HOOD (Trans): Faster product rollout; expense guide cut

Below is Dolphin Research's Trans of Robinhood FY26 Q2 earnings call

I. Core takeaways

1. Capital actions and shareholder returns: In Jun, the company raised $2.2bn opportunistically at a 0% coupon, with no net dilution unless the stock trades above $300, which management views as attractive for shareholders. YTD it has repurchased 7.5mn shares for $664mn, stressing that the 'denominator matters too' and that it is prudently managing share count alongside financing.

2. Lower and tighter expense guide: FY26 Adj. OPEx plus SBC guidance was lowered and tightened to $2.675bn–$2.775bn. The new guide includes costs for Rothera and WonderFi, which were excluded previously, funded through operating efficiency gains, with additional cost cuts across the system.

3. Quarterly financials: Revenue hit a record $1.3bn (+32% YoY). Adj. EBITDA was $741mn (+35% YoY) with a 57% margin, and EPS was $0.62 (+48% YoY).Adj. OPEx plus SBC was $641mn, well below the prior upper end of guidance.

4. Net inflows and Q3 start: Q2 net inflows reached a record $22bn, implying a 28% annualized growth rate. Nearly 1mn new net-inflow clients were added, the highest single-quarter figure since the IPO.In Jul, net inflows are tracking toward the $4bn level and do not yet include funds tied to Trump Accounts. Including Jul, YTD annualized net inflow growth remains well above the 20% long-term target.

5. Three long-term metrics to track: First, net inflows with a target of 20%+ annualized. Second, rule of 40, where the company has maintained rule of 80+ for several years even at $5bn+ annual revenue scale.Third, the number of businesses with ARR of $100mn+, now at 13, with Robinhood Legend and the credit card added this quarter. The financial ‘North Star’ remains unchanged: maximize long-term EPS and FCF per share.

II. Detailed call notes

2.1 Management commentary

Strategy framework

1. The founding vision is unchanged — 'make everyone an owner'. Since the IPO, platform assets have quadrupled and Adj. EBITDA is up over 8x. To deliver on this vision, the company is focused on three pillars:a) Be the No.1 platform for active traders, enabling clients to trade any tradable asset.b) Be the next-gen wallet-share leader, extending ownership across the household and over a lifetime.c) Build a leading global financial ecosystem, taking U.S. ownership globally.

2. Active trader business

a) Core operations were strong with share gains. Volumes in equities, options, and prediction markets all hit records, and margin balances also reached a new high.b) Rothera has begun handling Robinhood prediction market flow and, within about a month, quickly became a top-three DCM (designated contract market) in the U.S. The World Cup served as proof of concept, with rapid scale-up to follow.

c) Launched the first version of agentic trading, allowing clients to build AI agents to trade stocks, options, and crypto, with access to Robinhood tools and features. Over 100k users have onboarded and opened agentic accounts. Options trading is live, with crypto to follow shortly.

3. Wallet share (household and lifetime ownership)

a) Trump Accounts are live, with the company serving as broker and sole initial fiduciary. Management views this as a historic step toward broad financial ownership from birth.b) Robinhood Gold cardholders surpassed 1mn, with annualized spend now over $17bn, and the Platinum card is rolling out.c) Robinhood Banking has been promoted since Nov last year, with deposits now above $3bn.d) Gold subscriptions hit a record 4.8mn, a 17% penetration of net-inflow accounts.

4. Global financial ecosystem

a) Closed the acquisition of Canada's WonderFi and obtained a MAS capital markets services license in Singapore.b) At the 'the world is flat' crypto and Intl launch, the company introduced multiple products, including Robinhood Chain — the first L1 chain designed for real-world assets (RWA). DEX volume has exceeded $12bn since launch, making it one of the largest by weekly volume, and it is the fastest chain to reach 100mn transactions, now well above 150mn.c) Robinhood Earn is a stablecoin lending product built on Robinhood Chain and the USDG stablecoin, with customer deposits exceeding $200mn within weeks and a current APY of 7%.d) Stock tokens are now available in 120+ countries, viewed as a key path to bring exposure to U.S. equities and other high-quality assets to anyone with an internet connection.e) Non-U.S. accounts have surpassed 1mn, and management believes Intl is still very early.

