Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | Robinhood Markets, Inc. |
Entity Incorporation, State | DE |
Entity Primary SIC Number | 7372 |
Entity Tax Identification Number | 46-4364776 |
Entity Address, Street | 85 Willow Road |
Entity Address, City | Menlo Park |
Entity Address, State | CA |
Entity Address, Postal Zip Code | 94025 |
City Area Code | 844 |
Local Phone Number | 428-5411 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Entity Central Index Key | 0001783879 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | |||||||
Cash and cash equivalents | $ 5,077,752 | $ 1,402,629 | $ 794,482 | $ 644,050 | |||
Cash and securities segregated under federal and other regulations | 5,374,594 | 4,914,660 | 2,420,354 | ||||
Receivables from brokers, dealers and clearing organizations | 209,792 | 124,501 | 20,714 | ||||
Receivables from users, net | 5,423,643 | 3,354,142 | 640,171 | ||||
Deposits with clearing organizations | 272,204 | 225,514 | 122,477 | ||||
Other current assets | 1,542,902 | 851,138 | 28,342 | ||||
Total current assets | 17,900,887 | 10,872,584 | 3,876,108 | ||||
Property, software and equipment, net | 71,078 | 45,834 | 25,301 | ||||
Restricted cash | 17,273 | 7,364 | 5,164 | ||||
Non-current assets | 99,344 | 62,692 | 37,827 | ||||
Total assets | 18,088,582 | 10,988,474 | 3,944,400 | ||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | 292,851 | 104,649 | 37,587 | ||||
Payables to users | 7,768,181 | 5,897,242 | 2,365,151 | ||||
Amounts of liabilities presented on the unaudited condensed consolidated balance sheets | 2,642,900 | 1,921,118 | 674,029 | ||||
Other current liabilities | 1,536,344 | 893,036 | 24,613 | ||||
Total current liabilities | 12,240,276 | 8,816,045 | 3,101,380 | ||||
Other non-current liabilities | 463,548 | 48,012 | 27,657 | ||||
Total liabilities | 17,893,607 | 8,864,057 | 3,129,037 | ||||
Commitments and contingencies (Note 14) | |||||||
Mezzanine equity | |||||||
Redeemable convertible preferred stock | 2,179,739 | 2,179,739 | 912,411 | ||||
Stockholders’ deficit: | |||||||
Common stock | 1 | 1 | 1 | ||||
Additional paid-in capital | 151,281 | 134,307 | 99,439 | ||||
Accumulated other comprehensive income | 525 | 473 | 189 | ||||
Accumulated deficit | (2,136,571) | (190,103) | (196,677) | ||||
Total stockholders’ deficit | (1,984,764) | $ (1,485,186) | (55,322) | $ (86,949) | $ (146,791) | (97,048) | $ (21,482) |
Total liabilities, mezzanine equity and stockholders’ deficit | $ 18,088,582 | $ 10,988,474 | $ 3,944,400 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, authorized (in shares) | 658,311,424 | 414,033,220 | 643,333,662 |
Redeemable convertible preferred stock, issued (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, outstanding (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, Liquidation preference | $ 2,191,086 | $ 2,191,086 | $ 922,786 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,057,152,204 | 777,354,000 | 1,400,000,000 |
Common stock, shares issued (in shares) | 232,609,957 | 229,031,546 | 224,802,545 |
Common stock, shares outstanding (in shares) | 232,609,957 | 229,031,546 | 224,802,545 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Net interest revenues | 67,709 | 39,998 | 130,206 | 64,014 | 177,437 | 70,639 |
Total net revenues | 565,333 | 244,211 | 1,087,507 | 371,761 | 958,833 | 277,533 |
Operating expenses: | ||||||
Brokerage and transaction | 37,812 | 28,612 | 78,816 | 49,016 | 111,083 | 45,459 |
Technology and development | 156,347 | 44,971 | 273,205 | 78,176 | 215,630 | 94,932 |
Operations | 101,065 | 30,464 | 167,629 | 52,277 | 137,905 | 33,869 |
Marketing | 94,159 | 43,510 | 196,407 | 113,432 | 185,741 | 124,699 |
General and administrative | 111,346 | 38,636 | 248,460 | 73,287 | 294,694 | 85,504 |
Total operating expenses | 500,729 | 186,193 | 964,517 | 366,188 | 945,053 | 384,463 |
Change in fair value of convertible notes and warrant liability | 528,052 | 0 | 2,020,321 | 0 | ||
Other expense (income), net | 710 | (100) | (149) | 43 | (50) | 657 |
Income (loss) before income taxes | (464,158) | 58,118 | (1,897,182) | 5,530 | 13,830 | (107,587) |
Provision for income taxes | 37,507 | 534 | 49,286 | 448 | 6,381 | (1,018) |
Net income (loss) | (501,665) | 57,584 | (1,946,468) | 5,082 | 7,449 | (106,569) |
Net income (loss) attributable to common stockholders: | ||||||
Basic | (501,665) | 22,783 | (1,946,468) | 2,050 | 2,848 | (106,569) |
Diluted | $ (501,665) | $ 22,783 | $ (1,946,468) | $ 2,050 | $ 2,848 | $ (106,569) |
Earnings Per Share [Abstract] | ||||||
Basic (in dollars per share) | $ (2.16) | $ 0.10 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Diluted (in dollars per share) | $ (2.16) | $ 0.09 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||||
Basic (in shares) | 232,223,019 | 225,091,413 | 231,459,227 | 224,953,736 | 225,748,355 | 221,664,610 |
Diluted (in shares) | 232,223,019 | 244,338,145 | 231,459,227 | 244,539,192 | 244,997,388 | 221,664,610 |
Transaction-based revenues | ||||||
Revenues: | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Other revenues | ||||||
Revenues: | ||||||
Revenues | $ 46,457 | $ 16,800 | $ 85,695 | $ 24,703 | $ 61,263 | $ 36,063 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||||
Net income (loss) | $ (501,665) | $ 57,584 | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Other comprehensive income (loss), net of tax: | ||||||
Foreign currency translation | 23 | (42) | 52 | (174) | 284 | 179 |
Total other comprehensive income (loss), net of tax | 23 | (42) | 52 | (174) | 284 | 179 |
Total comprehensive income (loss) | $ (501,642) | $ 57,542 | $ (1,946,416) | $ 4,908 | $ 7,733 | $ (106,390) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||||
Net income | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 8,694 | 3,913 | 9,938 | 5,444 |
Provision for credit losses | 36,745 | 23,933 | 59,134 | 11,109 |
Share-based compensation | 10,134 | 3,777 | 24,330 | 26,667 |
Deferred income taxes | 1 | (88) | (261) | (665) |
Other | 0 | 19 | 2,400 | 834 |
Changes in operating assets and liabilities: | ||||
Segregated securities under federal and other regulations | (214,990) | 0 | (134,994) | 0 |
Receivables from brokers, dealers and clearing organizations | (85,291) | (116,703) | (103,787) | (9,081) |
Receivables from users, net | (2,104,430) | (769,581) | (2,771,967) | (64,711) |
Deposits with clearing organizations | (46,690) | (113,112) | (103,037) | (85,547) |
Other current and non-current assets | (730,233) | (156,252) | (848,538) | (47,758) |
Accounts payable and accrued expenses | 182,214 | 18,248 | 67,117 | 13,895 |
Payables to users | 1,870,939 | 2,913,253 | 3,532,091 | 802,817 |
Securities loaned | 721,782 | 91,468 | 1,247,089 | 674,029 |
Other current and non-current liabilities | 676,393 | 159,206 | 889,290 | 39,621 |
Net cash provided by (used in) operating activities | 399,121 | 2,063,163 | 1,876,254 | 1,260,085 |
Investing activities: | ||||
Purchase of property, software and equipment | (22,085) | (11,689) | (24,443) | (7,255) |
Capitalization of internally developed software | (5,777) | (4,573) | (7,887) | (5,198) |
Sales, maturities and paydowns of marketable securities | 0 | 141 | ||
Net cash used in investing activities | (27,862) | (16,262) | (32,330) | (12,312) |
Financing activities: | ||||
Proceeds from issuance of convertible notes and warrants | 3,551,975 | 0 | ||
Draws on credit facilities | 1,348,276 | 907,700 | 937,700 | 137,000 |
Repayments on credit facilities | (1,348,276) | (892,700) | (937,700) | (137,000) |
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | 0 | 557,297 | 1,267,328 | 372,733 |
Proceeds from exercise of stock options, net of repurchases | 6,690 | 584 | 8,555 | 2,617 |
Net cash provided by financing activities | 3,558,665 | 572,881 | 1,275,883 | 375,350 |
Effect of foreign exchange rate changes on cash and cash equivalents | 52 | (174) | 284 | 179 |
Net increase in cash, cash equivalents, segregated cash and restricted cash | 3,929,976 | 2,619,608 | 3,120,091 | 1,623,302 |
Cash, cash equivalents, segregated cash and restricted cash, beginning of the period | 6,189,659 | 3,069,568 | 3,069,568 | 1,446,266 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,119,635 | 5,689,176 | 6,189,659 | 3,069,568 |
Cash and cash equivalents, end of the period | 5,077,752 | 794,482 | 1,402,629 | 644,050 |
Segregated cash, end of the period | 5,024,610 | 4,887,330 | 4,779,666 | 2,420,354 |
Restricted cash, end of the period | 17,273 | 7,364 | 7,364 | 5,164 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,119,635 | 5,689,176 | 6,189,659 | 3,069,568 |
Supplemental disclosures: | ||||
Cash paid for interest | 3,083 | 2,582 | 3,207 | 621 |
Cash paid for income taxes | $ 3,128 | $ 417 | $ 5,689 | $ 1,396 |
CONSOLIDATED STATEMENTS OF MEZZ
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Redeemable convertible preferred stock | Series F | Series G | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2018 | 291,739,421 | |||||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2018 | $ 539,678 | |||||||
Increase (decrease) in mezzanine equity | ||||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 29,887,357 | |||||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 372,733 | |||||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2019 | 321,626,778 | 321,626,778 | ||||||
Balance at end of period, Redeemable convertible preferred stock at Dec. 31, 2019 | $ 912,411 | $ 912,411 | ||||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2018 | 220,339,931 | |||||||
Balance at beginning of period at Dec. 31, 2018 | (21,482) | $ 1 | $ 68,615 | $ 10 | $ (90,108) | |||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | (106,569) | (106,569) | ||||||
Shares issued in connection with employee stock plans (in shares) | 4,472,624 | |||||||
Shares issued in connection with employee stock plans | 2,291 | 2,291 | ||||||
Vesting of early-exercised stock options | 1,205 | 1,205 | ||||||
Repurchase of common stock (in shares) | (10,010) | |||||||
Change in other comprehensive income | 179 | 179 | ||||||
