Robinhood Markets (HOOD) Financial History

If the SEC, a state regulator or a private litigant were to prevail on claims that our staking services offered in the U.S.

Our Charter provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for a number of types of actions or proceedings sh…

In addition, a third party attempting to acquire us or a substantial position in our Class A common stock might be delayed or ultimately prevented from doing so by change in ownership or control regulations to which c…

control might have the effect of delaying, preventing or deterring a change in control of our Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of…

Further pursuant to the equity exchange right agreements entered into between us and each of our founders in connection with our IPO, each of our founders has Equity Exchange Rights.

On May 28, 2024, Robinhood announced that its board of directors approved the Repurchase Program authorizing the Company to repurchase up to $1 billion of its outstanding Class A common stock to return value to shareh…

Similarly, significant numbers of shares are subject to future issuance including under outstanding warrants held by pre-IPO investors, and under outstanding stock options and RSUs held by employees and other service…

As of December 31, 2025, our founders and their related entities hold approximately 12% of our outstanding common stock (and, as described below, over 50% of the voting power of our outstanding capital stock).

Further, if the market price of our Class A common stock is above the level that investors determine is reasonable for our Class A common stock, some investors might attempt to short our Class A common

In addition, in the past, following periods of volatility in the overall market and the trading price of a particular company’s securities, securities class action litigation has often been instituted against these co…

The trading price of our Class A common stock has been and might continue to be highly volatile and could continue to be subject to fluctuations in response to one or more of the risk factors described in this report,…

Our current controls and any new controls that we develop could become inadequate because of changes in conditions in our business.

We track certain operational metrics using internal company data gathered on an analytics platform that we developed and operate, including metrics such as Funded Customers, Total Platform Assets, Net Deposits, and Ro…

Our determination of our tax liability is subject to review by applicable tax authorities.

Our success depends, in part, on our ability to develop and commercialize our products and services without infringing, misappropriating or otherwise violating the intellectual property rights of third parties.

and when to rely upon trade secret protection, and the approach we select might ultimately prove to be inadequate.

Our success and ability to compete depend in part upon our ability to obtain, maintain, protect, defend and enforce our intellectual property rights and technology.

The highly automated nature of, and liquidity offered by, our spending and payments services to move money make us and our customers a target for illegal or improper uses, including scams and fraud directed at our sto…

credit risk in connection with selecting customers, managing accounts and establishing terms and credit limits.

We offered a Spending Account (in connection with a partnership with J.P.

We might also be harmed by the loss of any of our banking partners and Liquidity Providers.

We rely heavily on third-party banks, Liquidity Providers and cryptocurrency exchanges in connection with our provision of cryptocurrency products and services to our customers, with the exception of a cryptocurrency…

Moreover, we might decide not to or not be able to support a cryptocurrency resulting from the fork of a network which might cause our customers to lose confidence in us or reduce their engagement on our platforms.

Both Bitcoin and Ethereum protocols have been subject to “forks” that resulted in the creation of new networks, including, among others, Bitcoin Cash, BSV, Bitcoin Diamond, Bitcoin Gold, Ethereum Classic, and Ethereum…

for transacting with prohibited persons.

We also provide crypto staking services through our RHC, RHEU and Bitstamp platforms in which eligible customers of RHC, RHEU and Bitstamp are given the option to “stake” eligible crypto-assets.

Crypto Transfers initiated by users are subject to a heightened risk of user error.

In the U.S., we allow customers to deposit and withdraw cryptocurrencies to and from our RHC and Bitstamp platforms through our Crypto Transfers feature in the states in which RHC or Bitstamp operates.

Furthermore, the Infrastructure Investment and Jobs Act significantly changes the tax reporting requirements applicable to brokers and holders of cryptocurrency and digital assets.

In January 2023, the Bankruptcy Court for the Southern District of New York issued a ruling in In re Celsius Network LLC, that certain crypto assets held by Celsius customer accounts were the property of Celsius’s est…

In addition, future regulatory actions or policies, including, for instance, the assertion of jurisdiction by domestic and foreign regulators and governments over cryptocurrency and cryptocurrency markets could limit…

accounting principles.

Domestic and foreign regulators and governments are increasingly focused on the regulation of cryptocurrencies.

