Vlad Tenev on Robinhood's 11 revenue lines, the gold card hitting $15B in annual transaction volume, and crypto tokenization roadmap

Speaker 1: we have Vlad Tenev from Robinhood. He's the cofounder and CEO. He's still at the helm, what, ten, twelve, fifteen years in the mix? How long have you been running Robinhood these days? Gosh. You guys are making me feel old.

Speaker 6: Unk. I'm still in my thirties Okay. For one more year. Yeah. But 2015.

Speaker 1: This year, getting feeling older or reinvigorated? Age of AI, lots of opportunity at the same time, pullbacks in various markets, stocks up and down. How are you feeling?

Speaker 6: I'm feeling really good. Okay. I mean, yeah, on when when we talk about the business, I think people have a tendency to be short term oriented and think about the ephemerality of this quarter, that quarter, but the real story for me was we're making big investments, we're continuing to invest in areas that matter, and there's over a 100,000,000,000,000 moving from older generations to younger. Mhmm. And so things like us being the sole initial trustee and broker powering Trump accounts, which are gonna put Robin in front of 60,000,000 children, literally extending our market from 18 and over to zero and over. We've got investments at all stages of the life cycle. Trump accounts very early. We've got businesses that are scaling and doing quite well, like Robinhood Banking and Robinhood Gold Card. And then the active trader business and the core engine of the business, which is people depositing more money for investing and trading, is looking very, very strong as well. And then that's not to mention, we had a big product event in New York where we launched all these family features as well as the platinum card, but we've got

Speaker 1: bunch of other products that are in the hopper that I think people are gonna be very excited about. I I'm sure you're getting questions about the kids thing. I love the idea of kids investing in index funds and holding them until their retirement. Not big on them, betting on sports or taking crazy option strategies. How are you thinking about actually rolling out suite of features? Because there's some that are just like so educational. I remember reading about Warren Buffett and learned so much about investing. Of course, there's some risk. But then there's other products that are much more risk on, much more advanced stuff where you're much more like an investment professional to be able to do that responsibly. How do you think about the different products being available to different segments of the community now that Robinhood is so big?

Speaker 6: Yeah. I mean, I think we're very careful about leading with and incentivizing the products that most customers would benefit from. Mhmm. So if you actually look at what we incentivize, it's products like retirement where you get a 3% contribution match on contributions that you make to your retirement account. Yeah. And I'm not aware of anyone doing it. We were the first to do something like that, right? Yeah. Retirement's grown to 30,000,000,000, north of 30,000,000,000 in assets. In my opinion, and I admit that this is my product, but people should look at it. I I think that it's the best retirement offering on the market. Cool. Robinhood Strategies, which is our passive digital advisor offering, incredibly low cost. For that one, you might remember we pioneered the concept of a cap. So other investment advisor offerings, including digital advisors, charge you more the more you invest. And we thought, well Oh. Particularly for a digital advisor, you're kind of doing the same exact thing. Yeah. So why does it make sense to charge someone that has $10,000,000 invested with you 10 times more than someone that has 1,000,000? So we capped it at $250. So 0.25 percent, but capped at a 100 k. Yeah. And and that's been the first of its kind. So I I think we do a really nice job on the passive products. I think it's just that the active trading products where we compete and also do quite well tend to get more of the excitement and attention because it's not interesting to people to talk about saving money for retirement and Yeah. Having your your assets passively managed digitally.

Speaker 2: Yeah. Joshua in the chat wants to know about getting access to things like Korean stocks. Oh. What's going on with with Korea? What's what how are you thinking about ADRs. You know, you know

Speaker 1: Lot of exciting International. Computer stocks and AI stocks over in Korea. I know Leopold Yeah. There's couple of semis out in Korea that are interesting.

