Robinhood CEO Vlad Tenev Talks Blockbuster Quarter

Robinhood is out with strong earnings thanks to a 700% jump in its cryptocurrency revenue. The company also announcing it expects expects double-digit revenue growth this year. CEO Vlad Tenev joined host Sonali Basak to talk about the quarter, his outlook for events contracts and the promise of Stablecoin.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
Now another stock we're watching today Robinhood. The stock is
jumping after reporting topping estimates in its fourth quarter report.
It's revenue beat powered by a seven hundred percent drump
in its cryptocurrency revenue. The company also announcing it expects
double digit revenue growth this year, joining US now Robinhood
CEO of Lad Tenev billion dollars in revenue for the

(00:29):
first time as a public company. So clearly a great quarter.
The stock is responding to it. I do want to
talk Vlad about some of the growth initiatives, some of
the newer initiatives you launch, derivatives, businesses that have been
very much expanding event contracts. What can you tell us
about how well they're doing into twenty twenty five that

(00:50):
would signal these businesses becoming a bigger part of Robinhood
moving forward.

Speaker 3 (00:55):
Thanks Chanali, glad to be here. Yeah, it was a
strong quarter. The job's not finished, and one of the
things we're most excited by is that there's a full
packed roadmap. It's going to be an intense year and
we're going to make progress across all three of our
strategic priorities. You mentioned the Active Trader front Robinhood Legend,

(01:16):
which we unveiled a couple months ago, which is the
first desktop platform that we built specifically for active traders
in mind, that's already off to a fast start. That's
up to fifty million in annualized revenue after just two
months of being live to customers, and we expect that
to continue to accelerate as more customers adopt the platform

(01:38):
and we keep making improvements. The team's been shipping features
on a weekly basis and iterating extremely quickly. The feedback's
been very very good. Index Options we already announced is
up to a fifteen million annualized revenue run rate, and
that product just went live in the past few months
as well. And not to mention our derivatives business with

(01:59):
few and a comprehensive prediction markets event contracts offering that
are rolling out either now in the case of futures outrights,
but in the next few months for the comprehensive event
contracts offering.

Speaker 1 (02:14):
Well flat, that's exactly where I want to go the
events contracts business. Before we get to the ambitions, I
want to actually look backwards and talk about what happened
with the Super Bowl because you launched those Super Bowl
events contracts. They were live for about a day I think,
and then they were pulled at the request of the CFTC.
You said that you were in contact with the CFTC beforehand.
What actually happened there any light you could shed would

(02:37):
certainly be interesting.

Speaker 3 (02:39):
Yeah, of course, And I should say that we're huge
believers in prediction markets. We think they're the future of
trading and also the future of news and information. So
I've been a student and a fan for a long time,
and that's one of the reasons we're so excited about
bringing a larger, comprehensive event contracts offering to our customers.

(03:01):
You probably remember in November of last year, we launched
the Presidential Election market, which allowed our customers to trade
the election. That was our first event contracts offering, incredibly successful,
over half a billion contracts traded in just about a week.
We did follow that up with the Super Bowl last week,
and yeah, I mean, the CFTC had issue with that rollout.

(03:24):
They asked us to suspend the rollout, which which we
complied with, even though I mean it was a little
bit perplexing to us that several companies were allowed to
continue offering those to consumers. So we're going to have
to continue to work through that, and we believe in
these products. They're coming, and robin is going to be

(03:46):
a big part of offering those and also driving regulatory
clarity to make sure that these products that are so
useful and available to institutional consumers make their way to
retail as well. So TBD, you know, but I think
you should expect us to be a leader in this
innovative space and continue to push for clarity from regulators there.

Speaker 1 (04:08):
Well, just to say my own curiosity, it was live
for about a day. Did it actually generate any meaningful
business or was it too fresh?

Speaker 3 (04:17):
We pulled it back after it was rolled out to
a small percentage of customers. We did get some early
signs on whether customers would be interested in it, and
particularly how they would feel about it being alongside other
tradable assets like futures, options, equities and crypto because now
Robinhood's a comprehensive, diversified platform. So the signals were good. Obviously,

(04:43):
customers are interested in these products and that makes us
very very optimistic for delivering a comprehensive events offering later
this year.

Speaker 4 (04:52):
Well, you know now you have a new CFTC, or
at least that CFTC is no longer the one you're
going to be dealing with in that and that light, lad,
I'm sure that you attempt to be the best business
that you can regardless of the environment. But different environments
offer different opportunities. So what do you see as your
advantages now in you know, Trump's new sort of golden

(05:15):
golden era, golden age that he wants to drive.

