What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-02-27 · 539 added, 404 removed, 1015 unchanged (48% of the section changed)

14 unchanged sentences

Note 6 - Restructuring Activities

Note 7 - Allowance for Credit Losses

Note 7 - Allowance for Credit Losses and Credit Card Expected Loss Liability

Note 8 - Investments and Fair Value Measurement

Note 9 - Derivatives and Hedging Activities

Note 10 - Income Taxes

4 unchanged sentences

Note 1 5 - Net Income (Loss) per Share

Note 15 - Related Party Transactions

Note 16 - Leases

Note 17 - Commitments & Contingencies

Note 18 - Subsequent Events

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Robinhood Markets, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Robinhood Markets, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and mezzanine equity and stockholders’ (deficit) equity for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying report of management on internal control of financial reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

San Jose, California

February 27, 2023

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Robinhood Markets, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Robinhood Markets, Inc.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and mezzanine equity and stockholders’ (deficit) equity for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for three years in the period ended December 31, 2022 in conformity with U.S.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), mezzanine equity and stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2024 expressed an unqualified opinion thereon.

Adoption of SAB 121

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for obligations to safeguard crypto-assets held in custody on behalf of its platform users in 2022 due to the adoption of SAB 121.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

20 unchanged sentences

February 27, 2024

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Robinhood Markets, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Robinhood Markets, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Robinhood Markets, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Robinhood Credit, Inc., formerly known as X1, Inc., which is included in the 2023 consolidated financial statements of the Company and constituted less than one percent of total assets as of December 31, 2023 and less than one percent of consolidated total net revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Robinhood Credit, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), mezzanine equity and stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 27, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,

and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ Ernst & Young LLP

San Jose, California

February 27, 2024

ROBINHOOD MARKETS, INC.

10 unchanged sentences

User-held fractional shares 997 1,592

Held-to-maturity investments — 413

Prepaid expenses 86 63

4 unchanged sentences

Intangible assets, net 25 48

Non-current held-to-maturity investments — 73

Non-current prepaid expenses 17 4

14 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.0001 par value.

210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022;

and December 31, 2023.

Class A common stock, $ 0.0001 par value.

28 unchanged sentences

Change in fair value of convertible notes and warrant liability 2,045 — —

Other expense (income), net — ( 1 ) 16

Income (loss) before income taxes 13 ( 3,685 ) ( 1,027 )

Other (income) expense, net ( 1 ) 16 ( 3 )

Loss before income taxes ( 3,685 ) ( 1,027 ) ( 533 )

Provision for income taxes 2 1 8

Net income (loss) $ 7 $ ( 3,687 ) $ ( 1,028 )

Net income (loss) attributable to common stockholders:

Net loss $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Net loss attributable to common stockholders:

Basic $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Diluted $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Net income (loss) per share attributable to common stockholders:

Net loss per share attributable to common stockholders:

Basic $ ( 7.49 ) $ ( 1.17 ) $ ( 0.61 )

Diluted $ ( 7.49 ) $ ( 1.17 ) $ ( 0.61 )

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

Weighted-average shares used to compute net loss per share attributable to common stockholders:

Basic 492,381,190 878,630,024 890,857,659

5 unchanged sentences

(in millions) 2021 2022 2023

Net income (loss) $ 7 $ ( 3,687 ) $ ( 1,028 )

Net loss $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Other comprehensive loss, net of tax:

Foreign currency translation — ( 1 ) —

Net losses on hedging instruments:

Net losses arising during the period

Reclassification adjustment for net losses included in net loss

Net loss on hedging instruments — — ( 3 )

Total other comprehensive loss, net of tax — ( 1 ) ( 3 )

Total comprehensive income (loss) $ 7 $ ( 3,687 ) $ ( 1,029 )

Total comprehensive loss $ ( 3,687 ) $ ( 1,029 ) $ ( 544 )

See Accompanying Notes to the Consolidated Financial Statements.

4 unchanged sentences

Operating activities:

Net income (loss) $ 7 $ ( 3,687 ) $ ( 1,028 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net loss $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 26 61 71

5 unchanged sentences

Changes in operating assets and liabilities:

Segregated securities under federal and other regulations ( 135 ) 135 —

Securities segregated under federal and other regulations 135 — —

Receivables from brokers, dealers, and clearing organizations 36 12 ( 13 )

10 unchanged sentences

Investing activities:

Purchase of property, software, and equipment ( 24 ) ( 63 ) ( 28 )

Purchases of property, software, and equipment ( 63 ) ( 28 ) ( 2 )

Capitalization of internally developed software ( 20 ) ( 29 ) ( 19 )

Acquisitions of a business, net of cash acquired — ( 125 ) —

Purchase of investments — ( 27 ) ( 25 )

Sales of investments — — 42

Purchases of available-for-sale investments ( 27 ) ( 25 ) —

Proceeds from sales and maturities of available-for-sale investments — 42 10

Purchases of held-to-maturity investments — — ( 759 )

Proceeds from maturities of held-to-maturity investments — — 282

Acquisitions of a business, net of cash and cash equivalents acquired ( 125 ) — ( 93 )

Other ( 3 ) ( 20 ) ( 1 )

2 unchanged sentences

Proceeds from issuance of common stock in connection with initial public offering, net of offering costs 2,052 — —

Proceeds from issuance of common stock under the Employee Stock Purchase Plan — 7 16

Proceeds from issuance of common stock under the Employee Stock Purchase Plan ("ESPP") 7 16 14

Taxes paid related to net share settlement of equity awards ( 422 ) ( 12 ) ( 12 )

3 unchanged sentences

Payments of debt issuance costs — ( 10 ) ( 10 )

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs 1,267 — —

Change in principal collected from customers due to Coastal Bank — — 1

Proceeds from exercise of stock options, net of repurchases 14 6 5

Net cash provided by financing activities 1,276 5,203 —

Repurchase of common stock — — ( 608 )

Net cash provided by (used in) financing activities 5,203 — ( 610 )

Effect of foreign exchange rate changes on cash and cash equivalents — ( 1 ) —

Net increase (decrease) in cash, cash equivalents, segregated cash and restricted cash 3,120 4,080 ( 913 )

Net decrease in cash, cash equivalents, segregated cash, and restricted cash 4,080 ( 913 ) ( 11 )

Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period 6,190 10,270 9,357

Cash, cash equivalents, segregated cash, and restricted cash, end of the period $ 10,270 $ 9,357 $ 9,346

Reconciliation of cash, cash equivalents, segregated cash, and restricted cash, end of the period:

Cash and cash equivalents, end of the period $ 6,253 $ 6,339 $ 4,835

Segregated cash, end of the period 3,992 2,995 4,448

Restricted cash (current and non-current), end of the period 7 25 23

Restricted cash in other current assets, end of the period 1 1 46

Restricted cash in other non-current assets, end of the period 24 22 17

Cash, cash equivalents, segregated cash, and restricted cash, end of the period $ 10,270 $ 9,357 $ 9,346

12 unchanged sentences

Balance as of December 31, 2020 412,742,897 $ 2,180 229,031,546 $ — $ 134 $ 1 $ ( 190 ) $ ( 55 )

Net income — — — — — — 7 7

Net loss — — — — — — ( 3,687 ) ( 3,687 )

Shares issued in connection with stock option exercise, net of repurchases — — 6,832,725 — 14 — — 14

Issuance of Series F convertible preferred stock, net of issuance costs 48,000,000 599 — — — — — —

Issuance of Series G convertible preferred stock, net of issuance costs 43,116,119 668 — — — — — —

Vesting of early-exercised stock options — — — — 1 — — 1

Change in other comprehensive income — — — — — — — —

Issuance of common stock in connection with Employee Stock Purchase Plan — — 298,031 — 7 — — 7

Issuance of common stock in connection with initial public offering, net of issuance costs — — 56,729,194 — 2,052 — — 2,052

Issuance of common stock upon settlement of RSUs

— — 32,133,589 — — — — —

Shares withheld related to net share settlement — — ( 11,160,525 ) — ( 422 ) — — ( 422 )

Conversion of preferred stock to common stock ( 412,742,897 ) ( 2,180 ) 412,742,897 — 2,180 — — 2,180

Conversion of convertible notes to common stock — — 137,305,156 — 5,218 — — 5,218

Reclassification of warrant liability to stockholders' equity — — — — 380 — — 380

Vesting of replacement awards issued in connection with acquisition — — — — 1 — — 1

Share-based compensation — — — — 1,605 — — 1,605

5 unchanged sentences

capital Accumulated other comprehensive

income Accumulated

income (loss)

deficit Total stockholders’

5 unchanged sentences

Issuance of common stock in connection with Employee Stock Purchase Plan — — 1,907,241 — 16 — — 16

Issuance of common stock in connection with initial public offering, net of issuance costs — — 56,729,194 — 2,052 — — 2,052

Issuance of common stock upon settlement of RSUs — — 32,133,589 — — — — —

Shares withheld related to net share settlement — — ( 11,160,525 ) — ( 422 ) — — ( 422 )

Conversion of preferred stock to common stock ( 412,742,897 ) ( 2,180 ) 412,742,897 — 2,180 — — 2,180

Conversion of convertible notes to common stock — — 137,305,156 — 5,218 — — 5,218

Reclassification of warrant liability to stockholders' equity — — — — 380 — — 380

Vesting of replacement awards issued in connection with acquisition 1 1

Issuance of common stock upon settlement of restricted stock units, net of shares withheld — — 24,613,450 — ( 12 ) — — ( 12 )

Change in other comprehensive loss — — — — — ( 1 ) — ( 1 )

Share-based compensation — — — — 682 — — 682

3 unchanged sentences

CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY

Redeemable convertible preferred stock Common stock (1)

Common stock (1)

capital Accumulated other comprehensive

income (loss) Accumulated

deficit Total stockholders’

(deficit) equity

(in millions, except for number of shares) Shares Amount Shares Amount

(in millions, except for number of shares) Shares Amount

Balance as of December 31, 2022 892,751,571 $ — $ 11,861 $ — $ ( 4,905 ) $ 6,956

3 unchanged sentences

Issuance of common stock upon settlement of restricted stock units, net of shares withheld 30,267,312 — ( 12 ) — — ( 12 )

Change in other comprehensive income — — — — — ( 1 ) — ( 1 )

Repurchase and retirement of Class A common stock ( 55,273,469 ) — ( 611 ) — — ( 611 )

Change in other comprehensive loss — — — ( 3 ) — ( 3 )

Share-based compensation — — 888 — — 888

14 unchanged sentences

• Robinhood Crypto, LLC (“RHC”), which provides users the ability to buy, sell, and transfer cryptocurrencies and is responsible for the custody of user cryptocurrencies held by users on our platform;

• Robinhood Money, LLC (“RHY”), which offers a pre-paid debit card (the “Robinhood Cash Card”) and a spending account that help customers invest, save, and earn rewards.

• Robinhood Money, LLC (“RHY”), which offers the Robinhood Cash Card and a Spending Account that help customers invest, save, and earn rewards.

• Robinhood Credit, Inc.

(“Robinhood Credit”), which offers a no-fee credit card with rewards on each purchase.

Acting as the agent of the user, we facilitate the purchase and sale of options, cryptocurrencies, and equities through our platform by routing transactions through market makers, who are responsible for trade execution.

3 unchanged sentences

Our users also have ownership of the cryptocurrencies they transact on our platform (none of which are allowed to be purchased on margin and which do not serve as collateral for margin loans);

however, following our adoption of Staff Accounting Bulletin 121 (“SAB 121”), we recognize a liability to reflect our safeguarding obligation along with a corresponding asset on our balance sheet related to the cryptocurrencies we hold in custody for users (refer to Note 2 - Recent Accounting Pronouncements, for more information on the recent adoption of SAB 121).

however, following our adoption of SAB 121, we recognize a liability to reflect our safeguarding obligation along with a corresponding asset on our balance sheet related to the cryptocurrencies we hold in custody for users.

On August 2, 2021, we closed our IPO of 55.0 million shares of Class A common stock.

7 unchanged sentences

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial

statements and accompanying notes.

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.

We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances.

Assumptions and estimates used in preparing our consolidated financial statements include, but are not limited to, those related to revenue recognition and share-based compensation, the determination of allowances for credit losses, valuation of user cryptocurrencies safeguarding obligation and corresponding asset, investment valuation, capitalization of internally developed software, useful lives of property, software, and equipment, valuation and useful lives of intangible assets, incremental borrowing rate used to calculate operating lease right-of-use assets and related liabilities, impairment of long-lived assets, uncertain tax positions, income taxes, accrued and contingent liabilities.

Assumptions and estimates used in preparing our consolidated financial statements include, but are not limited to, those related to revenue recognition, SBC, the determination of allowances for credit losses, valuation of user cryptocurrencies safeguarding obligation and corresponding asset, investment valuation, capitalization of internally developed software, useful lives of property, software, and equipment, valuation and useful lives of intangible assets, incremental borrowing rate used to calculate operating lease right-of-use assets and related liabilities, impairment of long-lived assets, uncertain tax positions, income taxes, accrued and contingent liabilities.

Actual results could differ from these estimates and could have a material adverse effect on our operating results.

Segment Information

We operate and report financial information in one operating segment.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

All our revenues and substantially all of our assets are attributed to or located in the United States.

Variable Interest Entities

We evaluate our ownership, contractual and other interests in entities to determine if we have a variable interest in an entity.