Speaker 6: Think the great thing about our business is to some degree customers are always unsatisfied. So this is the first time we're really hearing loud feedback about international stocks. It's because we're kind of going down the list and there's relatively few things that Robinhood does not offer on par or better than our competitors. So last quarter, we would hear about interest on options collateral. For example, a lot of our active options traders would say, we love trading options at Robinhood. The experience is great. The costs are super low, but we'd like to get interest on the collateral that we have locked up like we do at other places. And then we added that. And now, of course, nobody mentions that. We've a lot of we have a lot of dividend investors, and they had this complaint for a long time about how other brokers pay their dividends in the morning. We do it in the evening. And one of the things we unveiled, which I think is like super innovative, is we said, okay, we're not just gonna go in the morning, we're gonna pay your dividends up to seventeen days early on average. Wow. So with dividends, I don't know if you guys are dividend hounds, but there's like a record date where if you own the if you own the stock on that date, you get you're entitled to the dividend. But the payout date is usually two to three weeks later. So what happens during that period? I mean, there's essentially no risk that you're not gonna receive that dividend. So we thought, why don't we just go through it and and make that easy for customers. So now the dividend the dividend people are are happy except they want a dividend tracker, which we're building. Okay. So, yeah, you're gonna get down to these things where yeah. Eventually, the biggest complaint will be

Speaker 1: connecting customers to the Kazakhstan markets and that's when we know we're doing we're doing really well. There's always more to to be done. Okay. Take us through what's going on in crypto. It's obviously showing up in the financials, but I mean, had someone on the show earlier who said it's down only. Is this people rotating from crypto to I was talking about more specifically like the token, the k shaped dynamic of the tokens. But like like it felt like there was a lot of legislation that was happening in crypto to sort of create smoother guardrails. There were no big blow ups. It felt like the some of the crazier more risk on behavior had sort of moved on. And so it felt like a time when crypto could sort of just grow steadily and yet it seems like the market's pulling back. Like how have you processed it? How are you thinking about crypto both for your business and just as an abstract asset class these days?

Speaker 6: Yeah. I mean, one of the things that I think one of the criticisms we get is that Robinhood is heavily reliant on crypto and trades sort of like correlated with BTC. Sure. Now if you look at what's actually happened in the past year, we have an incredibly diversified business, 11 lines of business generating 100,000,000 or more in annualized revenue. So crypto is a big one for sure, but it's under 20% of our revenue and we've got lots of other things that that are firing on all cylinders. And there's more in line. So it's eleven now, but Robin Hood Legend's been doing super well. Mhmm. The gold credit card has been growing at a very rapid pace. Yeah. So there's gonna be more. Now, when you look at crypto specifically, we're still very bullish on crypto assets over the long run, but as you can tell, there are cycles in the market. There's periods where we're just talking about crypto, then there's periods that are a little bit colder and more winterous. But developers are developing and we're continuing to build and invest and we see some very positive things. Now, our focus on crypto is actually investing in the technology and making it so that traditional assets are tokenized on chain. So, it's a little bit less like what's the new meme coin that we can list, although we do love our meme coins, and more how can we actually make tokenization a real thing. And I outlined kind of a three phase plan in our event in France about how first we're going to start tokenizing stocks in a limited fashion and it'll look somewhat similar to what's available in traditional markets, but in Europe. But eventually, you'll get to fully on chain DeFi enabled stock tokens that are composable. And we're still executing on that vision. As a matter of fact, Robinhood Chain launched on testnet and it was a very successful Testnet with something north of $100,000,000 in transactions. So developers are obviously very keen to integrate into the ecosystem and get access to the Robinhood customer base. So we're continuing to make investments across the full stack, centralized exchange, DeFi with Robinhood Chain, the non custodial wallet, which I think people are sleeping on, but I think we've got really, really good stuff there. And we announced an event in London in early July where we're gonna kind of Okay. Unveil the next chapter with a heavy emphasis on tokenization.

Speaker 1: Yeah. I wanna talk about these events because I feel like you have one of the most, I don't know, unique or diverse aesthetics for your events. I've seen you do sort of like the post game with the step and repeat, like it's a NBA game, and then the aesthetics for the the the France event was like this giant pool and everyone's in white suits. Like, is this coming from you? Like, who's driving this? Like, what is the meaning behind all the different stylistic touches? Like, it's cool. There there there's a whole bunch of different directions you're going. Is this something you wanna continue to experiment with? Is it like a creative outlet for you? Like how are you thinking about events?

Speaker 6: Well, guys have to watch. You you mentioned some good ones, but

Speaker 1: the last one we did at the TWA terminal in New York I love which that was pilot themed. Yeah. That's cool. I thought it was quite good as well. So so so you want to do a different theme every year maybe or every quarter? Like, is that the is that the idea? And do you come up with the themes or do you have a team that's submitting ideas? Like, how does that work?

