Robinhood Markets · 10-Q · Item 2 MD&A

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section presents management’s perspective on our financial condition and results of operations, including performance metrics that management uses to assess company performance. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this Quarterly Report, and should be read in conjunction with our interim unaudited condensed consolidated financial statements and notes elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.

It is also intended to provide you with information that will assist you in understanding our consolidated financial statements, the changes in key items in those consolidated financial statements from year to year, and the primary factors that accounted for those changes. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which might not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”

Data as of and for the three and six months ended June 30, 2025 and 2026 has been derived from our unaudited condensed consolidated financial statements appearing at the beginning of this Quarterly Report. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period.

We refer to our “users” and our “customers” interchangeably throughout this Quarterly Report to refer to individuals who hold accounts on our platforms.

Overview

Robinhood was founded on the belief that everyone should be welcome to participate in our financial system. We are creating modern financial services platforms for everyone, regardless of their wealth, income, or background.

Our mission is to democratize finance for all. We use technology to provide access to the financial system in a way that is simple and convenient for our customers. We believe investing should be familiar and welcoming, with a simple design and an intuitive interface, so that customers are empowered to achieve their goals. We started with a revolutionary, bold brand and design in the Robinhood app which makes investing approachable for millions. Over the last decade, we have disrupted and changed the industry, becoming the first U.S. retail broker to offer commission-free stock trading with no account minimums, which was subsequently adopted by the rest of the industry.

In recent years, we have continued to build relationships with our customers by introducing new products and diversifying our services that further expand access to the financial system, including focusing on products and tools for more seasoned investors. Through these efforts, we believe we have made investing culturally relevant and understandable, and that our platforms are enabling our customers to become long-term investors and take greater control of their finances.

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Financial Results and Performance

With respect to the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

•T1total net revenues increased 32% to $1,308 million compared to $989 million;

•net income attributable to Robinhood increased 45% to $561 million, compared to $386 million;

•diluted EPS increased 48% to $0.62, compared to $0.42;

•total operating expenses increased 33% to $734 million compared to $550 million;

•Adjusted EBITDA (non-GAAP) increased 35% to $741 million compared to $549 million;

•T2Funded Customers increased by 1.9 million, or 7%, to 28.4 million compared to 26.5 million, and Investment Accounts increased by 2.5 million, or 9%, to 29.9 million compared to 27.4 million;

•T3Total Platform Assets increased 32% to $368.7 billion compared to $278.6 billion, primarily driven by continued Net Deposits and higher equity valuations, partially offset by lower cryptocurrency valuations;

•Net Deposits were $21.7 billion, which translates to an annualized growth rate of 28% relative to Total Platform Assets at the end of the first quarter of 2026, compared to $13.8 billion, which translates to an annualized growth rate of 25% relative to Total Platform Assets at the end of the first quarter of 2025. Over the past twelve months, Net Deposits were $75.7 billion, a growth rate of 27% relative to Total Platform Assets at the end of the second quarter of 2025;

•Robinhood Gold Subscribers increased 39% to 4.84 million compared to 3.48 million.

Adjusted EBITDA is a non-GAAP financial measure. For more information about Adjusted EBITDA, including the definition and limitations of such measure, and a reconciliation of net income to Adjusted EBITDA, please see “—Non-GAAP Financial Measures” below.

Recent Developments

Workforce Reduction

On June 16, 2026, T4we announced a reduction in force as part of our efforts to maintain a high performance culture, further accelerate product velocity, and remain lean and disciplined. This reduction in force involved approximately 10% of our full-time employees, and additionally involved the closure of a small number of open roles across the Company.

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Key Performance Metrics

Key performance metrics for the relevant periods were as follows:

Three Months Ended

% Change

Funded Customers(1) (in millions)

7

%

Total Platform Assets(2) (in billions)

$

$

%

Net Deposits (in billions)

$

$

NM

Annualized Growth Rate with respect to Net Deposits

NM

ARPU (in dollars)

$

$

%

Robinhood Gold Subscribers (in millions)

%

________________

(1)The following table describes the annual changes within Funded Customers:

Three Months Ended

(in millions)

% Change

Beginning Funded Customers

6

%

New Funded Customers

%

Resurrected Customers

%

Acquired customers

NM

Churned Customers

%

Ending Funded Customers

7

%

(2)The following table sets out the components of Total Platform Assets by type of asset:

