WEBVTT - Robinhood CEO Vlad Tenev Talks Blockbuster Quarter 0:00:02.560 --> 0:00:07.080 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.360 --> 0:00:11.360 Now another stock we're watching today Robinhood. The stock is 0:00:11.400 --> 0:00:15.480 jumping after reporting topping estimates in its fourth quarter report. 0:00:15.680 --> 0:00:19.240 It's revenue beat powered by a seven hundred percent drump 0:00:19.280 --> 0:00:22.960 in its cryptocurrency revenue. The company also announcing it expects 0:00:23.000 --> 0:00:26.040 double digit revenue growth this year, joining US now Robinhood 0:00:26.079 --> 0:00:29.480 CEO of Lad Tenev billion dollars in revenue for the 0:00:29.520 --> 0:00:32.560 first time as a public company. So clearly a great quarter. 0:00:32.680 --> 0:00:35.839 The stock is responding to it. I do want to 0:00:36.040 --> 0:00:38.760 talk Vlad about some of the growth initiatives, some of 0:00:38.800 --> 0:00:43.160 the newer initiatives you launch, derivatives, businesses that have been 0:00:43.600 --> 0:00:47.159 very much expanding event contracts. What can you tell us 0:00:47.200 --> 0:00:49.960 about how well they're doing into twenty twenty five that 0:00:50.000 --> 0:00:53.160 would signal these businesses becoming a bigger part of Robinhood 0:00:53.200 --> 0:00:53.800 moving forward. 0:00:55.440 --> 0:00:58.640 Thanks Chanali, glad to be here. Yeah, it was a 0:00:58.680 --> 0:01:02.560 strong quarter. The job's not finished, and one of the 0:01:02.600 --> 0:01:06.399 things we're most excited by is that there's a full 0:01:06.600 --> 0:01:09.399 packed roadmap. It's going to be an intense year and 0:01:09.400 --> 0:01:12.240 we're going to make progress across all three of our 0:01:12.360 --> 0:01:16.920 strategic priorities. You mentioned the Active Trader front Robinhood Legend, 0:01:16.959 --> 0:01:19.360 which we unveiled a couple months ago, which is the 0:01:19.400 --> 0:01:23.480 first desktop platform that we built specifically for active traders 0:01:23.520 --> 0:01:26.360 in mind, that's already off to a fast start. That's 0:01:26.440 --> 0:01:30.199 up to fifty million in annualized revenue after just two 0:01:30.240 --> 0:01:33.920 months of being live to customers, and we expect that 0:01:34.000 --> 0:01:38.320 to continue to accelerate as more customers adopt the platform 0:01:38.400 --> 0:01:41.800 and we keep making improvements. The team's been shipping features 0:01:41.840 --> 0:01:45.679 on a weekly basis and iterating extremely quickly. The feedback's 0:01:45.680 --> 0:01:49.320 been very very good. Index Options we already announced is 0:01:49.400 --> 0:01:53.040 up to a fifteen million annualized revenue run rate, and 0:01:53.080 --> 0:01:56.400 that product just went live in the past few months 0:01:56.400 --> 0:01:59.600 as well. And not to mention our derivatives business with 0:01:59.720 --> 0:02:05.520 few and a comprehensive prediction markets event contracts offering that 0:02:06.240 --> 0:02:09.840 are rolling out either now in the case of futures outrights, 0:02:10.120 --> 0:02:13.720 but in the next few months for the comprehensive event 0:02:13.760 --> 0:02:14.760 contracts offering. 0:02:14.960 --> 0:02:17.360 Well flat, that's exactly where I want to go the 0:02:17.400 --> 0:02:20.040 events contracts business. Before we get to the ambitions, I 0:02:20.080 --> 0:02:22.720 want to actually look backwards and talk about what happened 0:02:22.760 --> 0:02:24.960 with the Super Bowl because you launched those Super Bowl 0:02:25.000 --> 0:02:28.000 events contracts. They were live for about a day I think, 0:02:28.040 --> 0:02:31.280 and then they were pulled at the request of the CFTC. 0:02:31.400 --> 0:02:34.920 You said that you were in contact with the CFTC beforehand. 0:02:34.960 --> 0:02:37.640 What actually happened there any light you could shed would 0:02:37.639 --> 0:02:38.600 certainly be interesting. 