Robinhood Markets HOOD · USD

NOTE 5: REVENUESDisaggregation of RevenuesThe following table presents our revenues disaggregated by revenue source:Year Ended December 31,(in millions)202320242025Transaction-based revenuesOptions$505$760$1,123Cryptocurrencies135626901Equities104177302Other4184302Total transaction-based revenues7851,6472,628Net interest revenues:Margin interest243319573Interest on segregated cash, cash equivalents, securities, and deposits210261319Cash Sweep123179229Securities lending, net7994190Interest on corporate cash and investments 288256167Credit card, net92464Interest expenses related to credit facilities(23)(24)(32)Other ——4Total net interest revenues9291,1091,514Other revenues:Gold subscription revenues $75$109$179Proxy revenues 616063Other152689Total other revenues 151 195 331 Total net revenues$1,865$2,951$4,473The following table presents interest revenue earned and interest expense paid from securities lending:Year Ended December 31,(in millions)202320242025Interest revenue$184 $321 $604 Interest expense(105)(227)(414)Securities lending, net$79 $94 $190 Contract BalancesContract receivables are recognized when we have an unconditional right to invoice and receive payment under a contract and are derecognized when cash is received. Transaction-based revenue receivables due from market makers are reported in receivables from brokers, dealers, and clearing organizations while other revenue receivables related to proxy revenues due from issuers are reported in other current assets on the consolidated balance sheets.As of December 31, 2025, contract liabilities include $39 million of unearned subscription revenue for Robinhood Gold and Robinhood Gold Card, recognized when users remit cash payments in advance of the time we satisfy our performance obligations. The unearned subscription revenue was recorded as other current liabilities on the consolidated balance sheets. Contract liabilities also include $17 million of TradePMR performance obligations acquired as part of the TradePMR acquisition, with $8 million recorded in other current liabilities and $9 million in other non-current liabilities which was recorded on the consolidated balance sheets. This liability represents consideration received in advance of satisfying the related performance obligations and is subject to repayment if certain contractual conditions are not met.

NOTE 15: COMMITMENTS & CONTINGENCIESWe are subject to contingencies arising in the ordinary course of our business, including contingencies related to legal, regulatory, non-income tax and other matters. We record an accrual for loss contingencies at management’s best estimate when we determine that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If the reasonable estimate is a range and no amount within that range is considered a better estimate than any other amount, an accrual is recorded based on the bottom amount of the range. If a loss is not probable, or a probable loss cannot be reasonably estimated, no accrual is recorded. Amounts accrued for contingencies in the aggregate were $128 million and $71 million as of December 31, 2024 and 2025. In our opinion, an adequate accrual had been made as of each such date to provide for the probable losses of which we are aware and for which we can reasonably estimate an amount.Legal and Regulatory MattersThe securities industry, and many other industries in which we operate, are highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increase in litigation and regulatory investigations involving the brokerage, cryptocurrency, derivatives, advisory, and credit card industries. Litigation has included and may in the future include class action suits that generally seek substantial and, in some cases, punitive damages. Federal and state regulators, exchanges, other SROs, or international regulators investigate issues related to regulatory compliance that may result in enforcement action. We are also subject to periodic regulatory audits and inspections that have in the past and could in the future lead to enforcement investigations or actions. We have been named as a defendant in lawsuits and from time to time we have been threatened with, or named as a defendant in arbitrations and administrative proceedings. The outcomes of these matters are inherently uncertain and some may result in adverse judgments or awards, including penalties, injunctions, or other relief, and we may also determine to settle a matter because of the uncertainty and risks of litigation.

