What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-18 compared with 2024-02-27 · 564 added, 514 removed, 1040 unchanged (51% of the section changed)

6 unchanged sentences

Consolidated Statements of Cash Flows

Consolidated Statements of Mezzanine Equity and Stockholders’ (Deficit) Equity

Consolidated Statements of Stockholders’ Equity

Notes to the Consolidated Financial Statements

5 unchanged sentences

Note 6 - Restructuring Activities

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

Note 7 - Allowance for Credit Losses

Note 8 - Investments and Fair Value Measurement

Note 9 - Derivatives and Hedging Activities

Note 9 - Income Taxes

2 unchanged sentences

Note 1 2 - Financing Activities and Off-Balance Sheet Risk

Note 14 - Common Stock and Stockholders' (Deficit) Equity

Note 1 3 - Common Stock and Stockholders' Equity

Note 1 4 - Net Income (Loss) per Share

2 unchanged sentences

Report of Independent Registered Public Accounting Firm

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

To the Shareholders 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, 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”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss) , stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

1 unchanged sentence

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, 2024, 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 18, 2025 expressed an unqualified opinion thereon.

Adoption of SAB 122

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 2024 due to the adoption of SAB 122.

Basis for Opinion

12 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements,

taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Description of the Matter Transaction-based revenues

15 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, 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.

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, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 18, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

10 unchanged sentences

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;

(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.

9 unchanged sentences

Cash and cash equivalents $ 4,835 $ 4,332

Cash segregated under federal and other regulations 2,995 4,448

Cash, cash equivalents, and securities segregated under federal and other regulations 4,448 4,724

Receivables from brokers, dealers, and clearing organizations 89 471

2 unchanged sentences

Deposits with clearing organizations 338 489

Asset related to user cryptocurrencies safeguarding obligation 8,431 14,708

User-held fractional shares 1,592 2,530

1 unchanged sentence

Prepaid expenses 63 75

Deferred customer match incentives

Other current assets 196 509

4 unchanged sentences

Non-current held-to-maturity investments 73 —

Non-current prepaid expenses 17 4

Other non-current assets 132 122

Non-current deferred customer match incentives 19 195

Other non-current assets, including non-current prepaid expenses of $ 4 as of December 31, 2023 and $ 17 as of December 31, 2024

Total assets $ 17,624 $ 26,187

4 unchanged sentences

Securities loaned 3,547 7,463

User cryptocurrencies safeguarding obligation

Fractional shares repurchase obligation 1,592 2,530

6 unchanged sentences

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.

210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2024.

Class A common stock, $ 0.0001 par value.

5 unchanged sentences

Class C common stock, $ 0.0001 par value.

7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and 2023.

7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2024.

Additional paid-in capital 12,145 12,008

Accumulated other comprehensive income (loss) — ( 3 )

Accumulated other comprehensive loss ( 3 ) ( 1 )

Accumulated deficit ( 5,446 ) ( 4,035 )

14 unchanged sentences

Operations 249 116 112

Provision for credit losses 36 43 76

Marketing 103 122 272

1 unchanged sentence

Total operating expenses 2,369 2,401 1,897

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

Other income (expense), net ( 16 ) 3 10

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

Provision for income taxes 2 1 8

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

Net loss attributable to common stockholders:

Income (loss) before income taxes ( 1,027 ) ( 533 ) 1,064

Provision for (benefit from) income taxes 1 8 ( 347 )

Net income (loss) $ ( 1,028 ) $ ( 541 ) $ 1,411

Net income (loss) attributable to common stockholders:

Basic $ ( 1,028 ) $ ( 541 ) $ 1,411

Diluted $ ( 1,028 ) $ ( 541 ) $ 1,411

Net loss per share attributable to common stockholders:

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

Basic $ ( 1.17 ) $ ( 0.61 ) $ 1.60

Diluted $ ( 1.17 ) $ ( 0.61 ) $ 1.56

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

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

Basic 878,630,024 890,857,659 881,113,156

5 unchanged sentences

(in millions) 2022 2023 2024

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

Other comprehensive loss, net of tax:

Net income (loss) $ ( 1,028 ) $ ( 541 ) $ 1,411

Other comprehensive income (loss), net of tax:

Foreign currency translation ( 1 ) — ( 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 loss $ ( 3,687 ) $ ( 1,029 ) $ ( 544 )

Net loss on hedging instruments during the period

Reclassification adjustment for net losses included in net income (loss)

Net gain (loss) on hedging instruments

Total other comprehensive income (loss), net of tax ( 1 ) ( 3 ) 2

Total comprehensive income (loss) $ ( 1,029 ) $ ( 544 ) $ 1,413

See Accompanying Notes to the Consolidated Financial Statements.

4 unchanged sentences

Operating activities:

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

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

Net income (loss) $ ( 1,028 ) $ ( 541 ) $ 1,411

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

Depreciation and amortization 61 71 77

1 unchanged sentence

Provision for credit losses 36 43 76

Deferred income taxes — — ( 369 )

Share-based compensation 654 871 304

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

Other 35 3 ( 2 )

6 unchanged sentences

Current and non-current prepaid expenses 33 37 ( 25 )

Current and non-current deferred customer match incentives — ( 30 ) ( 265 )

Other current and non-current assets ( 26 ) ( 18 ) ( 415 )

7 unchanged sentences

Capitalization of internally developed software ( 29 ) ( 19 ) ( 37 )

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

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

Business acquisition, net of cash and cash equivalents acquired — ( 93 ) ( 6 )

Asset acquisition, net of cash acquired — — ( 3 )

Purchases of held-to-maturity investments — ( 759 ) ( 556 )

Proceeds from maturities of held-to-maturity investments — 282 658

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

Purchases of credit card receivables by Credit Card Funding Trust — — ( 748 )

Collections of purchased credit card receivables — — 556

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

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

Other ( 20 ) ( 1 ) 1

1 unchanged sentence

Financing activities:

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 ("ESPP") 7 16 14

Proceeds from exercise of stock options, net of repurchases 6 5 18

Proceeds from issuance of common stock under the Employee Share Purchase Plan 16 14 16

Taxes paid related to net share settlement of equity awards ( 12 ) ( 12 ) ( 244 )

Proceeds from issuance of convertible notes and warrants 3,552 — —

Repurchase of Class A common stock — ( 608 ) ( 257 )

Draws on credit facilities 21 20 22

Repayments on credit facilities ( 21 ) ( 20 ) ( 22 )

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

Borrowings by the Credit Card Funding Trust — — 132

Repayments on borrowings by the Credit Card Funding Trust

Change in principal collected from customers due to Coastal Bank — 1 6

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

Repurchase of common stock — — ( 608 )

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

Payments of debt issuance costs ( 10 ) ( 10 ) ( 15 )

Net cash used in financing activities — ( 610 ) ( 345 )

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

2 unchanged sentences

Cash, cash equivalents, segregated cash, and restricted cash, end of the period $ 9,357 $ 9,346 $ 8,695

ROBINHOOD MARKETS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Cash and cash equivalents, end of the period $ 6,339 $ 4,835 $ 4,332

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

Segregated cash and cash equivalents, end of the period 2,995 4,448 4,327

Restricted cash in other current assets, end of the period 1 46 18

6 unchanged sentences

ROBINHOOD MARKETS, INC.

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

Redeemable convertible preferred stock Common stock Additional

capital Accumulated other comprehensive

income Accumulated

deficit Total stockholders’

(deficit) equity

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common stock (1)

capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’

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

Balance as of December 31, 2021 863,912,613 $ — $ 11,169 $ 1 $ ( 3,877 ) $ 7,293

Net loss — — — — ( 1,028 ) ( 1,028 )

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

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

Shares issued in connection with stock option exercises, net of repurchases 2,318,267 — 6 — — 6

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

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

2 unchanged sentences

ROBINHOOD MARKETS, INC.

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

Redeemable convertible preferred stock Common stock (1)

capital Accumulated other comprehensive

income (loss)

deficit Total stockholders’

(deficit) equity

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common stock (1)

capital Accumulated other comprehensive loss Accumulated deficit Total stockholders’

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

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

Net loss — — — — ( 541 ) ( 541 )

Shares issued in connection with stock option exercise, net of repurchases — — 2,318,267 — 6 — — 6

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

Shares issued in connection with stock option exercises, net of repurchases 2,449,169 — 5 — — 5

Issuance of common stock in connection with Employee Share Purchase Plan 1,968,081 — 14 — — 14

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

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

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

3 unchanged sentences

ROBINHOOD MARKETS, INC.