Share-based compensation | $ 27,328 | 27,328 | ||||||
Balance at end of period, Common stock (in shares) at Dec. 31, 2019 | 224,802,545 | 224,802,545 | ||||||
Balance at end of period at Dec. 31, 2019 | $ (97,048) | $ 1 | 99,439 | 189 | (196,677) | |||
Increase (decrease) in mezzanine equity | ||||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 44,640,000 | |||||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 557,297 | |||||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2020 | 366,266,778 | |||||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2020 | $ 1,469,708 | |||||||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | 5,082 | 5,082 | ||||||
Vesting of early-exercised stock options | 312 | 312 | ||||||
Repurchase of common stock (in shares) | (70,000) | |||||||
Repurchase of common stock | (875) | (875) | ||||||
Change in other comprehensive income | (174) | (174) | ||||||
Share-based compensation | 4,314 | 4,314 | ||||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2020 | 225,750,368 | |||||||
Balance at end of period at Jun. 30, 2020 | $ (86,949) | $ 1 | 105,505 | 15 | (192,470) | |||
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2019 | 321,626,778 | 321,626,778 | ||||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2019 | $ 912,411 | $ 912,411 | ||||||
Increase (decrease) in mezzanine equity | ||||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 48,000,000 | 43,116,119 | ||||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 599,284 | $ 668,044 | ||||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2020 | 412,742,897 | 412,742,897 | 48,000,000 | 43,116,119 | ||||
Balance at end of period, Redeemable convertible preferred stock at Dec. 31, 2020 | $ 2,179,739 | $ 2,179,739 | $ 599,284 | $ 668,044 | ||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2019 | 224,802,545 | 224,802,545 | ||||||
Balance at beginning of period at Dec. 31, 2019 | $ (97,048) | $ 1 | 99,439 | 189 | (196,677) | |||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | 7,449 | 7,449 | ||||||
Shares issued in connection with employee stock plans (in shares) | 4,310,197 | |||||||
Shares issued in connection with employee stock plans | 9,415 | 9,415 | ||||||
Vesting of early-exercised stock options | 527 | 527 | ||||||
Repurchase of common stock (in shares) | (81,196) | |||||||
Repurchase of common stock | (875) | (875) | ||||||
Change in other comprehensive income | 284 | 284 | ||||||
Share-based compensation | $ 24,926 | 24,926 | ||||||
Balance at end of period, Common stock (in shares) at Dec. 31, 2020 | 229,031,546 | 229,031,546 | ||||||
Balance at end of period at Dec. 31, 2020 | $ (55,322) | $ 1 | 134,307 | 473 | (190,103) | |||
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Mar. 31, 2020 | 321,626,778 | |||||||
Balance at beginning of period, Redeemable convertible preferred stock at Mar. 31, 2020 | $ 912,411 | |||||||
Increase (decrease) in mezzanine equity | ||||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 44,640,000 | |||||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 557,297 | |||||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2020 | 366,266,778 | |||||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2020 | $ 1,469,708 | |||||||
Balance at beginning of period, Common stock (in shares) at Mar. 31, 2020 | 225,567,600 | |||||||
Balance at beginning of period at Mar. 31, 2020 | (146,791) | $ 1 | 103,205 | 57 | (250,054) | |||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | 57,584 | 57,584 | ||||||
Vesting of early-exercised stock options | 154 | 154 | ||||||
Change in other comprehensive income | (42) | (42) | ||||||
Share-based compensation | 1,631 | 1,631 | ||||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2020 | 225,750,368 | |||||||
Balance at end of period at Jun. 30, 2020 | $ (86,949) | $ 1 | 105,505 | 15 | (192,470) | |||
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2020 | 412,742,897 | 412,742,897 | 48,000,000 | 43,116,119 | ||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2020 | $ 2,179,739 | $ 2,179,739 | $ 599,284 | $ 668,044 | ||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2021 | 412,742,897 | 412,742,897 | 48,000,000 | 43,116,119 | ||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2021 | $ 2,179,739 | $ 2,179,739 | $ 599,284 | $ 668,044 | ||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2020 | 229,031,546 | 229,031,546 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ (55,322) | $ 1 | 134,307 | 473 | (190,103) | |||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | (1,946,468) | (1,946,468) | ||||||
Vesting of early-exercised stock options | 173 | 173 | ||||||
Repurchase of common stock (in shares) | (3,110) | |||||||
Change in other comprehensive income | 52 | 52 | ||||||
Share-based compensation | $ 10,222 | 10,222 | ||||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2021 | 232,609,957 | 232,609,957 | ||||||
Balance at end of period at Jun. 30, 2021 | $ (1,984,764) | $ 1 | 151,281 | 525 | (2,136,571) | |||
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Mar. 31, 2021 | 412,742,897 | |||||||
Balance at beginning of period, Redeemable convertible preferred stock at Mar. 31, 2021 | $ 2,179,739 | |||||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2021 | 412,742,897 | 412,742,897 | 48,000,000 | 43,116,119 | ||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2021 | $ 2,179,739 | $ 2,179,739 | $ 599,284 | $ 668,044 | ||||
Balance at beginning of period, Common stock (in shares) at Mar. 31, 2021 | 232,257,374 | |||||||
Balance at beginning of period at Mar. 31, 2021 | (1,485,186) | $ 1 | 149,217 | 502 | (1,634,906) | |||
Increase (decrease) in stockholder's equity | ||||||||
Net income (loss) | (501,665) | (501,665) | ||||||
Vesting of early-exercised stock options | 113 | 113 | ||||||
Repurchase of common stock (in shares) | (3,110) | |||||||
Change in other comprehensive income | 23 | 23 | ||||||
Share-based compensation | $ 1,169 | 1,169 | ||||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2021 | 232,609,957 | 232,609,957 | ||||||
Balance at end of period at Jun. 30, 2021 | $ (1,984,764) | $ 1 | $ 151,281 | $ 525 | $ (2,136,571) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 5,077,752 | $ 1,402,629 |
Cash and securities segregated under federal and other regulations | 5,374,594 | 4,914,660 |
Receivables from brokers, dealers and clearing organizations | 209,792 | 124,501 |
Receivables from users, net | 5,423,643 | 3,354,142 |
Deposits with clearing organizations | 272,204 | 225,514 |
Other current assets | 1,542,902 | 851,138 |
Total current assets | 17,900,887 | 10,872,584 |
Property, software and equipment, net | 71,078 | 45,834 |
Restricted cash | 17,273 | 7,364 |
Non-current assets | 99,344 | 62,692 |
Total assets | 18,088,582 | 10,988,474 |
Current liabilities: | ||
Accounts payable and accrued expenses | 292,851 | 104,649 |
Payables to users | 7,768,181 | 5,897,242 |
Amounts of liabilities presented on the unaudited condensed consolidated balance sheets | 2,642,900 | 1,921,118 |
Other current liabilities | 1,536,344 | 893,036 |
Total current liabilities | 12,240,276 | 8,816,045 |
Convertible notes | 5,189,783 | 0 |
Other non-current liabilities | 463,548 | 48,012 |
Total liabilities | 17,893,607 | 8,864,057 |
Commitments and contingencies (Note 14) | ||
Mezzanine equity | ||
Redeemable convertible preferred stock | 2,179,739 | 2,179,739 |
Stockholders’ deficit: | ||
Common stock | 1 | 1 |
Additional paid-in capital | 151,281 | 134,307 |
Accumulated other comprehensive income | 525 | 473 |
Accumulated deficit | (2,136,571) | (190,103) |
Total stockholders’ deficit | (1,984,764) | (55,322) |
Total liabilities, mezzanine equity and stockholders’ deficit | $ 18,088,582 | $ 10,988,474 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, authorized (in shares) | 658,311,424 | 414,033,220 | 643,333,662 |
Redeemable convertible preferred stock, issued (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, outstanding (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, Liquidation preference | $ 2,191,086 | $ 2,191,086 | $ 922,786 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,057,152,204 | 777,354,000 | 1,400,000,000 |
Common stock, shares issued (in shares) | 232,609,957 | 229,031,546 | 224,802,545 |
Common stock, shares outstanding (in shares) | 232,609,957 | 229,031,546 | 224,802,545 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Net interest revenues | 67,709 | 39,998 | 130,206 | 64,014 | 177,437 | 70,639 |
Total net revenues | 565,333 | 244,211 | 1,087,507 | 371,761 | 958,833 | 277,533 |
Operating expenses: | ||||||
Brokerage and transaction | 37,812 | 28,612 | 78,816 | 49,016 | 111,083 | 45,459 |
Technology and development | 156,347 | 44,971 | 273,205 | 78,176 | 215,630 | 94,932 |
Operations | 101,065 | 30,464 | 167,629 | 52,277 | 137,905 | 33,869 |
Marketing | 94,159 | 43,510 | 196,407 | 113,432 | 185,741 | 124,699 |
General and administrative | 111,346 | 38,636 | 248,460 | 73,287 | 294,694 | 85,504 |
Total operating expenses | 500,729 | 186,193 | 964,517 | 366,188 | 945,053 | 384,463 |
Change in fair value of convertible notes and warrant liability | 528,052 | 0 | 2,020,321 | 0 | ||
Other expense (income), net | 710 | (100) | (149) | 43 | (50) | 657 |
Income (loss) before income taxes | (464,158) | 58,118 | (1,897,182) | 5,530 | 13,830 | (107,587) |
Provision for income taxes | 37,507 | 534 | 49,286 | 448 | 6,381 | (1,018) |
Net income (loss) | (501,665) | 57,584 | (1,946,468) | 5,082 | 7,449 | (106,569) |
Net income (loss) attributable to common stockholders: | ||||||
Basic | (501,665) | 22,783 | (1,946,468) | 2,050 | 2,848 | (106,569) |
Diluted | $ (501,665) | $ 22,783 | $ (1,946,468) | $ 2,050 | $ 2,848 | $ (106,569) |
Earnings Per Share [Abstract] | ||||||
Basic (in dollars per share) | $ (2.16) | $ 0.10 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Diluted (in dollars per share) | $ (2.16) | $ 0.09 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||||