5. App family demos

a) Trump Accounts App: Built with the U.S. Treasury, National Design Studio, and BNY Mellon, described by management as 'the best digital experience ever delivered by a government'. The product puts compounding front and center, showing current account value, projected value at age 18, and the compounding effect of adding $50 or $130 per month, extendable to age 60.A low-cost ETF holdings view is available. The contribution flow is animated, with the coin 'fill' mapping precisely to the $5,000 annual limit, and QR sharing enables third parties to contribute via Apple Pay without an account.It includes embedded investor education. Management sees strong potential as a charitable giving vehicle and is enabling employer contributions (up to $2,500 per person per year tax-free), with Robinhood itself participating.

b) Banking App: Positioned as the best digital banking experience with an uncompromising 'private bank' feel. With direct deposit and Gold, both checking and savings earn a high APY at a unified 3.5% with no minimum balance and no need to shuttle funds.Roughly 40% of customers have set up direct deposit. The rewards hub was redesigned, featuring 3% unlimited cash back and Gold card upgrades, and a new 'Family' tab makes families first-class citizens in banking.Management emphasized the flywheel: direct deposit into Banking, spend on card, cash back flows into brokerage, then investing starts or accelerates.

c) Robinhood Wallet: Upgraded alongside Robinhood Chain mainnet, with most features shown for 120+ countries ex-U.S. A perpetuals tab offers leveraged exposure to crypto perps, commodity perps, and single-stock perps via a partnership with Lighter for non-U.S. active traders.For stock tokens, advantages vs. traditional stocks include 24/7 trading, on-chain transfers, and more assets to come, with broader RWA tokenization on the roadmap.

6. Other

a) The 3rd Hood Summit will be held in two months in Houston, Texas.b) After Robinhood Ventures Fund 1, Fund 2 has begun roadshow with a public prospectus, focusing on early-stage projects, enabling individuals to gain exposure at the earliest stages through the full company lifecycle.

2.2 Q&A

Q: What is the goal for Robinhood Social and when will it open to all users?

A: To date, Robinhood has mainly been an order entry tool, while ideas typically originate off-platform — people get inspired in the real world, then come back to trade. We asked whether we can help customers learn from each other, leverage our large community, and aid idea generation on-platform. Early signals are encouraging.Our edge vs. other social platforms is verified, real trading data. If you say you made a trade, it actually happened, and others can confirm you hold the portfolio you claim.We are adding features continuously and aim to open to everyone by quarter-end. The work now is iterating on ranking, features, and post formats before full rollout, and based on what we see, we are confident in a launch before quarter-end.

Q: If the Clarity Act passes, what would impact Robinhood the most? What if it is delayed?

A: The Clarity Act is very important. While the current administration has been supportive — the first to truly embrace crypto innovation — we need durable foundations in the U.S., not rules rewritten every 4–8 years.Stability is required for real industry growth, and only legislation can provide it. The Genius bill shows this direction, and Clarity goes further.Tokenization is a major push for us, and we are investing across that product line, which we believe will be a large industry, primarily advancing outside the U.S. for now. The shift from v1 to v2 over the past year is compelling: fully on-chain, 24/7, transferable, and fractional by default.It would be a shame if the U.S. cannot benefit. We are excited about many aspects of the bill, but we are not waiting — we are building both on-chain and in traditional centralized products, innovating overseas and advancing on-chain offerings like Robinhood Earn in the U.S.Either way we will be fine, but Clarity is key to maximizing the value of what we have already built.

Q: How are Trump Accounts performing since the Jul launch? What does it mean for net inflows and AUC long term?