These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical and prospective information, among other factors.

If we determine that an entity for which we hold a contractual or ownership interest in is a variable interest entity (“VIE”) and that we are the primary beneficiary, we consolidate such entity in the consolidated financial statements.

The primary beneficiary of a VIE is the party that meets both of the following criteria:

(1) has the power to make decisions that most significantly affect the economic performance of the VIE;

and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

Periodically, we determine whether any changes in the interest or relationship with the entity impacts the determination of whether we are still the primary beneficiary.

If we are not deemed to be the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

We operate and report financial information in one operating segment as our CODM only reviews consolidated financial information to allocate resources and assess performance.

Substantially all of our revenues and assets are attributed to or located in the United States.

In August 2022, we announced a reorganization into a general manager (“GM”) structure under which GMs have assumed broad responsibility for our individual businesses.

Immediately after the GM reorganization, we began developing processes and controls to enable us to produce sufficiently precise and timely business level financial information that did not exist within the enterprise resource planning system at the time of the announcement.

We continue to work with each GM to review and iterate on their respective discrete financial information while also investing in building the technical capabilities necessary to automate the process of producing the GM level financial information.

We continue to improve our reporting of GM level financial information that may eventually be—but is not currently—shared with and used by the CODM to allocate resources and determine performance, which would potentially change the conclusion of one operating segment.

We will continue to monitor and evaluate the information provided to the CODM to assess all applicable accounting standards relevant to the determination of our segments.

Revenue Recognition

7 unchanged sentences

Net interest revenues consist of interest revenues less interest expenses.

We earn interest revenues on margin loans to users, corporate cash and investments, segregated cash and cash equivalents, deposits with clearing organizations, and Cash Sweep.

We earn interest revenues on corporate cash and investments, margin loans to users, segregated cash and cash equivalents, deposits with clearing organizations, Cash Sweep, and carried customer credit card balances.

We also earn and incur interest revenues and expenses on securities lending transactions.

10 unchanged sentences

We now earn proxy revenue directly from issuers.

Proxy services are made up of two performance obligations, (i) distribution of proxy materials to shareholders and (ii) collection, tallying, and reporting of shareholder response during a voting event.

Revenue is recognized at a point in time upon satisfaction of these performance obligations.

ACATS fees are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer.

We recognize revenue when our performance obligation of administering the transfer is satisfied.

Concentrations of Revenue and Credit

Concentrations of Revenue and Credit Risk

Concentrations of Revenue

4 unchanged sentences

Citadel Securities, LLC 22 % 16 % 12 %

Entities affiliated with Susquehanna International Group, LLP (1)

18 % 12 % 8 %

Entities affiliated with Wolverine Holdings, L.P.

10 % 10 % 8 %

Entities affiliated with Susquehanna International Group, LLP (2)

Tai Mo Shan Limited (3)

3 unchanged sentences

_______________

(1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC

(1) Consists of Wolverine Execution Services, LLC and Wolverine Securities, LLC.

(2) Consists of Global Execution Brokers, LP and G1 Execution Services, LLC.

(3) Member of Jump Trading Group.

Concentrations of Credit

Concentrations of Credit Risk

We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions.

1 unchanged sentence

The risk of default depends on the creditworthiness of the counterparty.

Default of a counterparty in equities and options trades, which are facilitated through

clearinghouses, would generally be spread among the clearinghouse's members rather than falling entirely on us.

Default of a counterparty in equities and options trades, which are facilitated through clearinghouses, would generally be spread among the clearinghouse's members rather than falling entirely on us.

It is our policy to review, as necessary, the credit standing of each counterparty.

In March 2023, certain U.S.

banks failed and were taken over by the U.S.

Federal Deposit Insurance Corporation (“FDIC”).

Our exposure to impacted U.S.

banks was immaterial.

However, we took steps to help ensure that the loss of all or a significant portion of any uninsured amount would not have had an adverse effect on our ability to pay our operational expenses or make other payments.

Operating Expenses

Brokerage and Transaction

Brokerage and transaction costs primarily consist of broker-dealer transaction expenses (such as fees paid to centralized clearinghouses and regulatory fees), market data expenses, cash and share-based compensation and benefits as well as allocated overhead for employees engaged in clearing and brokerage functions, and Robinhood Cash Card transactions expenses (such as network fees and card processing fees).

Brokerage and transaction costs primarily consist of broker-dealer transaction expenses (such as fees paid to centralized clearinghouses and regulatory fees), market data expenses, customer statements, cash compensation, SBC and employee benefits as well as allocated overhead for employees engaged in clearing and brokerage functions.

A large portion of our brokerage and transaction costs are variable and tied to trading and transaction volumes on our platform.

For the year ended December 31, 2022, brokerage and transaction costs also included a $ 57 million as a result of a processing error occurred in December 2022 (refer to Part II, Item 7 of this Annual Report, “Non-GAAP Financial Measures” for further details).

For the year ended December 31, 2022, brokerage and transaction costs included $ 57 million as a result of the Q4 2022 Processing Error.

Technology and Development

Technology and development costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for engineering, data science, and design personnel who support and improve our platform and develop new products, costs for cloud infrastructure services, and costs associated with computer hardware and software, including amortization of internally developed software.

Operations costs consist of customer service related expenses, including cash and share-based compensation and benefits as well as allocated overhead for employees engaged in customer support, and costs incurred to support and improve customer experience (such as third-party customer service vendors).

Operations costs also include our provision for credit losses and fraud in connection with unrecoverable receivables due to Fraudulent Deposit Transactions and chargebacks for unauthorized debit card use.

Marketing costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for employees engaged in the marketing function.

Marketing costs also include digital marketing, brand marketing, and creative services costs for creation, production, and placement of advertisements and marketing content, as well as marketing incentive expenses associated with the Robinhood Referral Program.

Other marketing costs include cash credits we offer to customers, which primarily relate to remediation for losses experienced by our customers due to service interruptions on our platform and reimbursement of direct losses incurred by our customers from allegedly unauthorized account activity.

Technology and development costs primarily consist of cash compensation, SBC and employee benefits as well as allocated overhead for engineering, data science, and design personnel who support and improve our platform and develop new products, costs for cloud infrastructure services, and costs associated with computer hardware and software, including amortization of internally developed software.

Operations costs consist of customer service related expenses, including cash compensation, SBC and employee benefits as well as allocated overhead for employees engaged in customer support, and costs incurred to support and improve customer experience (such as third-party customer service vendors).

Operations costs also include our provision for credit losses and fraud primarily in connection with unrecoverable receivables due to Fraudulent Deposit Transactions and credit card expected losses.

Marketing costs primarily consist of paid marketing channels such as digital marketing and brand marketing, as well as cash compensation, SBC, and employee benefits as well as allocated overhead for employees engaged in the marketing function.

Marketing costs also include incentive expenses associated with the Robinhood Referral Program.

Advertising costs are expensed as incurred and were $ 101 million, $ 52 million and $ 74 million in the years ended December 31, 2021, 2022, and 2023.

General and Administrative

General and administrative costs primarily consist of cash and share-based compensation and benefits as well as allocated overhead for certain executives and employees engaged in legal, finance, human resources, risk, and compliance.

General and administrative costs also include legal expenses, other professional fees, settlements and penalties, and business insurance.

General and administrative costs primarily consist of cash compensation, SBC, and employee benefits as well as allocated overhead for certain executives and employees engaged in legal, finance, human resources, risk, and compliance.

General and administrative costs also include settlements and penalties, legal expenses, other professional fees, and real estate charges including impairments on our operating leases or lease improvements and lease terminations.

For the year ended December 31, 2023, general and administrative costs included a $ 485 million SBC charge related to the 2021 Founders Award Cancellation.

Employee Retirement Benefits

2 unchanged sentences

In this case, participating employees defer a portion of their pre-tax earnings.

Employees may also contribute to a Roth 401(k) plan using post-tax dollars.

Employees may

also contribute to a Roth 401(k) plan using post-tax dollars.

We match employee contributions up to 3 %, and have incurred $ 10 million, $ 14 million, and $ 12 million of expense related to matching for the years ended December 31, 2021, 2022, and 2023.

1 unchanged sentence

Research and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred.

Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation.

Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including SBC.

Research and development costs recorded in operating expenses under ASC 730 were $ 438 million, $ 381 million, and $ 349 million for the years ended December 31, 2021, 2022, and 2023.

2 unchanged sentences

The fair value of our common stock is determined on the grant date using the closing price of our common stock, which is traded on the Nasdaq Global Select Market.

Prior to our IPO, the absence of an active market for our common stock required our board of directors to determine the fair value of our common stock for each grant date with respect to which awards were approved.

Our board of directors exercised reasonable judgement and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including:

independent contemporaneous third-party valuations of our common stock, the prices paid for common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our financial condition, results of operations, and capital resources, the valuation of comparable companies, the lack of marketability of our common stock, and general and industry specific economic outlook, among other factors.

Prior to our IPO, the absence of an active market for our common stock required the board of directors, the members of which we believe had extensive business, finance and venture capital experience, to determine the fair value of our common stock for purposes of granting stock-based awards and for calculating stock-based compensation expense.

We obtained contemporaneous third-party valuations to assist the board of directors in determining fair value.

These contemporaneous third-party valuations used the methodologies, approaches, and considerations were consistent with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Stock Options

14 unchanged sentences

The fair value of our RSUs is estimated based on the fair value of our common stock on the date of grant.

The time-based service condition for our awards is generally satisfied over four years .

For Time-Based RSUs granted pre-IPO, we record share-based compensation expense on an accelerated attribution method over the requisite service period, as these awards include a performance-based vesting condition.

The performance-based condition for our pre-IPO grants was satisfied upon the occurrence of the IPO in 2021, at which point we recorded a cumulative one-time share-based compensation expense determined using the awards’ grant-date fair value.

Share-based compensation related to the remaining time-based service after the IPO is recorded over the remaining requisite service period.

As of December 31, 2020 and 2021, we had not recognized share-based compensation for awards with performance-based conditions because the IPO had not occurred and, therefore, could not be considered probable.

No performance-based conditions exist for our post-IPO grants, and therefore for grants of Time-Based RSUs issued post-IPO, we record share-based compensation expense on a straight line basis over the requisite service period.

The time-based service condition for our awards is generally satisfied over one or four years .

For Time-Based RSUs granted pre-IPO, we record SBC expense on an accelerated attribution method over the requisite service period, as these awards include a performance-based vesting condition.

The performance-based condition for our pre-IPO grants was satisfied upon the occurrence of the IPO in 2021, at which point we recorded a cumulative one-time SBC expense determined using the awards’ grant-date fair value.

SBC related to the remaining time-based service after the IPO was recorded over the remaining requisite service period.

No performance-based conditions exist for our post-IPO grants, and therefore for grants of Time-Based RSUs issued post-IPO, we record SBC expense on a straight line basis over the requisite service period.

Market-Based RSUs

2 unchanged sentences

The time-based service condition for these awards generally is satisfied over six years .

The performance-based conditions are satisfied upon the occurrence of an IPO.

The performance-based conditions were satisfied upon the occurrence of an IPO.

The market-based conditions are satisfied upon our achievement of specified share prices.

1 unchanged sentence

We estimate the expected term based on various vesting scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of an IPO based on our expectation at the time of measurement of the award’s value.

We record share-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied.

We record SBC expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied.

We determine the requisite service period by comparing the derived service period to achieve the market-based condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period.

Upon the occurrence of our IPO in 2021, we recorded a cumulative one-time share-based compensation expense determined using the grant-date fair values.

Share-based compensation related to remaining time-based service and market-based conditions to be met will be recorded over the remaining derived requisite service period.

Upon the occurrence of our IPO in 2021, we recorded a cumulative one-time SBC expense determined using the grant-date fair values.

Remaining SBC related to the Market-Based RSUs will be recorded over the remaining derived requisite service period.

Previously recognized SBC related to the Market-Based RSUs will not be reversed even if the specified share prices are not achieved unless the requisite service is not rendered.

Net Income (Loss) per Share

Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares.

Our participating securities consist of all series of our redeemable convertible preferred stock.

Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses.

We present net income (loss) per share using the two-class method required for multiple classes of common stock.

The rights, including the liquidation and dividend rights, of the holders of Class A common stock and Class B common stock are identical, except with respect to voting.

As the liquidation and dividend rights are identical for Class A common stock and Class B common stock, the undistributed earnings are allocated on a proportionate basis and the resulting income (loss) per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis.

Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period.

Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential

common shares outstanding during the period.

The computation of the diluted earnings per share of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock.

Cash and Cash Equivalents

5 unchanged sentences

Cash Segregated Under Federal and Other Regulations

We are required to segregate cash for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Exchange Act.

We are required to segregate cash for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

We continually review the credit quality of our counterparties and have not experienced a default.

As a result, we do not have an expectation of credit losses for these arrangements.

Segregated cash also includes certain customer funds for which we are an agent and custodian on behalf of our customers that are reflected on our consolidated balance sheets, and for which we follow statutory requirements to keep these funds segregated.

Restricted Cash

1 unchanged sentence

We have no ability to draw on such funds as long as they remain restricted under the applicable agreements.

Restricted cash also includes customers’ credit card payments that we collect on behalf of other financial institutions that are pending remittance.

Cash subject to restrictions that expire within one year is included in other current assets in our consolidated balance sheets.

For the years ended December 31, 2021 and 2022, current restricted cash balances were $ 1 million.

