Hello. Good morning, everyone. Uh, Vlad, thanks so much for joining us.
I've got to say in the green room, your shoes are all the chatter. You got these on eBay.
A far cry from the like standard conference fare here that I'm wearing. Um, anyway, thank you so much for joining us. Uh, we have a lot to get through uh with our time. There may be some people in the audience that think of Robinhood or still think of Robinhood as like a meme stock trading platform. Uh or maybe they're familiar with you uh through Sebastian Stan's portrayal of you in the movie Dumb Money, but...
You know, there are worse kind of decisions. Yeah. Um but Robinhood is a platform that has significantly kind of diversified and in some ways matured since the kind of meme stock uh frenzy. Um, it now has 11 different business units that generate hundred million uh or more. And I think your goal is to be this kind of, you know, significantly diversified financial platform, equity options, uh, retirement, credit, etc. A whole host of things. Um, and we're going to talk about some of the kind of new areas of your platform today. Um, so I'd like to start with, uh, Trump accounts. Um so you know Robinhood is a partner of the Treasury uh as it prepares to launch uh Trump accounts which go live on July 4th I believe. Is that correct?
Yeah. Um and this was announced in April that you were the partner along with BNY. You must have been extremely busy over the last few months kind of spinning this up like what what is in it for Robinhood?
Yeah. And and to your point, so Robinhood is increasingly a financial super app serving our customers uh across every asset class and financial transaction uh and and really worldwide. Um, and one of the big things that we've been thinking about is over the course of the next few decades, there's going to be what's called the the great wealth transfer where a hundred trillion dollars or more are going to be moving from older generations to younger. And we want to make sure our customers are positioned to be the primary beneficiaries of this of this great wealth transfer. and we want to put them in the best possible position to succeed. And the great thing about Trump accounts, I mean there there's many amazing things about it, but um I mean customers will start at age zero, right? So for those of you that aren't familiar, every newborn gets uh a brokerage account seeded with $1,000 from US Treasury. And in April, the US Treasury made an announcement that Robinhood will be serving as uh sole initial trustee and broker for all these accounts in partnership with BNY, which is the Bank of New York, the oldest and most storied bank in in the United States. So, it's a it's a great honor. Um, our mission from the very beginning was to democratize finance for all, make everyone an owner. And I think it's it's more important now because there's um there there's a lot of sort of tension globally, but also in the US and people are kind of fighting against our free market system. And I I think the best way to actually counteract that is to make more people own it because there there's a little bit of a tragedy of the commons problem. If I don't feel like I have any skin in the game, I kind of would opt for a different path. But if I if I if I actually own uh the 500 best companies in the in the American economy, now I have an incentive to like preserve the system rather than turn it over.
And we'll come on to that in a in a moment. uh as it relates to your view on kind of access to private companies and so on. But staying on the Trump accounts for a moment, this is sort of like a kind of a generational opportunity, customer acquisition opportunity for you. Um but after a year, uh so June July 4th, 2027, uh the owners of these Trump accounts could in theory switch to other brokerage apps uh or platforms. And so what are you doing to make sure you guarantee kind of stickiness on the platform that you actually fully capitalize on this opportunity?
Yeah, a couple things. I mean, first of all, we want to make it as easy as possible for people to transfer accounts to whatever brokerage they choose. In fact, I think we're already among the best at this, even though it's sort of like contrarian interest. We we want to make it as easy as possible to move your account off of Robinhood into our competitors and our competitors make it very difficult.
Why do you aside from Trump accounts, why do you want to make that so easy?
Uh just because our uh we believe in the long term doing the best thing for customers. If a customer wants to do something, we should make it as easy as possible for them to do it. And of course, um, I want the incentives for our product and engineering and customer service teams to be to make a great product so we don't have to resort to, you know, these types of tactics to keep people.
Lights a fire under those teams. It's easier to lift and shift.
