Speaker 1: Bloomberg Audio Studios, podcasts, radio news taking a look at
Speaker 1: shares of Robin Hood's slightly lower on the day the
Speaker 1: fintech platforms in a year over year decline in crypto
Speaker 1: trading volume offset by record results in its options and
Speaker 1: prediction markets business. You put it all together, you still
Speaker 1: had a clean beat on both the top and the
Speaker 1: bottom lines, but a lot of questions about growth going forward.
Speaker 1: Who better to pose those questions to than the chairman
Speaker 1: and CEO hand co founder of Robinhood, Lad ten.
Speaker 2: I great to see if Lad pleasure me true.
Speaker 1: The numbers are decent. I mean, let's ignore, for example,
Speaker 1: the one and a half percent drop you're seeing in
Speaker 1: the shares here. I want to talk about growth and
Speaker 1: where the next leg of growth comes. You had a
Speaker 1: huge bump up and growth in the prediction markets business.
Speaker 1: I understand it's a new business, so obviously the growth
Speaker 1: would be there. Was that just sort of one off
Speaker 1: in terms of the growth because of the World Cup
Speaker 1: and all the other things that have been going on
Speaker 1: in the world, or is that sustainable?
Speaker 2: Prediction Markets has been growing consistently since launch. It's the
Speaker 2: fastest growing business in our history, well into the mid
Speaker 2: hundreds of millions of annualized revenue. So that's been strong
Speaker 2: and we expect it to continue to be strong. We
Speaker 2: have football season on the sports side coming up, as
Speaker 2: well as the midterms, which, if you remember the origin
Speaker 2: of prediction markets and this current supercycle, it really started
Speaker 2: with the twenty twenty four election, so we're expecting that
Speaker 2: this election is similarly going to be a big event.
Speaker 2: But you know, also one of the stories of the quarter,
Speaker 2: Robinhood has begun to diversify, and that's accelerated over time.
Speaker 2: We now have thirteen business lines generating over one hundred
Speaker 2: million in annualized revenue, including Robinhood Legend, which is our
Speaker 2: pro trading platform, as well as the Robinhood credit card.
Speaker 1: That's what I'm curious about, I mean, because yes, it
Speaker 1: is incredibly diversified now, but when we look at certain growths,
Speaker 1: I mean, some people are wondering, does the prediction market
Speaker 1: become sort of one of the bigger parts of this
Speaker 1: business over time or is your goal to try to
Speaker 1: keep at least some of the main components of those
Speaker 1: thirteen lines relatively in balance.
Speaker 2: Yeah. The way we do our business planning is we
Speaker 2: have general managers that are running running relatively autonomous business units,
Speaker 2: and you give.
Speaker 1: Them a lot of freedom to just well their.
Speaker 2: Goal to make their businesses as big as possible and
Speaker 2: when in market share across each of these So our
Speaker 2: goal is to be number one in all categories that
Speaker 2: we offer products to customers. And in fact there's a
Speaker 2: flywheel in effect, and it's it's actually continuing to expand
Speaker 2: we get more customers. Those customers bring more assets onto
Speaker 2: the platform and they become Gold subscribers. They use more
Speaker 2: of our products, which gives them an opportunity to deploy
Speaker 2: their assets across all sorts of different areas. Retirement, they
Speaker 2: can spend with our car products, they can earn a
Speaker 2: high rate, including on our FDIC insured deposits sweep. Also
Speaker 2: our Robinhood earn crypto backed product which offers seven percent
Speaker 2: apy that's been growing really quickly. So we have all
Speaker 2: these things that we enable you to put your money
Speaker 2: to work, and then those in turn bring in more customers.
Speaker 2: And now we also have advisors, So we have advisors
Speaker 2: joining the network. You can get a human advisor on
Speaker 2: Robinhood to help give you even more personalized guidance. The
Speaker 2: more advisors we bring on that in turn feeds the
Speaker 2: flywheel and over time increases the number of customers.
Speaker 3: Well, speaking of customers, you have now seven million children
Speaker 3: about signing up for these Trump accounts. When do you
Speaker 3: anticipate that actually translates to more regular Robinhood users? I mean,
Speaker 3: not the baby that just got the account, but maybe
Speaker 3: they're family members a parent here. When does that actually
Speaker 3: contribute to more users?
Speaker 2: Yeah? Well, remember the Trump accounts just launch earlier this
Speaker 2: month on July fourth, and it's been Secretary Beson called
Speaker 2: it the most successful program launch in government history. And
Speaker 2: what happens is, given the tremendous success of the program,
Speaker 2: there's more and more things to build. We're growing it
Speaker 2: bigger and bigger. Donors are coming up, So I think
Speaker 2: this can become the default philanthropic donor solution, and we
Speaker 2: can collect all of the donors, which bring in more
Speaker 2: assets to the platform because it gives a direct option
Speaker 2: for charitable giving. We're getting the employers on board. A
Speaker 2: lot of employers, including Robinhood and many other companies, are
Speaker 2: giving to the Trump accounts of their employees who are
Speaker 2: having children. And over time, we expect to go from
Speaker 2: seven million children signed up to closer to the seventy
Speaker 2: million in the addressable market. And you know, as the
Speaker 2: kids grow, when they turn eighteen, these rollover into traditional
Speaker 2: retirement accounts. So it's a long term play, but yeah,
Speaker 2: we believe it. It's probably the most important thing we
Speaker 2: could be doing for the future of the country.
Speaker 1: I do want to ask about one of your other
Speaker 1: lines of business, the Robinhood chain. I mean, we said
Speaker 1: in the intro the crypto business was down in the
Speaker 1: most recent quarter. You're building out a business that's effectively
Speaker 1: kind of built on the back of sort of a
Speaker 1: crypto technology. Is this sort of a play towards not
Speaker 1: just crypto long term but tokenization. Give me some sense
Speaker 1: here as to what you actually want this business to be.
Speaker 2: Yeah, so tokenization is one of the areas that we're
Speaker 2: a leader in. And the idea is when you say
Speaker 2: crypto is down, really a lot of that is just
Speaker 2: talking about the trading of crypto assets. But our view
Speaker 2: is that the future of crypto is that it becomes
Speaker 2: the infrastructure layer among trading all kinds of assets, including
Speaker 2: real world assets. You know, even though we're fans of memes,
Speaker 2: we also like real world assets. Yeah, and so what
Speaker 2: we've done is tokenized stocks, put them on chain through
Speaker 2: our stock Tokens product, and making them available to over
Speaker 2: one hundred and twenty countries around the world. We also
Speaker 2: have a stable coin lending product which allows customers to
Speaker 2: earn seven percent API, and that's up to two hundred
Speaker 2: million in balances in just a short number of weeks.
Speaker 2: And so even the crypto business line, if you look
Speaker 2: at it, is diversifying. There's now lending revenue, there's assets revenue,
Speaker 2: there's chain sequencer revenue from Robinhood chain. So you'll see
Speaker 2: that get more diversified and less reliant on the day
Speaker 2: to day price of bitcoin, for example, the market volatilty.
Speaker 3: Yeah, absolute, because it's happening. Ten OF, great to see you,
Speaker 3: thanks for joining us.
Speaker 2: Always a pleasure to be here in person. Thanks you much.
Speaker 3: That's ten OF, Chairman and CEO of Robinhood