Three Months Ended

(in billions)

% Change

Equities

$

$

%

Cryptocurrencies

%

Options and futures

%

RIA assets

%

Cash held by Customers

9

%

Receivables from Customers (primarily margin balances)

%

Total Platform Assets

$

$

%

The following table describes the changes within Total Platform Assets:

Three Months Ended

(in billions)

% Change

Beginning Total Platform Assets

$

$

%

Acquired assets

NM

Net Deposits

NM

Net market gains

%

Ending Total Platform Assets

$

$

%

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Non-GAAP Financial Measures

Adjusted EBITDA

We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total net revenues, net income, and other results under GAAP, we utilize non-GAAP calculations of Adjusted EBITDA. Adjusted EBITDA is defined as net income attributable to Robinhood, excluding (i) net income (loss) attributable to non-controlling interests, (ii) interest expenses related to debt obligations, (iii) provision for (benefit from) income taxes, (iv) depreciation and amortization, (v) SBC, (vi) significant legal and tax settlements and reserves, and (vii) other significant gains, losses, and expenses (such as impairments, restructuring charges, and business acquisition-, or disposition-related expenses) that we believe are not indicative of our ongoing results.

This non-GAAP financial information is presented for supplemental informational purposes only, should not be considered in isolation or as a substitute for, or superior to, financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

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The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income:

Three Months Ended

Six Months Ended

(in millions)

Net income attributable to Robinhood

$

$

$

$

Net income (loss) attributable to non-controlling interests

—

—

8

Net income

Add:

Interest expenses related to debt obligations

8

Provision for income taxes

Depreciation and amortization

EBITDA (non-GAAP)

Add:

SBC

Restructuring charges

—

—

Less:

Gain on deconsolidation of RVI (1)

—

—

Unrealized and realized gains in equity securities (2)

—

—

Adjusted EBITDA (non-GAAP)

$

$

$

$

_______________

(1) The $106 million gain from deconsolidation excludes a $17 million unrealized gain recognized in net income earlier in the current period, which was reflected in the carrying value of RVI at deconsolidation and is presented separately as a realized gain.

(2) For the three and six months ended June 30, 2026, primarily related to investments held by RVI.

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Results of Operations

The following table summarizes our unaudited condensed consolidated statements of operations data:

(in millions)

Three Months Ended

Six Months Ended

Revenues:

Transaction-based revenues

$

$

$

$

Net interest revenues

Other revenues

Total net revenues

Operating expenses(1):

Brokerage and transaction

Technology and development

Operations

Provision for credit losses

Marketing

General and administrative

Total operating expenses

Other income, net

3

4

Income before income taxes

Provision for income taxes

Net income

$

$

$

$

Less: Net income (loss) attributable to non-controlling interests

—

—

8

Net income attributable to Robinhood

$

$

$

$

_______________

(1)Includes SBC expense as follows:

Three Months Ended

Six Months Ended

(in millions)

Brokerage and transaction

$

3

$

2

$

5

$

5

Technology and development

Operations

2

1

3

2

Marketing

2

3

4

5

General and administrative

Total SBC expense

$

$

$

$

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Comparison of the Three and Six Months Ended June 30, 2025 and 2026

Revenues

Transaction-Based Revenues

Three Months Ended

Six Months Ended

(in millions, except for percentages)

% Change

% Change

Transaction-based revenues:

Options

$

$

%

$

$

%

Event contracts

NM

NM

Cryptocurrencies

%

%

Equities

%

%

Other

%

%

Total transaction-based revenues

$

$

%

$

$

%

Transaction-based revenues as a % of total net revenues:

Options

Event contracts

1%

1%

Cryptocurrencies

8%

Equities

7%

6%

9%

Other

4%

3%

3%

4%

Total transaction-based revenues

Transaction-based revenues increased by $237 million and $277 million, for the three and six months ended June 30, 2026, primarily driven by increases of $146 million and $247 million in event contracts, $77 million and $97 million in options, and $63 million and $89 million in equities, partially offset by decreases of $60 million and $178 million in cryptocurrencies.