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common stock (1)

capital Accumulated other comprehensive

deficit Total stockholders’

(deficit) equity

capital Accumulated other comprehensive income (loss) Accumulated earnings (deficit)

Total stockholders’

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

Balance as of December 31, 2023 872,162,664 $ — $ 12,145 $ ( 3 ) $ ( 5,446 ) $ 6,696

Net loss — — — — ( 541 ) ( 541 )

Shares issued in connection with stock option exercise, net of repurchases 2,449,169 — 5 — — 5

Issuance of common stock in connection with Employee Stock Purchase Plan 1,968,081 — 14 — — 14

Net income — — — — 1,411 1,411

Shares issued in connection with stock option exercises, net of repurchases 3,954,721 — 18 — — 18

Shares issued in connection with warrants exercises, net of shares withheld 456,764 — — — — —

Issuance of common stock in connection with Employee Share Purchase Plan 2,275,623 — 16 — — 16

Issuance of common stock upon settlement of restricted stock units, net of shares withheld 15,999,321 — ( 244 ) — — ( 244 )

Repurchase and retirement of Class A common stock ( 10,356,110 ) — ( 257 ) — — ( 257 )

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

Change in other comprehensive income — — — 2 — 2

Share-based compensation — — 330 — — 330

1 unchanged sentence

_______________

(1) The share amounts listed above combine common stock, Class A common stock and Class B common stock.

In connection with the completion of our initial public offering, all previously outstanding shares of common stock were reclassified into Class A common stock and Class B common stock.

See Note 1 - Description of Business and Summary of Significant Accounting Policies, for further information.

(1) The share amounts listed above combine Class A common stock and Class B common stock.

See Accompanying Notes to the Consolidated Financial Statements.

7 unchanged sentences

• Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer;

• 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 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.

(“Robinhood Credit”), which offers credit cards with certain rewards offerings;

• Robinhood Derivatives, LLC (“RHD”), a registered non-clearing futures commission merchant and a swap firm for trading cleared swaps.

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

Upon execution of a trade, users are legally required to purchase options, cryptocurrencies, or equities for cash from the transaction counterparty or to sell options, cryptocurrencies, or equities for cash to the transaction counterparty, depending on the transaction.

We facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade.

Our users have ownership of the securities they transact on our platform, including those that collateralize margin loans, and, as a result, such securities are not presented on our consolidated balance sheets, other than user-held fractional shares which are presented gross.

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 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.

On August 31, 2021, we sold an additional 4.4 million shares of Class A common stock pursuant to the option granted to the underwriters to purchase additional shares.

Our users have ownership of the securities they transact on our platforms, including those that collateralize margin loans, and, as a result, such securities are not presented on our consolidated balance sheets, other than user-held fractional shares which are presented gross.

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

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries.

The accompanying consolidated financial statements have been prepared in accordance with GAAP.

The consolidated financial statements include the accounts of RHM and its wholly-owned direct and indirect subsidiaries.

All intercompany balances and transactions have been eliminated.

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

The impact of these reclassifications is immaterial to the presentation of the consolidated financials statements taken as a whole.

The impact of these reclassifications is immaterial to the presentation of the consolidated financial statements taken as a whole.

Use of Estimates

1 unchanged sentence

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, 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.

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, investment valuation, capitalization of internally developed software, useful lives of property, software, and equipment, valuation and useful lives

of intangible assets, valuation of reporting units in assessing goodwill for impairment, incremental borrowing rate used to calculate operating lease right-of-use assets and related liabilities, impairment of long-lived assets, uncertain tax positions, realizability of deferred tax assets, accrued and contingent liabilities.

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

1 unchanged sentence

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.

Our CODM is our CEO and President, Vladimir Tenev.

We operate and report financial information in one operating segment.

This is because our CODM utilizes consolidated net income and company-wide key performance metrics (as defined in Part II, Item 7 of this Annual Report, “Key Performance Metrics”) to allocate resources and determine performance.

The measure of segment assets is not regularly presented to the CODM.

Consolidated net income is also used by the CODM to monitor budgeted versus actual results.

The monitoring of budgeted versus actual results is used by the CODM to assess performance of the business and in establishing company-wide’s objectives and key results.

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

Significant segment expenses required to be disclosed as part of the segment disclosure of a single segment entity under Accounting Standards Codification (“ASC”) 280 are presented throughout the consolidated financial statements including the consolidated statements of operations, consolidated statements of cash flows, and Note 5 - Revenues.

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.

Immediately after the GM reorganization, we began developing processes 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.

GM level financial information is not currently shared with and used by the CODM to allocate resources and determine performance, and there are no plans to do so in the near future.

Revenue Recognition

7 unchanged sentences

Net interest revenues consist of interest revenues less interest expenses.

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

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

We incur interest expenses in connection with our revolving credit facilities.

We incur interest expenses in connection with our revolving credit facilities and borrowings by the Credit Card Funding Trust.

Other Revenues

Other revenues primarily consists of Robinhood Gold subscription fees.

Our contract with users are for a term of 30 days and renew automatically each month.

Other revenues primarily consists of Robinhood Gold subscription fees, which is a flat recurring rate.

Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied.

Other revenues also consist of proxy rebates, proxy revenues, and ACATS fees charged to users.

Proxy rebates are revenues earned through our partnership with a third-party investor communications company.

We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms.

We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied.

During 2022, we terminated our partnership with the third-party proxy service provider and began using Say Technologies, a wholly-owned subsidiary, to provide proxy and investor communications services.

We now earn proxy revenue directly from issuers.

Other revenues also consist of proxy revenues, advertising revenues, and ACATS fees charged to users.

We earn proxy revenue directly from issuers through Say Technologies, a wholly-owned subsidiary.

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.

Advertising revenue, generated from sales of advertising services on Sherwood Media is recognized as advertisements are delivered.

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.

Robinhood Match Incentives

We offer a match incentive on customers’ eligible contributions to their retirement accounts and, from time to time, an incentive on other transfers of assets to our platform.

The match on retirement contributions and asset transfers are paid upfront and 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.

These incentives are deferred and recognized over the specified holding period.

For a limited time during 2024, we provided a match on eligible cash deposits made by Robinhood Gold subscribers.

Matches on these cash deposits are paid out on a monthly basis ratably over the specified earning period.

Future match payments are forfeited if deposits are not held on the platform over the specified earning period.

All match incentives are recognized as a reduction to revenue when earned.

The matches are allocated to certain revenue categories on a proportional basis.

For the years ended December 31, 2023, and 2024, no impairments of the deferred customer match incentive were recognized.

Concentrations of Revenue and Credit Risk

5 unchanged sentences

Citadel Securities, LLC 16 % 12 % 12 %

Entities affiliated with Wolverine Holdings, L.P.

Entities affiliated with Susquehanna International Group, LLP (2)

Tai Mo Shan Limited (3)

Wintermute Trading Ltd — % 2 % 10 %

All others individually less than 10% 43 % 26 % 34 %

1 unchanged sentence

59 % 40 % 56 %

_______________

(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 Risk

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

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

In the event our counterparties do not fulfill their obligations, we may be exposed to risk.

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

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.

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, 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 included $ 57 million as a result of the Q4 2022 Processing Error.

Brokerage and transaction costs primarily consist of cash compensation and employee benefits, SBC, as well as allocated overhead for employees engaged in clearing and brokerage functions, market data expenses, expenses related to our instant withdrawals feature, fees paid to centralized clearinghouses and regulatory fees, customer statement-related costs, and other brokerage and transaction costs such as costs related to our Cash Sweep and securities lending programs.

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

For the year ended December 31, 2022, brokerage and transaction costs included $ 57 million as a result of the Q4 2022 Processing Error (as defined in Note 16 - Commitments & Contingencies to our consolidated financial statements in this Annual Report).

Technology and Development

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.

Technology and development costs primarily consist of costs incurred to support and improve our platforms and develop new products, costs associated with computer hardware and software, including amortization of internally developed software, and compensation and benefits, including SBC, for engineering, data science, and design personnel, as well as allocated overhead.

Operations costs consist of customer service related expenses, including cash compensation and employee benefits, SBC, 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).

Provision for Credit Losses

The provision for credit losses consists of expected credit losses related to credit card and brokerage products.

For credit card related, we have two types of provision for credit losses:

i) one related to off-balance sheet credit card principal receivables, and ii) one related to on-balance sheet purchased credit card and interest receivables.

Brokerage-related provision for credit losses primarily relates to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and losses on margin lending.

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

Advertising costs are expensed as incurred and were $ 52 million, $ 74 million and $ 179 million in the years ended December 31, 2022, 2023, and 2024.

General and Administrative

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.

General and administrative costs primarily consist of cash compensation and employee benefits, SBC, 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, business insurance, and real estate charges including impairments on our operating leases and leasehold improvements, lease terminations, and settlements and penalties.

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 $ 14 million, $ 12 million, and $ 12 million of expense related to matching for the years ended December 31, 2022, 2023, and 2024.

Research and Development Costs

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

Research and development costs described in 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 SBC.

3 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 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

9 unchanged sentences

Expected dividend yield —We utilize a dividend yield of 0 % as we have not paid, and do not anticipate paying, dividends on our common stock.

Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life.

Time-Based RSUs

We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition.

Prior to our IPO, our Time-Based RSUs vested based upon the satisfaction of both a time-based service condition and a performance-based condition, namely the occurrence of a liquidity event such as the IPO.

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 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.

We have granted time-based RSUs that vest upon the satisfaction of a time-based service condition (“Time-Based RSUs”) and record SBC expense on a straight-line basis over the requisite service period, which is generally satisfied over one or four years .

We have elected to account for forfeitures as they occur, with previously recognized SBC reversed in the period that the awards are forfeited.