Cash subject to restrictions that exceed one year is included in non-current assets in our consolidated balance sheets.

For the years ended December 31, 2022 and 2023, current restricted cash balances included in other current assets in our consolidated balance sheets were $ 1 million and $ 46 million.

Cash subject to restrictions that exceed one year is included in other non-current assets in our consolidated balance sheets.

For the years ended December 31, 2022 and 2023, non-current restricted cash balances were $ 22 million and $ 17 million.

Securities Borrowing and Lending

We operate a securities lending program under which shares that users have pledged to us to collateralize their margin borrowing are lent by us to third parties (“Margin Securities Lending”) and a securities lending program under which we borrow fully-paid shares from participating users and lend them to third parties (“Fully-Paid Securities Lending”).

We operate a securities lending program under which shares that users have pledged to us to collateralize their margin borrowing are lent by us to third parties (“Margin Securities Lending”) and a Fully-Paid Securities Lending program under which we borrow fully-paid shares from participating users and lend them to third parties.

We also occasionally borrow securities from third parties for operational purposes, and we occasionally lend to third parties securities that we hold for our own account (such as our holdings to support fractional share operations).

2 unchanged sentences

For our Fully-Paid Securities Lending, portions of such revenues are paid to participating users, and those payments are recorded as interest expense.

the year ended December 31, 2021, interest revenue earned and interest expenses incurred related to the Fully-Paid Securities Lending program were not material.

For the year ended December 31, 2022, Fully-Paid Securities Lending program interest revenue earned was $ 11 million and interest expenses incurred was $ 2 million.

When we borrow securities from users participating in the Fully-Paid Securities Lending program (or from third parties), we provide cash as collateral and we record a receivable representing our right to the return of that collateral.

The amount of that receivable is presented in "securities borrowed" on our consolidated balance sheets.

The amount of that receivable is presented in “securities borrowed” on our

consolidated balance sheets.

In the case of our Fully-Paid Securities Lending program, the cash collateral is held by a third-party bank in a deposit account pledged to the user, which we administer as the user’s agent.

7 unchanged sentences

In connection with our securities borrowing and lending activities, however, our policy is to recognize all amounts that are subject to master netting arrangements on a gross basis in our consolidated balance sheets even though some of those amounts may be eligible for offset (i.e., to be presented on a net basis) under GAAP.

Refer to Note 11 - Securities Borrowing and Lending, for more information and the gross presentation in tabular format.

Our users may elect to participate in Cash Sweep, which allows them to earn interest on their uninvested brokerage cash.

As these balances are automatically swept to our partner banks they are not reflected on the consolidated balance sheet.

For the year ended December 31, 2021, interest revenue earned and interest expenses incurred related to Cash Sweep were not material.

For the year ended December 31, 2022, Cash Sweep interest revenue earned was $ 68 million and interest expenses incurred was $ 46 million.

Cryptocurrencies

2 unchanged sentences

After purchasing cryptocurrency on the platform, users are the legal owners of cryptocurrency held under custody by us and users have all the rights and benefits of ownership, including the rights to appreciation and depreciation of the cryptocurrency.

We do not allow users to purchase cryptocurrency on margin and cryptocurrency does

not serve as collateral for margin loans.

We do not allow users to purchase cryptocurrency on margin and cryptocurrency does not serve as collateral for margin loans.

We hold cryptocurrency in custody for users in one or more omnibus cryptocurrency wallets;

1 unchanged sentence

We hold cryptographic key information and maintain internal record keeping for the cryptocurrencies we hold in custody for users, and we are obligated to secure such assets from loss or theft.

Based on the terms of our user agreement and applicable law, we believe the cryptocurrency we hold in custody for users of our platform should be respected as users’ property (and should not be available to satisfy the claims of our general creditors) in the event we were to enter bankruptcy.

Based on the terms of our user agreement, the structure of our crypto offerings, and applicable law, after consultation with internal and external legal counsel, we believe the cryptocurrency we hold in custody for users of our platform should be respected as users’ property (and should not be available to satisfy the claims of our general creditors) in the event we were to enter bankruptcy.

For additional information relating to platform bankruptcy generally, see Part I, Item 1A of this Annual Report, “Risk Factors—Risks Related to Cryptocurrency Products and Services—Cryptocurrency laws, regulations, and accounting standards are often difficult to interpret and are rapidly evolving in ways that are difficult to predict.

Changes in these laws and regulations, or our failure to comply with them, could negatively impact cryptocurrency trading on our platform.

We invest in marketable debt securities which are classified as available-for-sale and are initially recorded at fair value.

These securities are included in other current assets on the audited consolidated balance sheets and are comprised of asset-backed securities, commercial paper, corporate bonds and government bonds.

We have elected the fair value option for our debt securities as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics.

Fair value adjustments are presented in other expense (income), net in our consolidated statements of operations, and we elected to present interest earned on the debt securities as interest income.

User cryptocurrencies safeguarding obligation and the corresponding asset on the consolidated balance sheets represent our obligation to safeguard crypto assets held in our custody on behalf of our users.

We carry these at fair value as prescribed by SAB 121.

We are obligated to safeguard user assets from loss, theft, or other misuse.

Any loss, theft, or other misuse would impact the measurement of the asset.

We invest in marketable debt securities and determine the classification at the time of purchase.

Available-for-sale investments are recorded at fair value.

We have elected the fair value option for our available-for-sale investments as we believe carrying these investments at fair value and taking changes in fair value through earnings best reflects their underlying economics.

Fair value adjustments are presented in other (income) expense, net and interest earned on the debt securities as net interest revenues in our consolidated statements of operations.

Held-to-maturity investments are securities that we have both the ability and positive intent to hold until maturity and are recorded at amortized cost.

Interest income is calculated using the effective interest method, adjusted for deferred fees or costs, premium, or discount existing at the date of purchase.

Interest earned is included in net interest revenues in our consolidated statements of operations.

We evaluate held-to-maturity investment for credit losses on a quarterly basis.

We do not expect credit losses for our held-to-maturity investments that are obligations of states and political subdivisions and securities issued by U.S.

government sponsored agencies.

We monitor remaining securities by type and standard credit rating.

Derivatives and Hedging Activities

All derivatives are recorded at fair value.

The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate the derivative in a hedging relationship and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting if elected.

As part of our interest rate risk management strategy, we use interest rate floors designated as cash flow hedges which involve the receipt of offsetting cash flows from a counterparty if interest rates fall below the strike rate on the contract in exchange for an up-front premium.

Changes in fair value of the cash flow hedges are recognized in accumulated other comprehensive income (loss) (“AOCI”) and are subsequently reclassified to net interest revenues as interest payments are received on the hedged item.

We assess hedge effectiveness on a quarterly basis to ensure all hedges remain highly effective.

If the derivative financial instruments designated as cash flow hedges are deemed ineffective, changes in the fair value of the derivative financial instrument are recognized directly in net interest revenues.

We are exposed to credit risk if counterparties to our derivative contracts do not perform pursuant to the terms of our interest rate floors.

Should a counterparty fail to perform under the terms of our interest rate floors, our credit exposure is limited to the net positive fair value and accrued interest owed from the failing counterparty.

We mitigate counterparty credit risk through credit approvals, credit limits and monitoring procedures, as appropriate.

We enter into master netting agreements with counterparties that permit the net settlement of amounts owed under the derivative contracts.

The master netting agreements generally provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.

We do not offset fair value amounts recognized for derivative instruments under master netting arrangements.

Our derivative contracts do not require collateral to be posted by us or the counterparties.

Credit Card Program

The Robinhood Credit card program is funded under the Program Agreement between Robinhood Credit and Coastal Bank, where Coastal Bank is the originator and owner of customer principal balances.

Robinhood Credit is responsible for administering the credit card program on a mobile app, including, (i) setting customer credit limits within Coastal Bank’s underwriting standards, (ii) loan servicing, (iii) remitting collected principal from customers to Coastal Bank, and (iv) offering and maintaining the customer rewards program.

Coastal Bank is responsible for (i) funding the customer credit, (ii) reporting customer credit activities, and (iii) holding customer receivables.

Additionally, Robinhood Credit is responsible to pay Coastal Bank customer balances that are ultimately charged off or deemed uncollectible, generally when balances become outstanding for over 180 days.

Robinhood Credit estimates the related credit card expected loss liability using a current expected credit losses model by evaluating historical collection data as well as considering charge off trends and market data by FICO cohort.

Under the Program Agreement, Robinhood Credit collects interest from customers that carry a balance and pays interest on the amount funded by Coastal Bank, with the difference between those amounts resulting in net interest revenue.

In addition, Robinhood Credit earns revenue from interchange fees from each credit card transaction.

As an agent, Robinhood Credit recognizes interchange revenue net of a revenue share paid to Coastal Bank, certain fees paid to third-parties, and rewards paid to customers.

Fair Value of Financial Instruments

13 unchanged sentences

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying amounts of certain financial instruments approximate their fair value due to the short-term nature, which include cash, cash segregated under federal and other regulations, receivables from brokers, dealers, and clearing organizations, receivables from users, net, deposits with clearing organizations, other current assets, accounts payable and accrued expenses, payable to users, securities loaned, and other current liabilities.

The carrying amounts of certain financial instruments approximate their fair value due to the short-term nature, which include cash and cash equivalents, cash segregated under federal and other regulations, receivables from brokers, dealers, and clearing organizations, receivables from users, net, deposits with clearing organizations, other current assets, accounts payable and accrued expenses, payable to users, securities loaned, and other current liabilities.

Receivables From Brokers, Dealers, and Clearing Organizations

Receivables from brokers, dealers, and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers.

These receivables are short term and settle within 30 days.

receivables are short term and settle within 30 days.

We continually review the credit quality of our counterparties and have not experienced a default.

1 unchanged sentence

Receivables From Users, Net

Receivable from users, net is primarily made up of margin receivables.

Receivables from users, net are primarily made up of margin receivables.

Margin receivables are adequately collateralized by users’ securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses.

12 unchanged sentences

As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements.

As of December 31, 2023, $ 50 million of our U.S.

treasury securities were pledged to a clearing organization to meet margin requirements for our security lending program.

Fractional Share Program

2 unchanged sentences

When a user purchases a fractional share, we record the cash received for the user-held fractional share as pledged collateral and an offsetting liability to repurchase the shares as we concluded that we did not meet the criteria for derecognition under the accounting guidance.

We measure our inventory of securities, user-held fractional shares and our repurchase obligation at fair value at each reporting period via the election of the fair value option, with realized and unrealized gains and losses , which equaled a net loss of $ 12 million and $ 7 million for the years ended December 31, 2021 and 2022, recorded in brokerage and transaction expenses in our consolidated statement of operations.

We measure our inventory of securities, user-held fractional shares and our repurchase obligation at fair value at each reporting period via the election of the fair value option, with realized and unrealized gains and losses recorded in brokerage and transaction expenses in our consolidated statement of operations.

We do not earn revenue from our users when they purchase or sell fractional shares from us.

We earn transaction-based revenue when shares are purchased from market makers to fulfill fractional share transactions.

We earn transaction-based revenue when shares are purchased from or routed to market makers to fulfill fractional share transactions.

Other Current Assets

Other current assets primarily includes securities owned by us for the Robinhood Referral Program and fractional share program, investments, and other receivables.

Other current assets include restricted cash subject to restrictions that expire within one year, other receivables, stablecoin assets owned by us that are considered financial assets, deferred costs of Robinhood Match Incentive Program (defined below), interest and dividends receivable, and securities owned by us used for the Robinhood Referral program and fractional share program.

Robinhood Match Incentive Program

Match incentives on customers’ eligible contributions to their retirement accounts and transfers of assets to our platform are subject to forfeiture if the recipient does not hold the contributed funds or transferred assets in their account for a specified period of time.

The match incentive amount is deferred and recognized over the specified period of time as a reduction to revenue.

If match funds are forfeited, we adjust the deferred match incentive balance and recognize any difference between the deferred match incentive balance and funds recuperated as an adjustment to revenue.

For the year ended December 31, 2023, the amount recognized as a reduction of revenue was immaterial.

We review the deferred match incentive balance for impairment.

For the year ended December 31, 2023, no impairment was recognized.

Robinhood Referral Program

The stock rewarded under this program could be fractional share, one share or shares of one of twenty stocks, selected by our users from our previously purchased inventory of settled shares held exclusively for this program, which are included in other current assets in our consolidated balance sheets.

Each stock reward is assigned at the time the reward is earned and each share cannot be associated with more than one reward at a time.

Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period.

As the inventory of shares are held specifically for the referral program and not as investments of the Company, gains and losses from changes in the fair market value of the shares are recorded within marketing expense in our consolidated statement of operations until the reward is claimed.

The stock rewarded under this program is included in other current assets in our consolidated balance sheets.

Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period, with gains and losses from changes in the fair market value of the shares recorded within marketing expense in our consolidated statement of operations.

Shares are derecognized when they are claimed by the user and delivered to the users’ account.

2 unchanged sentences

The liability is derecognized when the share is claimed by the user and delivered to the users’ account.

If a user does not claim the stock reward within 60 days of being notified, such reward expires and the liability is reversed.

We estimate the amount of unclaimed rewards expected at each reporting period, using historical trends and data, and adjust the accrued liability and marketing expense accordingly.

Property, Software, and Equipment

9 unchanged sentences

Internally developed software is capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended.