Options revenues increased due to a 43% and 32% increase in Options Contracts Traded per trader. The increase was partially offset by lower option rebate rates due to the mix of ticker symbols traded as different ticker symbols pay different rebate rates.

T5Event contracts revenues increased primarily due to an acceleration in our prediction markets business, reflecting higher trading activity compared to the same period in 2025 when the offering was still in its early stage.

T6Cryptocurrencies revenues decreased primarily due to lower cryptocurrency rebate rates from crypto market makers, a 16% and 24% decrease in the number of users placing cryptocurrency trades, and a 20% and 21% decrease in the average Notional Trading Volume traded per trader, partially offset by cryptocurrencies revenues benefiting from our acquisition of Bitstamp.

Equities revenues increased primarily due to a 56% and 51% increase in the average Notional Trading Volume traded per trader and a 13% and 6% increase in the number of users placing equity trades. Additionally, equities revenues increased as a result of higher equity rebate rates due to the mix of ticker symbols traded as different ticker symbols pay different rebate rates.

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Net Interest Revenues

Three Months Ended

Six Months Ended

(in millions, except for percentages)

% Change

% Change

Net interest revenues:

Margin interest

$

$

%

$

$

%

Interest on segregated cash, cash equivalents, securities, and deposits, net

%

%

Cash Sweep

%

%

Credit card, net

%

%

Interest on corporate cash and investments

%

%

Securities lending, net

%

%

Interest expenses related to credit facilities

(8)

%

%

Other

1

2

%

1

3

%

Total net interest revenues

$

$

9

%

$

$

%

Net interest revenues as a % of total net revenues:

Margin interest

%

%

%

%

Interest on segregated cash, cash equivalents, securities, and deposits, net

8

%

5

%

7

%

5

%

Cash Sweep

6

%

3

%

6

%

3

%

Credit card, net

1

%

3

%

1

%

3

%

Interest on corporate cash and investments

5

%

2

%

5

%

3

%

Securities lending, net

5

%

1

%

4

%

1

%

Interest expenses related to credit facilities

(1)

%

(1)

%

(1)

%

(1)

%

Other

—

%

—

%

—

%

—

%

Total net interest revenues

%

%

%

%

Net interest revenues increased by $32 million and $101 million for the three and six months ended June 30, 2026, primarily driven by higher margin interest and net credit card interest, due to increased margin borrowers and the growth in our credit card business, as well as higher accretion income on investments. The increase was partially offset by a decrease in interest revenue from securities lending activities driven by a relatively unfavorable average rate on higher stock loan balances, as well as a decrease in interest revenue on Cash Sweep, corporate cash and investments driven by a lower short-term interest rate environment. We anticipate any potential future rate cuts by the Federal Reserve will negatively impact our net interest revenues and adversely affect our customers’ returns on cash deposits.

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The following table summarizes interest-earning assets, the revenue generated by these assets, and their respective annualized yields:

(in millions, except for annualized yield)

Margin Book

Cash and deposits(1)

Cash Sweep

(off-balance sheet)

Credit card, net(2)

Total interest-earning assets

Securities lending, net

Interest expenses related to credit facilities(5)

Other

Total net interest revenues

$

$

$

$

$

Average(3)

Revenue (expense)

$

$

$

$

$

$

$

$

2

$

Annualized yield(4)

%

$

$

$

$

$

Average(3)

Revenue (expense)

$

$

$

$

$

$

4

$

(8)

$

1

$

Annualized yield(4)

%

$

$

$

$

$

Average(3)

Revenue (expense)

$

$

$

$

$

$

$

(8)

$

1

$

Annualized yield(4)

$

$

$

$

$

Average(3)

Revenue (expense)

$

$

$

$

$

$

$

$

3

$

Annual yield(4)

$

$

$

$

$

Average(3)

Revenue (expense)

$

$

$

$

$

$

$

$

1

$

Annualized yield(4)

__________

(1) Includes cash and cash equivalents, restricted cash, segregated cash, cash equivalents, and securities under federal and other regulations, deposits with clearing organizations, and investments.