Market-Based RSUs

1 unchanged sentence

time-based service conditions, performance-based conditions, and market-based conditions.

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

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

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.

For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of an IPO, and expected capital raise percentage.

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 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.

For market-based awards, we determined the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of an IPO, and expected capital raise percentage.

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

We recorded 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 determined 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 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.

Remaining SBC related to the Market-Based RSUs was fully recorded over the remaining derived requisite service period by December 31, 2024.

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

Net Income (Loss) per Share

3 unchanged sentences

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.

1 unchanged sentence

Cash and cash equivalents include deposits with banks and money market funds or highly liquid financial instruments with maturities of three months or less at the time of purchase.

We maintain cash in bank accounts at financial institutions that exceed federally insured limits.

We maintain cash in

bank accounts at financial institutions that exceed federally insured limits.

We also maintain cash in money market funds which are not FDIC insured.

We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf.

As we have not experienced any losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements.

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As we have not experienced any material losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements.

Cash, Cash Equivalents, and Securities Segregated Under Federal and Other Regulations

We are required to segregate cash, cash equivalents, and securities 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 continually review the credit quality of our counterparties and have not experienced a default.

10 unchanged sentences

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 Fully-Paid Securities Lending program under which we borrow fully-paid shares from participating users and lend them to third parties.

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 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).

3 unchanged sentences

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.

Users are not entitled to interest on such account, and any interest earned is for our benefit.

Our authorization from users to lend shares that collateralize their margin borrowing is found in our margin account agreement, our borrowing of fully-paid shares from users is conducted under the terms of our Fully-Paid Securities Lending program to which users consent when they enroll in that program, and substantially all of our securities lending and borrowing transactions with third parties are conducted under the terms of an industry-standard master securities loan agreement (“MSLA”), which has an open contractual term and may be terminated upon notice by either party.

substantially all of our securities lending and borrowing transactions with third parties are conducted under terms based on an industry-standard master securities loan agreement (“MSLA”), which has an open contractual term and may be terminated upon notice by either party.

We have also entered into fixed-term securities lending agreements with two financial institution counterparties (the “Fixed-Term Securities Lending Agreements”).

5 unchanged sentences

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.

These balances are automatically swept to our partner banks, and are not reflected on the consolidated balance sheet.

Cryptocurrencies

We act as an agent in the cryptocurrency transactions that users initiate on our platform.

We act as an agent in the cryptocurrency transactions that users initiate on our platforms.

We have determined we are an agent, for accounting purposes, because we do not control the cryptocurrency before delivery to the user, we are not primarily responsible for the delivery of cryptocurrency to our users, we are not exposed to risks arising from fluctuations of the market price of cryptocurrency before delivery to the user, and we do not set the prices charged to users.

4 unchanged sentences

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, 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.

Based on the terms of our user agreement, the structure of our crypto offerings, and applicable law, and, although we have not obtained a formal legal opinion on this matter, after consultation with internal and external legal counsel, we believe the cryptocurrency we hold in custody for users of our platforms 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.

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.

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.

6 unchanged sentences

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

14 unchanged sentences

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.

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 legal lender and originator, the party to which the customer has a creditor-borrower relationship, and the legal owner of the receivables.

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

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.

The interest collections and payments are indexed to the Federal Funds Rate and are settled monthly based on a notional of the outstanding principal balances at period end which are revolving with no fixed term.

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

Robinhood Credit recognizes interchange revenue net of rewards paid to customers.

Under the terms of the Program Agreement, Robinhood Credit has the ability to purchase credit card receivables originated and held for a period of time by Coastal Bank.

Prior to the purchase of the credit card receivables, the customer balances are off-balance sheet.

Once purchased, the customer balances are shown on-balance sheet.

Robinhood Credit continues to earn interest from customers and uses these purchased credit card receivables as collateral under a trust structure to access debt financing in the ordinary course of business.

To help facilitate these transactions, we created a variable interest entity known as the Credit Card Funding Trust.

We have credit exposure related to outstanding principal balances of customer credit cards whether they are owned by Coastal Bank or the Credit Card Funding Trust.

We guarantee payment to Coastal Bank in the event Coastal experiences a loss due to a failure by the customer to pay.

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 allowance for credit card loss based on outstanding customer credit card principal balances and anticipated future customer payment rates based on past portfolio performance, both of which are unobservable inputs.

The measurement of this allowance using this method approximates fair value.

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.

receivables are short term and settle within 30 days.

These receivables are short term and settle within 30 days.

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

8 unchanged sentences

In cases where the fair value of the collateral is less than the outstanding receivable balance from a user, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately.

The provision for credit losses is recorded as operations expense on the consolidated statement of operations.

We write-off unsecured balances when the balance becomes outstanding for over 180 days or when we otherwise deem the balance to be uncollectible.

Receivables from users, net also consists of credit card receivables purchased from Coastal Bank.

From time to time, purchased credit card receivables may be considered pledged under secured borrowings with Coastal Bank.

As of December 31, 2024, none of the balance of the purchased credit card receivables was considered pledged.

We record an allowance for credit losses related to purchased credit card principal balances receivable and credit card interest receivable from customers, shown as a reduction of receivables from users, net on the consolidated balance sheet.

This represents management’s estimate of expected credit losses from credit exposure over the remaining expected life of credit card receivables, and takes into account information from internal and external sources, including historical collection data, charge off trends by FICO cohort, and market data.

We write-off balances outstanding over 180 days or when we otherwise deem the balance to be uncollectible.

The accrual of interest revenue is suspended for aged credit card receivables past 90 days.

Interest payments on such nonaccrual receivables are recorded as interest revenue on a cash basis.

Once the balance is satisfied and brought current, the receivable returns to accrual status.

Deposits With Clearing Organizations

1 unchanged sentence

The clearing organizations establish financial requirements, including deposit requirements, to reduce their risk.

The required level of deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility.

We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations.

The required level of deposits may fluctuate significantly from time to time based upon the nature, size of users’ trading activity, and market volatility.

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

6 unchanged sentences

Other Current Assets

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 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.

We record an accrued liability within other current liabilities in our consolidated balance sheets at the time the bank account is linked with the expense recorded within marketing expense in our consolidated statement of operations.

The liability is initially recorded at the fair market value of the assigned share or shares upon the reward being earned by the referred user (i.e., upon bank linkage) and marked to fair market value until claimed or reversed, with gains and losses also recorded within marketing expense.

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

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

Property, Software, and Equipment

4 unchanged sentences

Fixture and furniture 7 years

Tenant improvements Shorter of estimated useful life or lease term

Leasehold improvements

Shorter of estimated useful life or lease term

Internally developed software 3 years

3 unchanged sentences

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.

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.

12 unchanged sentences

We record the amortization of the right-of-use asset and the accretion of lease liability as rent expense and allocate it as overhead in the consolidated statements of operations.

Business Combinations

We account for acquisitions of entities or asset groups that qualify as businesses in accordance with ASC 805, “Business Combinations”.

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.

We continuously monitor if any changes in the interest or relationship with the entity may impact the determination of whether we are still the primary beneficiary and require us to revise our previous conclusion.

Business Combinations and Asset Acquisitions

We account for acquisitions of entities or asset groups that qualify as businesses using the acquisition method of accounting.

The purchase price of the acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

2 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.

Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions.

We allocate the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.

Goodwill is not recognized in an asset acquisition.

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.

24 unchanged sentences

Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe that they will not be realized.

We consider many factors when assessing the likelihood of future realization of our deferred tax assets including, but not limited to, historical cumulative loss experience and expectations of future earnings, tax planning strategies, and the carry-forward periods available for tax reporting purposes.

periods available for tax reporting purposes.

Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute business plans and/or tax planning strategies.

10 unchanged sentences

Recently Adopted Accounting Pronouncements

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

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This guidance requires contract assets and contract liabilities from contracts with customers that are acquired in a business combination to be recognized and measured as if the acquirer had originated the original contract.

The guidance is effective for fiscal years beginning after December 15, 2022 on a prospective basis, 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.

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.

In January 2025, the staff of the SEC issued SAB 122 which rescinded the SAB 121 requirement for entities that have obligations to safeguard users’ crypto assets to recognize both a safeguarding liability and asset on the balance sheet measured at fair value of crypto in custody initially and at each subsequent reporting period.

As permitted, we early adopted SAB 122 as part of the consolidated financial statements for the year ended December 31, 2024, with retrospective application for all comparative periods.

As a result of our adoption of SAB 122, we derecognized both the asset captioned “Asset related to user cryptocurrencies safeguarding obligation” of $ 14.71 billion and $ 35.21 billion and liability captioned “User cryptocurrencies safeguarding obligation” of $ 14.71 billion and $ 35.21 billion as well as their related tax effects of $ 3.66 billion and $ 8.84 billion on our consolidated balance sheets as of December 31, 2023 and 2024.

We also considered whether a liability representing anticipated losses from crypto assets which we hold in custody on behalf of users should be recognized under the ASC 450-20, Loss Contingencies framework.