Capitalized costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts.

Capitalized costs are amortized over the estimated useful life of the software on a straight-line basis and included in technology and development in the consolidated statements of operations.

Capitalized costs consist of SBC, salaries, and payroll related costs for employees, and fees paid to third-party consultants who are directly involved in development efforts.

Capitalized costs are amortized over

the estimated useful life of the software on a straight-line basis and included in technology and development in the consolidated statements of operations.

We expense software development costs as they are incurred during the preliminary project stage.

1 unchanged sentence

Investments in non-marketable equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value for impairments and price changes from observable transactions in the same or a similar security from the same issuer.

Non-marketable equity securities were not material for the periods presented and were included in other non-current assets on the audited consolidated balance sheets.

Non-marketable equity securities are included in other non-current assets on the consolidated balance sheets and the related balances were not material for the periods presented.

We elected to apply the short-term lease measurement and recognition practical expedient to our leases where applicable, thus leases with an initial term of 12 months or less are not recorded on the balance sheet;

14 unchanged sentences

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations.

See Note 3 - Business Combinations, for further information.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and is allocated to reporting units expected to benefit from the business combination.

2 unchanged sentences

In testing for goodwill impairment, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required.

If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a

reporting unit is less than its carrying amount, then additional impairment testing is not required.

However, if we conclude otherwise, we proceed to a quantitative assessment.

The quantitative assessment compares the estimated fair value of a reporting unit to its book value, including goodwill.

If the fair value exceeds book value, goodwill is considered not to be impaired and no

additional steps are necessary.

If the fair value exceeds book value, goodwill is considered not to be impaired and no additional steps are necessary.

However, if the book value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

See Note 4 - Goodwill and Intangible Assets, for further information.

Intangible Assets, Net

Intangible assets are carried at cost and amortized on a straight-line basis over their estimated useful lives.

The Company evaluates the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining period of amortization.

See Note 4 - Goodwill and Intangible Assets, for further information.

We evaluate the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining period of amortization.

Impairment of Long-lived Assets

We evaluate the recoverability of long-lived assets, including property, software, and equipment, leases, and finite-lived intangible assets whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable compared to the undiscounted future net cash flows the assets are expected to generate.

The impairment test is performed at the asset group level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

When the test results indicate that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value.

Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third–party independent appraisals, as considered necessary.

Payables to Users

16 unchanged sentences

We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, based on the technical merits.

Income tax positions must meet a more-likely-than-not recognition

threshold at the effective date to be recognized.

Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized.

We account for uncertain tax positions, including net interest and penalties, as a component of income tax expense or benefit.

1 unchanged sentence

To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact to our consolidated financial statements and operating results.

Related Parties

We have defined related parties as members of our board of directors, executive officers, principal owners of our outstanding stock, and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations and any other affiliates.

Related party transactions may include any transaction between entities under common control or with a related party.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In March 2022, the staff of the SEC issued SAB 121, which provides guidance to entities that have obligations to safeguard crypto-assets held in custody on behalf of their platform users.

SAB 121 states that the entity should recognize a liability representing its obligation to safeguard such crypto-assets accompanied by a corresponding asset on its balance sheet representing the platform users’ crypto-assets held in custody measured at fair value initially and at each subsequent reporting period.

SAB 121 also states that accompanying disclosures should be considered regarding the entity’s obligation to safeguard crypto-assets for platform users.

We adopted SAB 121 as part of the financial statements covering the interim period ended June 30, 2022, with retrospective application as of the beginning of fiscal year 2022.

As a result of (and solely by virtue of) our adoption of SAB 121, we recognized an asset captioned “Asset related to user cryptocurrencies safeguarding obligation” and a liability captioned “User cryptocurrencies safeguarding obligation” on our consolidated balance sheets.

As of December 31, 2022, the carrying value of each was $ 8.4 billion We also added disclosures to Note 1 - Description of Business and Summary of Significant Accounting Policies and Note 8 - Investments and Fair Value Measurement.

Recently Issued Accounting Pronouncements Not Yet Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2021-08, “Business Combinations (Topic 805):

2 unchanged sentences

Early adoption is permitted.

As of December 31, 2022, the planned adoption of this guidance is not expected to have any impact on our financial statements.

We adopted this guidance effective January 1, 2023.

The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update 2023-08, “Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets.” This guidance requires entities to measure crypto assets within the scope of this guidance at fair value with changes in fair value recognized in net income, and provides comprehensive disclosure requirements.

The guidance is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

Early adoption is permitted.

We adopted this guidance effective January 1, 2023.

The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In October 2023, the FASB issued Accounting Standards Update 2023-06, “Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This amendment will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets.

The amendments in this guidance will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027.

Early adoption is prohibited.

We are currently evaluating the impacts of the amendment on our consolidated financial statements.

In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The amendments in guidance improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income taxes (Topic 740):

Improvements to Income Taxes Disclosures.” This guidance requires annual disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

BUSINESS COMBINATIONS

Acquisition of Say Technologies

On August 13, 2021, we acquired all outstanding stock of Say Technologies.

New York-based Say Technologies, founded in 2017, is an investor communications and shareholder engagement platform.

The acquisition of Say Technologies allows us to empower retail investors to access their full ownership rights by facilitating proxy and issuer materials delivery and making shareholder voting on corporate matters easier.

The acquisition date fair value of the consideration transferred for Say Technologies was $ 133 million, which consisted of the following:

(in millions) Fair Value

Share-based compensation awards attributable to pre-combination services 1

Total consideration $ 133

We entered into holdback agreements with certain employees of Say Technologies for $ 11 million in cash payments, which are contingent upon the continuous service of the employees and treated as post-combination compensation expense over the required service period of three years .

For employees of Say Technologies with unvested Say Technologies equity awards, we issued replacement awards whose aggregate estimated fair value was $ 6 million.

Transaction costs associated with the acquisition, which included legal, due diligence, and other professional fees, were not material.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition:

(in millions) Fair Value

Acquisition of X1

On July 3, 2023, we acquired all of the outstanding equity of X1 Inc.

(“X1”), a U.S.-based company that offers a no-fee credit card with rewards on each purchase.

The acquisition of X1 allows us to provide access to credit for our customers.

In August 2023, X1 was renamed Robinhood Credit.

The acquisition date fair value of the consideration transferred for Robinhood Credit was $ 104 million, which was entirely paid in cash.

The purchase price allocation is based on a preliminary valuation and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during

the measurement period (up to one year from the acquisition date).

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

Cash and cash equivalents $ 14

Accounts receivable 2

Receivable from users, net 3

Prepaid expenses 1

Other current assets 48

Intangible assets 36

Accounts payable, accrued expenses and other current liabilities ( 9 )

Deferred tax liability ( 3 )

Accounts payable and accrued expenses ( 44 )

Other current liabilities ( 25 )

Other non-current liabilities ( 1 )

Net assets acquired $ 104

The excess of purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes.

Goodwill is primarily attributed to the assembled workforce of Say Technologies and anticipated operational synergies.

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes.

Goodwill is primarily attributed to the assembled workforce of Robinhood Credit and anticipated operational synergies.

The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions at the time of acquisition.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

(in millions, except years) Fair Value Useful Life

(in millions, except years)

Fair Value Useful Life

Developed technology $ 25 4

1 unchanged sentence

Trade names 1 1

The overall weighted average useful life of the identified amortizable intangible assets acquired is five years .

The estimated fair values of the intangible assets acquired approximate the amounts a market participant would pay for these intangible assets as of August 13, 2021.

We used the replacement cost method to estimate the fair value of developed technology and the relief from royalty method to estimate the fair value of trade names.

A multi-period excess earnings method was used to estimate the fair value of customer relationships.

The overall weighted average useful life of the identified amortizable intangible assets acquired is 5 years.

The estimated fair value of the intangible assets acquired approximate the amounts a market participant would pay for these intangible assets as of July 3, 2023.

We used the replacement cost method to estimate the fair value of developed technology, and a multi-period excess earnings method was used to estimate the fair value of customer relationships.

Tangible net assets were valued at their respective carrying amounts as of the acquisition date, as these amounts approximated fair value.

During the fourth quarter of 2021, we recorded an immaterial measurement period adjustment to other non-current liabilities with a corresponding decrease to goodwill, based on facts and circumstances in existence as of the effective date of the acquisition.

Results of operations of Say Technologies were included in our results since the date of acquisition and were not material for the year ended December 31, 2022.

Pro forma results of operations for Say Technologies have not been presented as the effect of this acquisition was not material.

During the fourth quarter of 2023, we recorded a $ 7 million measurement period adjustment to accounts payable and accrued expenses with a corresponding increase to goodwill, and an adjustment to increase other current assets and other current liabilities by $ 25 million based on facts and circumstances as of the acquisition date.

Pro forma results of operations for Robinhood Credit have not been presented as the effect of this acquisition was not material.

From the date of the acquisition through December 31, 2023, Robinhood Credit revenues were not material to our consolidated statements of operations.

GOODWILL AND INTANGIBLE ASSETS

8 unchanged sentences

_______________

(1) Substantially all of the additions related to the Say Technologies acquisition as disclosed in Note 3 - Business Combinations, and the remainder related to other immaterial business acquisitions.

(1) Substantially all of the additions related to the acquisition of Robinhood Credit as disclosed in Note 3 - Business Combinations, and the remainder related to other immaterial business acquisitions.

There was no impairment of goodwill for the years ended December 31, 2022 and 2023.

6 unchanged sentences

Customer relationships 12 ( 2 ) 10 8.62

Trade names — $ — — 2.62

Indefinite-lived intangible assets 2 — 2 N/A

5 unchanged sentences

Customer relationships 23 ( 4 ) 19 7.04

Trade names 1 ( 1 ) — —

Indefinite-lived intangible assets 2 — 2 N/A

Total $ 74 $ ( 26 ) $ 48

Amortization expense of intangible assets was nil , $ 3 million, and $ 9 million for the years ended December 31, 2020, 2021, and 2022.

Amortization expense of intangible assets was $ 3 million, $ 9 million, and $ 14 million for the years ended December 31, 2021, 2022, and 2023.

There was no impairment of intangible assets for the years ended December 31, 2022 and 2023.

2 unchanged sentences

Disaggregation of Revenues

The following table presents our revenue disaggregated by revenue source:

The following table presents our revenues disaggregated by revenue source:

Year Ended December 31,

6 unchanged sentences

Net interest revenues:

Margin interest 67 132 177

Interest on corporate cash and investments 1 103 288

Securities lending, net 98 136 89

Margin interest 132 177 243

Interest on segregated cash and cash equivalents and deposits 4 57 210

Cash Sweep, net 1 3 22

Cash Sweep 3 22 123

Securities lending, net 136 89 79

Credit card, net — — 9

Interest expenses related to credit facilities ( 20 ) ( 24 ) ( 23 )

2 unchanged sentences

Total net revenues $ 1,815 $ 1,358 $ 1,865

For our Fully-Paid Securities Lending program, we earn revenue for lending certain securities based on demand for those securities and portions of such revenues are paid to participating users, and those payments are recorded as interest expense.

The program was launched during the three months ended

June 30, 2022.

The following table presents interest revenue earned and interest expense paid from Fully-Paid Securities Lending:

(in millions) 2022 2023

Interest revenue $ 11 $ 44

Interest expense ( 2 ) ( 7 )

Fully-Paid Securities Lending, net

Contract Balances

Contract receivables are recognized when we have an unconditional right to invoice and receive payment under a contract and are derecognized when cash is received.

Transaction-based revenue receivables due from market makers are reported in receivables from brokers, dealers, and clearing organizations while other revenue receivables due from our relationship with a third-party investor communications company are reported in other current assets on the consolidated balance sheets.

Contract liabilities, which consist of unearned subscription revenue, are recognized when users remit cash payments in advance of the time we satisfy our performance obligations and are recorded as other current liabilities on the consolidated balance sheets.

Transaction-based revenue receivables due from market makers are reported in receivables from brokers, dealers, and clearing organizations while other revenue receivables related to proxy revenues due from issuers are reported in other current assets on the consolidated balance sheets.

Contract liabilities, which primarily consist of unearned subscription revenue, are recognized when users remit cash payments in advance of the time we satisfy our performance obligations and are recorded as other current liabilities on the consolidated balance sheets.

The table below sets forth contract receivables and liabilities balances for the periods indicated:

9 unchanged sentences

Changes during the period $ 27 $ 1

The difference between the opening and ending balances of our contract receivables primarily results from lower transaction-based revenue driven by the market environment which had a negative impact on the number of traders and Notional Trading Volume and timing differences between our performance and counterparties’ payments.

The change in contract receivables was primarily driven by increases in trading volume for Cryptocurrencies, Equities, and Options for the month ended December 31, 2023 compared to the same period in the prior year.

Receivable balances are also impacted by the timing differences between our performance and counterparties’ payments.

We recognized all revenue from amounts included in the opening contract liability balances for the year end December 31, 2023.

1 unchanged sentence

April 2022 Restructuring

On April 26, 2022, we announced the April 2022 Restructuring as part of our efforts to improve efficiency and operating costs, increase our velocity, and ensure that we are responsive to the changing needs of our customers.

On April 26, 2022, we announced the April 2022 Restructuring as part of our efforts to improve efficiency and operating costs, increase our velocity, and ensure that we are responsive to the changing

needs of our customers.