A: We are very pleased. About 7mn children have registered, with contributions approaching $1.5bn, even before major charitable inflows start.We think the account count will reach tens of millions and we are pushing hard toward that. We also expect contributions to grow rapidly from here.This will take sustained effort. Successful programs make users want more, quickly, and we are working with partners on employer funding for employees' children and a high-quality charity experience. For donors, choices today are not ideal, with uncertainty over fees and efficacy, and we believe we can offer a low-cost default option. This is just the beginning.

Q: Q2 net-inflow account adds far exceeded expectations. Which drivers are structural, and how is Europe progressing?

A: Last quarter we said we would re-accelerate the top of funnel, and nearly 1mn new net-inflow clients were added this quarter, the highest since the IPO nearly five years ago. It was multi-factor: a strong market backdrop helped, new products like Banking and the credit card drove organic growth, SpaceX’s IPO contributed, an acquisition added several hundred thousand accounts, and Intl continued to grow.This showcases the financial app ecosystem at work — at any time, several growth vectors can fire, and this quarter many did. We will keep focusing here via both product and marketing, and this will remain one of our most important KPIs, with much more to do.

Q: With the World Cup over and football season ahead, how do you view prediction markets' durability? How are macro or major event contracts performing outside sports?

A: The benefit of prediction markets is a steady cadence of events. Football season is coming, and midterms too — a huge topic that customers will want to trade and use to hedge portfolios.Events are a continuous supply, and we are preparing. We are also improving product and pricing, Rothera is live, the World Cup validated it, and we aim to scale quickly to deliver better pricing.The approach is to route across multiple venues to ensure the best price for customers on Robinhood.

Q: Since Jun, prediction market activity has stayed strong into Jul. How much came from existing prediction users, from existing clients new to prediction, and from brand-new clients?

A: Customers who come for one thing often do more. For context, 40–50% of new customers still subscribe to Gold, and the journey is: come for stocks, options, prediction markets, crypto, or Banking, discover Gold, then adopt other products.Regardless of the initial product, customers tend to take Gold and cross-adopt. For example, prediction users are actually more likely to hold retirement accounts on Robinhood.Prediction is only one strong vector this quarter. Banking is very strong and a great new traffic source, the credit card base is now 1mn+, and there is some seasonal tailwind from retirement accounts in Q1–Q2.With the World Cup and upcoming midterms, prediction will also keep adding new users. The last time we disclosed prediction users it was ~1.5mn; it is now approaching 2mn and growing well. The key point: growth is broad-based across products, with multi-product adoption.

On marketing, we continue to see strong, diversified ROIs — prediction ROI is strong, and so are Gold and some active-trader products. We are fortunate to have multiple fronts performing well simultaneously.

Q: What have you learned from the first version of agentic trading? How are performance and behavior, what maps to v2, and when will you open to all?

A: As the first large platform doing this, we started conservatively with equities and separated agentic from main accounts. Typically, customers fund a smaller amount and then connect their agent.We have since expanded to options trading via agentic, and we are seeing intricate strategies. Crypto will open soon, and we will extend the toolset to cover as much of the Robinhood ecosystem as possible.Over 100k users have onboarded and opened agentic accounts, which is great, and AUM and volumes are growing.Friction points are twofold: surprisingly, not everyone wants to stitch apps together in Codex or Claude Code, which takes skill, and many models are unfamiliar with trading use cases and sometimes 'push back', requiring effort to get them to do what you want. We are addressing these and other issues.

Q: Rothera is already a top-three DCM. Can you scale the DCM-plus-retail distribution model further, e.g., into perps or traditional futures, to challenge the top two?

A: Making top three in a month is good, but the goal is to keep scaling. Rothera is a JV, so I will not speak for it, but its roadmap should be continued growth and added capabilities.It is currently focused on prediction and event contracts, with categories expected to expand over time. On perps, we offer on-chain perps and, via Bitstamp overseas, off-chain perps, with rapid expansion of product sets, including commodity perps.Customers can access best-of across multiple venues via the Robinhood retail app, and our job is to stitch, clarify, and compress cost, in a multi-homed architecture.Over time, this can also be a B2B biz. We can connect to more FCMs, and while we focus on retail UX today, there is no reason it cannot grow into a large institutional business as well.