Basic (in shares) | 232,223,019 | 225,091,413 | 231,459,227 | 224,953,736 | 225,748,355 | 221,664,610 |
Diluted (in shares) | 232,223,019 | 244,338,145 | 231,459,227 | 244,539,192 | 244,997,388 | 221,664,610 |
Transaction-based revenues | ||||||
Revenues: | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Other revenues | ||||||
Revenues: | ||||||
Revenues | $ 46,457 | $ 16,800 | $ 85,695 | $ 24,703 | $ 61,263 | $ 36,063 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||||
Net income (loss) | $ (501,665) | $ 57,584 | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Other comprehensive income (loss), net of tax: | ||||||
Foreign currency translation | 23 | (42) | 52 | (174) | 284 | 179 |
Total other comprehensive income (loss), net of tax | 23 | (42) | 52 | (174) | 284 | 179 |
Total comprehensive income (loss) | $ (501,642) | $ 57,542 | $ (1,946,416) | $ 4,908 | $ 7,733 | $ (106,390) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||||
Net income | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 8,694 | 3,913 | 9,938 | 5,444 |
Provision for credit losses | 36,745 | 23,933 | 59,134 | 11,109 |
Share-based compensation | 10,134 | 3,777 | 24,330 | 26,667 |
Deferred income taxes | 1 | (88) | (261) | (665) |
Change in fair value of convertible notes and warrant liability | 2,020,321 | 0 | ||
Other | 0 | 19 | 2,400 | 834 |
Changes in operating assets and liabilities: | ||||
Segregated securities under federal and other regulations | (214,990) | 0 | (134,994) | 0 |
Receivables from brokers, dealers and clearing organizations | (85,291) | (116,703) | (103,787) | (9,081) |
Receivables from users, net | (2,104,430) | (769,581) | (2,771,967) | (64,711) |
Deposits with clearing organizations | (46,690) | (113,112) | (103,037) | (85,547) |
Other current and non-current assets | (730,233) | (156,252) | (848,538) | (47,758) |
Accounts payable and accrued expenses | 182,214 | 18,248 | 67,117 | 13,895 |
Payables to users | 1,870,939 | 2,913,253 | 3,532,091 | 802,817 |
Securities loaned | 721,782 | 91,468 | 1,247,089 | 674,029 |
Other current and non-current liabilities | 676,393 | 159,206 | 889,290 | 39,621 |
Net cash provided by (used in) operating activities | 399,121 | 2,063,163 | 1,876,254 | 1,260,085 |
Investing activities: | ||||
Purchase of property, software and equipment | (22,085) | (11,689) | (24,443) | (7,255) |
Capitalization of internally developed software | (5,777) | (4,573) | (7,887) | (5,198) |
Net cash used in investing activities | (27,862) | (16,262) | (32,330) | (12,312) |
Financing activities: | ||||
Proceeds from issuance of convertible notes and warrants | 3,551,975 | 0 | ||
Draws on credit facilities | 1,348,276 | 907,700 | 937,700 | 137,000 |
Repayments on credit facilities | (1,348,276) | (892,700) | (937,700) | (137,000) |
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | 0 | 557,297 | 1,267,328 | 372,733 |
Proceeds from exercise of stock options, net of repurchases | 6,690 | 584 | 8,555 | 2,617 |
Net cash provided by financing activities | 3,558,665 | 572,881 | 1,275,883 | 375,350 |
Effect of foreign exchange rate changes on cash and cash equivalents | 52 | (174) | 284 | 179 |
Net increase in cash, cash equivalents, segregated cash and restricted cash | 3,929,976 | 2,619,608 | 3,120,091 | 1,623,302 |
Cash, cash equivalents, segregated cash and restricted cash, beginning of the period | 6,189,659 | 3,069,568 | 3,069,568 | 1,446,266 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,119,635 | 5,689,176 | 6,189,659 | 3,069,568 |
Cash and cash equivalents, end of the period | 5,077,752 | 794,482 | 1,402,629 | 644,050 |
Segregated cash, end of the period | 5,024,610 | 4,887,330 | 4,779,666 | 2,420,354 |
Restricted cash, end of the period | 17,273 | 7,364 | 7,364 | 5,164 |
Cash, cash equivalents, segregated cash and restricted cash, end of the period | 10,119,635 | 5,689,176 | 6,189,659 | 3,069,568 |
Supplemental disclosures: | ||||
Cash paid for interest | 3,083 | 2,582 | 3,207 | 621 |
Cash paid for income taxes | $ 3,128 | $ 417 | $ 5,689 | $ 1,396 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Redeemable convertible preferred stock | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2018 | 291,739,421 | |||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2018 | $ 539,678 | |||||
Increase (decrease) in mezzanine equity | ||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 29,887,357 | |||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 372,733 | |||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2019 | 321,626,778 | 321,626,778 | ||||
Balance at end of period, Redeemable convertible preferred stock at Dec. 31, 2019 | $ 912,411 | $ 912,411 | ||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2018 | 220,339,931 | |||||
Balance at beginning of period at Dec. 31, 2018 | (21,482) | $ 1 | $ 68,615 | $ 10 | $ (90,108) | |
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | (106,569) | (106,569) | ||||
Vesting of early-exercised stock options | 1,205 | 1,205 | ||||
Repurchase of common stock (in shares) | (10,010) | |||||
Change in other comprehensive income | 179 | 179 | ||||
Share-based compensation | $ 27,328 | 27,328 | ||||
Balance at end of period, Common stock (in shares) at Dec. 31, 2019 | 224,802,545 | 224,802,545 | ||||
Balance at end of period at Dec. 31, 2019 | $ (97,048) | $ 1 | 99,439 | 189 | (196,677) | |
Increase (decrease) in mezzanine equity | ||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 44,640,000 | |||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 557,297 | |||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2020 | 366,266,778 | |||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2020 | $ 1,469,708 | |||||
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | 5,082 | 5,082 | ||||
Shares issued in connection with employee stock plans (in shares) | 1,017,823 | |||||
Shares issued in connection with employee stock plans | 1,440 | 1,440 | ||||
Vesting of early-exercised stock options | 312 | 312 | ||||
Repurchase of common stock (in shares) | (70,000) | |||||
Repurchase of common stock | (875) | (875) | ||||
Change in other comprehensive income | (174) | (174) | ||||
Share-based compensation | 4,314 | 4,314 | ||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2020 | 225,750,368 | |||||
Balance at end of period at Jun. 30, 2020 | $ (86,949) | $ 1 | 105,505 | 15 | (192,470) | |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2019 | 321,626,778 | 321,626,778 | ||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2019 | $ 912,411 | $ 912,411 | ||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2020 | 412,742,897 | 412,742,897 | ||||
Balance at end of period, Redeemable convertible preferred stock at Dec. 31, 2020 | $ 2,179,739 | $ 2,179,739 | ||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2019 | 224,802,545 | 224,802,545 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ (97,048) | $ 1 | 99,439 | 189 | (196,677) | |
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | 7,449 | 7,449 | ||||
Vesting of early-exercised stock options | 527 | 527 | ||||
Repurchase of common stock (in shares) | (81,196) | |||||
Repurchase of common stock | (875) | (875) | ||||
Change in other comprehensive income | 284 | 284 | ||||
Share-based compensation | $ 24,926 | 24,926 | ||||
Balance at end of period, Common stock (in shares) at Dec. 31, 2020 | 229,031,546 | 229,031,546 | ||||
Balance at end of period at Dec. 31, 2020 | $ (55,322) | $ 1 | 134,307 | 473 | (190,103) | |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Mar. 31, 2020 | 321,626,778 | |||||
Balance at beginning of period, Redeemable convertible preferred stock at Mar. 31, 2020 | $ 912,411 | |||||
Increase (decrease) in mezzanine equity | ||||||
Issuance of Series F convertible preferred stock, net of issuance costs (in shares) | 44,640,000 | |||||
Issuance of Series F convertible preferred stock, net of issuance costs | $ 557,297 | |||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2020 | 366,266,778 | |||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2020 | $ 1,469,708 | |||||
Balance at beginning of period, Common stock (in shares) at Mar. 31, 2020 | 225,567,600 | |||||
Balance at beginning of period at Mar. 31, 2020 | (146,791) | $ 1 | 103,205 | 57 | (250,054) | |
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | 57,584 | 57,584 | ||||
Shares issued in connection with employee stock plans (in shares) | 182,768 | |||||
Shares issued in connection with employee stock plans | 515 | 515 | ||||
Vesting of early-exercised stock options | 154 | 154 | ||||
Change in other comprehensive income | (42) | (42) | ||||
Share-based compensation | 1,631 | 1,631 | ||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2020 | 225,750,368 | |||||
Balance at end of period at Jun. 30, 2020 | $ (86,949) | $ 1 | 105,505 | 15 | (192,470) | |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Dec. 31, 2020 | 412,742,897 | 412,742,897 | ||||
Balance at beginning of period, Redeemable convertible preferred stock at Dec. 31, 2020 | $ 2,179,739 | $ 2,179,739 | ||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2021 | 412,742,897 | 412,742,897 | ||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2021 | $ 2,179,739 | $ 2,179,739 | ||||
Balance at beginning of period, Common stock (in shares) at Dec. 31, 2020 | 229,031,546 | 229,031,546 | ||||
Balance at beginning of period at Dec. 31, 2020 | $ (55,322) | $ 1 | 134,307 | 473 | (190,103) | |
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | (1,946,468) | (1,946,468) | ||||
Shares issued in connection with employee stock plans (in shares) | 3,581,521 | |||||
Shares issued in connection with employee stock plans | 6,579 | 6,579 | ||||
Vesting of early-exercised stock options | 173 | 173 | ||||
Repurchase of common stock (in shares) | (3,110) | |||||
Change in other comprehensive income | 52 | 52 | ||||
Share-based compensation | $ 10,222 | 10,222 | ||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2021 | 232,609,957 | 232,609,957 | ||||
Balance at end of period at Jun. 30, 2021 | $ (1,984,764) | $ 1 | 151,281 | 525 | (2,136,571) | |