Speaker 6: I mean, it's it's a collaborative process, but I've been generally coming up with and and at least approving and editing the themes. Love it. Creative director. I love it. No. No. It should. I mean, it's like it's it's fun to bring the CEO's personality I think it's hard to do strange stuff without, you know, the CEO kind of driving it at least to some degree. Right? Yeah. I think that's the risk with corporate events. Yeah. They could end up, if you're not being careful Yeah. Looking like crappier versions of original Apple events. And I think, admittedly, that's kind of how we started. Our first event was 2024 where we unveiled the Gold Card. Mhmm. And it it sort of was heavily inspired by the Apple events. But then we asked ourselves, you know, it's time to grow beyond that. Sort of like learn from the masters, but then we've got to push the frontier. I think that what we ask ourselves is we want to roll out these products, but how can we roll them out in a way that's super engaging and sort of like imbues storytelling and craftsmanship into the actual announcements. So the last one, the New York event was viewed over 60,000,000 times. I mean, the numbers were just shocking to me. Six sixty million if you look at it across x and YouTube. I mean, that that's more than most movies. That's wild. Wild. How do you think LLMs are changing

Speaker 2: retail investor behavior?

Speaker 6: Yeah. I mean, I think there's three different ways that actually AI advances affect Robinhood, which which I think is more than most companies. And we're kind of working hard to lead in all three. So number one, it's just the the stuff that we're doing internally, accelerating software engineering, automating customer support. And we were early on to this and we've actually built a lot of our own internal tooling because third party stuff hasn't quite caught up even now. The second is Robinhood Cortex and AI tooling inside our product. So one of the things I announced at earnings is that Robinhood Cortex, which is our AI family of products, has now been used by nearly 1,000,000 customers and that's growing very, very quickly. And we just rolled out Cortex Assistant, which is essentially AI chatbot that has full context into your account and financial data in your Robinhood app. And obviously, the next step is, can we take some of these Claude code esque agentic capabilities and empower all sorts of financial trading and, and other use cases? So we're we're working on that. I don't think anyone in financial services has really cracked that. There have been some early experiments, but I I think I think we've got some good stuff to share there. So and that's gonna be, you know, year. Starting next month, I think we're going to we're going to roll out some of these agentic capabilities. Then there's a third one. You guys probably saw I know I know congratulations on the OpenAI deal, by the way. Robinhood Ventures, which I've been talking to you about since the beginning, invested in OpenAI. Yes. Yes. Amazing. So now Robinhood Ventures is like We're all tied.

Speaker 1: Public. Yeah. The k rattles who grows. I love it. Every company will This

Speaker 2: May this may be a a silly question Yeah. But you're a good person to answer it. Button. Why did Microsoft, Meta, Google, and Amazon why do they end up all having earnings? Yeah. Is that by design or random? Like you would think you would think that you would say like, hey, these companies represent you know 20 I want my special day. I'll go on Monday. Yeah. You want the attention. You announced earnings today. Yeah. Why not why not not give everybody their own kind of moment?

Speaker 6: Yeah. I mean, could speak for myself Mhmm. In in how we do it. We do not coordinate with other companies on when to do our earnings. I mean, it's just kind of driven by alright, there's a certain window that you can do it after the quarter ends and it's sort of like availability, Right? You don't want to do it on a Monday, you don't really want to do it on a Friday, it kind of has to be Tuesday, Wednesday, Thursday. Yeah. And so maybe the hyperscalers

Speaker 2: were kind of all in the same window, but then they're like, let's jump together. Like, we're gonna we're gonna

Speaker 6: I would be surprised if there was any sort of collusion involved, but maybe they were all juggling the same conferences or anything or or something. Yeah.

Speaker 1: There are a surprising amount of questions in the chat about the gold card. I want to know both how it's going and I want to know is it a like how unfair is it to characterize it as a marketing project? How good of a business is it? How good of a business will it be? How important is it to the overall ecosystem?