Q: With Robinhood Chain live and healthy, what is the broader DeFi roadmap? Beyond tokenized assets, Earn, and Wallet perps, what on-chain services could be next growth drivers, like lending or other yield?

A: Lending is already enabled via partners, with on-chain lending pools and interesting builds underway. One benefit of high volumes is inbound integrations — most major wallets and protocols integrated proactively in recent weeks because of the volume.That, in turn, attracts developers who see momentum and broad wallet support, boosting developer activity to among the highest across chains. Developers are building composable RWA use cases and stock-token utilities, including ideas we had not anticipated.Our roadmap is to keep hardening infra and cleaning up APIs — block times are already strong but can improve — while adding more RWAs and stock tokens and expanding into other asset classes. Our uniqueness is treating RWA as a core chain primitive and ensuring it works well, then letting developers compose on top.

Q: What is your appetite to launch perps in the U.S.? What are the obstacles, and could it happen soon after CFTC approval?

A: We are in constructive dialogue with the CFTC and making progress. No specifics to share yet, but we are confident customers will get a high-quality perps experience.We are already live in Europe, so the remaining work is not large.

Q: Do you plan to support foreign stocks? Today, investors mostly get exposure via ETFs.

A: Short answer: yes. This is clearly on the roadmap, and over time Robinhood clients should have a more complete selection.We want to offer U.S. stocks globally and foreign stocks globally, including to U.S. customers. We will build a marketplace where our general-purpose infrastructure becomes a real asset.It is not as simple as snapping fingers to connect the world, though we wish it were, but this remains a high-priority direction. Active traders always want more, which keeps us busy — and we love that.

Q: Robinhood Chain has achieved ~$15bn in monthly volume, 2mn+ MAUs, and nearly $500mn in stablecoin supply. What does the best-case scenario look like?

A: We designed Robinhood Chain for RWAs. To be clear, I also like meme assets — Robinhood helped pioneer that market in many ways — and the chain is permissionless for whatever people want to build.Our distinct contribution is RWAs. We are doing the hard work on liquidity and regulatory fronts to bring assets safely on-chain and make them useful, starting with stock tokens and expanding scope over time as they become fully DeFi-native.Developers are already building things I did not imagine, and our job is to keep giving them better tools. Enthusiasm is high, but we will not confuse that with a license to relax — we must keep building to make this the most useful chain for developers and traders.

Q: Jul net inflows were about $4bn, notably below Jun and the YTD low. Why? How is investor health given the semiconductor pullback and recent markets?

A: The target is 20% annualized, and we do not focus on any single month or quarter-end. Things fluctuate, but YTD including Jul we are still well above 20%.Q2 was very strong with high engagement, but the metric will vary. Net inflows are influenced by macro, product launch timing, seasonality (summer is usually softer), and promos.We remain focused on delivering for customers and launching new products. Over a year and beyond, we should approximate 20%, and everything we see says that is still happening.Engagement remains healthy. Our customer base skews tech-optimist and younger, with a long-term mindset, buying dips.On down days or months, we usually see strong net buying, which was true in Q2 and remains so. As noted, Jul ADVs are close to Q2 levels, net inflows are solid, and all health indicators look good.We also have durable tailwinds. Beyond short-term promos and macro, we are building more resilient inflow engines: Banking remains early and successful and is not yet fully integrated into the main app and ecosystem, Advisor network is a strong RIA consolidation entry with stable inflows, multiple brokerage accounts are growing well, and trust features are rolling out with many HNW users holding wealth in trusts. As we add and support these, they become durable growth tailwinds for biz. and inflows.

Q: As Robinhood approaches a $100bn market cap, how hard is the next 10x? Could $100bn to $1tn be easier given scale and operating leverage? What is needed to surpass legacy financials, and will AI accelerate global expansion?