Balance at beginning of period, Redeemable convertible preferred stock (in shares) at Mar. 31, 2021 | 412,742,897 | |||||
Balance at beginning of period, Redeemable convertible preferred stock at Mar. 31, 2021 | $ 2,179,739 | |||||
Balance at end of period, Redeemable convertible preferred stock (in shares) at Jun. 30, 2021 | 412,742,897 | 412,742,897 | ||||
Balance at end of period, Redeemable convertible preferred stock at Jun. 30, 2021 | $ 2,179,739 | $ 2,179,739 | ||||
Balance at beginning of period, Common stock (in shares) at Mar. 31, 2021 | 232,257,374 | |||||
Balance at beginning of period at Mar. 31, 2021 | (1,485,186) | $ 1 | 149,217 | 502 | (1,634,906) | |
Increase (decrease) in stockholder's equity | ||||||
Net income (loss) | (501,665) | (501,665) | ||||
Shares issued in connection with employee stock plans (in shares) | 355,693 | |||||
Shares issued in connection with employee stock plans | 782 | 782 | ||||
Vesting of early-exercised stock options | 113 | 113 | ||||
Repurchase of common stock (in shares) | (3,110) | |||||
Change in other comprehensive income | 23 | 23 | ||||
Share-based compensation | $ 1,169 | 1,169 | ||||
Balance at end of period, Common stock (in shares) at Jun. 30, 2021 | 232,609,957 | 232,609,957 | ||||
Balance at end of period at Jun. 30, 2021 | $ (1,984,764) | $ 1 | $ 151,281 | $ 525 | $ (2,136,571) |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood Markets, Inc. (“RHM”, together with its subsidiaries, “Robinhood”, the “Company”, “we”, or “us”) was incorporated in the State of Delaware on November 22, 2013. Our most significant, wholly-owned subsidiaries are: • Robinhood Financial LLC (“RHF”), a registered introducing broker-dealer; • Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer; and • Robinhood Crypto, LLC (“RHC”), which provides users the ability to buy and sell cryptocurrencies. Acting as the agent of the user, we facilitate the purchase and sale of equities, options and cryptocurrencies through our platform by routing transactions through market makers, who are responsible for trade execution. Upon execution of a trade, users are legally required to purchase equities, options, or cryptocurrencies for cash from the transaction counterparty or to sell equities, options or cryptocurrencies for cash to the transaction counterparty, depending on the transaction. Acting as agent, we facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade. Our users have ownership of the securities, including those that collateralize margin loans, and cryptocurrencies transacted on our platform and, as a result, any such securities or cryptocurrencies owned by users are not presented in our unaudited condensed consolidated balance sheets. We do not allow users to purchase cryptocurrency on margin. We hold cryptocurrency in custody for our users’ accounts in one or more omnibus cryptocurrency wallets. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus referred to as “COVID-19” to be a global pandemic. The COVID-19 pandemic has negatively impacted the global economy and caused significant volatility in the financial markets. In response to the pandemic, we have enabled nearly all of our employees to work remotely and have restricted business travel. Throughout the COVID-19 pandemic, we have seen substantial growth in our user base, retention, engagement and trading activity metrics, as well as continued gains and periodic all-time highs achieved by the equity markets generally. During the COVID-19 pandemic, we have seen an increasing interest in personal finance and investing, coupled with low interest rates and a positive market environment, especially in the U.S. equity markets, that has encouraged an unprecedented number of first-time retail investors to become our customers and begin trading on our platform. At the same time, the COVID-19 pandemic has resulted, in part, in inefficiencies or delays in our business, operational challenges and additional costs related to business continuity initiatives as our workforce has fully transitioned to remote working. The extent of the impact of COVID-19 on our business and financial results will depend largely on future developments, including the duration of the pandemic, actions taken to contain COVID-19 or address its impact, the ability to reintegrate our workforce or to adapt to the long-term distributed workforce model (with some employees part- or full-time remote, and others not) we expect to adopt, the impact on capital and financial markets and the related impact on the financial circumstances of our customers, all of which are highly uncertain and cannot be predicted. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. The condensed consolidated financial statements are unaudited, and in management’s opinion, include all adjustments, including normal recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year ended December 31, 2021 or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in our final prospectus for our IPO dated July 28, 2021 and filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1934 on July 30, 2021 (the “Final Prospectus”). There have been no material changes in our significant accounting policies as described in our consolidated financial statements included in our audited annual consolidated financial statements for the year ended December 31, 2020, other than the adoption of the accounting pronouncement as described below in Note 2. The unaudited condensed consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our unaudited condensed consolidated financial statements. Deferred offering costs We have capitalized qualified legal, accounting and other direct costs related to our efforts to raise capital through a sale of our common stock in an IPO. Deferred offering costs are included in other current assets on the unaudited condensed consolidated balance sheets and will be deferred until the completion of the IPO, at which time they will be reclassified to additional paid-in capital as a reduction of the IPO proceeds. If we terminate the planned IPO or there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses. As of December 31, 2020 and June 30, 2021, $1.3 million and $9.5 million of deferred offering costs were capitalized. Concentration of credit risk We had transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Market maker: Citadel Securities, LLC 36 % 14 % 34 % 21 % Tai Mo Shan Limited (1) 1 % 29 % 2 % 20 % Entities affiliated with Susquehanna International Group, LLP (2) 21 % 9 % 20 % 11 % Entity affiliated with Jane Street Group 1 % 12 % 1 % 9 % Entities affiliated with Wolverine Holdings, L.P. (3) 8 % 8 % 10 % 8 % All others individually less than 10% 10 % 7 % 9 % 11 % Total as percentage of total revenue: 77 % 79 % 76 % 80 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is our policy to review, as necessary, the credit standing of each counterparty. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood Markets, Inc. (“RHM”, together with its subsidiaries, “Robinhood”, the “Company”, “we”, or “us”) was incorporated in the State of Delaware on November 22, 2013. Our most significant, wholly-owned subsidiaries are: • Robinhood Financial LLC (“RHF”), a registered introducing broker-dealer; • Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer; and • Robinhood Crypto, LLC (“RHC”), provides users the ability to buy and sell cryptocurrencies Our mission is to democratize finance for all. We are building products and services that make it easier for people from all backgrounds to participate in the financial system. Our approach is to build easy-to-use and low cost financial products and services for our users. When we first began operating, we started by offering users the ability to buy and sell equities, and have since expanded our brokerage operations to allow retail investors access to other investment vehicles by offering commission-free trading for both options and cryptocurrencies, in addition to equities. We now offer a variety of services to our users to facilitate their trading experience, including a subscription service, Robinhood Gold, which allows users to access premium features such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. We have a fractional shares program which allows users to purchase and sell fractions of a share in certain equities, enabling users to place real-time fractional share orders in dollar amounts or share amounts, with purchases rounded to the nearest penny and the ability to purchase as small as 1/1,000,000 of a share. We also have a cash management program which allows users’ uninvested cash balances to earn interest through a cash sweep program with program banks insured by Federal Deposit Insurance Corporation (“FDIC”) and to be used to make purchases and ATM withdrawals through a co-branded debit card with Mastercard® bearing the logo of Robinhood (“Robinhood debit card”). Acting as the agent of the user, we facilitate the purchase and sale of equities, options and cryptocurrencies through our platform by routing transactions through market makers, who are responsible for trade execution. Upon execution of a trade, users are legally required to purchase equities, options, or cryptocurrencies for cash from the transaction counterparty or to sell equities, options or cryptocurrencies for cash to the transaction counterparty, depending on the transaction. Acting as agent, we facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade. Our users have ownership of the securities, including those that collateralize margin loans, and cryptocurrencies transacted on our platform and, as a result, any such securities or cryptocurrencies owned by users are not presented in our consolidated balance sheets. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus referred to as “COVID-19” to be a global pandemic. The COVID-19 pandemic has negatively impacted the global economy and caused significant volatility in the financial markets. In response to the pandemic, we have enabled nearly all of our employees to work remotely and have restricted business travel. Throughout the COVID-19 pandemic, we have seen substantial growth in our user base, retention, engagement and trading activity metrics, as well as continued gains and periodic all-time highs achieved by the equity markets generally. During the COVID-19 pandemic, we have seen an increasing interest in personal finance and investing, coupled with low interest rates and a positive market environment, especially in the U.S. equity markets, that has encouraged an unprecedented number of first-time retail investors to become our customers and begin trading on our platform. At the same time, the COVID-19 pandemic has resulted, in part, in inefficiencies or delays in our business, operational challenges and additional costs related to business continuity initiatives as our workforce has fully transitioned to remote working. The extent of the impact of COVID-19 on our business and financial results will depend largely on future developments, including the duration of the pandemic, actions taken to contain COVID-19 or address its impact, the ability to reintegrate our workforce or of our workforce to adapt to the long-term distributed workforce model (with some employees part- or full-time remote, and others not) we expect to adopt, the impact on capital and financial markets and the related impact on the financial circumstances of our customers, all of which are highly uncertain and cannot be predicted. Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. Segment Information We operate and report financial information in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. All our revenues and substantially all of our assets are attributed to or located in the United States. Revenue recognition Transaction-based revenues We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. Net interest revenues Net interest revenues consist of interest revenues less interest expenses. We earn and incur interest revenues and expense on securities lending transactions. We also earn interest on margin loans to users, which constitute the majority of receivables from users, net in the consolidated balance sheets, and on our segregated cash, cash and cash equivalents, and deposits with clearing organizations. We incur interest expenses in connection with our revolving credit facilities. Other revenues Other revenues primarily consists of Robinhood Gold, a paid subscription service that provides customers with premium features, such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. Our contract with users are for a term of 30 days and renew automatically each month. Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied. Other revenues also consist of proxy rebates and miscellaneous fees charged to users. Proxy rebates are revenues earned through our partnership with a third-party investor communications company. We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms. We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied. Miscellaneous fees are primarily Automated Customer Account Transfer Services (“ACATS”) fees, which are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer. We recognize revenue when our performance obligation of administering the transfer is satisfied. Concentration of credit risk We had revenues from market makers in excess of 10% of total revenues, as follows: Year Ended December 31, 2019 2020 Market maker: Citadel Securities, LLC 29 % 34 % Entities affiliated with Susquehanna International Group, LLP (1) 13 % 18 % Entities affiliated with Wolverine Holdings, L.P. (2) 12 % 10 % All others individually less than 10% 8 % 13 % Total as percentage of total revenue: 62 % 75 % _____________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (2) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions when applicable. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is our policy to review, as necessary, the credit standing of each counterparty. Operating expenses Brokerage and transaction Brokerage and transaction costs primarily consist of fees paid to centralized clearinghouses and regulatory fees, market data expenses, compensation and benefits, including share-based compensation, for employees engaged in clearing and brokerage functions, and allocated overhead. Technology and development Technology and development costs primarily consist of compensation and benefits, including share-based compensation, for engineering, data science, and design personnel, costs incurred to support and improve our platform, costs incurred in connection with the development of new products, costs associated with computer hardware and software, allocated overhead, and amortization of internally developed software. Operations Operations costs primarily consist of customer service related expenses, including compensation and benefits, which includes share-based compensation, for employees engaged in customer support, third-party customer service expenses, customer onboarding and account verification and allocated overhead. Operations costs also include our provision for credit losses primarily in connection with unrecoverable receivables due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (which we refer to as “Fraudulent Deposit Transactions”) as well as chargebacks for unauthorized debit card transactions; and to a lesser extent, losses on margin borrowings. Marketing Marketing costs primarily consist of expenses associated with our stock referral program (the “Robinhood Referral Program”) , production and placement of advertisements in various media outlets, including online and on television, and customer goodwill, which primarily related to costs to remediate losses experienced by our users due to service interruptions on our platform and reimbursement of direct losses that happen due to unauthorized activity that is not the fault of our users. Marketing costs also include compensation and benefits, including share-based compensation, for employees engaged in the marketing function and allocated overhead. Advertising costs are expensed as incurred and were $119.6 million and $157.1 million in the years ended December 31, 2019 and 2020. General and administrative General and administrative costs consist primarily of compensation and benefits, including share-based compensation, for certain executives as well as employees engaged in legal, finance, human resources, risk, and compliance. General and administrative costs also includes certain legal settlements and professional fees, such as, but not limited to, legal, audit and accounting fees, as well as allocated overhead. Research and development costs Research and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred. Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation. Research and development costs recorded in operating expenses under ASC 730 were $27.7 million and $52.2 million for the years ended December 31, 2019 and 2020. Share-based compensation Stock Options We estimate the fair value of stock options granted to employees and directors using the Black-Scholes option-pricing model. The fair value of stock options is recognized as compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for when they occur. The Black-Scholes option-pricing model incorporates various assumptions in estimating the fair value of stock-based awards. These variables include: Fair value of our common stock —Because our common stock is not yet publicly traded, we must estimate the fair value of common stock. Our board of directors considers numerous objective and subjective factors to determine the fair value of our common stock including: contemporaneous third-party valuations of our common stock, sales of our common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our operating and financial performance, the valuation of comparable companies, the lack of marketability, and general and industry specific economic outlook, amongst other factors. Expected volatility —Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since we do not have sufficient trading history of our common stock, we estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies over a period equal to the expected term of the award. Expected term —We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-free interest rate —Based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Expected dividend yield —We utilize a dividend yield of 0% as we have not paid, and do not anticipate paying, dividends on our common stock. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life. Performance-based RSUs We have granted RSUs that vest upon the satisfaction of both time-based service and performance-based conditions. The fair value of these RSUs is estimated based on the fair value of our common stock on the date of grant. The time-based service condition for these awards is generally satisfied over four years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, defined as the earlier of (i) the closing of certain, specific liquidation or change in control transactions, or (ii) an initial public offering (“IPO”). We record share-based compensation expense for performance-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. As of December 31, 2019 and 2020, we had not recognized share-based compensation for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. In the period in which our qualifying event is probable, we will record a cumulative one-time share-based compensation expense determined using the grant-date fair values. Share-based compensation related to remaining time-based service after the qualifying event will be recorded over the remaining requisite service period. Market-Based RSUs We have granted RSUs that vest upon the satisfaction of all the following conditions: time-based service conditions, performance-based conditions, and market-based conditions. The time-based service condition for these awards generally is satisfied over six years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, as described