NOTE 8: INCOME TAXESThe components of income (loss) before income taxes were as follows: Year Ended December 31,(in millions)202320242025Domestic$(534)$1,063 $2,086 Foreign1 1 22 Income (loss) before income taxes$(533)$1,064 $2,108 The components of the provision for (benefit from) income taxes were as follows:Year Ended December 31,(in millions)202320242025Current:Federal$5 $16 $22 State3 6 18 Foreign— — 4 Total current tax expense (benefit)8 22 44 Deferred:Federal— (333)173 State— (36)20 Foreign— — (12)Total deferred tax expense (benefit)— (369)181 Total provision for (benefit from) income taxes$8 $(347)$225 The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 2 - Recent Accounting Pronouncements for additional details on the adoption of ASU 2023-09.The reconciliation of statutory federal income tax rate and our effective income tax rate was as follows (in millions, except for percentages):Year Ended December 31, 2025AmountPercentFederal tax at statutory rate$443 21.0 %State tax (benefit), net of federal benefit(1)34 1.6 Foreign tax effects(12)(0.6)Effect of cross-border tax laws1 0.1 Nontaxable or nondeductible items:Share-based compensation(184)(8.7)Others5 0.2 Tax credits:Research and development credits(66)(3.1)Changes in unrecognized tax benefits— — Change in valuation allowance3 0.1 Other adjustments1 0.1 Total provision for (benefit from) income taxes$225 10.7 %(1) State and local taxes in New York, New Jersey, Pennsylvania and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the reconciliation of statutory federal income tax rate and our effective income tax rate was as follows (in percentages):Year Ended December 31,20232024Federal tax at statutory rate21.0 %21.0 %State tax (benefit), net of federal benefit(1.9)1.1 Share-based compensation(29.7)(3.5)Research and development credits5.6 (4.8)Non-deductible regulatory settlements(4.6)(0.7)Other0.2 0.3 Change in valuation allowance8.0 (46.0)Effective tax rate(1.4)%(32.6)%For the year ended December 31, 2025, total income taxes paid (net of refunds) consisted of the following: Year Ended December 31,(in millions)2025U.S. federal$49 U.S. state and local45Foreign1Total$95 Individual jurisdictions equaling 5% or more of the total income taxes paid (net of refunds) for the year ended December 31, 2025 include U.S.

NOTE 14: LEASESOur operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park, CA and our office in New York City, NY. Our leases have remaining terms of one year to ten years, and many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. We do not have any finance leases. Lease assets and liabilities recognized on our consolidated balance sheets were as follows:December 31,(in millions)Classification20242025Lease right-of-use assets:Operating lease assetsOther non-current assets$94 $182 Lease liabilities:Current operating lease liabilitiesOther current liabilities21 22 Non-current operating lease liabilitiesOther non-current liabilities110 199 Total lease liabilities$131 $221 Fixed operating lease costs primarily consist of monthly base rent amounts due. Variable operating lease costs primarily relate to common area maintenance, property taxes, insurance, and other operating expenses. The components of lease expense were as follows:Year Ended December 31,(in millions)202320242025Fixed operating lease costs$21 $22 $29 Variable operating lease costs7 8 9 Short-term lease costs1 1 3 Sublease income(3)(6)(4)Total lease costs$26 $25 $37 Other information related to our operating leases was as follows:December 31,20242025Weighted-average remaining lease term6.86 years7.56 yearsWeighted-average discount rate6.92 %6.62 %Cash flows related to leases were as follows:Year Ended December 31,(in millions)202320242025Operating cash flows:Payments for operating lease liabilities$39 $28 $30 Supplemental cash flow data:Lease liabilities arising from obtaining right-of-use assets(1)$(8)$42 $106 _______________(1) For the year ended December 31, 2023, lease liabilities arising from obtaining right-of-use assets primarily related to a lease modification, partially offset by remeasurements resulting from reassessments of existing lease terms. For the year ended December 31, 2024, lease liabilities arising from obtaining right-of-use assets primarily related to initial recognition of new leases and lease extensions. For the year ended December 31, 2025, lease liabilities arising from obtaining right-of-use assets primarily related to initial recognition of new leases and amendments to existing leases.