(2) Credit card, net consists of i) an off-balance sheet amount representing customer principal amounts funded by Coastal Bank under the Program Agreement. Under the Program Agreement, Robinhood Credit collects interest from customers that carry a balance and pays interest on the amount funded by Coastal Bank, with the difference between those amounts resulting in net interest revenue and ii) an on-balance sheet amount representing purchased credit card receivables by the Trust. Robinhood Credit collects interest from customers that carry balances and pays interest on the amount funded through the Trust, with the difference in those amounts resulting in net interest revenues. As of June 30, 2026, the off-balance sheet amount funded under the Program agreement was $214 million and the on-balance sheet amount was $1,243 million. Refer to Note 11 - Financing Activities and Off-Balance Sheet Risk to our unaudited condensed consolidated financial statements in this Quarterly Report for more information.

(3) Average balance rows represent the simple average of month-end balances in a given period.

(4) Annualized yield is calculated by annualizing revenue for the given period and dividing by the applicable average asset balance.

(5) Includes interest expenses related to our revolving credit facilities; interest expense related to the Trust is included in the credit card, net interest yield calculation. Refer to Note 11 - Financing Activities and Off-Balance Sheet Risk to our unaudited condensed consolidated financial statements in this Quarterly Report for more information.

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Other Revenues

Three Months Ended

Six Months Ended

(in millions, except for percentages)

% Change

% Change

Other revenues:

Gold subscription revenues

$

$

%

$

$

%

Proxy revenues

%

%

Other

%

%

Total other revenues

$

$

%

$

$

%

Other revenues as a % of total net revenues:

Gold subscription revenues

4

%

4

%

4

%

4

%

Proxy revenues

4

%

3

%

2

%

2

%

Other

1

%

4

%

2

%

4

%

Other revenues as a % of total net revenues

9

%

%

8

%

%

Other revenues increased $50 million and $81 million for the three and six months ended June 30, 2026, primarily driven by increases in Robinhood Gold subscription revenues due to growth in Robinhood Gold Subscribers, service revenues earned from Trump Accounts, and revenues earned from coin listings.

Operating Expenses

Three Months Ended

Six Months Ended

(in millions, except for percentages)

% Change

% Change

Operating expenses:

Brokerage and transaction

$

$

%

$

$

%

Technology and development

%

%

Operations

%

%

Provision for credit losses

%

%

Marketing

5

%

3

%

General and administrative

%

%

Total operating expenses

$

$

%

$

$

%

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Brokerage and Transaction

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Employee compensation, benefits, and overhead

$

$

Market data expenses

8

Instant withdrawals

5

9

Other

Total

$

$

$

$

Percent of total net revenues:

5

%

5

%

5

%

5

%

Brokerage and transaction costs increased by $14 million and $24 million for the three and six months ended June 30, 2026, primarily due to a $5 million and $7 million increase in market data expense driven by an increase in customer volume. In addition, employee compensation, benefits, and overhead expenses increased $2 million and $6 million due to the growth and expansion of our business. Other brokerage and transactions costs increased $3 million and $7 million primarily related to increases in credit card processing fees.

Technology and Development

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Employee compensation, benefits, and overhead

$

$

%

$

$

%

Cloud infrastructure services

2

%

4

%

Software and tools

%

%

Other

(9)

%

%

Total

$

$

%

$

$

%

Percent of total net revenues:

%

%

%

%

Technology and development costs increased by $42 million and $69 million for the three and six months ended June 30, 2026, primarily due to a $30 million and $38 million increase in employee compensation, benefits, and overhead expenses driven by recent acquisitions and the launch of new products. Additionally, software and tools expenses increased by $12 million and $25 million driven by continued growth of our business and the integration of acquired businesses.

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Operations

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Employee compensation, benefits, and overhead

$

$

$

$

Customer experience

5

Other

5

9

Total

$

$

$

$

Percent of total net revenues:

3

%

4

%

3

%

4

%

Operations costs increased by $28 million and $35 million for the three and six months ended June 30, 2026, primarily due to a $13 million and $14 million increase in customer experience costs to support Trump Accounts. Employee compensation, benefits, and overhead increased by $11 million and $15 million driven by the increased growth and expansion of our business. Additionally, other operations expense increased by $4 million and $6 million driven by the increase in transaction volume.

