Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Now another stock we're watching today Robinhood. The stock is
Speaker 2: jumping after reporting topping estimates in its fourth quarter report.
Speaker 2: It's revenue beat powered by a seven hundred percent drump
Speaker 2: in its cryptocurrency revenue. The company also announcing it expects
Speaker 2: double digit revenue growth this year, joining US now Robinhood
Speaker 2: CEO of Lad Tenev billion dollars in revenue for the
Speaker 2: first time as a public company. So clearly a great quarter.
Speaker 2: The stock is responding to it. I do want to
Speaker 2: talk Vlad about some of the growth initiatives, some of
Speaker 2: the newer initiatives you launch, derivatives, businesses that have been
Speaker 2: very much expanding event contracts. What can you tell us
Speaker 2: about how well they're doing into twenty twenty five that
Speaker 2: would signal these businesses becoming a bigger part of Robinhood
Speaker 2: moving forward.
Speaker 3: Thanks Chanali, glad to be here. Yeah, it was a
Speaker 3: strong quarter. The job's not finished, and one of the
Speaker 3: things we're most excited by is that there's a full
Speaker 3: packed roadmap. It's going to be an intense year and
Speaker 3: we're going to make progress across all three of our
Speaker 3: strategic priorities. You mentioned the Active Trader front Robinhood Legend,
Speaker 3: which we unveiled a couple months ago, which is the
Speaker 3: first desktop platform that we built specifically for active traders
Speaker 3: in mind, that's already off to a fast start. That's
Speaker 3: up to fifty million in annualized revenue after just two
Speaker 3: months of being live to customers, and we expect that
Speaker 3: to continue to accelerate as more customers adopt the platform
Speaker 3: and we keep making improvements. The team's been shipping features
Speaker 3: on a weekly basis and iterating extremely quickly. The feedback's
Speaker 3: been very very good. Index Options we already announced is
Speaker 3: up to a fifteen million annualized revenue run rate, and
Speaker 3: that product just went live in the past few months
Speaker 3: as well. And not to mention our derivatives business with
Speaker 3: few and a comprehensive prediction markets event contracts offering that
Speaker 3: are rolling out either now in the case of futures outrights,
Speaker 3: but in the next few months for the comprehensive event
Speaker 3: contracts offering.
Speaker 1: Well flat, that's exactly where I want to go the
Speaker 1: events contracts business. Before we get to the ambitions, I
Speaker 1: want to actually look backwards and talk about what happened
Speaker 1: with the Super Bowl because you launched those Super Bowl
Speaker 1: events contracts. They were live for about a day I think,
Speaker 1: and then they were pulled at the request of the CFTC.
Speaker 1: You said that you were in contact with the CFTC beforehand.
Speaker 1: What actually happened there any light you could shed would
Speaker 1: certainly be interesting.
Speaker 3: Yeah, of course, And I should say that we're huge
Speaker 3: believers in prediction markets. We think they're the future of
Speaker 3: trading and also the future of news and information. So
Speaker 3: I've been a student and a fan for a long time,
Speaker 3: and that's one of the reasons we're so excited about
Speaker 3: bringing a larger, comprehensive event contracts offering to our customers.
Speaker 3: You probably remember in November of last year, we launched
Speaker 3: the Presidential Election market, which allowed our customers to trade
Speaker 3: the election. That was our first event contracts offering, incredibly successful,
Speaker 3: over half a billion contracts traded in just about a week.
Speaker 3: We did follow that up with the Super Bowl last week,
Speaker 3: and yeah, I mean, the CFTC had issue with that rollout.
Speaker 3: They asked us to suspend the rollout, which which we
Speaker 3: complied with, even though I mean it was a little
Speaker 3: bit perplexing to us that several companies were allowed to
Speaker 3: continue offering those to consumers. So we're going to have
Speaker 3: to continue to work through that, and we believe in
Speaker 3: these products. They're coming, and robin is going to be
Speaker 3: a big part of offering those and also driving regulatory
Speaker 3: clarity to make sure that these products that are so
Speaker 3: useful and available to institutional consumers make their way to
Speaker 3: retail as well. So TBD, you know, but I think
Speaker 3: you should expect us to be a leader in this
Speaker 3: innovative space and continue to push for clarity from regulators there.
