker 1: And last one on volumes for the business overall, particularly

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Speaker 1: with the US volumes. What are volumes looking like in

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Speaker 1: terms of in terms of trading volumes. Are they starting

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Speaker 1: to turn around looking better?

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Speaker 2: What I announced in Q three was that we've seen

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Speaker 2: market share continuing to increase across all of the all

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Speaker 2: the assets that we offer equities market share options. Market

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Speaker 2: share both increased year over year and three quarters sequentially,

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Speaker 2: so it's a little bit hard to disentangle from the

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Speaker 2: data as higher rates have caused the overall trading environment

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Speaker 2: and volume to decrease, but we're using that as an

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Speaker 2: opportunity to both diversify our business away from trading and

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Speaker 2: grow market share and consolidate because we know we're in

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Speaker 2: a cyclical industry. Things EBB and flow interest rates change

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Speaker 2: all the time, so we have to diversify to take

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Speaker 2: advantage of the current environment that we're in. But we're

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Speaker 2: also continuing to invest in the core business of trading

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Speaker 2: because when the cycle turns in the other direction, we

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Speaker 2: think we'll be excellently positioned to benefit from that and

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Speaker 2: consolidate our leadership even more