Provision for credit losses

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Provision for credit losses - credit card related

$

$

$

$

Provision for credit losses - brokerage related

9

5

Total

$

$

$

$

Percent of total net revenues:

3

%

4

%

3

%

4

%

Provision for credit losses increased by $28 million and $40 million for the three and six months ended June 30, 2026, primarily due to a $32 million and $50 million increase in credit card-related provision for credit losses driven by higher balances of purchased credit card receivables consistent with the growth of our credit card business, partially offset by a decrease in reserve rates, benefitting from improved recovery rates. In addition, brokerage related provision for credit losses decreased by $4 million and $10 million due to decreased fraud activity.

Marketing

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Digital marketing

$

$

%

$

$

%

Employee compensation, benefits, and overhead

%

%

Brand marketing

7

%

%

Other

%

%

Total

$

$

5

%

$

$

3

%

Percent of total net revenues:

%

8

%

%

9

%

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Marketing costs increased by $5 million and $7 million for the three and six months ended June 30, 2026 primarily due to an increase in marketing expenses related to our prediction markets and credit card offerings, offset by an decrease in brand marketing expenses due to lower campaign spend compared to the same periods in 2025.

General and Administrative

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Employee compensation, benefits, and overhead

$

$

%

$

$

%

Legal expenses

%

%

Other professional fees

%

%

Other

3

%

%

Total

$

$

%

$

$

%

Percent of total net revenues:

%

%

%

%

General and administrative costs increased by $67 million and $108 million for the three and six months ended June 30, 2026 primarily due to a $29 million and $58 million increase in employee compensation, benefits, and overhead expenses driven by increased SBC related to the modification of executive awards related to senior leadership transitions and the growth and expansion of our business. Additionally, other general and administrative expenses increased $22 million and $25 million and legal expenses increased $7 million and $16 million for the three and six months ended June 30, 2026 in relation to new product offerings and reserves for legal matters.

Other income, net

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Other income, net

$

3

$

NM

$

4

$

NM

Other income, net increased by $132 million and $131 million for the three and six months ended June 30, 2026 primarily driven by a $106 million gain recognized as a result of the deconsolidation of RVI and a $23 million gain from equity securities primarily related to investments held by RVI during the three and six months ended June 30, 2026. Refer to Note 4 - Deconsolidation of RVI of our unaudited condensed consolidated financial statements in this Quarterly Report for more information.

Provision for Income Taxes

Three Months Ended

Six Months Ended

(in millions)

% Change

% Change

Provision for income taxes

$

$

%

$

$

%

Provision for income taxes increased by $80 million and $110 million for the three and six months ended June 30, 2026 primarily due to the growth of the business and decrease in excess tax benefits from SBC.

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Liquidity and Capital Resources

Sources and Uses of Funds

Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, investments, and stablecoin. Other sources of future funds may include potential borrowing under our revolving lines of credit and potential issuance of new debt or equity. Our liquidity needs are primarily to support and invest in our core business, including investing in new ways to serve our customers, potentially seeking strategic acquisitions to leverage existing capabilities and further build our business, and for general capital needs (including capital requirements imposed by regulators and SROs and cash deposit and collateral requirements under the rules of the DTC, the NSCC, OCC, and the CFTC. Based on our current level of operations, we believe our primary sources of liquidity will be adequate to meet our current liquidity needs for the next 12 months.

Liquid Assets

As of June 30, 2026, we had cash and cash equivalents of $5.4 billion and stablecoin of $155 million. Refer to Note 8 - Investments and Fair Value Measurement, to our unaudited condensed consolidated financial statements in this Quarterly Report for further information.

Revolving Credit Facilities and Credit Card Funding Trust

As of June 30, 2026, we had committed revolving credit facilities with a total borrowing capacity of up to $4.875 billion and a borrowing capacity for the Trust of up to $1.550 billion. Refer to Note 11 - Financing Activities and Off-Balance Sheet Risk to our unaudited condensed consolidated financial statements in this Quarterly Report for further information.

RVI Deconsolidation

On June 25, 2026, we sold a portion of our ownership interest in RVI, generating cash proceeds of $22 million. Refer to Note 4 - Deconsolidation of RVI, to our unaudited condensed consolidated financial statements in this Quarterly Report for further information.