The April 2022 Restructuring involved approximately 330 employees, representing approximately 9 % of our full-time employees at that time.

We allowed affected employees’ share-based awards to continue vesting over a transitional period (generally two months during which they remained employed but were not expected to provide active service), which were generally accounted for as a modification allowing a portion of the awards to vest that otherwise would have been forfeited.

However, as a result of the reversal of share-based compensation expense that had been previously recognized (under the accelerated attribution method, generally), the April 2022 Restructuring resulted in a net reduction to share-based compensation of $ 24 million, which was recognized in the second quarter of 2022 (refer to Note 13 - Common Stock and Stockholders' (Deficit) Equity, for more information).

However, as a result of the reversal of SBC expense that had been previously recognized (under the accelerated attribution method, generally), the April 2022 Restructuring resulted in a net reduction to SBC of $ 24 million, which was recognized in the second quarter of 2022 (refer to Note 14 - Common Stock and Stockholders' (Deficit) Equity, for more information).

In addition, we recognized $ 17 million of cash restructuring and related charges in the second quarter of 2022, which primarily consisted of employee-related wages, benefits, and severance expense.

2 unchanged sentences

On August 2, 2022, we announced the August 2022 Restructuring, which involved approximately 780 employees, representing approximately 23 % of our full-time employees at the time, the planned closure of two offices, and related matters.

These actions were part of a Company reorganization into a general manager (“GM”) structure under which GMs have assumed broad responsibility for our individual businesses.

These actions were part of a Company reorganization into a GM structure under which GMs have assumed broad responsibility for our individual businesses.

As we continued to execute the August 2022 Restructuring, our lower headcount led us to evaluate our real estate portfolio.

3 unchanged sentences

We attributed the impairments on a relative carrying value basis between the right-of-use assets and leasehold improvements.

In addition, we accelerated

depreciation of $ 9 million related to other fixed assets.

In addition, we accelerated depreciation of $ 9 million related to other fixed assets.

The impairments were recognized in general and administrative expense on our consolidated statements of operations.

Similar to the April 2022 Restructuring, we allowed affected employees’ share-based awards to continue vesting over a transitional period allowing a portion of the awards to vest that otherwise would have been forfeited.

However, as a result of the reversal of share-based compensation expense that had been previously recognized (under the accelerated attribution method, generally), the August 2022 Restructuring resulted in a net reduction to share-based compensation of $ 53 million, which was recognized in the third quarter of 2022 (refer to Note 13 - Common Stock and Stockholders' (Deficit) Equity, for more information).

However, as a result of the reversal of SBC expense that had been previously recognized (under the accelerated attribution method, generally), the August 2022 Restructuring resulted in a net reduction to SBC of $ 53 million, which was recognized in the third quarter of 2022 (refer to Note 14 - Common Stock and Stockholders' (Deficit) Equity, for more information).

In addition, we recognized $ 34 million of cash restructuring and related charges primarily related to employee-related wages, benefits, and severance expense.

As of December 31, 2022, all of the restructuring charges relating to the April 2022 Restructuring had been paid in full.

As of December 31, 2022, all of the restructuring charges relating to the August 2022 Restructuring had been paid in full.

ALLOWANCE FOR CREDIT LOSSES AND CREDIT CARD EXPECTED LOSS LIABILITY

Allowance for Credit Losses

Substantially all of the allowance for credit losses relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and losses on margin lending.

Substantially all of the allowance for credit losses relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions, losses on margin lending, and reserves on proxy revenue receivables.

The following table summarizes the allowance for credit losses:

5 unchanged sentences

Ending balance $ 40 $ 18 $ 16

Credit Card Expected Loss Liability

The following table summarizes the credit card expected loss liability as part of accounts payable and accrued expenses on the consolidated balance sheets:

Year Ended December 31,

(in millions)

Beginning balance $ —

Opening balance from acquisition of Robinhood Credit

Provision for credit losses 19

Payments to Coastal Bank

Ending balance $ 32

INVESTMENTS AND FAIR VALUE MEASUREMENT

Investments are included in other current assets on the consolidated balance sheet and consisted of the following:

Available-for-sale

As of December 31, 2022, our available-for-sale investments, which are included in other current assets on the consolidated balance sheets, were $ 10 million with no significant unrealized gains or losses.

These investments had a stated contractual maturity or redemption date within one year.

As of December 31, 2023, we had a $ 500 million time deposit that was an available-for-sale investment classified as cash equivalents on the consolidated balance sheets.

This investment has a maturity of three months or less at the time of purchase, and an aggregate market value equal to amortized cost.

Refer to Fair Value of Financial Instruments below for further details.

Held-to-maturity

We had no held-to-maturity investments as of December 31, 2022.

The following table summarizes our held-to-maturity investments as of December 31, 2023:

December 31, 2023

(in millions) Amortized Cost Unrealized Gains Unrealized Losses Fair Value

(in millions) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value

Debt securities:

Asset-backed securities $ 5 $ — $ — $ 5

Corporate debt securities $ 205 $ — $ — $ ( 1 ) $ 204

Treasury securities 202 — — — 202

government agency securities 42 — — — 42

Certificates of deposit 34 — — — 34

Commercial paper 3 — — — 3

Corporate bonds 7 — — 7

Government bonds 1 — — 1

Total investments $ 27 $ — $ — $ 27

Total held-to-maturity investments $ 486 $ — $ — $ ( 1 ) $ 485

There were no sales of held-to-maturity investments during the year ended December 31, 2023.

The table below presents the amortized cost and fair value of held-to-maturity investments by contractual maturity;

the maximum maturity is two years:

December 31, 2023

(in millions) Amortized Cost Unrealized Gains Unrealized Losses Fair Value

(in millions) Within 1 Year 1 to 2 Years Total

Amortized cost

Debt securities:

Corporate debt securities $ 153 $ 52 $ 205

Treasury securities 184 18 202

government agency securities 39 3 42

Certificates of deposit 34 — 34

Commercial paper 3 — 3

Corporate bonds 2 — — 2

Government bonds 3 — — 3

Total investments $ 10 $ — $ — $ 10

All of our debt securities as of December 31, 2022 had a stated contractual maturity or redemption date within one year.

Total held-to-maturity investments $ 413 $ 73 $ 486

Debt securities:

Corporate debt securities $ 152 $ 52 $ 204

Treasury securities 184 18 202

government agency securities 39 3 42

Certificates of deposit 34 — 34

Commercial paper 3 — 3

Total held-to-maturity investments $ 412 $ 73 $ 485

Fair Value of Financial Instruments

5 unchanged sentences

Other current assets:

Asset-backed securities — 5 — 5

Equity securities - securities owned 8 — — 8

Commercial paper — 5 — 5

Corporate bonds — 7 — 7

Government bonds 3 — — 3

Equity securities - securities owned 14 — — 14

Corporate bonds — 2 — 2

Asset related to user cryptocurrencies safeguarding obligation — 8,431 — 8,431

User-held fractional shares 997 — — 997

Total financial assets $ 1,743 $ 8,438 $ — $ 10,181

Fractional share repurchase obligations $ 1,834 $ — $ — $ 1,834

User cryptocurrencies safeguarding obligation $ — $ 8,431 $ — $ 8,431

Fractional shares repurchase obligations 997 — — 997

Total financial liabilities $ 997 $ 8,431 $ — $ 9,428

2 unchanged sentences

Cash equivalents:

Time deposit $ — $ 500 $ — $ 500

Money market funds 146 — — 146

Deposits with clearing organizations:

Treasury securities 50 — — 50

Other current assets:

Commercial paper — 5 — 5

Corporate bonds — 2 — 2

Government bonds 3 — — 3

Stablecoin 20 — — 20

Equity securities - securities owned 10 — — 10

Other non-current assets:

Money market funds - escrow account 2 — — 2

Asset related to user cryptocurrencies safeguarding obligation — 14,708 — 14,708

2 unchanged sentences

User cryptocurrencies safeguarding obligation $ — $ 14,708 $ — 14,708

Fractional share repurchase obligations 997 — — 997

Fractional shares repurchase obligations 1,592 — — 1,592

Total financial liabilities $ 1,592 $ 14,708 $ — $ 16,300

The fair value for certain financial instruments that are not required to be measured or reported at fair value was presented on our consolidated balance sheets as follows:

December 31, 2023

(in millions) Level 1 Level 2 Level 3 Total

Held-to-maturity investments:

Corporate debt securities $ — $ 204 $ — $ 204

Treasury securities 202 — — 202

government agency securities — 42 — 42

Certificates of deposit — 34 — 34

Commercial paper — 3 — 3

Total held-to-maturity investments $ 202 $ 283 $ — $ 485

The fair values used for held-to-maturity investments are obtained from an independent pricing service and represent fair values determined by pricing models using a market approach that considers observable market data, such as interest rate volatility, relevant yield curves, credit spreads and prices from market makers and live trading systems.

Management reviews the valuation methodology and quality controls utilized by the pricing services in management's overall assessment of the reasonableness of the fair values provided.

During the year ended December 31, 2023, we did not have any transfers in or out of Level 3 assets or liabilities.

1 unchanged sentence

Safeguarded user cryptocurrencies were as follows:

(in millions) December 31, 2022

Dogecoin (DOGE) $ 2,802

Ethereum (ETH) 2,341

Year Ended December 31,

(in millions) 2022 2023

Bitcoin (BTC) $ 2,327 $ 6,149

Ethereum (ETH) 2,341 3,761

Dogecoin (DOGE) 2,802 3,319

Other 961 1,479

Total user cryptocurrencies safeguarding obligation and corresponding asset $ 8,431 $ 14,708

The fair value of the user cryptocurrencies safeguarding obligation and the corresponding asset were determined based on observed market pricing representing the last price executed for trades of each cryptocurrency as of December 31, 2022.

Convertible Notes and Warrant Liability

In February 2021, we issued two tranches of convertible notes (the “convertible notes”) and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (the “warrant liability”).

We elected the fair value option for both tranches of the convertible notes as we believe it best reflects their underlying economics.

Under the fair value option, the convertible notes were initially measured at their issuance date estimated fair value and subsequently remeasured at their estimated fair value at the end of each reporting period.

Upon the closing of the IPO, all of our outstanding convertible notes and warrants were reclassified from liability to equity and the fair value was no longer required to be remeasured.

The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability:

December 31, 2021

(in millions) Convertible notes (2)

Warrant liability

DERIVATIVES AND HEDGING ACTIVITIES

As of December 31, 2023, we had two interest rate floors that were designated as cash flow hedges of interest rate risk associated with our margin receivables.

One interest rate floor with a notional amount of $ 2 billion was effective as of June 30, 2023 and another with a notional amount of $ 1 billion will be effective in the first quarter of 2024.

Both interest rate floors have a maturity of six months .

As of December 31, 2023, the fair value of hedging instruments was immaterial and included in other current assets in our consolidated balance sheets.

We had no derivatives and hedging activities during the year ended December 31, 2022.

Amounts reported in AOCI related to interest rate floors will be reclassified to net interest revenues as interest payments are received or paid on the hedged items.

During the next 12 months, we expect to reclassify $ 3 million of losses from AOCI as a reduction to net interest revenues.

As of December 31, 2023, we hedged our exposure to the variability in future cash flows for forecasted transactions over a maximum period of one year .

The following table summarizes the amount of gain or loss recognized in AOCI on our consolidated financial statements:

Year Ended December 31,

(in millions) 2023

Derivatives designated as hedging instruments:

Loss on derivatives included in effectiveness assessment $ ( 4 )

Loss reclassified from AOCI into net interest revenues included in effectiveness assessment

Total $ ( 3 )

The following table summarizes the components of AOCI related to hedging activities on our consolidated financial statements:

Year Ended December 31,

(in millions) 2023

Beginning balance $ —

Issued during the period 3,299 253

Change in fair value (1)

Reclassifications to equity ( 5,218 ) ( 380 )

Other comprehensive loss before reclassifications, net of tax ( 4 )

Reclassification adjustment for net losses included in net interest revenues, net of tax

Other comprehensive loss after reclassifications, net of tax $ ( 3 )

Ending balance $ ( 3 )

________________

(1) We have elected to present the component related to accrued interest in the change in fair value of convertible notes and warrant liability.

(2) None of the expense recorded due to changes in fair value for the convertible notes was attributable to the change in the instrument-specific credit risk.

The components of income (loss) before income taxes were as follows:

22 unchanged sentences

Share-based compensation

Tender offer compensation 26.1 % — % — %

( 0.5 ) ( 12.3 ) ( 29.7 )

Research and development credits 1.3 3.6 5.6

Non-deductible regulatory settlements — % ( 11.7 ) % ( 0.3 ) %

Non-deductible change in convertible notes and warrant ( 0.3 ) — —

Non-deductible regulatory settlements ( 11.7 ) ( 0.3 ) ( 4.6 )

Permanent differences — ( 0.1 ) ( 0.2 )

4 unchanged sentences

Year Ended December 31,

(in millions)

Deferred tax assets:

User cryptocurrencies safeguarding obligation

$ 2,167 $ 3,660

Net operating loss carryforwards 266 176

Tax credit carryforwards 134 161

Share-based compensation 135 85

Research and Experimentation expenditure amortization 83 151

Lease liability 40 38

Share-based compensation

Accruals and other liabilities 21 29

Lease liabilities 38 27

Total deferred tax assets $ 2,809 $ 4,266

16 unchanged sentences

federal, state, and certain foreign net deferred tax assets may not be realized, and accordingly, the net deferred tax assets have been fully offset by a valuation allowance.