NOTE 3: BUSINESS COMBINATIONSAcquisition of TradePMROn February 26, 2025, we acquired all of the outstanding equity of TradePMR, a custodial and portfolio management platform for RIAs. The acquisition of TradePMR allows us to deliver investment advisory capabilities to customers by bringing in a scaled RIA custodial and portfolio management platform that connects financial advisors to a new generation of investors. The acquisition date fair value of the consideration transferred for TradePMR was approximately $175 million following customary purchase price adjustments and was entirely paid in cash. The post-close compensation consisted of 2,049,711 unvested shares of the Company’s Class A common stock, valued at approximately $100 million as of the closing date of the acquisition, which will vest over a four-year period post-acquisition, subject to the terms of a vesting agreement. Shares of unvested restricted stock have the same voting rights as all other Class A common stock and are considered to be issued and outstanding. These shares are not part of the equity incentive plans described in Note 12 - Common Stock and Stockholders’ Equity. The purchase price allocation is based on a preliminary valuation and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during the measurement period (up to one year from the acquisition date). The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:(in millions)Fair ValueCash and cash equivalents$25 Receivable from users, net5 Prepaid expenses1 Other current assets9 Other non-current assets3 Goodwill111 Intangible assets81 Accounts payable and accrued expenses(1)Other current liabilities(21)Other non-current liabilities(38)Net assets acquired$175 The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes. Goodwill is primarily attributed to the assembled workforce of TradePMR and anticipated operational synergies. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions at the time of acquisition.

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 platform. As a result, our systems and operations as well as those of the third parties on which we rely to conduct certain key functions are vulnerable to cybersecurity incidents, which we have experienced in the past. Although no organization can eliminate cybersecurity and information technology risk completely, we have a cybersecurity program that includes physical, technological, and administrative controls designed to detect, contain, respond to and remediate cybersecurity threats and incidents and defined processes to assess, identify and manage material risks from cybersecurity threats. These controls and processes include, among others:•maintaining a vulnerability management program that performs regular vulnerability scans and relies on our risk-based information security program to promote coverage of critical areas;•establishing an offensive security team that actively tests our security controls, imitating methods persons trying to achieve unauthorized access might use to identify any weaknesses;•our global privacy program supported by our privacy engineering and privacy legal teams;•maintaining an incident response plan which outlines the roles and responsibilities of key personnel in the event of a cybersecurity incident; •conducting mandatory annual security and privacy training for employees and contractors and, where appropriate, giving employees and contractors role-based training focused on content specific to their role at the Company;•undertaking an annual review of our consumer facing policies and statements related to cybersecurity;•requiring our employees to treat customer information and data with care through policy, practice and contract (as applicable); and•carrying cybersecurity insurance that provides some protection against potential losses arising from a cybersecurity incident.Our cybersecurity program is managed by the Company’s Security and Corporate Engineering organization, which is led by our CISO, who reports directly to the Chief Technology Officer. Our CISO has over twenty years of experience in the security industry and has held a variety of leadership positions in cybersecurity at Medicity, Aetna, and Google.

The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the Annual Meeting of Stockholders to be held in 2026, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates.

NOTE 6: ALLOWANCE FOR CREDIT LOSSESAllowance for Credit Losses - Brokerage RelatedThe following table summarizes the brokerage related allowance for credit losses which is primarily related to fraudulent activities, included in receivables from users, net on the consolidated balance sheet:Year Ended December 31,(in millions)202320242025Beginning balance$18 $15 $14 Provision for credit losses22 21 28 Write-offs(25)(23)(30)Recoveries— 1 4 Ending Balance$15 $14 $16 Allowance for Credit Losses - Credit Card RelatedWe have two types of allowance for credit losses related to credit cards: i) an allowance related to off-balance sheet credit card receivables, shown as part of accounts payable and accrued expenses on the consolidated balance sheet, and ii) an allowance related to purchased credit card receivables and interest receivable from customers, included in receivables from users, net on the consolidated balance sheet. The following table summarizes the allowance related to off-balance sheet credit card receivables:Year Ended December 31,(in millions)202320242025Beginning balance$— $32 $40 Opening balance from acquisition of Robinhood Credit23 — — Provision for credit losses19 40 27 Payments to Coastal Bank(11)(34)(28)Recoveries1 2 2 Ending balance$32 $40 $41 The following table summarizes the allowance related to purchased credit card receivables and interest receivables from customers:Year Ended December 31,(in millions)202320242025Beginning balance$— $1 $11 Provision for credit losses2 15 59 Write-offs(1)(5)(17)Recoveries— — 3 Ending balance$1 $11 $56 The following tables present the aging analysis of our credit card receivables for the periods presented and the delinquency aging includes all past due principal on loans. Accrued interest receivable of $3 million and $9 million as of December 31, 2024 and 2025 were not included in the tables below.