We continue to analyze the cryptocurrencies supported on the RHC and Bitstamp US platforms under our Crypto Listing Frameworks and Bitstamp’s similar internal policies, respectively, on a periodic basis to ensure that…

To the extent that the SEC or a court asserts or determines that any cryptocurrencies supported by our RHC or Bitstamp US platforms are securities, that assertion or determination could prevent us from continuing to f…

Although neither our board of directors nor management have to date identified any material gaps or weaknesses with respect to our existing risk management processes and policies in light of recent cryptocurrency mark…

While we currently support several cryptocurrencies for trading, market interest in particular cryptocurrencies can also be volatile and there are many cryptocurrencies in the market that we do not support.

While we have observed a positive trend in the total market capitalization of cryptocurrency assets over the long-term, driven by increased adoption of cryptocurrency trading by both retail and institutional investors…

•Cryptocurrency exchanges’ deposit and withdrawal policies and practices, liquidity on such exchanges and interruptions in service from or failures of such exchanges.

The prices of most cryptocurrencies are based in part on market adoption and future expectations, which might or might not be realized.

In general, the overwhelming majority of cryptocurrency coins on our platforms are held in cold storage, though some coins are held in hot wallets to support day-to-day operations.

The loss, destruction or unauthorized use or access of a private key required to access any of the cryptocurrencies we hold on behalf of customers could result in irreversible loss of such cryptocurrencies.

We also provide customers with a variety of educational materials in various jurisdictions, investment tools, and financial news and information, such as our “Snacks” newsletter (which is offered by Sherwood Media), t…

standards and requirements on recommendations to retail investors.

Providing investment advice and recommendations could subject us to investigations, penalties, and liability for customer losses if we fail to comply with applicable regulatory standards, and providing investment educ…

We have policies and procedures designed to manage credit risk, but we face a risk that such policies and procedures might not be fully effective.

We are also exposed to credit risk in our dealings with the Liquidity Providers to which we route cryptocurrency orders.

We extend margin credit and leverage to customers, which are collateralized by customer assets.

Our exposure to credit risk with customers, Liquidity Providers, and other counterparties could result in losses.

In addition, as a clearing member firm of securities and derivatives clearinghouses in the U.S., we are also exposed to clearing member credit risk.

Our clearing operations (including for TradePMR customers through TradePMR’s contract with its clearing firm, Wells Fargo Clearing Services, LLC) also require a commitment of our capital and, despite safeguards implem…

We provide clearing and execution services for our securities brokerage business.

We are also exposed to heightened regulatory risk because our business is subject to extensive regulation and oversight in a variety of areas and geographies, and such regulations are subject to revision, supplementat…

The SEC, FINRA, and various state regulators have stringent rules or proposed rules with respect to the maintenance of specific levels of net capital by securities broker-dealers.

While we maintain cybersecurity insurance, our coverage may be insufficient to cover all liabilities resulting from a cybersecurity incident.

Furthermore, to the extent the operation of our systems relies on our third-party service providers, through either a connection to, or an integration with, third parties’ systems, the risk of cybersecurity attacks an…

Cybersecurity attacks and other malicious internet-based activity continue to increase, and financial technology platform providers have been and expect to continue to be targeted.

We also use AI technologies from third parties, which may include open source software.

We currently use machine learning and AI to improve our products and processes in certain circumstances, such as to increase the efficiency of our in-app chat support, customer support workflows, fraud detection syste…

We continue to incorporate AI technologies into some of our products and processes.

We rely on certain third-party computer systems or third-party service providers, including several cloud technology providers such as AWS (on which we primarily rely to deliver our services to customers on our platfo…

In addition, surges in trading volume on our platforms have in the past and might in the future cause our systems to operate at diminished speed or even fail, temporarily or for a more prolonged period of time, which…

Our products and internal systems also rely on software that is highly technical and complex (including software developed or maintained internally and/or by third parties and also including machine learning models) i…

We rely on technology, including the internet and mobile services, to conduct much of our business activity and allow our customers to conduct financial transactions on our platforms.

•a broad decline in the equity or other financial markets, which could result in many of these investors feeling discouraged and exiting the markets altogether (as has occurred in connection with prior bear market cyc…

We are also subject to various AML and counter-terrorist financing laws and regulations that prohibit, among other things, our involvement in transferring the proceeds of criminal activities.

We are subject to the FCPA, U.S.