Speaker 3 (05:19):
Yeah, I mean, I think a lot of a lot
of people focus on crypto, and we're certainly going to
be in a more innovation friendly environment in crypto. I
think that's going to be a tailwind for our business
as one of the few scaled players in both crypto
and traditional financial assets. But Robino's at the forefront of

(05:40):
innovation and financial services in a few key areas. Artificial
intelligence is coming and is going to disrupt financial services
in a big way. We talked about event contracts and
prediction markets and that's a huge innovative new product and
that that's going to be a new industry. We're at
the forefront of that, and so it's great to see

(06:02):
innovation friendly regime that's coming in that believes that the
US needs to be number one, number one in business
and innovation, and I think that'll be good not just
for Robinhood, but but for every industry we operated.

Speaker 2 (06:16):
Speaking of innovation, this whole move to twenty four hour trading.
One way you have told investors now you're facilitating that
is partly through using stable coin to power settlements. How
far does that go and how else can you be
using stable coin to make your business more efficient? Does
that just take off once you have greater US rules

(06:37):
around this? Yeah.

Speaker 3 (06:40):
So we're part of the US Dollar Global Network USDG
with a couple of other great companies, And the idea
that we want to introduce is that in order for
stable coins to be competitive with other means of holding
and transacting in dollars, there needs to be a better
way to pass yield directly onto holders. And right now,

(07:03):
in a high interest rate environment, you can be getting
four percent yield on your cash in a bank. So
if it's not easy to get the same type of
experience with stable coins, then they're not going to be
as competitive. So that's the real innovation that we're driving.
Making it easy to do that now in terms of
use of stable coins for institutional purposes. One of the

(07:28):
things that we have to do to operate our crypto
platform is facilitate transactions and settlements between cash and crypto
twenty four to seven, particularly on weekends when the banks
are usually not open and there's no way of transmitting
dollars using banking rails on weekends. Stable coins solve that

(07:49):
problem because it's a twenty four to seven network that's
running on software. And I think that just shows you
just one of the advantages of crypto technology over the
tradition financial system, and that translates not just to money movement,
but also to trading, to liquidity pools, and to the

(08:09):
trading of private assets that that are that are typically
considered I liquid.

Speaker 2 (08:14):
Speaking of private assets, a lot of things that are
trying to be done in the private assets world is
tokenization of private funds. You've been talking about tokenization as well.
You told investors just last night that it's something that
you're perhaps most excited about. How big of a business
could that become for you? And what are the near
term plans to make tokenization a serious part of what

(08:35):
Robinhood does.

Speaker 3 (08:37):
Yeah, so I think the near term opportunity that everyone's
excited about in the US, provided we get some regulatory
clarity on this. On this point is being able to
put real world assets on blockchains. And I think what
resonates with customers in the US is private private cum

(09:00):
company stock. So I think it's ludicrous that you know,
customers are free, retails free to invest in, you know,
a wide collection of mean coins and other alternative assets.
But open ai and SpaceX and other private companies that
early backers have seen you know, one hundred x sometimes
thousand x or more returns are impermissible and are seen

(09:24):
as too risky. So I think that needs to change.
And I think over time what you'll see is if
we release the power of crypto technology and allow crypto
to be connected to real world assets like securities. I
mean the addressable market for that is every private and

(09:44):
public listed equity, which which is obviously trillions of dollars
in market value. We see crypto as the next stage
and the technological advancement. We've gone from you know, filing
cabinet to mainframe to on premise to cloud, and I
think the next stage of evolution is going to be
the financial infrastructure going from cloud to crypto technology. I

(10:07):
think Robinhood's best position to actually lead that transformation.

Speaker 4 (10:10):
Clod we only have about.

Speaker 1 (10:11):
A minute left, but you brought up meme coins, and
I'm curious about that because compared to maybe some of
your competitors, compared to a coinbase, for example, when it
comes to meme coins, it seems like you've submitted fewer
requests to regulators to list those coins than Coinbase, for example.
Way is that and do you see that strategy changing

(10:32):
maybe under this new regulatory regime. Yeah.

Speaker 3 (10:36):
I mean, historically we've been extremely selective about the assets
that we list on the platform. I think now we're
in a world where, you know, on some of these chains,
including Solana, there's hundreds of thousands or more new coins created,
and I think that's really interesting. On the one hand,

(10:58):
it raises questions for what it looks like to list
assets and what the policy should be to make it
available to retail freely through these centralized platforms like Robinhood.
I think we need clarity on that. On the other hand,
it kind of shows you the power of this technology
and what an improvement it is upon the existing IPO process,

(11:19):
which is so long and cumbersome. That a lot of
the best and biggest private companies are choosing to delay
or forego it entirely. So that's why I think it's
so interesting to connect crypto technology with real world productive assets,
because all the benefits that you get can accrue to

(11:41):
customers that want to trade those revenue generating productive assets.

Speaker 4 (11:45):
Glad great, have you on the program. Really appreciate your time.
Robinhood's CEO of vlad Tenev. They're talking to us about
driving his business forward.