Speaker 1: Well, just to say my own curiosity, it was live
Speaker 1: for about a day. Did it actually generate any meaningful
Speaker 1: business or was it too fresh?
Speaker 3: We pulled it back after it was rolled out to
Speaker 3: a small percentage of customers. We did get some early
Speaker 3: signs on whether customers would be interested in it, and
Speaker 3: particularly how they would feel about it being alongside other
Speaker 3: tradable assets like futures, options, equities and crypto because now
Speaker 3: Robinhood's a comprehensive, diversified platform. So the signals were good. Obviously,
Speaker 3: customers are interested in these products and that makes us
Speaker 3: very very optimistic for delivering a comprehensive events offering later
Speaker 3: this year.
Speaker 4: Well, you know now you have a new CFTC, or
Speaker 4: at least that CFTC is no longer the one you're
Speaker 4: going to be dealing with in that and that light, lad,
Speaker 4: I'm sure that you attempt to be the best business
Speaker 4: that you can regardless of the environment. But different environments
Speaker 4: offer different opportunities. So what do you see as your
Speaker 4: advantages now in you know, Trump's new sort of golden
Speaker 4: golden era, golden age that he wants to drive.
Speaker 3: Yeah, I mean, I think a lot of a lot
Speaker 3: of people focus on crypto, and we're certainly going to
Speaker 3: be in a more innovation friendly environment in crypto. I
Speaker 3: think that's going to be a tailwind for our business
Speaker 3: as one of the few scaled players in both crypto
Speaker 3: and traditional financial assets. But Robino's at the forefront of
Speaker 3: innovation and financial services in a few key areas. Artificial
Speaker 3: intelligence is coming and is going to disrupt financial services
Speaker 3: in a big way. We talked about event contracts and
Speaker 3: prediction markets and that's a huge innovative new product and
Speaker 3: that that's going to be a new industry. We're at
Speaker 3: the forefront of that, and so it's great to see
Speaker 3: innovation friendly regime that's coming in that believes that the
Speaker 3: US needs to be number one, number one in business
Speaker 3: and innovation, and I think that'll be good not just
Speaker 3: for Robinhood, but but for every industry we operated.
Speaker 2: Speaking of innovation, this whole move to twenty four hour trading.
Speaker 2: One way you have told investors now you're facilitating that
Speaker 2: is partly through using stable coin to power settlements. How
Speaker 2: far does that go and how else can you be
Speaker 2: using stable coin to make your business more efficient? Does
Speaker 2: that just take off once you have greater US rules
Speaker 2: around this? Yeah.
Speaker 3: So we're part of the US Dollar Global Network USDG
Speaker 3: with a couple of other great companies, And the idea
Speaker 3: that we want to introduce is that in order for
Speaker 3: stable coins to be competitive with other means of holding
Speaker 3: and transacting in dollars, there needs to be a better
Speaker 3: way to pass yield directly onto holders. And right now,
Speaker 3: in a high interest rate environment, you can be getting
Speaker 3: four percent yield on your cash in a bank. So
Speaker 3: if it's not easy to get the same type of
Speaker 3: experience with stable coins, then they're not going to be
Speaker 3: as competitive. So that's the real innovation that we're driving.
Speaker 3: Making it easy to do that now in terms of
Speaker 3: use of stable coins for institutional purposes. One of the
Speaker 3: things that we have to do to operate our crypto
Speaker 3: platform is facilitate transactions and settlements between cash and crypto
Speaker 3: twenty four to seven, particularly on weekends when the banks
Speaker 3: are usually not open and there's no way of transmitting
Speaker 3: dollars using banking rails on weekends. Stable coins solve that
Speaker 3: problem because it's a twenty four to seven network that's
Speaker 3: running on software. And I think that just shows you
Speaker 3: just one of the advantages of crypto technology over the
Speaker 3: tradition financial system, and that translates not just to money movement,
Speaker 3: but also to trading, to liquidity pools, and to the
Speaker 3: trading of private assets that that are that are typically
Speaker 3: considered I liquid.