As of December 31, 2023 and 2024, the likelihood of loss from crypto assets which we held in custody on behalf of users was remote;

as such, no liability was recorded on our consolidated balance sheets.

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.

We adopted this guidance for our fiscal year ending December 31, 2024 and interim periods thereafter.

For further information, refer to the Segment Information section in Note 1 - Description of Business and Summary of Significant Accounting Policies

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.

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The amendments 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):

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.

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

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

3 unchanged sentences

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

In March 2024, the SEC adopted final rules under SEC Release No.

34-99678 and No.

33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (the “Final Rules”), which requires registrants to provide certain climate-related information in their registration statements and annual reports.

The Final Rules require, among other things, disclosure in the notes to the audited financial statements of the effects of severe weather events and other natural conditions, subject to certain thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates in certain circumstances.

The disclosure requirements of the Final Rules were to begin phasing in for annual periods beginning in fiscal year 2025.

In April 2024, the SEC stayed the effectiveness of the Final Rules and the timing of the effectiveness of these disclosure requirements remain uncertain.

We are currently monitoring the status of the Final Rules and evaluating the potential impact of the Final Rules.

In November 2024, the FASB issued Accounting Standards Update 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40).” This guidance requires additional disclosures about certain amounts included in the expense captions presented on the statement of operations as well as disclosures about selling expenses.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The guidance can either be applied prospectively or retrospectively.

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

BUSINESS COMBINATIONS

5 unchanged sentences

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:

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

Cash and cash equivalents $ 14

22 unchanged sentences

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.

Asset Acquisitions

On January 3, 2024, we acquired all outstanding stock of MNA Holdco LLC and its subsidiary Marex North America LLC (“Marex”) and licenses held by Marex for approximately $ 3 million (net of cash acquired in the amount of $ 125 million), which was determined to be an asset acquisition.

The license acquired was recognized as an indefinite-lived intangible asset.

Pending Acquisitions

In June 2024, we entered into an agreement to acquire all outstanding equity of Bitstamp, a globally-scaled cryptocurrency exchange with retail and institutional customers, for an aggregate consideration of approximately $ 200 million, subject to customary purchase price adjustments and payable in cash.

In November 2024, we entered into an agreement to acquire all outstanding equity of TradePMR, a custodial and portfolio management platform for registered investment advisors, for cash consideration of approximately $ 180 million and post-close equity compensation of approximately $ 120 million, for aggregate consideration and post-close compensation of approximately $ 300 million.

The purchase consideration is subject to customary purchase price adjustments.

Both pending acquisitions are subject to customary closing conditions, including regulatory approvals, and are expected to close in the first half of 2025.

GOODWILL AND INTANGIBLE ASSETS

8 unchanged sentences

_______________

(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.

(1) During the year ended December 31, 2023, 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, 2023 and 2024.

6 unchanged sentences

Customer relationships 23 ( 4 ) 19 7.04

Trade names 1 ( 1 ) — —

Indefinite-lived intangible assets 2 — 2 N/A

5 unchanged sentences

Customer relationships 23 ( 13 ) 10 4.72

Trade names 1 ( 1 ) — —

Indefinite-lived intangible assets 10 — 10 N/A

12 unchanged sentences

Equities 117 104 177

Other 7 41 84

Total transaction-based revenues 814 785 1,647

Net interest revenues:

Interest on corporate cash and investments 1 103 288

Margin interest 177 243 319

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

Interest on segregated cash, cash equivalents, securities, and deposits 57 210 261

Interest on corporate cash and investments 103 288 256

Cash Sweep 22 123 179

4 unchanged sentences

Other revenues:

Gold subscription revenues

Proxy revenues

Total other revenues

Total net revenues $ 1,358 $ 1,865 $ 2,951

Fully-Paid Securities Lending

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 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:

3 unchanged sentences

Fully-Paid Securities Lending, net

$ 9 $ 37 $ 72

Contract Balances

10 unchanged sentences

(in millions) Contract Receivables Contract Liabilities

Beginning of period, January 1, 2023 $ 60 $ 3

End of period, December 31, 2023 87 4

Beginning of the period, January 1, 2024 $ 87 $ 4

End of the period, December 31, 2024 294 11

Changes during the period $ 207 $ 7

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.

The difference between the opening and ending balances of our contract receivables was primarily driven by higher transaction-based revenues due to increased trading volumes and timing differences between our performance and counterparties’ payments.

We recognized all revenue from amounts included in the opening contract liabilities balance for the year end December 31, 2024.

RESTRUCTURING ACTIVITIES

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 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).

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 13 - Common Stock and Stockholders' 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.

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

All of the restructuring charges relating to the April 2022 Restructuring had been paid in full in 2022.

August 2022 Restructuring

9 unchanged sentences

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 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).

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 13 - Common Stock and Stockholders' 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 August 2022 Restructuring had been paid in full.

ALLOWANCE FOR CREDIT LOSSES AND CREDIT CARD EXPECTED LOSS LIABILITY

All of the restructuring charges relating to the August 2022 Restructuring had been paid in full in 2022.

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, losses on margin lending, and reserves on proxy revenue receivables.

The following table summarizes the allowance for credit losses:

Allowance for Credit Losses - Brokerage Related

The following table summarizes the brokerage related allowance for credit losses as a reduction of receivables from users, net on the consolidated balance sheet:

Year Ended December 31,

3 unchanged sentences

Write-offs ( 58 ) ( 25 ) ( 23 )

Recoveries — — 1

Ending Balance $ 18 $ 15 $ 14

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:

Allowance for Credit Losses - Credit Card Related

We have two types of allowance for credit losses related to credit cards:

i) an allowance related to off-balance sheet credit card receivables, shown as part of accounts payable and accrued expenses on the consolidated balance sheet, and ii) an allowance related to purchased credit card receivables and interest receivable from customers, shown as a reduction of receivables from users, net on the consolidated balance sheet.

The following table summarizes the allowance related to off-balance sheet credit card receivables:

Year Ended December 31,

4 unchanged sentences

Payments to Coastal Bank ( 11 ) ( 34 )

Recoveries 1 2

Ending balance $ 32 $ 40

The following table summarizes the allowance related to purchased credit card receivables and interest receivables from customers:

Year Ended December 31,

(in millions)

Beginning balance $ — $ 1

Provision for credit losses 2 15

Write-offs ( 1 ) ( 5 )

Ending balance $ 1 $ 11

The following tables present the aging analysis of our credit card receivables for the periods presented and the delinquency aging includes all past due principal on loans.

Accrued interest receivable of $ 5 million and $ 3 million as of December 31, 2023 and 2024 were not included in the tables below.

(in millions)

December 31, 2023

Past due receivables

Current <90 Days ≥ 90 days Total Past due receivables Total Receivables

On-balance sheet

$ — $ — $ — $ — $ —

Off-balance sheet

174 20 11 31 205

Total credit card loans $ 174 $ 20 $ 11 $ 31 $ 205

% of Total loans 85 % 10 % 5 % 15 % 100 %

(in millions)

December 31, 2024

Past due receivables

Current <90 Days ≥ 90 days Total Past due receivables Total Receivables

On-balance sheet

$ 186 $ 2 $ 1 $ 3 $ 189

Off-balance sheet

177 15 10 25 202

Total credit card loans $ 363 $ 17 $ 11 $ 28 $ 391

% of Total loans 93 % 4 % 3 % 7 % 100 %

The risk in our credit card receivables portfolio correlates to broad economic trends as well as customers' financial condition.

The key indicator we monitor when assessing the credit quality and risk is customers' credit scores as they measure the creditworthiness of customers.

We use a national third-party provider to update FICO credit scores on a monthly basis.

The updated scores are incorporated into a series of credit management reports, which are utilized to monitor risk.

The table below presents our credit card receivables by our credit quality indicator, FICO score, including both on-balance sheet and off-balance sheet amounts, as of December 31, 2023 and December 31, 2024.

We present our receivables by FICO scores.

(in millions, except FICO scores)

Below 640 $ 55 $ 64

640-690 64 100

Greater than 690 86 227

Total credit card loans $ 205 $ 391

INVESTMENTS AND FAIR VALUE MEASUREMENT

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.

As of December 31, 2023 and December 31, 2024, we had $ 500 million and $ 750 million of available-for-sale time deposits classified as cash equivalents on the consolidated balance sheets.

These investments had 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:

The following tables summarize our held-to-maturity investments:

December 31, 2023

7 unchanged sentences

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

December 31, 2024

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

Debt securities:

Treasury securities $ 337 $ — $ 1 $ — $ 338

Corporate debt securities 51 — — — 51

government agency securities 10 — — — 10

Total held-to-maturity investments $ 398 $ — $ 1 $ — $ 399

There were no sales of held-to-maturity investments during the year ended December 31, 2024.