Commitments

The following table summarizes our short- and long-term material cash requirements for contractual obligations as of June 30, 2026:

Payments Due by Period

(in millions)

Total

Thereafter

Convertible notes

$

$

—

$

—

$

$

—

Purchase commitments(1)

Credit Card Funding Trust borrowing principal and interest

—

—

—

Operating lease commitments(2)

Robinhood match incentives commitments(3)

9

9

—

—

—

Total

$

$

$

$

$

_______________

(1) Purchase commitments are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated. These primarily relate to commitments for cloud infrastructure, data services and business insurance.

(2) Operating lease commitments include tenant improvement allowances, which are amortized as a reduction of lease expense over the shorter of the estimated useful life of the improvements or the respective lease term.

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(3) Robinhood match incentives commitments represent non-cancelable future match payments on eligible cash deposits made by Robinhood Gold Subscribers. The future match payments are forfeited if deposits are not held on the platform during the specific earning period.

In addition to lease and purchase commitments, we have two committed financing agreements: one with a contractual term of 30 days and a daily minimum commitment of $25 million and another with a contractual term of 21 days with a daily minimum commitment of $35 million.

Regulatory Capital Requirements

Our broker-dealer subsidiaries (RHS, RHF, and TradePMR) are subject to the Net Capital Rule, administered by the SEC and FINRA, which requires the maintenance of minimum net capital, as defined. Net capital and the related net capital requirements may fluctuate on a daily basis. RHS and RHF compute net capital under the alternative method as permitted by the Net Capital Rule.

Our FCM subsidiary, RHD, is subject to CFTC Regulation 1.17, administered by the CFTC and the NFA, which requires the maintenance of minimum net capital, as defined by CFTC Regulation 1.17. Net capital and the related net capital requirements may fluctuate on a daily basis.

The table below summarizes the net capital, capital requirements, and excess net capital of RHS, RHF, RHD, and TradePMR as of periods presented:

(in millions)

Net Capital

Required Net Capital

Net Capital in Excess of Required Net Capital

RHS

$

$

$

RHF

RHD

9

TradePMR

As of June 30, 2026, these subsidiaries were in compliance with their respective regulatory capital requirements.

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Cash Flows

The following table summarizes our cash flow activities:

Six Months Ended

(in millions)

Cash provided by (used in):

Operating activities

$

$

Investing activities

Financing activities

Operating activities

(in millions)

Changes to net cash provided by (used in) operating activities were primarily due to:

Increase in securities loaned due to continued growth of our securities lending program, as well as market conditions, variable lending and funding activities

$

Increase in payable to users primarily driven by higher customer free credit balance

Increase in net income after adjusting for non-cash items

Increase in securities borrowed due to increased customer activities

Increase in receivables from users primarily driven by higher customer margin receivables

Increase in securities segregated under federal and other regulations

Decrease in working capital primarily driven by increase in receivables from brokers, dealers, and clearing organizations and increase in deposits with clearing organizations

$

Investing activities

(in millions)

Changes to net cash provided by (used in) investing activities were primarily due to:

Increase due to lower cash paid associated with business and asset acquisitions

$

Increase in proceeds from sales of investment

Increase in purchases of non-marketable securities

Cash derecognized upon deconsolidation of RVI

Increase in purchases of credit card receivables offset by collections during the year

Decrease in proceeds received from maturities of held-to-maturity investments

Decrease in cash, cash equivalents, and segregated cash acquired in business acquisitions

Other

$

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Financing activities

(in millions)

Changes to net cash provided by (used in) financing activities were primarily due to:

Proceeds from issuance of convertible senior notes

$

Decrease in cash paid for taxes related to net share settlement of equity awards

Proceeds received from issuance of RVI common stock in connection with initial public offering, net of offering costs

Increase in borrowings by the Credit Card Funding Trust to purchase credit card receivables

Increase in contributions from noncontrolling interests

Increase in repayments on borrowings by the Credit Card Funding Trust

Purchase of Capped Calls

Increase in cash paid for repurchases of common stock of RHM

Other

$

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities on our unaudited condensed consolidated financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results might differ significantly from these estimates under different assumptions, judgments, or conditions.

There have been no material changes to our critical accounting estimates during the six months ended June 30, 2026, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in our 2025 Form 10-K.

Recent Accounting Pronouncements

See Item 1 of Part I, “Unaudited Financial Statements — Note 2 - Recent Accounting Pronouncements.”

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