Speaker 2: Speaking of private assets, a lot of things that are
Speaker 2: trying to be done in the private assets world is
Speaker 2: tokenization of private funds. You've been talking about tokenization as well.
Speaker 2: You told investors just last night that it's something that
Speaker 2: you're perhaps most excited about. How big of a business
Speaker 2: could that become for you? And what are the near
Speaker 2: term plans to make tokenization a serious part of what
Speaker 2: Robinhood does.
Speaker 3: Yeah, so I think the near term opportunity that everyone's
Speaker 3: excited about in the US, provided we get some regulatory
Speaker 3: clarity on this. On this point is being able to
Speaker 3: put real world assets on blockchains. And I think what
Speaker 3: resonates with customers in the US is private private cum
Speaker 3: company stock. So I think it's ludicrous that you know,
Speaker 3: customers are free, retails free to invest in, you know,
Speaker 3: a wide collection of mean coins and other alternative assets.
Speaker 3: But open ai and SpaceX and other private companies that
Speaker 3: early backers have seen you know, one hundred x sometimes
Speaker 3: thousand x or more returns are impermissible and are seen
Speaker 3: as too risky. So I think that needs to change.
Speaker 3: And I think over time what you'll see is if
Speaker 3: we release the power of crypto technology and allow crypto
Speaker 3: to be connected to real world assets like securities. I
Speaker 3: mean the addressable market for that is every private and
Speaker 3: public listed equity, which which is obviously trillions of dollars
Speaker 3: in market value. We see crypto as the next stage
Speaker 3: and the technological advancement. We've gone from you know, filing
Speaker 3: cabinet to mainframe to on premise to cloud, and I
Speaker 3: think the next stage of evolution is going to be
Speaker 3: the financial infrastructure going from cloud to crypto technology. I
Speaker 3: think Robinhood's best position to actually lead that transformation.
Speaker 4: Clod we only have about.
Speaker 1: A minute left, but you brought up meme coins, and
Speaker 1: I'm curious about that because compared to maybe some of
Speaker 1: your competitors, compared to a coinbase, for example, when it
Speaker 1: comes to meme coins, it seems like you've submitted fewer
Speaker 1: requests to regulators to list those coins than Coinbase, for example.
Speaker 1: Way is that and do you see that strategy changing
Speaker 1: maybe under this new regulatory regime. Yeah.
Speaker 3: I mean, historically we've been extremely selective about the assets
Speaker 3: that we list on the platform. I think now we're
Speaker 3: in a world where, you know, on some of these chains,
Speaker 3: including Solana, there's hundreds of thousands or more new coins created,
Speaker 3: and I think that's really interesting. On the one hand,
Speaker 3: it raises questions for what it looks like to list
Speaker 3: assets and what the policy should be to make it
Speaker 3: available to retail freely through these centralized platforms like Robinhood.
Speaker 3: I think we need clarity on that. On the other hand,
Speaker 3: it kind of shows you the power of this technology
Speaker 3: and what an improvement it is upon the existing IPO process,
Speaker 3: which is so long and cumbersome. That a lot of
Speaker 3: the best and biggest private companies are choosing to delay
Speaker 3: or forego it entirely. So that's why I think it's
Speaker 3: so interesting to connect crypto technology with real world productive assets,
Speaker 3: because all the benefits that you get can accrue to
Speaker 3: customers that want to trade those revenue generating productive assets.
Speaker 4: Glad great, have you on the program. Really appreciate your time.
Speaker 4: Robinhood's CEO of vlad Tenev. They're talking to us about
Speaker 4: driving his business forward.