0:02:39.520 --> 0:02:43.240 Yeah, of course, And I should say that we're huge 0:02:43.240 --> 0:02:45.840 believers in prediction markets. We think they're the future of 0:02:45.880 --> 0:02:49.800 trading and also the future of news and information. So 0:02:50.000 --> 0:02:53.320 I've been a student and a fan for a long time, 0:02:53.720 --> 0:02:55.880 and that's one of the reasons we're so excited about 0:02:55.919 --> 0:03:00.800 bringing a larger, comprehensive event contracts offering to our customers. 0:03:01.720 --> 0:03:04.800 You probably remember in November of last year, we launched 0:03:04.800 --> 0:03:07.760 the Presidential Election market, which allowed our customers to trade 0:03:07.760 --> 0:03:11.960 the election. That was our first event contracts offering, incredibly successful, 0:03:11.960 --> 0:03:15.120 over half a billion contracts traded in just about a week. 0:03:15.520 --> 0:03:18.880 We did follow that up with the Super Bowl last week, 0:03:19.480 --> 0:03:24.440 and yeah, I mean, the CFTC had issue with that rollout. 0:03:24.960 --> 0:03:28.080 They asked us to suspend the rollout, which which we 0:03:28.200 --> 0:03:31.720 complied with, even though I mean it was a little 0:03:31.760 --> 0:03:35.400 bit perplexing to us that several companies were allowed to 0:03:35.440 --> 0:03:39.560 continue offering those to consumers. So we're going to have 0:03:39.600 --> 0:03:43.040 to continue to work through that, and we believe in 0:03:43.080 --> 0:03:46.160 these products. They're coming, and robin is going to be 0:03:46.160 --> 0:03:49.600 a big part of offering those and also driving regulatory 0:03:49.640 --> 0:03:52.840 clarity to make sure that these products that are so 0:03:53.000 --> 0:03:56.440 useful and available to institutional consumers make their way to 0:03:56.920 --> 0:04:02.119 retail as well. So TBD, you know, but I think 0:04:02.160 --> 0:04:04.040 you should expect us to be a leader in this 0:04:04.080 --> 0:04:08.040 innovative space and continue to push for clarity from regulators there. 0:04:08.240 --> 0:04:11.400 Well, just to say my own curiosity, it was live 0:04:11.560 --> 0:04:14.520 for about a day. Did it actually generate any meaningful 0:04:14.560 --> 0:04:15.840 business or was it too fresh? 0:04:17.240 --> 0:04:19.599 We pulled it back after it was rolled out to 0:04:19.920 --> 0:04:23.719 a small percentage of customers. We did get some early 0:04:23.839 --> 0:04:28.400 signs on whether customers would be interested in it, and 0:04:28.440 --> 0:04:32.080 particularly how they would feel about it being alongside other 0:04:32.160 --> 0:04:36.840 tradable assets like futures, options, equities and crypto because now 0:04:36.920 --> 0:04:43.159 Robinhood's a comprehensive, diversified platform. So the signals were good. Obviously, 0:04:43.200 --> 0:04:47.520 customers are interested in these products and that makes us 0:04:47.600 --> 0:04:51.760 very very optimistic for delivering a comprehensive events offering later 0:04:51.800 --> 0:04:52.240 this year. 0:04:52.800 --> 0:04:55.120 Well, you know now you have a new CFTC, or 0:04:55.120 --> 0:04:57.520 at least that CFTC is no longer the one you're 0:04:57.560 --> 0:05:01.000 going to be dealing with in that and that light, lad, 0:05:01.040 --> 0:05:03.560 I'm sure that you attempt to be the best business 0:05:03.560 --> 0:05:06.560 that you can regardless of the environment. But different environments 0:05:06.560 --> 0:05:11.440 offer different opportunities. So what do you see as your 0:05:11.480 --> 0:05:15.320 advantages now in you know, Trump's new sort of golden 0:05:15.680 --> 0:05:18.080 golden era, golden age that he wants to drive. 0:05:19.800 --> 0:05:22.200 Yeah, I mean, I think a lot of a lot 0:05:22.240 --> 0:05:25.920 of people focus on crypto, and we're certainly going to 0:05:25.960 --> 0:05:29.279 be in a more innovation friendly environment in crypto. I 0:05:29.279 --> 0:05:31.680 think that's going to be a tailwind for our business 0:05:32.279 --> 0:05:35.799 as one of the few scaled players in both crypto 0:05:35.920 --> 0:05:40.680 and traditional financial assets. But Robino's at the forefront of 0:05:40.880 --> 0:05:44.920 innovation and financial services in a few key areas. Artificial 0:05:44.960 --> 0:05:48.800 intelligence is coming