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

15 unchanged sentences

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

December 31, 2024

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

Amortized cost

Debt securities:

Treasury securities $ 337 $ — $ 337

Corporate debt securities 51 — 51

government agency securities 10 — 10

Total held-to-maturity investments $ 398 $ — $ 398

Debt securities:

Treasury securities $ 338 $ — $ 338

Corporate debt securities 51 — 51

government agency securities 10 — 10

Total held-to-maturity investments $ 399 $ — $ 399

Fair Value of Financial Instruments

3 unchanged sentences

Cash equivalents:

Time deposits $ — $ 500 $ — $ 500

Money market funds 146 — — 146

Other current assets:

Deposits with clearing organizations:

Treasury securities (1)

Asset-backed securities

Stablecoin 20 — — 20

Equity securities - securities owned 10 — — 10

Commercial paper — 5 — 5

Government bonds 3 — — 3

Corporate bonds — 2 — 2

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

Other non-current assets:

Money market funds - escrow account 2 — — 2

User-held fractional shares 1,592 — — 1,592

Total financial assets $ 1,820 $ 500 $ — $ 2,320

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

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

3 unchanged sentences

Cash equivalents:

Time deposit $ — $ 500 $ — $ 500

Time deposits $ — $ 750 $ — $ 750

Money market funds 53 — — 53

Deposits with clearing organizations:

Cash, cash equivalents, and securities segregated under federal and other regulations:

Treasury securities 1,193 — — 1,193

4 unchanged sentences

Money market funds - escrow account 2 — — 2

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

User-held fractional shares 2,530 — — 2,530

Total financial assets $ 4,154 $ 750 $ — $ 4,904

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

Fractional shares repurchase obligations 2,530 — — 2,530

Total financial liabilities $ 2,530 $ — $ — $ 2,530

____________________________

(1) As of December 31, 2023, U.S.

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

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:

8 unchanged sentences

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

December 31, 2024

(in millions) Level 1 Level 2 Level 3 Total

Held-to-maturity investments:

Treasury securities $ 338 $ — $ — $ 338

Corporate debt securities — 51 — 51

government agency securities — 10 — 10

Total held-to-maturity investments $ 338 $ 61 $ — $ 399

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.

1 unchanged sentence

During the year ended December 31, 2024, we did not have any transfers in or out of Level 3 assets or liabilities.

Safeguarded user cryptocurrencies

Safeguarded user cryptocurrencies were as follows:

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 and 2023.

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 $ —

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 )

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

20 unchanged sentences

State tax benefit, net of federal benefit 1.8 ( 1.9 ) 1.1

Foreign rate differential — — —

Share-based compensation

1 unchanged sentence

Research and development credits 3.6 5.6 ( 4.8 )

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

Non-deductible regulatory settlements ( 0.3 ) ( 4.6 ) ( 0.7 )

Permanent differences — ( 0.1 ) ( 0.2 )

Other — 0.2 0.3

Change in valuation allowance ( 13.9 ) 8.0 ( 46.0 )

Total provision for (benefit from) income taxes ( 0.1 ) % ( 0.1 ) % ( 1.4 ) %

Effective tax rate ( 0.1 ) % ( 1.4 ) % ( 32.6 ) %

Significant components of our deferred tax assets and liabilities consisted of the following:

2 unchanged sentences

Deferred tax assets:

User cryptocurrencies safeguarding obligation

$ 2,167 $ 3,660

Net operating loss carryforwards 266 176

Tax credit carryforwards 134 161

Research and experimentation expenditure amortization 151 248

Tax credit carryforwards 161 174

Lease liabilities 27 33

Net operating loss carryforwards 176 29

Share-based compensation 43 16

Accruals and other liabilities 17 16

Lease liabilities 38 27

Provision for credit losses 12 16

Total deferred tax assets $ 613 $ 563

Deferred tax liabilities:

Asset related to user cryptocurrencies safeguarding obligation $ ( 2,167 ) $ ( 3,660 )

Deferred customer match incentives

Right of use assets ( 17 ) ( 24 )

11 unchanged sentences

The realization of tax benefits of net deferred assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable.

Based on all available evidence for the year ending December 31, 2023, we believe it is more likely than not that the tax benefits of the remaining U.S.

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

Based on our analysis of all positive and negative evidence available for the year ended December 31, 2024, having demonstrated sustained profitability which is objective and verifiable, and taking into account anticipated future earnings, we concluded it is more likely than not that our U.S.

federal, and certain U.S.

states net deferred tax assets will be realizable.

Accordingly, we have recognized a non-recurring tax benefit of $ 506 million related to the valuation allowance release.

In addition, we recognized deferred tax expense of $ 137 million for the portion of U.S.

federal and certain U.S.

states deferred tax assets benefited during the year, resulting in a net deferred tax benefit of $ 369 million for the year ended December 31, 2024.

We continue to maintain a valuation allowance for our California, and other certain other U.S.

states and certain foreign net deferred tax assets, as we believe it is more likely than not that the tax benefits of these jurisdictions’ net deferred tax assets may not be realized.

The Company continues to maintain a valuation allowance against its Californian net deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criteria, particularly as the Company expects research and development tax credit generation to exceed its ability to use the credits in future years.

The valuation allowance for California, and other certain U.S.

states and certain foreign net deferred tax assets increased by approximately $8 million for the year ended December 31, 2024.

As of December 31, 2024, we have $ 20 million of U.S.

8 unchanged sentences

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.

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 Code, and similar state provisions.

The annual limitation may result in the expiration of net operating losses and tax credits before utilization.

We had unrecognized tax benefits of approximately $ 58 million and $ 74 million as of December 31, 2022 and 2023.

These unrecognized tax benefits, if recognized, would not affect the effective tax rate.

We had unrecognized tax benefits of approximately $ 98 million of which $ 65 million would affect our effective tax rate if recognized as of December 31, 2024.

The remaining $ 33 million of unrecognized tax benefits would not impact the effective tax rate due to realizability of those deferred tax assets.

As of December 31, 2023, we had $ 74 million of unrecognized tax benefits, which would not affect the effective tax rate due to realizability of those deferred tax assets.

We record interest and penalties related to unrecognized tax benefits in income tax expenses.

26 unchanged sentences

Amortization expense of internally developed software was $ 26 million, $ 41 million, and $ 43 million for the years ended December 31, 2022, 2023, and 2024.

In connection with our August 2022 Restructuring, we recognized an impairment of $ 15 million associated with our leasehold improvements and accelerated depreciation of $ 9 million related to other fixed assets for the year ended December 31, 2022.

Refer to Note 6 - Restructuring Activities for more information.

SECURITIES BORROWING AND LENDING

When we lend securities to third parties we receive cash as collateral for the securities loaned.

In the table below, the cash collateral we hold related to loaned securities is presented in “securities loaned” and the fair value of securities lent is presented in “security collateral pledged.” Similarly, when we borrow securities from third parties or fully-paid securities from users, we provide cash collateral.

In the table below, the amount of that cash collateral is presented in “securities borrowed” and the fair value of the securities received is presented in “security collateral received.”

Our securities lending transactions are subject to enforceable master netting arrangements with other broker-dealers;

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.

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

When we borrow securities from users participating in the Fully-Paid Securities Lending program or from third parties, we provide cash collateral to our users and third parties, which is recorded on our consolidated balance sheets as “securities borrowed”, an asset, representing our rights to the return of that collateral.

When we lend securities to third parties, we receive cash as collateral, which is recorded on our consolidated balance sheets as “securities loaned”, a liability, representing our obligation to return the collateral.

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

1 unchanged sentence

Assets Securities borrowed

Gross amount of securities borrowed $ 517 $ 1,602

Gross amount of cash collateral provided to users for securities borrowing transactions

$ 1,602 $ 3,236

Gross amount offset on the consolidated balance sheets — —

Amounts of assets presented on the consolidated balance sheets 1,602 3,236

Gross amount of securities borrowed not offset on the consolidated balance sheets:

Securities borrowed 517 1,602

Security collateral received ( 509 ) ( 1,536 )

Gross amount not offset on the consolidated balance sheets:

Cash collateral provided to users and third parties for securities borrowing transactions

Fair value of securities borrowed from users and third parties ( 1,536 ) ( 3,118 )

Net amount $ 66 $ 118

Liabilities Securities loaned

Gross amount of securities loaned $ 1,834 $ 3,547

Gross amount of securities loaned offset on the consolidated balance sheets — —

Gross amount of cash collateral received from counterparties for securities lending transactions

$ 3,547 $ 7,463

Gross amount offset on the consolidated balance sheets

Amounts of liabilities presented on the consolidated balance sheets

Gross amount of securities loaned not offset on the consolidated balance sheets:

Securities loaned 1,834 3,547

Security collateral pledged ( 1,629 ) ( 3,188 )

Gross amount not offset on the consolidated balance sheets:

Cash collateral received from counterparties for securities lending transactions

Fair value of securities pledged to counterparties

( 3,188 ) ( 6,887 )

Net amount $ 359 $ 576

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, 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, 2023 and 2024, we were permitted to re-pledge securities with a fair value of $ 4.78 billion and $ 11.04 billion under margin account agreements with users, and securities with a fair value of an immaterial balance for fiscal year 2023 and 2024 that we borrowed under MSLAs with third parties.

Under the Fully-Paid Securities Lending program, as of December 31, 2023 and 2024, we were permitted to borrow securities with a fair value of $ 14.03 billion and $ 38.70 billion including securities with a fair value of $ 1.54 billion and $ 3.12 billion that we had borrowed from users.