The valuation allowance increased by approximately $ 112 million for the year ended December 31, 2022.

The valuation allowance decreased by approximately $ 33 million for the year ended December 31, 2023.

As of December 31, 2023, we have $ 635 million of U.S.

1 unchanged sentence

net operating loss carryforwards available to reduce future taxable income.

federal net operating loss carryforwards, $ 1 million will begin to expire in 2037 and the $ 1,011 million will carryforward indefinitely.

federal net operating loss carryforwards, $ 635 million will carryforward indefinitely.

Our state net operating losses begin to expire in 2024 , while our non-U.S.

net operating losses do not expire.

As of December 31, 2023, we have utilized federal and state net operating losses generated from tax years 2013 through 2021.

federal tax credit carryforwards of $ 152 million that will begin to expire in 2041 , if not utilized, and state tax credit carryforwards of $ 98 million that will begin to expire in 2026 .

As of December 31, 2023, we have utilized U.S.

federal and state tax credits generated from tax years 2014 through 2021.

Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions.

38 unchanged sentences

however, we do not net securities borrowing and lending transactions.

Therefore, activity related to securities borrowing and lending activities are presented gross in our consolidated balance sheets (refer to Note 1 - Description of Business and Summary of Significant Accounting Policies, for more information).

Therefore, activity related to securities borrowing and lending activities are presented gross in our consolidated balance sheets.

The following tables set forth certain balances related to our securities borrowing and lending activities:

17 unchanged sentences

As described in Note 1 - Description of Business and Summary of Significant Accounting Policies, we obtain securities on terms that permit us to pledge and/or transfer securities to others.

As of December 31, 2021 and 2022, we were permitted to re-pledge securities with a fair value of $ 9.21 billion and $ 4.36 billion under margin account agreements with users, and securities with a fair value of $ 0.3 million and $ 18.4 million that we had borrowed under MSLAs with third parties.

Under the Fully-Paid Securities Lending program, as of December 31, 2022, we were permitted to re-pledge securities with a fair value of $ 4.45 billion including securities with a fair value of $ 490.4 million that we had borrowed from users.

As of December 31, 2022 and 2023, we were permitted to re-pledge securities with a fair value of $ 4.36 billion and $ 4.78 billion under margin account agreements with users, and securities with a fair value of $ 18 million and an immaterial balance that we had borrowed under MSLAs with third parties.

Under the Fully-Paid Securities Lending program, as of December 31, 2023, we were permitted to re-pledge securities with a fair value of $ 14.03 billion including securities with a fair value of $ 1.54 billion that we had borrowed from users.

As of December 31, 2022 and 2023, we had re-pledged securities with a fair value of $ 1.63 billion and $ 3.19 billion, in each case under MSLAs and Fixed-Term Securities Lending Agreements with third parties.

In addition, as of December 31, 2021 and 2022, we had re-pledged $ 220.1 million and $ 231.2 million of the permitted amounts under the Margin Securities Lending program with clearing organizations to meet deposit requirements.

In addition, as of December 31, 2022 and 2023, we had re-pledged $ 231 million and $ 676 million of the permitted amounts under the margin account agreements with clearing organizations to meet deposit requirements.

FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK

3 unchanged sentences

In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $ 600.0 million with a maturity date of October

In April 2021, we further increased the aggregate credit amount available under the October

2019 Credit Facility to $ 625.0 million.

In April 2021, we further increased the aggregate credit amount available under the October 2019 Credit Facility to $ 625.0 million.

Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00 % or (b) the ABR.

13 unchanged sentences

April 2023 Credit Facility

In April 2021, we entered into a $ 2.18 billion committed and secured revolving line of credit, subject to certain borrowing base limitations, with a maturity date of April 15, 2022 (the “April 2021 Credit Facility”).

Borrowings from the April 2021 Credit Facility must be specified to be Tranche A, Tranche B, Tranche C or a combination thereof.

On March 24, 2023, RHS, our wholly-owned subsidiary, entered into the Second Amended and Restated Credit Agreement (the “April 2023 Credit Agreement”) among RHS, as borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, amending and restating the $ 2.275 billion 364-day senior secured revolving credit facility entered into in April 2022.

The April 2023 Credit Agreement provides for a 364-day senior secured revolving credit facility with a total commitment of $ 2.175 billion.

Under circumstances described in the April 2023 Credit Agreement, the aggregate commitments may be increased by up to $ 1.0875 billion, for a total commitment under the April 2023 Credit Agreement of $ 3.2625 billion.

Borrowings under the credit facility must be specified to be Tranche A, Tranche B, Tranche C or a combination thereof.

Tranche A loans are secured by users’ securities purchased on margin and are used primarily to finance margin loans.

Tranche B loans are secured by the right to the return from National Securities Clearing Corporation (“NSCC”) of NSCC margin deposits and cash and property in a designated collateral account and used for the purpose of satisfying NSCC deposit requirements.

Tranche C loans are secured by the right to the return of eligible funds from any reserve account of the borrower and cash and property in a designated collateral account and used for the purpose of satisfying reserve requirements under Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate is calculated as a per annum rate equal to 1.25 % for Tranche A loans and 2.50 % for Tranche B and Tranche C loans, plus the Short-Term Funding Rate at the applicable time.

The Short-Term Funding Rate is equal to the greatest of (i) the Eurodollar Rate for a one month interest period on such day, which equals to the Eurodollar Base Rate that is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time, (ii) the Federal Funds Effective Rate (as defined in the agreement) and (iii) the Overnight Bank Funding Rate (as defined in the agreement) in effect on such day.

There were no outstanding borrowings under the April 2021 Credit Facility at December 31, 2021.

We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.50 % on any unused amount of the April 2021 Credit Facility quarterly in arrears.

In April 2022, we entered into a $ 2.275 billion committed and secured revolving line of credit with a maturity date of April 10, 2023 (the “April 2022 Credit Facility”), amending and restating the April 2021 Credit Facility.

Under circumstances described in the agreement for the April 2022 Credit Facility, the aggregate commitments may be increased by up to $ 1.138 billion, for a total commitment under the agreement of $ 3.413 billion.

The April 2022 Credit Facility terms are otherwise substantially the same as

the April 2021 Credit Facility in all material aspects except for the Short-Term Funding Rate, which is equal to the greatest of (i) Daily Simple SOFR (as defined in the agreement) plus 0.10 %, (ii) the Federal Funds Effective Rate (as defined in the agreement) and (iii) the Overnight Bank Funding Rate (as defined in the agreement), in each case, in effect on such day.

There were no outstanding borrowings under the April 2022 Credit Facility at December 31, 2022.

We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.50 % on any unused amount of the April 2022 Credit Facility quarterly in arrears.

Borrowings under the April 2023 Credit Agreement will bear interest at a rate per annum equal to the greatest of (i) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10 %, (ii) the Federal Funds Effective Rate (as defined in the April 2023 Credit Agreement) and (iii) the Overnight Bank Funding Rate (as defined in the April 2023 Credit Agreement), in each case, as of the day the loan is initiated, plus an applicable margin rate.

The applicable margin rate is 1.25 % for Tranche A loans and 2.5 % for Tranche B and Tranche C loans.

Undrawn commitments will accrue commitment fees at a rate per annum equal to 0.5 %.

The April 2023 Credit Agreement requires RHS to maintain a minimum consolidated tangible net worth and a minimum excess net capital, and subjects RHS to a specified limit on minimum net capital to aggregate debit items.

In addition, the April 2023 Credit Agreement contains certain customary affirmative and negative covenants, including limitations with respect to debt, liens, fundamental changes, asset sales, restricted payments, investments and transactions with affiliates, subject to certain exceptions.

Amounts due under the April 2023 Credit Agreement may be accelerated upon an “event of default,” as defined in the April 2023 Credit Agreement, such as failure to pay amounts owed thereunder when due, breach of a covenant, material inaccuracy of a representation, or occurrence of bankruptcy or insolvency, subject in some cases to cure periods.

The October 2019 Credit Facility, as amended, and the April 2023 Credit Facility contain customary covenants, including limitations with respect to debt, liens, fundamental changes, asset sales, restricted payments, investments and transactions with affiliates, subject to certain exceptions.

We were in compliance with all covenants under these facilities as of December 31, 2022 and 2023, as applicable.

Credit Card Funding Trust

Robinhood Credit has a trust subsidiary that has entered into an arrangement with a financial institution to purchase up to $ 100 million of credit card receivables originated by Coastal Bank under the Program Agreement, providing incremental availability to offer customer credit.

Since inception of the arrangement and as of December 31, 2023, no purchases have occurred and no balances were outstanding with this financial institution.

Off-Balance Sheet Risk

Coastal Bank Program Agreement

Under the Program Agreement, most recently amended in November 2023, Coastal Bank may fund up to $ 300 million of credit card receivables.

Robinhood Credit pays Coastal Bank interest which accrues daily based on the average balance of advances during the month at the federal funds rate plus a margin of 3.75 % on the first $ 150 million and 3.00 % on such amounts in excess of $ 150 million.

The credit card receivables and the funding from Coastal Bank are treated as off-balance sheet, considering Coastal Bank is the legal lender and originator, the party to which the customer has a creditor-borrower relationship;

and the legal owner of the receivables.

As of December 31, 2023, off-balance sheet customer principal amounts funded under the Program Agreement were approximately $ 205 million.

The related accrued interest payable and interest expense were immaterial.

Transaction Settlement

In the normal course of business, we engage in activities involving settlement and financing of securities transactions.

3 unchanged sentences

COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY

Redeemable Convertible Preferred Stock

In February 2021, we authorized 244.3 million shares of Series G-1 redeemable convertible preferred stock in connection with our convertible notes.

No shares of Series G-1 were issued or outstanding immediately prior to our IPO.

Immediately prior to our IPO, all outstanding shares of redeemable convertible preferred stock were converted into shares of our Class A common stock on a one -to-one basis and their carrying value of $ 2.18 billion was reclassified into stockholders' equity.

As such, there were no shares of redeemable convertible preferred stock authorized or issued and outstanding as of December 31, 2021 and 2022.

Preferred Stock

Pursuant to our Charter, our board of directors may issue shares of our preferred stock in one or more series and, subject to the applicable law of the State of Delaware, our board of directors may set the powers, rights, preferences, qualifications, limitations and restrictions of such preferred stock.

As of December 31, 2022, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding.

December 31, 2023, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding.

Voting Rights

2 unchanged sentences

Holders of our Class A common stock are entitled to one vote per share on all matters to be voted upon by our stockholders, holders of our Class B common stock are entitled to 10 votes per share on all matters to be voted upon by our stockholders and, except as otherwise required by applicable law, holders of our Class C common stock are not entitled to vote on any matter to be voted upon by our stockholders.

of our Class A common stock and Class B common stock vote together as a single class, unless otherwise required by our Charter or applicable law.

The holders of our Class A common stock and Class B common stock vote together as a single class, unless otherwise required by our Charter or applicable law.

Conversion of Class B Common Stock

13 unchanged sentences

No redemption or sinking fund provisions are applicable to our common stock.

The rights, preferences and

privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

The convertible notes issued in February 2021 (see Note 8 - Investments and Fair Value Measurement for further information) were converted into 137.3 million shares of Class A common stock at a conversion price of $ 26.60 per share upon completion of our IPO.

The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

The convertible notes issued in February 2021 were converted into 137.3 million shares of Class A common stock at a conversion price of $ 26.60 per share upon completion of our IPO.

As of December 31, 2023, warrants outstanding consisted of warrants to purchase 14.3 million shares of Class A common stock with a strike price of $ 26.60 per share.

2 unchanged sentences

As of December 31, 2023, the warrants have not been exercised and are included as a component of additional paid in capital on the consolidated balance sheets.

Share Repurchase and Retirement

On August 30, 2023, we entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with the United States Marshal Service (the “USMS”), for and on behalf of the United States, pursuant to which we agreed to repurchase 55,273,469 shares of the Company's Class A common stock from the USMS for $ 10.96 per share.

The transaction closed on August 31, 2023.

We repurchased, and subsequently retired, all of the shares for an aggregate amount of $ 608 million, recorded entirely in additional paid-in capital on the consolidated balance sheet in absence of retained earnings, which included $ 2 million in transaction costs.

As of December 31, 2023, we have accrued $ 3 million, also recorded in additional paid-in capital, related to the 1% excise tax on net share repurchases as a result of the Inflation Reduction Act of 2022.

Equity Incentive Plans

2 unchanged sentences

Our 2013 Plan was terminated in connection with adoption of our 2020 Plan, and our 2020 Plan was terminated in connection with the adoption of our 2021 Plan (defined below) but any awards outstanding under our 2013 Plan and 2020 Plan remain in effect in accordance with their terms.

Any shares that were or otherwise would become available for grant under the 2013 Plan or 2020 Plan will be available for grant under the 2021 Plan.

Any shares that were or otherwise would

become available for grant under the 2013 Plan or 2020 Plan will be available for grant under the 2021 Plan.

No new awards may be granted under our 2013 Plan or 2020 Plan.

4 unchanged sentences

Generally, options granted are exercisable for up to ten years from the date of grant.

RSUs granted generally vest quarterly on a straight-line basis and expire seven years from the date of grant.

RSUs granted mostly vest monthly on a straight-line basis and expire seven or ten years from the date of grant.

