Robinhood Markets, Inc.

Good day and thank you for standing by. Welcome to the Robin Hood first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Cagle, Vice President of Investor Relations for Robinhood. Please go ahead.

Thank you, Liz, and thank you, everyone, for joining Robinhood's first quarter earnings call. With us today are CEO and co-founder Vlad Tenev and CFO Jason Warnick. Before getting started, I want to remind you that today's call will contain forward-looking statements. Actual results could differ materially from our expectations, and we have no duty to provide updates unless legally required. Potential risk factors that could cause differences, including regulatory developments that we continue to monitor, are described in the press release we issued today, the earnings presentation on our investor relations website at investors.robinhood.com, a Form 10-Q filed this afternoon, and in our other SEC filings. Today's discussion will also include non-GAAP financial measures. Reconciliations to the GAAP results we consider most comparable can be found in the earnings presentation. With that, let me turn it over to Vlad.

Thanks for the intro, Chris, and thanks to everyone for joining us today. We had a strong quarter. I want to call out three things that I'm especially proud of. First, our product velocity continued to accelerate with several innovative products delivered to customers. And we're not slowing down. We're enabling 24-hour individual stock trading for customers by launching 24-hour market next week. Second, we're continuing to see significant growth from the new products we launched last year. And third, in the face of uncertainty in the banking sector, we're continuing to see strong net deposits and improving customer satisfaction. All of this is leading to financial results that keep getting better as we move closer to GAAP profitability. I'm excited to tell you about all this, so let's start with our business results. In Q1, customer assets under custody were up 26% sequentially to $78 billion, driven by rebounding stock and crypto valuations, as well as continuing net deposits. If we look at net deposits, we saw $1.5 billion in March and $4.4 billion for all of Q1, which translates to a 29% annualized growth rate. And perhaps most importantly, All of the new products and features we've launched in the past year are continuing to drive higher customer satisfaction with Q1 net promoter scores improving more than 20 points from a year ago. Now, if you look at financial results, Q1 we grew total net revenues by 16% from Q4. And by keeping our costs lean, we drove nice operating leverage in our business with adjusted EBITDA up 40% sequentially. I'd also highlight that two new products I mentioned last quarter continue to accelerate, stock lending and instant withdrawals. Each of these had Q1 annualized revenues that grew 50% above their January levels. If you combine the Q1 revenue from these two products, it's approaching the size of our equity trading business. And that's very exciting, and I'm incredibly proud of how well the team is executing. Now, let's turn to our 2023 roadmap. Since we launched over eight years ago, Robinhood has introduced several innovations that have become industry standard today. Mobile trading, seamless digital onboarding, zero commissions and no account minimums, and fractional shares. With these innovations, we've disrupted the U.S. brokerage market and grown our business. We're now broadening our offering to include areas like retirement, advisory, and payments, and we're expanding outside the U.S., This is not only good for customers, but it also expands our addressable market. And as you know, we've organized our 2023 roadmap into three areas, deepening relationships with our customers, innovating for our active traders, and launching new growth opportunities. Let me talk about how we're deepening our relationships with our more than 23 million existing customers. Our goal is to serve the entirety of our customers' critical financial needs. We started with trading investing, and more recently, we've launched spending, saving, and retirement products. We track our progress here by looking at net deposits and ARPU. In Q1, net deposits grew at a 29% annualized growth rate, and ARPU increased to $77, the highest level since 2021. Our focus has been on helping customers save and invest their long-term money. In January, we launched Robinhood Retirement, The first IRA with a 1% match, no employer necessary. We've continued to enhance the product. Customers have already invested over half a billion dollars into their IRAs. It's great to see this early customer response. Teams roadmap is full, and we think retirement has a ton of growth potential. We also love what we're seeing in Robinhood Gold. At the end of Q1, gold subscribers continued to increase up to 1.2 million, and gold cash sweep balances were up to $8 billion. Our gold yield is now 4.65%, and we're offering up to 2 million in FDIC insurance starting June 1. We see a big opportunity here to provide differentiated value to customers, and we're working hard to get the word out even more, including by launching a new marketing campaign across multiple channels. You may have seen our TV ads during the NBA playoffs. What we've seen from gold in the past six months gives us a lot of confidence to increase our investment, and we're looking forward to unveiling some new gold features in the coming months that provide our gold customers even more differentiated value. Finally, we're going to deepen relationships with our customers even more by taking our first steps in advisory. Our goal is to provide a personalized advisory experience much like what high net worth individuals have traditionally received from human advisors, but at a much lower price point by using technology. We believe this can help a lot of people who want access to advice, but have been deterred by the traditional 1% annual fee. We're excited to share more with you later this year. Now, let's discuss active traders. Over the past year, our work on options including advanced charts, cash accounts, and strategy builder, helped drive Q1 option contract volumes up 16%, and Q1 active trader NPS up over 30 points year over year. We feel like we're on a good trajectory with options, and we have now turned our focus to our core equities offering. In April, we started rolling out stock screeners, a powerful research tool with the simple and beautiful user experience our customers have come to expect from Robinhood. We really love what we've built here, and we're excited to get it into more of our customers' hands. And just ahead of this call, we announced the launch of 24-Hour Market, which will make us the first U.S. retail brokerage to offer 24-5 trading of single-name stocks. This is an exciting upgrade to our stock trading product. It allows our customers to better manage their risk and take advantage of opportunities no matter what time of day they arise. We're starting with over 40 well-known stocks and ETFs and plan to expand from there. And as we look ahead, we're also working to add a broader selection of assets to Robinhood. In March, we applied for a futures commission merchant license. Pending regulatory approval, we hope to launch futures trading around the end of this year. There's so much more to build for our active traders and we're excited to continue to innovate for them. The third part of our 2023 roadmap is exploring new growth opportunities to broaden the scope and geographical reach of our products so we can add more customers and increase our revenues over time. In Q1, we rolled out our non-custodial Robinhood wallet, which customers have downloaded in over 130 countries around the world. Customers love having total control of their crypto and NFTs, as well as the no gas fees for coin swaps on the Polygon chain. There's a lot more to build here, and we're encouraged by the early user feedback. As we brought Robinhood Wallet to market, we found that one of the biggest problems was that the fiat to crypto on-ramp solutions available in market were too cumbersome and expensive to use. So we built our own that we're calling Robinhood Connect. and it leverages the multiple payment rails and robust trading infrastructure we've developed at Robinhood. Two weeks ago at consensus, our crypto GM, Johan Kerbrot, announced that we're offering Robinhood Connect to third-party developers. We're pleased by the early response we've seen and believe we're well-positioned to take market share versus early entrance. Finally, we're making progress towards our ambitious goal of launching brokerage operations in the UK by the end of the year. We have an existing license in place, a brand that resonates, and experienced leaders running the effort. So we're excited to launch and start driving innovation in the U.K. market like we've done in the U.S. over the past eight years. We're really excited about the roadmap ahead of us, and there's so much to do. With that, I'll turn the call over to Jason.