A: Getting to $1tn is very hard — I do not think any financial company has done it historically — but achievable. We are at the frontier of many fast-moving trends.It is not just scaling brokerage and going Intl, but also agentic finance — building great tools for agents — and moving toward a world where a large share of activity is agent-driven.We aim to use early traction in Robinhood Chain to offer all assets, and all of America, to billions globally and benefit from rising global wealth. I am also excited about prediction markets, plus Robinhood Ventures Fund 1 and now Fund 2, focused on early-stage, letting individuals gain exposure from the earliest stages through the full lifecycle.Put together, I see multiple axes to 10x the company, and we will pursue them all. We do not comment on the stock, but we believe we can 10x the biz. in the next decade via these vectors.Assets are the best predictor of future revenue. Core brokerage alone maps to tens of trillions in assets with no reason we cannot capture more, then retirement is multiples of that, then Banking and crypto are multiples again, then Intl, then B2B.Uniquely, adjacent markets for us are larger, not smaller, enabling sustained growth. We plan on a 10-year roadmap, not just one or five, and if we execute, the opportunity is compelling.One more point: not long ago Apple became the first $1tn company, and few thought many would follow. Now there is a $5tn company, and there will be a $10tn company soon, and I have no doubt Robinhood will be a $1tn company.

Q: Engagement was very strong this quarter, platform assets are near $400bn, and Gold penetration reached 17% with record subs. Why is engagement so strong, what parts of the flywheel are working, and how to sustain it for the next decade?

A: First, the product must be great. We launched many strong products, with the credit card a standout — 3% uncapped cash back, excellent UI, and a great virtual card experience.Not every attempt succeeds — we iterated through multiple debit and cash management versions (then called McDuckling) before finding product-market fit.There is a flywheel: acquire a customer, they become a Gold subscriber, then survey the full product set. If our products are at parity or better, they adopt, and with direct deposit we see a material share of income flow to Robinhood.They spend time on-platform and discover new features as we ship them. The challenge is presenting the right product to the right customer at the right time and making the experience coherent.This is getting harder as the app evolves, and orchestration into a single, unified financial tool is an increasing focus area where we can still improve.At the same time, each component must be world-class on a standalone basis, even if a user does not take 10 products. If we deliver on component quality and stitch them elegantly, there is ample runway.

Q: With the updated expense guide, how are the three spend buckets (new products, core, M&A) evolving? Are you still funding early-growth bets at similar intensity?

A: The exciting part is we can self-fund many growth initiatives, so we are still growing and that has not changed. We are building many products and apps — we remain a growth company — and with a lean, disciplined operation we can self-fund much of the spend.On the three buckets from year-start (guide was +18%: +10ppt for launches, +5ppt for core, +3ppt for M&A), the short answer is: savings come from all three.M&A saw efficiency gains, and new M&A was not included and is fully self-funded. In core, teams have worked hard to maintain velocity while improving efficiency, generating savings.In new seed businesses, we not only funded the planned amounts but actually increased vs. the initial plan. After half a year with good trends and demonstrated discipline, we felt it was the right time to lower guidance — we are still growing, just more efficiently.

Q: You just received MAS approval in Singapore and have two small brokers operating in Indonesia. How is Asia product rollout progressing, how will it compare to the U.S., and where can you passport from Singapore?

A: To clarify, this is about our centralized businesses; with the chain and DeFi products, we are already live in many countries.For centralized brokerage, we have approval in Singapore and are working to bring as much of the product set as MAS permits. From the U.K., we learned that launching more products at once works better than staggering stocks, then options, then margin.So in subsequent markets, we aim to make more of the ecosystem available at launch, and we are close. This will be our general approach in other regions, too.We expect Singapore to be our SE Asia and APAC hub, passporting into many countries from there, while in some markets like Indonesia we will obtain local licenses where deeper localization is attractive.