As of December 31, 2023, an aggregate of 405 million shares had been authorized for issuance under the 2013 Plan, 2020 Plan, and 2021 Plan, of which 131 million shares had been issued under the plans, 69 million shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 205 million shares remained available for new grants under the 2021 Plan.

7 unchanged sentences

Exercised during the period ( 2,443,991 ) 2.07

Cancelled and forfeited during the period ( 1,330,736 ) 13.31

Expired during the period ( 179,524 ) 13.14

Forfeited during the period ( 461,015 ) 14.15

Balance at December 31, 2023 12,141,566 $ 4.78 3.76 $ 100

1 unchanged sentence

Options exercisable at December 31, 2023 10,667,515 $ 3.50 3.57 $ 100

The weighted-average grant date fair value of options granted during the years ended December 31, 2020 and 2022 was $ 3.64 and $ 14.15 .

No options were granted during 2021.

The weighted-average grant date fair value of options granted during the years ended December 31, 2022 was $ 14.15 .

No options were granted during 2021 nor 2023.

The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

1 unchanged sentence

2021 2022 2023

Dividend yield 0 % N/A 0 %

Risk-free interest rate 0.61 % N/A 1.61 %

Expected volatility 36.69 % N/A 40.72 %

Expected term (years) 6.04 N/A 4.61

Dividend yield N/A 0 % N/A

Risk-free interest rate N/A 1.61 % N/A

Expected volatility N/A 40.72 % N/A

Expected term (years) N/A 4.61 N/A

The total intrinsic value of options exercised during 2021, 2022, and 2023 was $ 179 million, $ 25 million, and $ 20 million.

The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the market value of the stock at the time of exercise.

The total grant date fair value of options that vested for each of the periods presented was immaterial.

grant date fair value of options that vested during 2023 was $ 7 million and was immaterial for 2021 and 2022.

Time-Based RSUs

7 unchanged sentences

Unvested at December 31, 2023 34,551,998 $ 14.99

The fair value of Time-Based RSUs vested during 2021 and 2022 was $ 1,054 million and $ 542 million, respectively.

No Time-Based RSUs vested during 2020.

The fair value of Time-Based RSUs vested during 2021 2022 and 2023 was $ 1,054 million, $ 542 million and $ 490 million , respectively.

Market-Based RSUs

In 2019 and 2021, we granted Market-Based RSUs to our founders under which vesting is conditioned upon both the achievement of share price targets and the continued employment by each recipient over defined service periods.

There were no Market-Based RSUs granted during 2022.

There were no Market-Based RSUs granted during 2022 or 2023.

As of December 31, 2023, none of the 2021 Market-Based RSUs had vested based on share price targets.

In February 2023, the 2021 Market-Based RSUs (corresponding to 35.3 million unvested shares) were canceled (see Note 18 - Subsequent Events).

In February 2023, we cancelled the 2021 Market-Based RSUs of 35.5 million unvested shares.

We recognized $ 485 million SBC expense related to the cancellation during the year ended December 31, 2023 , which was included in the general and administrative expense in our consolidated statements of operations.

No further expense associated with these awards was recognized after the cancellation.

No other payments, replacement equity awards or benefits were granted in connection with the cancellation.

The following table summarizes the activity related to our Market-Based RSUs for the year ended December 31, 2023:

5 unchanged sentences

Vested ( 461,062 ) — ( 461,062 ) 2.34

Forfeited — — —

Cancelled — ( 35,520,000 ) ( 35,520,000 ) 22.68

Unvested at December 31, 2023 345,796 22,130,926 22,476,722 $ 25.67

2 unchanged sentences

(2) Represents RSUs that have not yet become eligible to vest because share price targets have not yet been achieved.

The fair value of Market-Based RSUs that vested during 2021 and 2022 was $ 161 million and $ 5 million .

No Market-Based RSUs vested during 2020.

The fair value of Market-Based RSUs that vested during 2021, 2022, and 2023 was $ 161 million,$ 5 million and $ 5 million.

2021 Employee Share Purchase Plan

10 unchanged sentences

Share-Based Compensation

The following table presents share-based compensation in our consolidated statements of operations for the periods indicated:

The following table presents SBC in our consolidated statements of operations for the periods indicated:

Year Ended December 31,

7 unchanged sentences

_______________

( 1) Included in the table above, we recorded share-based compensation expense of $ 323 million related to Market-Based RSUs, $ 314 million related to Time-Based RSUs, $ 11 million related to ESPP, and $ 6 million related to options for the year ended December 31, 2022.

In the year ended December 31, 2020, subsequent to the sale of our Series G redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (the “2020 Tender Offer”).

The 2020 Tender closed on November 13, 2020, when existing employees sold 1.4 million shares of our common stock for an aggregate purchase price of $ 22 million.

With the 2020 Tender Offer, we believe that we had established a pattern of cash settlement of immature shares and stock options only during a very discrete set of circumstances in which we opened a tender offer in conjunction with a preferred stock financing.

As such, during the 2020 Tender Offer period, we recorded a liability equal to the fair value of the maximum number of options representing immature shares that could have been redeemed in the tender offer.

To the extent that this liability exceeded amounts previously recognized in equity, the excess was recognized as additional share-based compensation expense.

Following the closing of the 2020 Tender Offer, the remaining liability of $ 19 million was reclassified to additional paid-in capital.

We recorded share-based compensation expense of $ 17 million in connection with this tender offer in the year ended December 31, 2020.

Out of the $ 17 million expenses, $ 16 million related to options and $ 2 million related to Time-Based RSUs.

( 1) Included in the table above, we recorded SBC expense of $ 567 million related to Market-Based RSUs, $ 292 million related to Time-Based RSUs, $ 8 million related to ESPP, and $ 4 million related to options for the year ended December 31, 2023.

The tax benefits recognized in the consolidated statements of operations for SBC were $ 73 million for year ended December 31, 2023 and were no t material during the years ended December 31, 2021 and 2022.

In March 2021, we modified certain Time-Based RSUs of approximately 500 employees to remove the one-year vesting cliff, considered to be an improbable to improbable modification.

The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $ 39.75 per share was used to calculate share-based compensation expense.

We have capitalized share-based compensation expense related to internally developed software of $ 1 million , $ 35 million , and $ 28 million for years 2020, 2021, and 2022.

The April 2022 Restructuring and the August 2022 Restructuring resulted in net reductions of $ 24 million and $ 53 million in share-based compensation expense, respectively.

Both reductions were substantially all related to Time-Based RSUs.

The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $ 39.75 per share was used to calculate SBC expense.

We have capitalized SBC expense related to internally developed software of $ 35 million , $ 28 million , and $ 17 million for years 2021, 2022, and 2023.

The April 2022 Restructuring and the August 2022 Restructuring resulted in net reductions of $ 24 million and $ 53 million in SBC expense, respectively.

Both reductions were substantially related to

Time-Based RSUs.

The net reductions were primarily recognized in technology and development expense, $ 16 million and $ 22 million, and general and administrative expense, $ 6 million and $ 28 million.

As of December 31, 2022, there was $ 1.23 billion of unrecognized share-based compensation expense that is expected to be recognized over a weighted-average period of 1.99 years.

Scheduled vesting for awards outstanding as of December 31, 2022 , is as follows:

(in millions, except for number of shares) Number of Shares (1)

2023 24,081,983 $ 563

2024 17,662,243 368

2025 12,342,086 247

2026 4,286,976 49

Total 58,373,288 $ 1,227

(1) Excludes future ESPP shares and Market-Based RSUs for which the share price target has not been met as we cannot forecast the vesting of these shares.

The above schedule excludes an estimate for forfeitures, which are recognized as they occur, and future equity grants.

NET INCOME (LOSS) PER SHARE

As of December 31, 2023, there was $ 355 million of unrecognized SBC expense that is expected to be recognized over a weighted-average period of 1.08 years.

NET LOSS PER SHARE

We present net income (loss) per share using the two-class method required for multiple classes of common stock.

1 unchanged sentence

The following table presents the calculation of basic and diluted income (loss) per share:

The following table presents the calculation of basic and diluted loss per share:

(in millions, except per share data) Year Ended December 31,

2021 2022 2023

Net income (loss) $ 7 $ ( 3,687 ) $ ( 1,028 )

allocation of earnings to participating securities 4 — —

Net income (loss) attributable to common stockholders $ 3 $ ( 3,687 ) $ ( 1,028 )

Net loss $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Net loss attributable to common stockholders $ ( 3,687 ) $ ( 1,028 ) $ ( 541 )

Weighted-average common shares outstanding - basic 492,381,190 878,630,024 890,857,659

1 unchanged sentence

Weighted-average common shares used to compute diluted loss per share 492,381,190 878,630,024 890,857,659

Net income (loss) per share attributable to common stockholders:

Net loss per share attributable to common stockholders:

Basic $ ( 7.49 ) $ ( 1.17 ) $ ( 0.61 )

Diluted $ ( 7.49 ) $ ( 1.17 ) $ ( 0.61 )

The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period:

The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions that were not satisfied by the end of the period:

Year Ended December 31,

2021 2022 2023

Redeemable convertible preferred stock 412,742,897 — —

RSUs 75,375,307 108,359,188 114,614,461

Time-Based RSUs 49,440,344 56,156,677 34,625,253

Market-Based RSUs 58,918,844 58,457,784 22,476,722

Stock options 14,527,468 15,226,096 12,141,566

1 unchanged sentence

Warrants 14,278,034 14,278,034 14,278,034

ESPP shares — 246,179 364,427

ESPP 246,179 364,427 305,692

Total anti-dilutive securities 137,425,995 144,483,018 83,827,267

RELATED PARTY TRANSACTIONS

Related party transactions may include any transaction between entities under common control or with a related party.

In 2022, we did not have any material related party transactions.

In February 2021, we issued two tranches of convertible notes and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (see Note 8 - Investments and Fair Value Measurement, for further information).

Two of the Tranche I investors were related parties prior to the completion of our IPO.

Their respective aggregate outstanding principal and accrued interest of their convertible notes automatically converted into shares of Class A common stock upon the closing of our IPO .

Our operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park, CA and our office in New York City, NY.

Our leases have remaining terms of less than one year to 10 years, and many leases include one or more options to renew.

Our leases have remaining terms of less than one year to nine years , and many leases include one or more options to renew.

We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement.

3 unchanged sentences

As a result of these agreements, we derecognized the related right-of-use assets of $ 28 million and lease liability of $ 33 million and recognized an immaterial amount of net gain.

As of December 31, 2023 , we have an executed operating lease for office facilities that had not yet commenced and is expected to commence in the second quarter of 2024.

Under the terms of the lease, we will have the right to construct tenant improvements to the underlying asset upon commencement.

Lease assets and liabilities recognized on our consolidated balance sheets were as follows:

25 unchanged sentences

Lease liabilities arising from obtaining right-of-use assets (1)

$ 97 $ 32 $ ( 8 )

_______________

(1) For the years ended December 31, 2021 and 2022, lease liabilities arising from obtaining right-of-use assets primarily related to initial recognition of new leases during the respective years.

For the year ended December 31, 2023, lease liabilities arising from obtaining right-of-use assets primarily related to a lease modification, partially offset by remeasurements resulting from reassessments of existing lease terms.

Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2023 are as follows:

4 unchanged sentences

lease incentives ( 1 )

leases executed but not yet commenced ( 7 )

Total lease liabilities $ 109

5 unchanged sentences

Amounts accrued for contingencies in the aggregate were $ 85 million and $ 190 million as of December 31, 2022 and 2023.

In our opinion, an adequate accrual had been made as of December 31, 2022 to provide for the probable losses of which we are aware and for which we can reasonably estimate an amount.

In our opinion, an adequate accrual had been made as of each such date to provide for the probable losses of which we are aware and for which we can reasonably estimate an amount.

Legal and Regulatory Matters

2 unchanged sentences

Litigation has included and may in the future include class action suits that generally seek substantial and, in some cases, punitive damages.

Federal and state regulators, exchanges, or other SROs investigate issues related to regulatory compliance that may result in enforcement action.

Federal and state

regulators, exchanges, or other SROs investigate issues related to regulatory compliance that may result in enforcement action.

We are also subject to periodic regulatory audits and inspections that have in the past and could in the future lead to enforcement investigations or actions.

4 unchanged sentences

In addition, the ultimate outcome of legal proceedings involves judgments and inherent uncertainties and cannot be predicted with certainty.

Any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and

Any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows.

We might also incur substantial legal fees, which are expensed as incurred, in defending against legal and regulatory claims.

5 unchanged sentences

An amended consolidated complaint was filed in May 2021, alleging violations of Section 10(b) of the Exchange Act and various state law causes of action based on claims that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including PFOF).

Plaintiffs seek damages, restitution, disgorgement, and other relief.

Plaintiffs seek unspecified monetary damages, restitution, disgorgement, and other relief.

In February 2022, the court granted Robinhood’s motion to dismiss the amended consolidated complaint without prejudice.

2 unchanged sentences

In November 2022, Robinhood filed a motion for judgment on the pleadings, which the court denied in January 2023.

March 2020 Outages

A consolidated putative class action lawsuit relating to the March 2020 Outages is pending in the United States District Court for the Northern District of California.

The lawsuit generally alleges that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and we failed to implement appropriate backup systems.

The lawsuit includes, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment and violations of certain California consumer protection statutes.

The lawsuit generally seeks damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief.