and is going to disrupt financial services 0:05:48.800 --> 0:05:52.159 in a big way. We talked about event contracts and 0:05:52.200 --> 0:05:56.800 prediction markets and that's a huge innovative new product and 0:05:56.839 --> 0:05:59.040 that that's going to be a new industry. We're at 0:05:59.080 --> 0:06:01.920 the forefront of that, and so it's great to see 0:06:02.240 --> 0:06:06.839 innovation friendly regime that's coming in that believes that the 0:06:07.000 --> 0:06:11.279 US needs to be number one, number one in business 0:06:11.279 --> 0:06:13.719 and innovation, and I think that'll be good not just 0:06:13.760 --> 0:06:16.719 for Robinhood, but but for every industry we operated. 0:06:16.720 --> 0:06:20.680 Speaking of innovation, this whole move to twenty four hour trading. 0:06:21.080 --> 0:06:24.000 One way you have told investors now you're facilitating that 0:06:24.200 --> 0:06:28.679 is partly through using stable coin to power settlements. How 0:06:28.800 --> 0:06:31.200 far does that go and how else can you be 0:06:31.320 --> 0:06:34.839 using stable coin to make your business more efficient? Does 0:06:34.839 --> 0:06:37.880 that just take off once you have greater US rules 0:06:37.920 --> 0:06:40.560 around this? Yeah. 0:06:40.640 --> 0:06:46.160 So we're part of the US Dollar Global Network USDG 0:06:47.520 --> 0:06:51.200 with a couple of other great companies, And the idea 0:06:51.240 --> 0:06:53.479 that we want to introduce is that in order for 0:06:53.520 --> 0:06:57.080 stable coins to be competitive with other means of holding 0:06:57.080 --> 0:06:59.720 and transacting in dollars, there needs to be a better 0:06:59.760 --> 0:07:03.920 way to pass yield directly onto holders. And right now, 0:07:03.920 --> 0:07:06.000 in a high interest rate environment, you can be getting 0:07:06.000 --> 0:07:09.000 four percent yield on your cash in a bank. So 0:07:09.800 --> 0:07:11.960 if it's not easy to get the same type of 0:07:12.000 --> 0:07:16.200 experience with stable coins, then they're not going to be 0:07:16.280 --> 0:07:19.920 as competitive. So that's the real innovation that we're driving. 0:07:20.000 --> 0:07:22.880 Making it easy to do that now in terms of 0:07:23.320 --> 0:07:28.000 use of stable coins for institutional purposes. One of the 0:07:28.000 --> 0:07:30.240 things that we have to do to operate our crypto 0:07:30.320 --> 0:07:36.400 platform is facilitate transactions and settlements between cash and crypto 0:07:36.880 --> 0:07:41.280 twenty four to seven, particularly on weekends when the banks 0:07:41.680 --> 0:07:45.040 are usually not open and there's no way of transmitting 0:07:45.200 --> 0:07:49.040 dollars using banking rails on weekends. Stable coins solve that 0:07:49.120 --> 0:07:52.720 problem because it's a twenty four to seven network that's 0:07:52.800 --> 0:07:56.240 running on software. And I think that just shows you 0:07:56.320 --> 0:07:59.600 just one of the advantages of crypto technology over the 0:07:59.640 --> 0:08:04.840 tradition financial system, and that translates not just to money movement, 0:08:04.920 --> 0:08:09.760 but also to trading, to liquidity pools, and to the 0:08:09.800 --> 0:08:13.480 trading of private assets that that are that are typically 0:08:13.520 --> 0:08:14.600 considered I liquid. 0:08:14.760 --> 0:08:16.960 Speaking of private assets, a lot of things that are 0:08:17.000 --> 0:08:19.200 trying to be done in the private assets world is 0:08:19.240 --> 0:08:22.840 tokenization of private funds. You've been talking about tokenization as well. 0:08:22.880 --> 0:08:25.760 You told investors just last night that it's something that 0:08:25.800 --> 0:08:29.200 you're perhaps most excited about. How big of a business 0:08:29.240 --> 0:08:31.960 could that become for you? And what are the near 0:08:32.080 --> 0:08:35.400 term plans to make tokenization a serious part of what 0:08:35.480 --> 0:08:36.200 Robinhood does. 0:08:37.760 --> 0:08:42.760 Yeah, so I think the near term opportunity that everyone's 0:08:42.800 --> 0:08:46.800 excited about in the US, provided we get some regulatory 0:08:46.800 --> 0:08:50.560 clarity on this. On this point is being able to 0:08:50.600 --> 0:08:55.680 put real world assets on blockchains. And I think what 0:08:55.800 --> 0:08:59.920 resonates with customers in the US is private private cum 0:09:00.000 --> 0:09:03.920 company stock. So I think it's ludicrous that you know, 0:09:04.640 --> 0:09:08.120 customers are free, retails free to invest in, you know, 0:09:08.600 --> 0:09:12.000 a wide collection of mean coins and other alternative assets. 