I I think the right incentive is to always just make sure that you're aligned with customers and to put uh to to make the service better. And and you know, if if you look back over the past few years, we've we've generally been net positive on account transfers from all of our major competitors across the board. So people have been moving assets into uh into Robinhood. And so that's one. Also, our our customers are younger. They're generally millennials and Gen Z. They're the ones having the kids. Right. Right. So um I I think a large portion of them will prefer to keep their finances in one place.
So when you discussed this on the earnings call uh last week, there was some analyst push back. I I would kind of bracket this in like three categories. One was the cost $100 million uh which you sort of talked about on the call. Uh one was potential distraction to management. Um and another was sort of alignment with the Trump administration or perceived alignment with the Trump administration which you know is is polarizing. Um, what is your response to that kind of analyst push back?
Well, I'll I'll take all of them. First, the cost. Um, I think there was a little bit of confusion because we we kind of led with the 100 million number and and really a couple of things there. One is we're serving as a government subcontractor, which basically means this is profitable for us. This is operating at a cost plus model. Um, now why is it such a large amount of money? Because it's very, very important to the administration for these accounts to have the best service. And 5.5 million children have already signed up and there are 70 million that are under the age of 18. So, you know, we've got to be ready to serve tens of millions of customers um relatively quickly with, you know, high touch, very high quality human support. And of course, we've we've done a lot of uh I mean, for for the core Robinhood business, we've talked a lot about how we're really innovating with AI and and doing all these things, but I think for for this for this purpose, we're going to we believe in humans. So we're we're going to make sure people have the best human touch for for their service as well.
And and you know the the Treasury and the government feel very strongly about that. So um...
So that's cost, distraction of management time, and kind of political polarization.
Yeah. I mean uh I I haven't heard much about the distraction of management time. We have been spending a decent bit of time making sure this goes well. But if you if you think about our mission of how to get more people invested in the markets, I think this is um this is...
Probably aligns with your core mission.
It's it's probably one of the top three things in our history and maybe you know certainly a once in a lifetime opportunity to to be in this position. So we don't take that lightly and the aspiration is to actually build the best product that the government's ever been associated with. So um yeah and I think good things will happen and we're also building the muscle with is I I think we might be one of the if not the first fintech to serve in the capacity as a subcontractor in this way. and we're already having people from other governments and the states reach out to uh ask about, you know, how to do similar things or how to piggy back off of it. So, I think for us, this is this could be the start of a big new uh public sector business, which which I think is is interesting and attractive.
I I want to move on uh to sort of access to private companies as uh as we sort of alluded to a moment ago. As you as you mentioned, your your mission is to kind of democratize access to markets for retail investors. Um, and you did that uh largely through commission-free uh investing and so on. Significantly increase retail participation. Uh, and now you have your eye on private companies. I don't know what the term is by the way for like this category of like OpenAI, SpaceX, and so on. Like unicorn doesn't feel like it does it. I don't know what that like the mega unicorn or whatever.
We call them frontier companies. So companies...
Uh, Robinhood Ventures, uh, which I I think really were creating this this whole category across, um, a number of different fronts of opening up private markets to retail. So, uh, about a month ago, a little bit over, uh, over a month ago, we actually took Robinhood Ventures Fund One public. So, this is a public closed-end fund listed on the New York Stock Exchange. You can think of it as like um publicly traded venture capital firm. Yep. With daily liquidity, no accreditation requirements and no carry. So just competitive management fee, no carry, which for for those of you familiar with venture capital, typically when you invest in a fund as an LP, you pay a management fee, but there's also a carry of typically around 20%. Which means 20% of your your profits go to the fund manager. So, uh, Robinhood Ventures Fund One went public. Uh, it's got a portfolio of frontier companies at the frontier of their industries. Last week we just announced uh OpenAI is is in the portfolio.
It also includes like SpaceX, Databricks, I think Stripe, a number of others, right?
It doesn't include SpaceX, but Databricks and Stripe are are in the in the initial portfolio.