Various lawmakers, regulators and other public officials have previously made statements about our business and that of other broker-dealers signaling an increased focus on new or additional laws or regulations that,…

These and other proceedings, some of which are described in Note 15 - Commitments & Contingencies to our consolidated financial statements in this Annual Report, have in the past and might in the future relate to brok…

•In January 2025, we settled multiple matters with the SEC (including investigations into Regulation SHO, the timeliness of our broker-dealers’ SAR filings, EBS submissions, various brokerage recordkeeping issues, the…

•In August 2024, we settled a matter with the CAGO related to, among other things, certain disclosures by RHC and delivery of customers’ cryptocurrency assets under California Corporations Code Sections 29520 and 2950…

•In connection with the Early 2021 Trading Restrictions, we and our employees, including our CEO, Vladimir Tenev, have received requests for information, and in some cases, subpoenas and requests for testimony from th…

From time to time, we have been and currently are subject, and, given the highly regulated nature of the industries in which we operate, we expect that we will be subject in the future, to a number of legal and regula…

required.

The substantial costs and uncertainties related to complying with these laws and regulations continue to increase, and our introduction of new products or services, expansion of our business into new jurisdictions or…

We are subject to a wide variety of local, state, federal, and international laws, regulations, licensing schemes, and industry standards in the U.S., the U.K., the EU, the United Arab Emirates, Singapore, the British…

We currently have a large segment of employees who work remotely and are not required to come into the office on a daily basis.

•double taxation of our international earnings and potentially adverse tax consequences due to requirements of or changes in the income and other tax laws of the U.S.

•fluctuations in currency exchange rates, inflation, and tariffs and trade policy shifts could limit our ability to operate efficiently across or within borders, and the requirements of currency control regulations, w…

•compliance with anti-bribery and anti-corruption laws, such as the FCPA and equivalent AML and sanctions rules and requirements in local markets, by us, our employees, and our business partners;

•the additional complexities of any merger or acquisition activity internationally, which could subject us to additional regulatory scrutiny, approvals, obligations, costs and penalties or risk;

•the need to understand, interpret and comply with local laws, regulations and customs in multiple jurisdictions, including laws and regulations governing cryptocurrency-related, credit, payments services, derivatives…

We intend to continue expanding our operations outside of the U.S.

We currently only offer select services to the public outside the U.S.

In general, our efforts to grow through acquisitions are subject to the risks that we might be unable to find suitable acquisition or investment candidates or to complete acquisitions on favorable terms or in a timely…

Acquisitions of, or investments in, other companies, products or technologies have in the past and could in the future require significant management attention, disrupt our business, dilute stockholder value, and adve…

We also might not be successful in attracting, integrating or retaining qualified personnel to fulfill our current or future needs.

As we are a financial services company, our business, results of operations, and reputation are directly and indirectly affected by elements beyond our control, such as financial market volatility (such as we previous…

•negative responses by customers, regulators, or other third parties to our business model or to particular features, products or services;

We receive a high volume of media coverage, which has included, and might continue to include, negative coverage regarding our products and services and the risk of our customers’ misuse or misunderstanding of our pro…

Our brand and our reputation are two of our most important assets.

Unfavorable media coverage and other events that harm our brand and reputation have in the past, and may in the future, adversely affect our revenue and the size, engagement, and loyalty of our customer base.

A reduction in our liquidity position could reduce our customers’ confidence in us, which could result in the withdrawal of customer assets and loss of customers, or could cause us to fail to satisfy broker-dealer or…

In addition, our clearing and carrying broker-dealer is subject to cash deposit and collateral requirements under the rules of the clearinghouses in which it participates (including DTC, NSCC, and OCC), which requirem…

Maintaining adequate liquidity is crucial to our securities brokerage, cryptocurrency and money services business operations, including key functions such as transaction settlement, custody requirements, and margin le…

We also might be adversely affected in the future by regulatory changes related to our obligations with regard to best execution.

Higher interest rates also lead to higher payment obligations by our customers to us and to their creditors under mortgage, credit card, and other consumer and merchant loans, which might reduce our customers’ ability…

RHC has started to allow customers to choose a fee-based model in lieu of a liquidity provider rebate-based model (under which RHC receives Transaction Rebates from Liquidity Providers) for cryptocurrency orders route…

Additionally, any negative publicity surrounding PFOF or Transaction Rebate practices generally, or our implementation of these practices, could harm our brand and reputation.

Risks Related to Negative Publicity Associated with PFOF, Transaction Rebates or our Liquidity Providers