0:09:12.280 --> 0:09:15.880 But open ai and SpaceX and other private companies that 0:09:16.440 --> 0:09:19.880 early backers have seen you know, one hundred x sometimes 0:09:20.000 --> 0:09:24.000 thousand x or more returns are impermissible and are seen 0:09:24.080 --> 0:09:27.480 as too risky. So I think that needs to change. 0:09:28.000 --> 0:09:30.960 And I think over time what you'll see is if 0:09:31.000 --> 0:09:35.320 we release the power of crypto technology and allow crypto 0:09:35.440 --> 0:09:40.080 to be connected to real world assets like securities. I 0:09:40.080 --> 0:09:44.520 mean the addressable market for that is every private and 0:09:44.559 --> 0:09:48.120 public listed equity, which which is obviously trillions of dollars 0:09:48.160 --> 0:09:51.920 in market value. We see crypto as the next stage 0:09:51.920 --> 0:09:55.640 and the technological advancement. We've gone from you know, filing 0:09:55.720 --> 0:10:00.760 cabinet to mainframe to on premise to cloud, and I 0:10:00.800 --> 0:10:02.840 think the next stage of evolution is going to be 0:10:03.080 --> 0:10:07.319 the financial infrastructure going from cloud to crypto technology. I 0:10:07.360 --> 0:10:10.520 think Robinhood's best position to actually lead that transformation. 0:10:10.880 --> 0:10:11.959 Clod we only have about. 0:10:11.800 --> 0:10:13.920 A minute left, but you brought up meme coins, and 0:10:14.320 --> 0:10:17.080 I'm curious about that because compared to maybe some of 0:10:17.120 --> 0:10:19.920 your competitors, compared to a coinbase, for example, when it 0:10:19.960 --> 0:10:22.800 comes to meme coins, it seems like you've submitted fewer 0:10:22.880 --> 0:10:27.920 requests to regulators to list those coins than Coinbase, for example. 0:10:28.480 --> 0:10:32.360 Way is that and do you see that strategy changing 0:10:32.400 --> 0:10:36.920 maybe under this new regulatory regime. Yeah. 0:10:36.960 --> 0:10:42.080 I mean, historically we've been extremely selective about the assets 0:10:42.080 --> 0:10:46.320 that we list on the platform. I think now we're 0:10:46.320 --> 0:10:49.000 in a world where, you know, on some of these chains, 0:10:49.040 --> 0:10:54.319 including Solana, there's hundreds of thousands or more new coins created, 0:10:54.920 --> 0:10:58.080 and I think that's really interesting. On the one hand, 0:10:58.320 --> 0:11:02.240 it raises questions for what it looks like to list 0:11:02.280 --> 0:11:04.760 assets and what the policy should be to make it 0:11:04.800 --> 0:11:08.719 available to retail freely through these centralized platforms like Robinhood. 0:11:08.880 --> 0:11:11.520 I think we need clarity on that. On the other hand, 0:11:11.800 --> 0:11:14.360 it kind of shows you the power of this technology 0:11:14.520 --> 0:11:19.520 and what an improvement it is upon the existing IPO process, 0:11:19.600 --> 0:11:23.080 which is so long and cumbersome. That a lot of 0:11:23.120 --> 0:11:26.640 the best and biggest private companies are choosing to delay 0:11:26.720 --> 0:11:29.600 or forego it entirely. So that's why I think it's 0:11:29.600 --> 0:11:35.760 so interesting to connect crypto technology with real world productive assets, 0:11:36.080 --> 0:11:39.000 because all the benefits that you get can accrue to 0:11:41.440 --> 0:11:45.959 customers that want to trade those revenue generating productive assets. 0:11:45.960 --> 0:11:48.480 Glad great, have you on the program. Really appreciate your time. 0:11:48.800 --> 0:11:52.400 Robinhood's CEO of vlad Tenev. They're talking to us about 0:11:52.480 --> 0:11:54.160 driving his business forward.