Speaker 6: Yeah. It's a strong business. Okay. So right now, we've got 800,000 gold card holders currently, and they're generating something around 15,000,000,000 in annual transaction So volume, right, it's a scaled, like, large offering. The reason you're hearing so much noise about it is that pretty much everyone in the country wants this credit card. It's by far the best deal, 3% cash back on all categories. That's why people want it. It's like the best cash back coupled with what I think is the best customer experience. And so we're getting a little bit of criticism about can we be rolling it out faster. But if you look at the rollout, it's sort of like on par with the fastest rollouts of other successful credit cards in history. If you look at the companies that have rolled out faster than us, and we have to make sure we monitor credit quality and all of these things, the ones that have rolled out faster than us have not been responsible and have run into trouble. So I think we're balancing two things. We want to roll it out as fast as possible while also staying responsible. So certainly we will cross 1,000,000 cardholders this year and a 100,000,000 in ARR, and we'll probably do it well before the end of the year as well. So

Speaker 1: there any other incentives that were at the top of the list for you where you thought it might be interesting? Like, the classic, you know, credit card is like you get airline miles, travel. And that even if it's a lower percentage, it's a it's a worse economic deal. It lends itself to great marketing because Visa is this abstract thing or Amex is abstract thing, but then they show you a picture of you getting on a business class flight, going to Hawaii, staying at a five star hotel and it's like this can all be free and it's like you could just pay for that with 3% cash back, but it it it allows more storytelling. Was there anything else that you were like, ah, that might be an interesting twist or was it just like pure economic value?

Speaker 6: Well, the the gold card is a simple daily driver product. And the whole point is you don't have to think too hard about your rewards, which which I think is really attractive because for a lot of people who aren't like super points optimizers, they want to just know that they're getting a good deal and that they have a nice card Yeah. But probably not, you know, spend time on the points guy and compare. There are people that we want to serve that are in that latter category, which is why we unveiled the platinum card at the Take Flight event. So that's a more premium card, $6.95 annual fee made of pure platinum. So it has pure platinum in there. It's one of the heaviest cards. Love it. And that one is a little bit different. Yeah. So you get 5% back on dining, which I think I haven't seen a better deal for restaurants out there. And we've really been getting good feedback on the wellness benefits. So there there was some criticism that I should own up to after our announcement. And by the way, our announcement, it was like the the headliner. It was it was intended to be the appetizer, but so many people got excited about the Platinum card that the wait list sign ups greatly exceeded our expectations there. But some people were saying, you know, maybe it's a little bit complicated, it's a little bit too coupon y, And so our team's been hard at work fixing all of that. So so actually, even though people were excited,

Speaker 1: we're gonna come back to them with something better ahead of rollout that fixes a lot of the concerns. So, yeah. Is there is there a card in the pipeline that goes above? Are you going do the Tungsten card? For for our crypto friends. Maybe. Yeah. The Tungsten cube. That was very popular for a while. There's something there.

Speaker 6: Yeah. It's been considered and we've been thinking about a black card. Yeah. So yeah. Not it it's not like carbon

Speaker 1: nanotubes in the card or something. I don't know. You gotta get funky with the materials for sure. There's so much to ideas for sure. We

Speaker 6: some good like, know the design of it. I think the question just is let's digest gold, roll that out fully. Let's digest platinum, and then I I think we'll see. We can go in both directions, both like sort of like a more basic starter card and and as well as Yeah. There's always more room at the top. The whole pipeline. I would like the mahogany card. The mahogany card Especially wood of business. Yeah. A wooden card maybe. A nice Velour card. Velour.

Speaker 1: You too. Well, anything else, Jordy? No. This is this is great. Thank you so much for taking the time. Congratulations on the progress you. All the different initiatives you have going on. Look forward to talking to you soon. Have a great rest your day. Thanks, guys. Goodbye. See you, Jordy. Great. Later. Q one earnings is in. All in one place. Brandon Gorell has I was trying to data.

Speaker 2: Was trying to bring Andrew Reed. Okay. I was trying to bring in Yeah. Andrew Reed with our buddies, but it didn't work. Well, there's some

Speaker 1: there are a bunch of yeah. We we we can bring in our next guest soon. Run through run through earnings. But Google's up big. Meta's down big. Amazon's down a bit. Microsoft's down a bit, but it seems like performance was strong across the board earnings per revenue. Let's do revenue. Microsoft, 82,000,000,000. 81 was the estimate. Meta, 56,300,000,000. 55,400,000,000 was the estimate. Google, $1.00 9,900,000,000 was the revenue. $1.00 7,200,000,000