As of December 31, 2023 and 2024, we had re-pledged securities with a fair value of $ 3.19 billion and $ 6.89 billion, in each case under MSLAs and Fixed-Term Securities Lending Agreements with third parties.

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.

In addition, as of December 31, 2023 and 2024, we had re-pledged $ 676 million and $ 1.60 billion of the permitted amounts under the margin account agreements with clearing organizations to meet deposit requirements.

FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK

Revolving Credit Facilities

October 2019 Credit Facility

In October 2019, we entered into a $ 200.0 million committed and unsecured revolving line of credit with a syndicate of banks maturing in October 2023 (the “October 2019 Credit Facility”).

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.

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.

The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from London Interbank Offered Rate (“LIBOR”), multiplied by the Statutory Reserve Rate (as defined in the agreement) at the applicable time.

The ABR is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50 % and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00 %.

If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate (as defined in the agreement) as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent.

In December 2022, the terms of the October 2019 Credit Facility were amended.

Under the amendment, the October 2019 Credit Facility bears interest, at our option, at a per annum rate of either (a) the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus 1.00 % or (b) the Alternative Base Rate.

The Adjusted Term SOFR Rate is equal to the Term SOFR Rate for such interest period, published by the Term SOFR Administrator, plus the applicable Term SOFR Adjustment at the applicable time.

The Term SOFR Adjustment is (i) 0.11 % per annum for an interest period of one month;

(ii) 0.26 % per annum for an interest period of three months;

and (iii) 0.43 % per annum for an interest period of six months.

RHM March 2024 Credit Agreement

On March 22, 2024, RHM entered into a second amended and restated credit agreement with a syndicate of banks (the “RHM March 2024 Credit Agreement”) amending and restating the unsecured revolving line of credit entered into in October 2019 and as thereafter amended.

The RHM March 2024

Credit Agreement has an initial commitment of $ 750 million with a maturity date of March 22, 2027.

Under circumstances described in the RHM March 2024 Credit Agreement, the aggregate commitments may be increased by up to $ 187.5 million, for a total commitment of up to $ 937.5 million.

Borrowings under the RHM March 2024 Credit Agreement will bear interest at a rate per annum equal to the Alternate Base Rate or Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin rate of 1.50 %.

For purposes of the RHM Credit Agreement, the Alternate Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.5 % and (iii) the Adjusted Term SOFR for a one month interest period plus 1.0 %.

The Adjusted Term SOFR Rate is equal to the Term SOFR, published by the Term SOFR Administrator, plus the Term SOFR Adjustment.

The Term SOFR Adjustment is 0.10 %.

If the Adjusted Term SOFR Rate is less than the floor of 0.0 %, such rate shall be deemed to be equal to the floor.

As amended, the ABR is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50 % and (iii) the Adjusted Term SOFR for a one month Interest Period plus 1.00 %.

There were no outstanding borrowings under the October 2019 Credit Facility, as amended, at December 31, 2022 and 2023.

We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10 % on any unused amount of the October 2019 Credit Facility quarterly in arrears.

April 2023 Credit Facility

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.

RHM is obligated to pay a commitment fee calculated at a per annum rate equal to 0.25 % on any unused amount of the RHM March 2024 Credit Agreement.

RHS March 2024 Credit Agreement

On March 22, 2024, RHS, our wholly-owned subsidiary, entered into the Third Amended and Restated Credit Agreement (the “RHS March 2024 Credit Agreement”) among RHS, as borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, amending and restating the $ 2.175 billion 364-day senior secured revolving credit facility entered into in March 2023.

The RHS March 2024 Credit Agreement provides for a 364-day senior secured revolving credit facility with a total commitment of $ 2.25 billion.

Under circumstances described in the RHS March 2024 Credit Agreement, the aggregate commitments may be increased by up to $ 1.125 billion, for a total commitment of $ 3.375 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 B loans are secured by the right to the return from 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 Exchange Act.

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.

Borrowings under the RHS March 2024 Credit Agreement will bear interest at a rate per annum equal to the greatest of (i) Daily Simple SOFR plus 0.10 % (as defined in the RHS March 2024 Credit Agreement), (ii) the Federal Funds Effective Rate (as defined in the RHS March 2024 Credit Agreement) and (iii) the Overnight Bank Funding Rate (as defined in the RHS March 2024 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 2.50 % for Tranche B and Tranche C loans.

Undrawn commitments will accrue commitment fees at a rate per annum equal to 0.50 %.

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.

The RHS March 2024 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 RHS March 2024 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 RHS March 2024 Credit Agreement may be accelerated upon an “event of default,” as defined in the RHS March 2024 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.

As of December 31, 2023 and December 31, 2024, there were no borrowings outstanding and we were in compliance with all covenants, as applicable, under our revolving credit facilities.

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.

Under terms of the Coastal Bank Program Agreement (discussed below), Robinhood Credit has the ability to purchase credit card receivables originated and held for a period of time by Coastal Bank.

To help facilitate these transactions, we created a VIE known as the Credit Card Funding Trust (the “Trust”).

We are the primary beneficiary of the Trust as, through our role as the servicer and administrator, we have the power to direct the activities that most significantly affect the Trust ’ s economic performance and, due to owning all the equity interest in the Trust, have the right to receive benefits or the obligation to absorb losses.

As such, we consolidate the Trust in the consolidated financial statements.

Substantially all of the Trust’s assets and liabilities are the purchased credit card receivables, included in receivables from users, net, and the outstanding borrowing, included in other current liabilities, on the consolidated balance sheets.

Our exposure to losses in the Trust is limited to the carrying value of net assets held by the Trust, including expected credit losses related to the purchased credit card receivables (Refer to Note 7 - Allowance for Credit Losses).

For the Trust, the creditors have no recourse to our general credit and the liabilities of the Trust can only be settled by the Trust’s assets.

Additionally, the assets of the Trust can only be used to settle obligations of the Trust.

The credit card receivables of the Trust have risks and characteristics similar to other off-balance sheet credit card receivables owned by Coastal Bank and were underwritten to the same standard.

Accordingly, the performance of these assets is expected to be similar to other comparable credit card receivables.

As of December 31, 2024, the Trust had two arrangements in place, one to borrow up $ 200 million from Barclays Bank (“Barclays”) and one to borrow up to $ 100 million from Silicon Valley Bank (“SVB”).

Borrowings under the Barclays arrangement will mature November 2026 and bear interest at Barclays commercial paper rate plus 1.75 % during the revolving period and a higher fixed margin during the other periods.

Borrowings under the SVB arrangement will mature in April 2025 and bear interest at an annual rate of SOFR plus 2.75 % for outstanding borrowings less than $ 50 million, and SOFR plus 2.50 % for outstanding borrowings greater than $ 50 million.

The weighted average interest rate of the SVB and Barclays arrangements is 7.81 %.

During the year ended December 31, 2024, we purchased $ 748 million of credit card receivables.

As of December 31, 2024, the carrying value of purchased credit card receivables that had not been collected, net of provision for credit losses, was $ 179 million, and the outstanding balance of borrowing principal and interest was $ 131 million.

There were no purchases of credit card receivables or borrowings under this arrangement for the year ended December 31, 2023.

For the year ended December 31, 2024, the related interest revenue and expense of the Trust were immaterial .

Off-Balance Sheet Risk

1 unchanged sentence

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.

Robinhood Credit pays Coastal Bank interest 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 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, 2024, the off-balance sheet credit card receivables funded under the Program Agreement was $ 202 million.

Transaction Settlement

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

User securities transactions are recorded on a settlement date basis, which is generally two business days after the trade date for equities and one business day after the trade date for options.

User securities transactions are recorded on a settlement date basis.

Effective May 2024, the settlement date for equities has been shortened from two business days after the trade date to one business day after the trade date, while the settlement date for options remains unchanged at one business day after the trade date.

These activities may expose us to off-balance sheet risk in the event that the other party to the transaction is unable to fulfill its contractual obligations.

In such events, we may be required to purchase financial instruments at prevailing market prices in order to fulfill our obligations.

COMMON STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY

COMMON STOCK AND STOCKHOLDERS' EQUITY

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.

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

As of December 31, 2024, no terms of the preferred stock were designated, and no shares of preferred stock were outstanding.

Voting Rights

19 unchanged sentences

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.

As of December 31, 2024, we had outstanding warrants with a strike price of $ 26.60 that can be exercised to purchase 12.87 million shares of Class A common stock.

The warrants expire on February 12, 2031 and can be exercised with cash or net shares settled at the holder’s option.

In aggregate, the maximum purchase amount of all warrants is $ 380 million.

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

As of December 31, 2024, 1.4 million warrants had been exercised via net settlement, resulting in 456,764 shares of Class A common stock issued, and the maximum purchase amount of all outstanding warrants was $ 342 million.

Share Repurchases

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.

1 unchanged sentence

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.

In 2024, we paid $ 3 million in taxes related to the 1% excise tax

on net share repurchases as a result of the Inflation Reduction Act of 2022, which was also recorded in additional paid-in capital.