Q: With DeFi expansion, how do user touchpoints and engagement change? Do you need to rethink acquisition and mindshare? How should we think about monetization vs. today?

A: Many of these customers are active on Twitter and listen to podcasts — areas where I am already active, to the chagrin of our PR, legal, and compliance teams. We are always seeking more channels, and I may even embrace TikTok if needed.Engagement largely flows from developers. After you build something great, people need to find it, and distribution at Robinhood is a strength — good products scale on our reach, whether DeFi, permissionless, or centralized.Monetization is charged per transaction in basis points, not by notional volume. The exact rate varies by trade size, but think a few bps on average, with roughly a 50:50 revenue share with Arbitrum, our L2. When scale builds and we have a few quarters of data, we will disclose more detail; for now, think a few bps per transaction with a 50:50 split.

Q: Cboe filed with the SEC to list company KPI contracts. Is Rothera interested in launching these, and will more HOOD event contracts (e.g., NFL) migrate to Rothera in 2H?

A: My understanding is these KPI contracts fall under the securities framework, so I am not sure Rothera would launch them now. But Robinhood connects to a broad set of counterparties — we have brokerage and FCM, and Rothera is a high-quality JV with SIG — so that does not preclude offering such products to customers.We think they can be useful with real demand and will keep evaluating new categories.On routing, in the near to medium term, expect most or a large share of flow to go through Rothera. We are still validating its scaling, but after a month volumes are already meaningful, and more flow will route there.

Q: Can you break down Jul further? Were ADVs by asset class close to Q2, and what about the take rate? Crypto was not mentioned — what drove Q2 fee rate improvement, and how is Q3 shaping up?

A: Your read is correct. Jul ADVs in equities, options, and prediction markets were in ranges similar to Q2, with healthy engagement, while crypto is likely a touch softer than Q2 so far, though the month is young.On take rate, Jul is in a range similar to the Q2 Avg., which is a reasonable starting point. Drivers vary: in equities and options it depends on mix, volatility, and contract types, while in crypto it depends on institutional share and customer fee tiers. There are many variables, but the broad picture is that Jul take rates and most asset classes are in ranges close to Q2 Avg.

Q: Beyond routing more prediction flow to Rothera, reports suggest you are exploring other exchange partnerships. Is there room to improve economics via multi-venue, or is the focus on concentrating at Rothera?

A: Both. We invested in Rothera and like its economics, and we plan to route more flow there.But we also continue to connect to more venues: we started with ForecastX (IBKR’s DCM), then Kalshi, and of course Rothera. We seek diversification so customers have multiple options and we are not dependent on any single counterparty.

Q: Top-of-funnel — what are the next priorities? Did the PDT rule removal help this quarter, and are you doing anything to win back lapsed users?

A: There is much product work, like streamlining onboarding — especially as we support more products, multiple accounts, and more asset classes — and we are investing time here. We also see opportunities in sharing and referrals.With Banking scaling and momentum strong, and 1mn+ cardholders, we are studying how to make it easier for brokerage users to get the card, and vice versa, how to convert Banking and card users into brokerage users as another active-growth vector.We have barely scratched the surface, and we are confident in the path. On PDT, we are glad the SEC removed an outdated rule that penalized small-balance customers for how they trade.The Jun change was a nice tailwind across the industry, likely larger for us given smaller average balances. Customers are returning and adopting features, and we expect the tailwind to persist for several quarters, though it is early to size. NPS and other feedback show returning users are happy to be able to trade again.

Q: What are the next milestones for agentic trading? Could volumes exceed human trading, and will AI agents get access to prediction markets?

A: The product goal is to expose the full toolkit that human traders have on Robinhood to agents. This is interesting because Robinhood historically constrained access via our own UI, and now we are opening it up so traders and developers can access capabilities within reasonable bounds.The team has done a lot on the agentic front, and there is much more to come. We were early into this market, and the opportunity ahead is far larger; we will share more soon, including at the upcoming active trader event.

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