In May 2022, the parties notified the court that they had reached an agreement in principle resolving this action.

The settlement agreement has been preliminarily approved by the court.

In addition, in September 2021, approximately 400 jointly-represented customers initiated an arbitration of individual claims against us arising out of the March 2020 Outages and other alleged system outages.

The parties have reached an agreement to resolve this matter.

State Regulatory Matters

Certain state regulatory authorities have conducted investigations regarding RHF’s options trading and related customer communications and displays, options and margin trading approval process, March 2020 platform outages, and customer support prior to June 2020.

RHF has reached a settlement in principle with the Alabama Securities Commission and anticipates a potential multi-state settlement related to these issues.

Certain state regulatory authorities have conducted investigations regarding RHF’s options trading and related customer communications and displays, options and margin trading approval process, the March 2020 Outages, and customer support prior to June 2020.

RHF reached settlements with several state regulators including the Alabama Securities Commission, the California Department of Financial Protection and Innovation, the Colorado Division of Securities, the Delaware Department of Justice - Investor Protection Unit, the New Jersey Bureau of Securities, the South Dakota Division of Insurance, and the Texas State Securities Board, under which we paid a monetary penalty of $ 200,000 per state.

RHF has reached additional state settlements and anticipates reaching more as part of a multi-state settlement related to these issues totaling up to approximately $ 10 million.

FINRA previously conducted an investigation and reached a settlement with RHF regarding many of these issues.

The New York Attorney General is conducting an investigation into brokerage execution quality.

We are cooperating with this investigation.

Brokerage Enforcement Matters

FINRA Enforcement staff are conducting investigations related to, among other things, RHS’s reporting of fractional share trades, as applicable, to a Trade Reporting Facility (“TRF”), the Over-the-Counter Reporting Facility (“ORF”), the Order Audit Trail System (“OATS”), and the Consolidated Audit Trail (“CAT”);

RHS’s reporting of accounts holding significant options positions to the Large Option Position Report (“LOPR”) system;

processing of certain requests for transfers of assets from Robinhood through the Automated Customer Account Transfer System (“ACATS”);

FINRA Enforcement staff are conducting investigations related to, among other things, RHS’s reporting of fractional share trades, as applicable, to a Trade Reporting Facility, the Over-the-Counter Reporting Facility, the Order Audit Trail System, and the Consolidated Audit Trail;

RHS’s reporting of accounts holding significant options positions to the Large Option Position Report system;

processing of certain requests for transfers of assets from Robinhood through the Automated Customer Account Transfer System;

responses to Electronic Blue Sheets requests from FINRA;

RHF’s compliance with FINRA registration requirements for member

the Q4 2022 Processing Error;

RHF’s and RHS’s compliance with FINRA registration requirements for member personnel;

marketing involving social media influencers and affiliates;

and collaring the prices of certain trade orders.

collaring the prices of certain trade orders;

RHS’s and RHF’s compliance with best execution obligations and RHS’s compliance with FINRA Rule 6190;

RHS’s and RHF’s compliance with regulations governing the delivery of required documents;

and matters related to RHS’s and RHF’s supervision of technology.

We are cooperating with these investigations.

RHS has received requests from the SEC Division of Enforcement regarding its compliance with Regulation SHO’s trade reporting and other requirements in connection with securities lending and fractional share trading and previously received similar requests from FINRA examinations staff.

RHS and RHF have also received requests from the SEC Division of Enforcement and FINRA Enforcement staff related to the Firms’ compliance with recordkeeping requirements.

RHS has received requests from the SEC Division of Enforcement regarding its compliance with Regulation SHO’s trade reporting and other requirements in connection with securities lending, fractional share trading, the Q4 2022 Processing Error, and responses to Electronic Blue Sheets requests, and previously received similar requests from FINRA examinations staff.

RHS and RHF have also received requests from the SEC Division of Enforcement and FINRA Enforcement staff related to RHS’s and RHF’s compliance with recordkeeping requirements, including requests regarding off-channel communications.

We are cooperating with these investigations.

1 unchanged sentence

RHC has received subpoenas from the California Attorney General’s Office seeking information about, among other things, RHC’s trading platform, business and operations, custody of customer assets, customer disclosures, and coin listings.

RHC is cooperating with this investigation.

RHC also has received investigative subpoenas from the SEC regarding, among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations.

RHC is cooperating with these investigations.

Account Takeovers, Anti-Money Laundering, and Cybersecurity Matters

FINRA Enforcement and the SEC Division of Enforcement are investigating account takeovers (i.e., circumstances under which an unauthorized actor successfully logs into a customer account), as well as anti-money laundering compliance and cybersecurity issues.

The SEC’s Division of Enforcement is also investigating issues related to compliance with the Electronic Funds Transfer Act.

We are cooperating with these investigations.

In January 2021, Siddharth Mehta filed a putative class action in California state court against RHF and RHS, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users.

RHF and RHS removed this action to the United States District Court for the Northern District of California.

Plaintiff generally alleges that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets and seeks monetary damages and injunctive relief.

In April 2022, the parties reached a settlement in principle to resolve this matter.

The settlement agreement has been preliminarily approved by the court.

Massachusetts Securities Division Matter

In December 2020, the Enforcement Section of the Massachusetts Securities Division (“MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD in July 2020.

In December 2020, the MSD filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD in July 2020.

The complaint alleged three counts of Massachusetts securities law violations regarding alleged unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020.

2 unchanged sentences

If RHF were to lose its license to operate in Massachusetts, we would not be able to acquire any new customers in Massachusetts, and we expect that our current customers in Massachusetts would be unable to continue utilizing any of the services or products offered on our platform (other than closing their positions) and that we may be forced to transfer such customers’ accounts to other broker-dealers.

Additionally, revocation of RHF’s Massachusetts license could trigger similar disqualification or proceedings to restrict or condition RHF’s registration by other state regulators.

Additionally, revocation of RHF’s

Massachusetts license could trigger similar disqualification or proceedings to restrict or condition RHF’s registration by other state regulators.

A revocation of RHF’s license to operate in Massachusetts would result in RHF and RHS being subject to statutory disqualification by FINRA and the SEC, which would then result in RHF needing to obtain relief from FINRA subject to SEC review in order to remain a FINRA member and RHS possibly needing relief from FINRA or other SROs.

2 unchanged sentences

In March 2022, the court ruled in favor of RHF, declaring that the Massachusetts fiduciary duty regulation was unlawful.

The MSD is appealing the ruling.

A hearing on the two remaining counts alleged by the MSD in its amended administrative complaint is currently scheduled to begin in March 2023.

In August 2023, the Massachusetts Supreme Judicial Court reversed the decision of the Massachusetts Superior Court.

In January 2024, we settled this matter with the MSD related to supervision of certain product features and marketing strategies, the March 2020 Outages, and our options trading approval process, as well as the November 2021 Data Security Incident, under which we paid a $ 7.5 million fine and agreed to engage an independent consultant to review, among other things, implementation of the FINRA independent’s recommendations, policies and procedures regarding certain application features, and cybersecurity measures.

RHF has dismissed its state court action.

Text Message Litigation

In August 2021, Cooper Moore filed a putative class action against RHF alleging that RHF initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington state law.

The complaint seeks statutory and treble damages, injunctive relief, and attorneys’ fees and costs.

The complaint seeks unspecified total statutory and treble monetary damages, injunctive relief, and attorneys’ fees and costs.

The case is currently pending in the U.S.

3 unchanged sentences

In August 2022, the court denied RHF ’ s motion to dismiss.

The parties have reached a settlement in principle to resolve this matter and the court has granted preliminary approval.

Early 2021 Trading Restrictions Matters

5 unchanged sentences

federal antitrust claims, federal securities law claims, and state law claims.

In July 2021, plaintiffs filed consolidated complaints seeking monetary damages in connection with the federal antitrust and state law tranches.

In July 2021, plaintiffs filed consolidated complaints seeking unspecified monetary damages in connection with the federal antitrust and state law tranches.

The federal antitrust complaint asserted one violation of Section 1 of the Sherman Act;

3 unchanged sentences

In January 2022, the court dismissed the state law complaint with prejudice.

Plaintiffs have appealed the court’s order to the United States Court of Appeals for the Eleventh Circuit.

In August 2023, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s order.

In November 2021, the court dismissed the federal antitrust complaint without prejudice.

3 unchanged sentences

In November 2021, plaintiffs for the federal securities tranche filed a complaint alleging violations of Sections 9(a) and 10(b) of the Exchange Act.

The complaint seeks unspecified monetary damages, costs and expenses, and other relief.

In January 2022, we moved to dismiss the federal securities law complaint.

In August 2022, the court granted in part and denied in part Robinhood’s motion to dismiss.

RHM, RHF, RHS, and our Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), the DOJ, Antitrust Division, the SEC’s Division of Enforcement, FINRA, the New York Attorney General’s Office, other state attorneys general offices, and a number of state securities regulators.

In November 2023, the court denied Plaintiffs’ motion for class certification without prejudice.

RHM, RHF, RHS, and our Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), DOJ, Antitrust Division, the SEC’s Division of Enforcement, FINRA, the New York Attorney General’s Office, other state attorneys general offices, and a number of state securities regulators.

Also, a related search warrant was executed by the USAO to obtain Mr.

6 unchanged sentences

FINRA Enforcement has also requested information about policies, procedures, and supervision related to employee trading generally.

In January 2023, approximately 4,700 jointly represented customers filed a statement of claim with FINRA to initiate arbitration of individual claims against RHF and RHS arising out of the Early 2021 Trading Restrictions.

A motion to sever the arbitration was granted in July 2023 and any customer seeking to proceed with a claim is required to file a separate individual arbitration.

IPO Litigation

In December 2021, Philip Golubowski filed a putative class action in the U.S.

District Court for the Northern District of California against RHM, the officers and directors who signed Robinhood’s IPO offering documents, and Robinhood’s IPO underwriters.

District Court for the Northern District of California against RHM, the officers and directors who signed Robinhood’s initial public offering (“IPO”) offering documents, and Robinhood’s IPO underwriters.

Plaintiff’s claims are based on alleged false or misleading statements in Robinhood’s IPO offering documents allegedly in violation of Sections 11 and 12(a) of the Securities Act of 1933, as amended (the “Securities Act”).

Plaintiff seeks compensatory damages, rescission of shareholders’ share purchases, and an award for attorneys’ fees and costs.

Plaintiff seeks unspecified compensatory damages, rescission of shareholders’ share purchases, and an award for attorneys’ fees and costs.

In February 2022, certain alleged Robinhood stockholders submitted applications seeking appointment by the court to be the lead plaintiff to represent the putative class in this matter, and in March 2022, the court appointed lead plaintiffs.

2 unchanged sentences

In February 2023, the court granted Robinhood’s motion without prejudice.

In March 2023, plaintiffs filed a second amended complaint.

In January 2024, the court granted Robinhood’s motion to dismiss the second amended complaint without leave to amend.

In February 2024, plaintiffs filed a notice of appeal to the 9th Circuit.

In January 2022, Robert Zito filed a complaint derivatively on behalf of Robinhood against Robinhood’s directors at the time of its IPO in the U.S.

1 unchanged sentence

Plaintiff alleges breach of fiduciary duties, waste of corporate assets, unjust enrichment, and violations of Section 10(b) of the Exchange Act.

Plaintiff’s claims are based on allegations of false or misleading statements in Robinhood’s IPO offering documents, and plaintiff seeks an award of damages and restitution to the Company, injunctive relief, and an award for attorney’s fees and costs.

In March 2022, the district court entered a stay of this litigation pending resolution of Robinhood’s motion to dismiss in the Golubowski securities action discussed above.

Plaintiff’s claims are based on allegations of false or misleading statements in Robinhood’s IPO offering documents, and plaintiff seeks an award of unspecified damages and restitution to the Company, injunctive relief, and an award for attorney’s fees and costs.

In March 2022, the district

court entered a stay of this litigation pending resolution of Robinhood’s motion to dismiss in the Golubowski securities action discussed above.

In August 2022, a shareholder sent a letter to the RHM board of directors demanding, among other things, that the board of directors pursue causes of action on behalf of the Company related to allegations of misconduct in connection with the Early 2021 Trading Restrictions, Robinhood’s IPO offering documents, and the November 2021 Data Security Incident.

The Board has formed a Demand Review Committee that is reviewing the demand.

SUBSEQUENT EVENTS

Termination of Ziglu Stock Purchase Agreement

On April 16, 2022, we entered into a definitive stock purchase agreement to acquire all outstanding equity of Ziglu Limited (“Ziglu”).

Advances of $ 12 million made to Ziglu during the year were accounted for as non-marketable equity securities under the fair value alternative, considering the securities lacked a readily determinable fair value.

In February 2023, we notified Ziglu of the termination

of the stock purchase agreement.

Due to this and other factors, we have adjusted the carrying value of our investment in Ziglu to zero as of December 31, 2022.

Market-Based RSUs Cancellation

In February 2023, we cancelled the 2021 Market-Based RSUs of 35.5 million unvested shares.

We expect to recognize approximately $ 485 million SBC expense related to the cancellation during the first quarter of 2023.

We will no longer be required to recognize any further SBC expense associated with these awards over future fiscal quarters upon the cancellation.

No other payments, replacement equity awards or benefits were granted in connection with the cancellation.

The board of directors has formed a Demand Review Committee that is reviewing the demand.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data