On May 28, 2024, we announced that our board of directors approved the Repurchase Program authorizing the Company to repurchase up to $ 1 billion of its outstanding Class A common stock.

While the Repurchase Program does not have an expiration date, we continue to expect to complete over a period of two to three years .

The timing and amount of repurchase transactions will be determined by us from time to time at our discretion based on our evaluation of market conditions, share price, and other factors.

Repurchase transactions may be made using a variety of methods, such as open market share repurchases, including the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, or other financial arrangements or transactions.

The Repurchase Program does not obligate us to acquire any particular amount of Class A common stock and the Repurchase Program may be suspended or discontinued at any time at our discretion.

All shares repurchased will be subsequently retired.

As of December 31, 2024, we repurchased 10 million shares of our Class A common stock for $ 257 million.

Equity Incentive Plans

Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan

Our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), provided for share-based awards to eligible participants, granted as incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”) or restricted stock awards (“RSAs”).

Our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), provided for share-based awards to eligible participants, granted as incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), RSUs, stock appreciation rights (“SARs”) or restricted stock awards (“RSAs”).

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.

30 unchanged sentences

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.

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

The total grant date fair value of options that vested during 2023 and 2024 was $ 7 million and $ 3 million and was immaterial for 2022.

Time-Based RSUs

We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition (“Time-Based RSUs”).

We have granted Time-Based RSUs that vest upon the satisfaction of a time-based service condition.

The following table summarizes the activity related to our Time-Based RSUs for the year ended December 31, 2024:

9 unchanged sentences

There were no Market-Based RSUs granted during 2022, 2023 or 2024.

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

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

9 unchanged sentences

Vested ( 230,532 ) — ( 230,532 ) 2.34

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

Forfeited (3)

( 115,264 ) ( 11,065,463 ) ( 11,180,727 ) 25.79

Unvested at December 31, 2024 — 11,065,463 11,065,463 $ 26.04

2 unchanged sentences

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

(3) The 11 million forfeited shares reflects the impact of the resignation of our co-founder and former Chief Creative Officer during the first quarter of 2024.

The fair value of Market-Based RSUs that vested during 2022, 2023, and 2024 was $ 5 million,$ 5 million and $ 4 million.

14 unchanged sentences

(in millions) 2022 2023 2024

General and administrative $ 885 $ 425 $ 640

Brokerage and transaction $ 5 $ 7 $ 9

Technology and development 212 211 192

Operations 8 8 7

Brokerage and transaction 7 5 7

Marketing 4 5 8

General and administrative 425 640 88

Total $ 654 $ 871 $ 304

_______________

( 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 SBC expense.

( 1) For the year ended December 31, 2022 and 2023, SBC expense primarily consisted $ 314 million and $ 292 million related to Time-Based RSUs and $ 323 million and $ 567 million related to Market-Based RSUs.

For year ended 2024, SBC expense primarily consisted of $ 300 million related to Time-Based RSUs and negative $ 8 million related to Market-Based RSUs, as a portion of the Market-Based RSUs became fully vested in prior periods and was net of an $ 11 million reversal of previously recognized expense related to unvested awards that were forfeited upon the resignation of our co-founder and former Chief Creative Officer during the first quarter of 2024.

The tax benefits recognized in the consolidated statements of operations for SBC were $ 154 million and $ 73 million for year ended December 31, 2024 and December 31, 2023 and were no t material during the year ended December 31, 2022.

We have capitalized SBC expense related to internally developed software of $ 28 million , $ 17 million , and $ 26 million for years 2022, 2023, and 2024.

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.

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, 2024, there was $ 230 million of unrecognized SBC expense that is expected to be recognized over a weighted-average period of 0.86 years.

NET LOSS PER SHARE

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.

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

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

NET INCOME (LOSS) PER SHARE

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

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

2022 2023 2024

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

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

Class A Class B Class A Class B Class A Class B

Net income (loss) $ ( 878 ) $ ( 150 ) $ ( 465 ) $ ( 76 ) $ 1,214 $ 197

Net income (loss) attributable to common stockholders $ ( 878 ) $ ( 150 ) $ ( 465 ) $ ( 76 ) $ 1,214 $ 197

Weighted-average common shares outstanding - basic 750,681,627 127,948,397 763,580,698 127,276,961 758,213,055 122,900,101

Basic EPS $ ( 1.17 ) $ ( 1.17 ) $ ( 0.61 ) $ ( 0.61 ) $ 1.60 $ 1.60

Net income (loss) $ ( 878 ) $ ( 150 ) $ ( 465 ) $ ( 76 ) $ 1,214 $ 197

Reallocation of net income as a result of conversion of Class B to Class A common stock — — — — 197 —

Reallocation of net income to Class B common stock — — — — — $ ( 5 )

Net income (loss) for diluted EPS $ ( 878 ) $ ( 150 ) $ ( 465 ) $ ( 76 ) $ 1,411 $ 192

Weighted-average common shares outstanding - basic 750,681,627 127,948,397 763,580,698 127,276,961 758,213,055 122,900,101

Dilutive effect of stock options and unvested shares — — — — 25,058,348 —

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

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 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:

Conversion of Class B to Class A common stock — — — — 122,900,101 —

Weighted-average common shares outstanding - diluted 750,681,627 127,948,397 763,580,698 127,276,961 906,171,504 122,900,101

Diluted EPS $ ( 1.17 ) $ ( 1.17 ) $ ( 0.61 ) $ ( 0.61 ) $ 1.56 $ 1.56

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:

Year Ended December 31,

3 unchanged sentences

Stock options 15,226,096 12,141,566 —

Early-exercised stock options 15,126 — —

Warrants 14,278,034 14,278,034 12,868,262

ESPP 246,179 364,427 305,692

364,427 305,692 —

Total anti-dilutive securities 144,483,018 83,827,267 24,761,949

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 nine years , and many leases include one or more options to renew.

Our leases have remaining terms of one year to eight 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.

We do not have any finance leases.

See Note 6 - Restructuring Activities, for further information relating to impacts on leases due to the April and August 2022 Restructurings.

In 2022, we executed agreements to assign some of our operating leases to third-party assignees who assumed all of our obligations, liabilities, covenants, and conditions under the assigned leases.

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.

Refer to Note 6 - Restructuring Activities, for further information relating to impacts on leases due to the April and August 2022 Restructurings.

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

14 unchanged sentences

Short-term lease costs — 1 1

Sublease income — ( 3 ) ( 6 )

Total lease costs $ 40 $ 26 $ 25

11 unchanged sentences

_______________

(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.

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

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.

For the year ended December 31, 2024, lease liabilities arising from obtaining right-of-use assets primarily related to initial recognition of new leases and lease extensions.

Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2024 are as follows:

12 unchanged sentences

Amounts accrued for contingencies in the aggregate were $ 190 million and $ 128 million as of December 31, 2023 and 2024.

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.

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

The securities industry is highly regulated and many aspects of our business involve substantial risk of liability.

In past years, there has been an increase in litigation and regulatory investigations involving the brokerage and cryptocurrency industries.

The securities industry, and many other industries in which we operate, are highly regulated and many aspects of our business involve substantial risk of liability.

In past years, there has been an increase in litigation and regulatory investigations involving the brokerage, cryptocurrency, derivatives, and credit card industries.

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, other SROs, or international regulators 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.

17 unchanged sentences

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

In March 2024, Plaintiffs filed a motion for class certification, which Robinhood opposed.

In October 2024, the court denied class certification without prejudice.

Plaintiffs filed a renewed motion for class certification in January 2025, which Robinhood is opposing.

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, 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.

The New York Attorney General is conducting an investigation into brokerage execution quality and collaring the prices of certain trade orders.

The MSD is examining RHF’s customer complaint supervision, the disruptions experienced by BOATS during the Robinhood 24 Hour Market overnight trading session on August 4-5, 2024, and the offering of presidential election event contracts.

We are cooperating with these investigations.

SEC Settlement

On January 13, 2025, as part of the January 2025 SEC Settlement, RHF and RHS resolved the SEC’s investigations concerning Regulation SHO, Electronic Blue Sheets requests, account takeovers, anti-money laundering compliance and cybersecurity issues, including the data security incident we experienced in November 2021 when an unauthorized third-party socially engineered a customer support employee by phone and obtained access to certain customer support systems (the “November 2021 Data Security Incident”), and various brokerage recordkeeping issues, including off-channel communications.

RHF and RHS paid penalties totaling $ 45 million for these violations, were censured, and agreed to certain undertakings.

The settlement related to (i) RHS’s failures to comply with various provisions of Regulation SHO in connection with its stock lending and fractional trading programs from May 2019 until March 2020 and December 2019 until December 2023, respectively;

(ii) RHS’s failures to submit complete and accurate electronic blue sheet data in response to SEC staff Electronic Blue Sheet requests from at least October 2018 through April 2024;

(iii) RHF and RHS’s untimely filing of suspicious activity reports from January 2020 through March 2022;

(iv) RHF and RHS’s failure to implement adequate policies and procedures designed to detect, prevent, and mitigate identity theft in connection with customer accounts from April 2019 through June 2022 in violation of Regulation S-ID;

(v) RHF and RHS’s failure to adequately address known risks posed by a vulnerability related to remote access to our systems from at least June 28, 2021 through November 3, 2021 in violation of Regulation S-P;

and (vi) RHF and RHS’s failures to maintain and preserve (a) off-channel brokerage communications sent or received by employees from at least 2019 through 2022, (b) core operational databases in a manner required by regulation or for the required length of time between December 2020 and December 2023, and (c) certain customer communications between 2020 and March 2021 due to our third-party archiving vendor’s ingestion limits being exceeded.

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, the Over-the-Counter Reporting Facility, the Order Audit Trail System, and the Consolidated Audit Trail;

FINRA Enforcement and Examination 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;

processing of certain requests for transfers of assets from Robinhood through ACATS;

responses to Electronic Blue Sheets requests from FINRA;

the Q4 2022 Processing Error;

the delays in notification from third parties and process failures within our brokerage systems and operations in connection with the handling of a 1-for-25 reverse stock split transaction of Cosmo Health, Inc, in December 2022 (the “Q4 2022 Processing Error”);

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

1 unchanged sentence

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, 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.

RHS’s and RHF’s compliance with best execution obligations;

RHS’s compliance with FINRA Rules 6190, 5260 and 6121;

RHF’s compliance with regulations governing the delivery of required documents;

matters related to RHS’s and RHF’s supervision of technology;

origin code reporting;

short interest reporting;

customer complaint supervision and restriction issues;

the disruptions experienced by BOATS during the Robinhood 24 Hour Market overnight trading session on August 4-5, 2024;

account takeovers (i.e., circumstances under which an unauthorized actor successfully logs into a customer account), anti-money laundering compliance and cybersecurity issues;

and the Early 2021 Trading Restrictions (as defined below) and employee trading issues as described more fully below.

We are in advanced discussions with FINRA to resolve the majority of these matters.

There can be no assurances that these discussions will lead to resolution of the investigations and examinations.

In December 2024 and January 2025, FINRA advised us in writing that it had closed the previously disclosed examinations and investigations into compliance with Rule 3210, Regulation SHO, and recordkeeping, including off-channel communications.

The FDIC is investigating issues related to compliance with the Electronic Funds Transfer Act (“EFTA”).

On January 13, 2025, the SEC advised us in writing that it had closed the previously disclosed investigation into the broker-dealers’ compliance with the EFTA.

Robinhood Crypto Matters

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 received subpoenas from the California Attorney General’s Office (the “CAGO”) seeking information about, among other things, RHC’s trading platform, business and operations, custody of customer assets, customer disclosures, and coin listings.

On August 31, 2024, RHC reached a settlement with the CAGO to resolve this matter for which we paid $ 3.9 million.

The settlement related to certain disclosures by RHC and delivery of customers’ cryptocurrency assets under California Corporations Code Sections 29520 and 29505 during the period January 2018 through April 2022.

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, including the November 2021 Data Security Incident.

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.

Massachusetts Securities Division Matter

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.

Among other things, the MSD alleged that our product features and marketing strategies, outages, and options trading approval process constitute violations of Massachusetts securities laws.

MSD subsequently filed an amended complaint that seeks, among other things, injunctive relief (a permanent cease and desist order), censure, restitution, disgorgement, appointment of an independent consultant, an administrative fine, and revocation of RHF’s license to operate in Massachusetts.

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.

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.

In April 2021, RHF filed a complaint and motion for preliminary injunction and declaratory relief in Massachusetts state court seeking to enjoin the MSD administrative proceeding and challenging the legality of the Massachusetts fiduciary duty standard.

In September 2021, the parties filed cross-motions for partial judgment on the pleadings.

In March 2022, the court ruled in favor of RHF, declaring that the Massachusetts fiduciary duty regulation was unlawful.

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.

RHC is cooperating with this investigation.

On May 4, 2024, RHC received a “Wells Notice” (the “May 2024 Wells Notice”) from the SEC Staff stating that the SEC Staff has advised RHC that it made a “preliminary determination” to recommend that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Exchange Act.

The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities.

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 unspecified total statutory and treble monetary damages, injunctive relief, and attorneys’ fees and costs.

The case is currently pending in the U.S.

District Court for the Western District of Washington.

RHF filed a motion to dismiss the complaint.

In February 2022, Moore and Andrew Gillette filed an amended complaint, which RHF again moved to dismiss.

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.

The complaint sought unspecified total statutory and treble monetary damages, injunctive relief, and attorneys’ fees and costs.

In July 2024, the court granted final approval of a $ 9 million settlement.

Early 2021 Trading Restrictions Matters

Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp.

and AMC Entertainment Holdings, Inc., on our platform (the “Early 2021 Trading Restrictions”).

and AMC Entertainment Holdings, Inc., on our U.S.

trading platform (the “Early 2021 Trading Restrictions”).

A number of individual and putative class actions related to the Early 2021 Trading Restrictions were filed against RHM, RHF, and RHS, among others, in various federal and state courts.

In April 2021, the Judicial Panel on Multidistrict Litigation entered an order centralizing the federal cases identified in a motion to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions in the United States District Court for the Southern District of Florida (the “MDL”).

The court subsequently divided plaintiffs’ claims against Robinhood into three tranches:

federal antitrust claims, federal securities law claims, and state law claims.

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;

the state law complaint asserted negligence and breach of fiduciary duty claims.

In August 2021, we moved to dismiss both of these complaints.

In September 2021, plaintiffs filed an amended complaint asserting state law claims of negligence, breach of fiduciary duty, tortious interference with contract and business relationship, civil conspiracy, and breaches of the covenant of good faith and fair dealing and implied duty of care.

In January 2022, the court dismissed the state law complaint with prejudice.

In January 2022, the court dismissed the state law claims with prejudice.

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.

In January 2022, plaintiffs filed an amended complaint in connection with the federal antitrust tranche and Robinhood moved to dismiss the amended complaint.

In May 2022, the court dismissed the federal antitrust complaint with prejudice.

Plaintiffs have appealed the court’s order to the United States Court of Appeals for the Eleventh Circuit.

In May 2022, the court dismissed the federal antitrust claims with prejudice.

In June 2024, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s order.

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.

3 unchanged sentences

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.

In April 2024, the court denied Plaintiffs’ motion for leave to file a renewed motion for class certification.

On May 28, 2024, Robinhood notified the court that it had reached a settlement in principle with the Plaintiffs in their individual capacities.

Robinhood subsequently notified the court that one of these Plaintiffs was unwilling to sign the settlement agreement and requested additional time to negotiate with that individual.

On August 14, 2024, the court dismissed the lead and named Plaintiffs’ claims.

Robinhood has reached settlements with a number of remaining individual plaintiffs, continues to negotiate with others, and has filed a motion to compel arbitration of the majority of the remaining claims.

RHM, RHF, RHS, and our 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 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.

1 unchanged sentence

There have been several inquiries based on specific customer complaints.

We have also received requests from the SEC Division of Enforcement and FINRA related to employee trading in certain securities that were subject to the Early 2021 Trading Restrictions, including GameStop Corp.

We have received requests from the SEC Division of Enforcement and FINRA related to employee trading in certain securities that were subject to the Early 2021 Trading Restrictions, including GameStop Corp.

and AMC Entertainment Holdings, Inc., during the week of January 25, 2021.

2 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.

On January 10, 2025, SEC Enforcement advised us in writing that it had closed its investigation into the Early 2021 Trading Restrictions and any contemporaneous employee trading issues.

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 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”).

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.

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.

Plaintiff seeks unspecified compensatory damages, rescission of shareholders’ share purchases, and an award for attorneys’ fees and costs.

5 unchanged sentences

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 February 2024, plaintiffs filed a notice of appeal to the 9th Circuit and the appeal is currently pending.

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 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.

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 of directors has formed a Demand Review Committee that is reviewing the demand.

Pay Transparency Litigation

In July 2024, RHM, RHY, and RHC were sued in a putative class action captioned John Milito v.

Robinhood Markets, Inc.

al., alleging that Robinhood violated Washington’s Equal Pay and Opportunity Act, because some of the Company’s job postings allegedly failed to include a wage scale or salary range.

The complaint seeks unspecified total statutory damages, attorneys’ fees and costs, injunctive relief, and declaratory relief.

The case is currently stayed in the Superior Court in King County in Washington pending a certified question to the Washington Supreme Court.

Cash Sweep Litigation

In October 2024, RHM, RHF, and RHS were sued in a putative class action captioned Dey v.

Robinhood Markets, Inc.

al., in the U.S.

District Court for the Northern District of California.

Plaintiff asserts breach of fiduciary duty, gross negligence, negligent misrepresentation and omissions, breach of implied covenant of good faith and dealing, and violation of California’s unfair competition law based on allegations that defendants failed to pay a reasonable rate of interest to non-Robinhood Gold brokerage account holders on cash balances swept to program bank deposit programs.

The complaint seeks, among other things, certification of the class, unspecified monetary, punitive, treble, and statutory damages, restitution, disgorgement, attorneys’ fees and costs, injunctive relief, and declaratory relief.

In January 2025, Robinhood filed a motion to dismiss.

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