above. The market-based conditions are satisfied upon our achievement of specified initial public offering prices. For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected capital raise percentage. We estimate the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of a qualifying event based on our expectation at the time of measurement of the award’s value. We record share-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. We determine the requisite service period by comparing the derived service period to achieve the market-based condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period. As of December 31, 2019 and 2020, we had not recognized share-based compensation expense for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. In the period in which our qualifying event is probable, we will record a cumulative one-time share-based compensation expense determined using the grant-date fair values. Loss contingencies We are subject to claims and lawsuits in the ordinary course of business, including arbitration, class actions and other litigation, some of which include claims for substantial or unspecified damages. We are also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. We review our lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provide disclosures and record loss contingencies in accordance with the loss contingencies accounting guidance. We establish an accrual for losses at management’s best estimate when we assess that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If no amount within the range is considered a better estimate than any other amount, an accrual for losses is recorded based on the bottom amount of the range. Accrual for loss contingencies are recorded in accounts payable and accrued expenses on the consolidated balance sheets and expensed in general and administrative expenses in our consolidated statements of operations. We monitor these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjust the amount as appropriate. Earnings (loss) per share Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. Our participating securities consist of all series of our redeemable convertible preferred stock. Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses. Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Cash and cash equivalents We consider all highly liquid financial instruments with maturities at the time of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits with banks and money market funds that are not segregated and deposited for regulatory purposes or to meet margin requirements at clearinghouses. We maintain cash in bank accounts at financial institutions that exceed federally insured limits. We also maintain cash in money market funds which are not FDIC insured. We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf. As we have not experienced any losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements. Cash and securities segregated under federal and other regulations We are required to segregate cash and/or qualified securities for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Securities Exchange Act of 1934. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Restricted cash We are required to maintain restricted cash deposits to back letters of credit for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. Fair value of financial instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, our own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: Level 1 Inputs: unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by us Level 2 Inputs: quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly Level 3 Inputs: unobservable inputs that are significant to the fair value of the assets or liabilities A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Receivables from brokers, dealers, and clearing organizations Receivables from brokers, dealers and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers. Orders are trades which users have not specifically instructed to be routed to a particular venue for execution. These receivables are short term and settle within 30 days. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Receivables from users, net Receivable from users, net is primarily made up of margin receivables. Margin receivables are adequately collateralized by users’ marketable securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses. We monitor margin levels and require users to deposit additional collateral, or reduce margin positions, to meet minimum collateral requirements and avoid automatic liquidation of their positions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for margin loans. We have no expectation of credit losses for margin loans that are fully secured, where the fair value of the collateral securing the loans is equal to or in excess of the loaned amount. This is based on our assessment of the nature of the collateral (liquid investments actively traded), potential future changes in collateral values, and historical credit loss information relating to fully secured receivables. In cases where the fair value of the collateral is less than the outstanding margin balance, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately when the user fails to meet their margin call. Based on historical experience, we have limited expectation of borrowers to replenish their collateral after not meeting a margin call. We also record a full provision for credit losses on receivables from users due to Fraudulent Deposit Transactions. Due to the fraudulent nature of these transactions and based on historical experience, we have no expectation that we will collect these funds. As such, we record a provision for credit loss immediately for the full balance when a Fraudulent Deposit Transaction is identified. The provision for credit losses is recorded as operations expense on the consolidated statement of operations. We write-off unsecured balances when the balance becomes outstanding for over 180 days. Deposits with clearing organizations We are required to maintain cash collateral as deposits with clearing organizations such as Depository Trust & Clearing Corporation and Options Clearing Corporation which allows us to use their security transactions services for trade comparison, clearance and settlement. The clearing organizations establish financial requirements, including deposits, to reduce their risk. The deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility. We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations. As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements. Other current assets Other current assets primarily includes user-held fractional shares, and to a lesser extent securities owned by us for the Robinhood Referral Program, prepaid expenses and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. These prepaid expenses include items such as prepayments on clearing services, rent, insurance, regulatory fees, web services, data feed, research, and software subscriptions. We evaluate certain prepaid expenses and other current assets for credit losses based on historic events, current economic conditions, and our expectations of future economic conditions and record an allowance for credit loss to estimate uncollectible receivables. The allowance for credit losses for prepaid expenses and other assets were immaterial for all periods presented. Robinhood referral program Through our referral program, RHF credits referring and referred users with a stock reward, with the potential value of each share ranging from $2.50 to $225. Approximately 98% of users receive a stock reward having a value ranging from $2.50 to $10. Referring users can earn more than one reward through the Robinhood Referral Program, subject to a maximum of $500 in total rewards earned annually per user. Stock rewards are also available to users who sign up through paid marketing channels. In order for a reward to be earned by the referring and referred user, the referred user must fulfill certain conditions stated in their promotion, such as linking their bank account to the Robinhood platform. After the reward is earned, the user must claim their stock reward in the Robinhood app within 60 days of notification thereof, at which point the stock is deposited to such user’s Robinhood account. Users do not need to provide any cash consideration for the reward. The stock reward is a share or shares, selected randomly from our previously purchased inventory of settled shares held exclusively for this program, which are included in other current assets in our consolidated balance sheets. Each stock reward is assigned at the time the reward is earned and each share cannot be associated with more than one reward at a time. Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period. As the inventory of shares are held specifically for the referral program and not as investments of the Company, gains and losses from changes in the fair market value of the shares are recorded within marketing expense in our consolidated statement of operations until the reward is claimed. Shares are derecognized when they are claimed by the user and delivered to the users’ account. We record an accrued liability within other current liabilities in our consolidated balance sheets at the time the bank account is linked with the expense recorded within marketing expense in our consolidated statement of operations. The liability is initially recorded at the fair market value of the assigned share or shares upon the reward being earned by the referred user (i.e., upon bank linkage) and marked to fair market value until claimed or reversed, with gains and losses also recorded within marketing expense. The liability is derecognized when the share is claimed by the user and delivered to the users’ account. If a user does not claim the stock reward within 60 days of being notified, such reward expires and the liability is reversed. We estimate the amount of unclaimed rewards expected at each reporting period, using historical trends and data, and adjust the accrued liability and marketing expense accordingly. Fractional share program We operate our fractional share program for the benefit of our users and maintain an inventory of securities held exclusively for the fractional share program. This proprietary inventory is recorded within other current assets on our consolidated balance sheets. When a user purchases a fractional share, we record the cash received for the user-held fractional share as pledged collateral recorded within other current assets on our consolidated balance sheets and an offsetting liability to repurchase the shares, recorded within ot |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our unaudited condensed consolidated financial statements. Recently issued accounting pronouncements not yet adopted | RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases. This guidance requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for operating leases with a term greater than one year. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2019 using the optional transition method. Pursuant to the practical expedients, we elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Upon adoption, we recognized $19.3 million of operating right-of-use lease assets and $25.5 million of operating lease liabilities on our consolidated balance sheets. Credit Loss on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This guidance requires entities to use a current expected credit loss impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost within the scope of the standard. The entity’s estimate would consider relevant information about past events, current condition and reasonable and supportable forecasts, which all result in recognition of lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020. The adoption of the guidance did not have a material impact on our consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs should be capitalized. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020 using the prospective transition method. The adoption of the guidance did not have a material impact on our consolidated financial statements. Simplifying Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying Accounting for Income Taxes. This guidance simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in accounting standards. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We early adopted the standard effective April 1, 2020 and it did not have a material impact on our consolidated financial statements. Recent accounting pronouncements not yet adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to contract modifications that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. This guidance is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. We are evaluating the impact of this guidance on our consolidated financial statements. Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this guidance on our consolidated financial statements. |
REVENUE
REVENUE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUES | REVENUES Disaggregation of revenues The following table presents our revenue disaggregated by revenue source: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Transaction-based revenues: Options $ 111,148 $ 164,604 $ 170,908 $ 362,464 Cryptocurrencies 5,320 233,103 9,558 320,690 Equities 70,606 52,012 102,195 185,313 Other 339 1,448 383 3,139 Total transaction-based revenues 187,413 451,167 283,044 871,606 Net interest revenues: Securities lending 28,633 39,448 35,138 75,074 Margin interest 10,958 31,230 18,787 58,961 Interest on segregated cash and securities 1,436 931 10,632 2,041 Other interest revenue 526 1,368 2,516 2,197 Interest expenses related to credit facilities (1,555) (5,268) (3,059) (8,067) Total net interest revenues 39,998 67,709 64,014 130,206 Other revenues 16,800 46,457 24,703 85,695 Total net revenues $ 244,211 $ 565,333 $ 371,761 $ 1,087,507 Receivables and Contract Balances Receivables are recognized when we have an unconditional right to invoice and receive payment under a contract with a customer and are derecognized when cash is received. Receivables primarily consist of transaction-based revenue receivables due from market makers and are reported in receivables from brokers, dealers and clearing organizations and other revenue receivables due from our partnership with a third-party investor communications company and are reported in other current assets on the unaudited condensed consolidated balance sheets. The table below sets forth contract receivables balances for the period indicated: (in thousands) Receivables Beginning of period, January 1, 2021 $ 111,871 End of period, June 30, 2021 147,168 Increase in receivables during the period $ 35,297 The difference between the opening and ending balance of our receivables primarily results from the growth of our business over the period and timing differences between our performance and counterparties’ payments. Contract liabilities consist of unearned subscription revenue which are recognized when users remit contractual cash payments in advance of us satisfying our performance obligations under the contract and are recorded as other current liabilities on the unaudited condensed consolidated balance sheets. The table below sets forth contract liabilities balances for the period indicated: (in thousands) Contract Liabilities Beginning of period, January 1, 2021 $ 2,060 End of period, June 30, 2021 3,605 Increase in contract liabilities during the period $ 1,545 | REVENUES Disaggregation of revenues The following table presents our revenue disaggregated by revenue source: Year Ended December 31, (in thousands) 2019 2020 Transaction-based revenues: Options $ 110,656 $ 440,070 Equities 50,688 251,200 Cryptocurrencies 9,487 26,708 Other — 2,155 Total transaction-based revenues 170,831 720,133 Net interest revenues: Securities lending 6,380 98,165 Margin interest 19,104 66,781 Interest on segregated cash and securities 36,281 13,401 Other interest revenue 9,865 3,972 Interest expenses related to credit facilities (991) (4,882) Total net interest revenues 70,639 177,437 Other revenues 36,063 61,263 Total net revenues $ 277,533 $ 958,833 Receivables and Contract Balances Receivables are recognized when we have an unconditional right to invoice and receive payment under a contract with a customer and are derecognized when cash is received. Receivables primarily consist of transaction-based revenue receivables due from market makers and are reported in Receivables from brokers, dealers and clearing organizations on the consolidated balance sheets. The table below sets forth receivables balances for the periods indicated: December 31, (in thousands) 2019 2020 Receivables, beginning of the period $ 9,056 $ 20,577 Receivables, end of the period 20,577 111,871 Increase in receivables during the period $ 11,521 $ 91,294 The difference between the opening and ending balance of our receivables primarily results from the growth of our business over the period as timing of payments from counterparties remained consistent. Contract liabilities consist of unearned subscription revenue which are recognized when users remit contractual cash payments in advance of us satisfying our performance obligations under the contract and are recorded as other current liabilities on the consolidated balance sheets. The table below sets forth contract liabilities balances for the periods indicated: December 31, (in thousands) 2019 2020 Contract liabilities, beginning of the period $ 1,727 $ 954 Contract liabilities, end of the period 954 2,060 Increase/(decrease) in contract liabilities during the period $ (773) $ 1,106 |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (“Fraudulent Deposit Transactions”) and to a lesser extent, losses on margin borrowings, for the periods indicated: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Beginning balance $ 27,070 $ 30,875 $ 17,122 $ 34,092 Provision for credit losses 13,985 20,342 23,933 36,745 Write-offs — (15,964) $ — $ (35,584) Ending balance $ 41,055 $ 35,253 $ 41,055 $ 35,253 During the three and six months ended June 30, 2020, the provision for credit losses related to unsecured balances of receivables from users was $13.4 million and $23.3 million while the remaining $0.6 million and $0.6 million was related to other receivables. During the three and six months ended June 30, 2021, the provision for credit losses related to unsecured receivables from users was $19.0 million and $34.9 million while the remaining $1.3 million and $1.8 million was related to other receivables. As of June 30, 2020 and 2021, the ending allowance for credit losses related to unsecured balances of receivables from users was $40.4 million and $32.9 million while the remaining $0.7 million and $2.4 million were related to other receivables. | ALLOWANCE FOR CREDIT LOSSES The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and to a lesser extent, losses on margin borrowings, for the periods indicated: Year Ended December 31, (in thousands) 2019 2020 Beginning balance $ 6,013 $ 17,122 Provision for credit losses 11,109 59,134 Write-offs — (42,164) Ending balance $ 17,122 $ 34,092 During the years ended December 31, 2019 and 2020, the provision for credit losses related to unsecured balances from users was $11.1 million and $58.0 million while the remaining $1.1 million related to December 31, 2020 was related to other receivables. As of December 31, 2019 and 2020, the ending allowance for credit losses related to unsecured balances of receivables from users was $17.1 million and $33.5 million while the remaining $0.6 million in allowance for the year ended December 31, 2020 was related to other receivables. In the year ended December 31, 2020, we implemented our policy to write-off unsecured balances when the balance becomes outstanding for over 180 days. Previously, we did not have sufficient historical information to provide a reasonable basis upon which to write off balances. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 Other current assets: Equity securities - user-held fractional shares 802,483 — — 802,483 Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Other current liabilities: Equity securities - repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 June 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,927,574 $ — $ — $ 1,927,574 U.S. Treasury securities 349,984 — — 349,984 Other current assets: Equity securities - user-held fractional shares 1,430,855 — — 1,430,855 Equity securities - securities owned 18,874 — — 18,874 Total financial assets $ 3,727,287 $ — $ — $ 3,727,287 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 389 $ — $ — $ 389 Other current liabilities: Equity securities - repurchase obligations 1,430,855 — — 1,430,855 Convertible notes: Convertible notes — — 5,189,783 5,189,783 Other non-current liabilities: Warrant liability — — 382,513 382,513 Total financial liabilities $ 1,431,244 $ — $ 5,572,296 $ 7,003,540 We measure our cash equivalents, securities segregated under federal and other regulations, equity securities owned by us for the promotional stock referral and fractional shares programs, and user-held fractional shares at fair value. Repurchase obligations in connection with our fractional shares program and equity securities that were awarded to our users as a part of our promotional stock referral program but had not been claimed as of December 31, 2020 and June 30, 2021 are also measured at fair value. We have evaluated the estimated fair value of financial instruments using available market information such as quoted market prices for the same instrument in active markets. Such instruments are classified within Level 1 of the fair value hierarchy. Convertible notes and warrant liability In February 2021, we issued two tranches of convertible notes (the “convertible notes”) and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (the “warrant liability”) - see Note 10 for more information. We have elected the fair value option for both tranches of the convertible notes as we believe it best reflects its underlying economics. Under the fair value option, the convertible notes are initially measured at their issuance date estimated fair value and subsequently remeasured at their estimated fair value at each reporting period. The valuation methodology for both the convertible notes and warrant liability is based on unobservable estimates and judgements, and therefore they are classified within Level 3 of the fair value hierarchy. The fair value of the convertible notes is determined using an if-converted approach and the fair value of the warrant liability is determined using a Black-Scholes option-pricing model. The significant unobservable inputs used in the fair value measurement of the convertible notes and warrant liability include: June 30, 2021 Convertible notes Warrant liability Fair value of common stock $ 38.00 $ 38.00 Volatility N/A 56 % Risk free rate N/A 1.42 % Fair value measurements are highly sensitive to changes in these inputs and significant changes in these inputs would result in a significantly different fair value. For the three and six months ended June 30, 2021, we recorded total expense due to changes in fair value of $514.7 million and $1,890.8 million for the convertible notes and $13.4 million and $129.6 million for the warrant liability in our unaudited condensed consolidated statements of operations, none of which is attributable to the change in the instrument-specific credit risk. We have elected to present the component related to accrued interest in the change in fair value of convertible notes and warrant liability. The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,890,752 129,569 End of period, June 30, 2021 $ 5,189,783 $ 382,513 During the six months ended June 30, 2021, we did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. | FAIR VALUE OF FINANCIAL INSTRUMENTS We measure our cash equivalents, securities segregated under federal and other regulations and equity securities owned for the referral program and fractional shares, owned by us and user-held, at fair value. Repurchase obligations in connection with our fractional shares program and stock that were awarded to our users as a part of our promotional stock referral program but not claimed as of December 31, 2019 and 2020 are also measured at fair value. We have evaluated the estimated fair value of financial instruments using available market information. As of December 31, 2019 and 2020, the types of instruments valued based on quoted market prices for the same instrument in active markets include money market funds and publicly traded stocks owned by us. Such instruments are classified within Level 1 of the fair value hierarchy. We did not have any instruments classified within Level 2 or Level 3 as of December 31, 2019 and 2020. Financial assets measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Cash equivalents: Money market funds $ 416,025 $ 416,025 $ 1,026,034 $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities — — 134,994 134,994 Other current assets: Equity securities - user-held fractional shares — — 802,483 802,483 Equity securities - securities owned 2,997 2,997 3,222 3,222 Total financial assets $ 419,022 $ 419,022 $ 1,966,733 $ 1,966,733 Financial liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Accounts payable and accrued expenses: Equity securities - referral program liability $ 303 $ 303 $ 695 $ 695 Other current liabilities: Equity securities - repurchase obligations — — 802,483 802,483 Total financial liabilities $ 303 $ 303 $ 803,178 $ 803,178 During the years ended December 31, 2019 and 2020, we did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | INCOME TAXES Three Months Ended Six Months Ended (in thousands, except percentages) 2020 2021 2020 2021 Income (loss) before income taxes $ 58,118 $ (464,158) $ 5,530 $ (1,897,182) Provision for income taxes 534 37,507 448 49,286 Effective Tax Rate 0.9 % (8.1) % 8.1 % (2.6) % Our tax provision for interim periods is determined using an estimated annual effective tax rate (“ETR”), adjusted for discrete items arising in the period. In each quarter, we update our estimated annual ETR and make a year-to-date calculation of the provision. For the three months ended June 30, 2020, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the three months ended June 30, 2021, the ETR differs from the U.S. federal statutory rate primarily due to the non-deductible change in fair value of the convertible notes and warrant liability, and the change in valuation allowance on our remaining U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the six months ended June 30, 2020, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the six months ended June 30, 2021, the ETR differs from the U.S. federal statutory rate primarily due to the non-deductible change in fair value of the convertible notes and warrant liability, and the change in valuation allowance on our remaining U.S. federal and state deferred tax assets partially offset by our current federal and state taxes payable. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence during the six months ended June 30, 2021, we believe it is more likely than not that the tax benefits of the remaining U.S. net deferred tax assets may not be realized. We intend to maintain the full valuation allowance on the U.S. net deferred tax assets until enough positive evidence exists to support a reversal of, or decrease in, the valuation allowance. Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization. | INCOME TAXES The components of income (loss) before income taxes were as follows: December 31, (in thousands) 2019 2020 Domestic $ (104,690) $ 14,773 Foreign (2,897) (943) Income (loss) before income taxes $ (107,587) $ 13,830 The components of the provision for (benefit from) income taxes were as follows: December 31, (in thousands) 2019 2020 Current: Federal $ (58) $ 2,780 State (295) 3,801 Foreign — — Total current tax expense (benefit) (353) 6,581 Deferred: Federal — — State — — Foreign (665) (200) Total deferred tax expense (benefit) (665) (200) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows: December 31, (in thousands) 2019 2020 Federal tax (benefit) at statutory rate (22,593) 2,905 State tax (benefit), net of federal benefit (5,491) (862) Foreign rate differential (57) (2) Share-based compensation (1,221) (2,654) Tender offer compensation 4,229 3,607 Research and development credits (2,104) (10,489) Non-deductible regulatory settlements — 21,000 Permanent differences — 526 Other 905 52 Change in valuation allowance 25,314 (7,702) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 Significant components of our deferred tax assets and liabilities consist of the following: December 31, (in thousands) 2019 2020 Deferred tax assets: Accruals and other liabilities 7,704 14,849 Lease liabilities 9,859 13,794 Tax credit carryforwards 3,198 9,058 Net operating loss carryforwards 23,091 3,141 Share-based compensation 1,442 3,123 Other 686 3,386 Total deferred tax assets 45,980 47,351 Deferred tax liabilities: Right of use assets (8,194) (12,551) Depreciation and amortization (1,914) (6,965) Total deferred tax liabilities (10,108) (19,516) Valuation allowance $ (35,207) $ (26,909) Net deferred tax assets $ 665 $ 926 The realization of tax benefits of net deferred assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on all available evidence for the year ending December 31, 2020, we believe it is more likely than not that the tax benefits of the remaining U.S. federal and state net deferred tax assets may not be realized, and accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $8.3 million for the year ended December 31, 2020. As of December 31, 2020, we have U.S. state net operating loss carryforwards of $32.3 million that will begin to expire in 2034, if not utilized, and non-U.S. net operating loss carryforwards of $4.7 million that do not expire. We have U.S. federal tax credit carryforwards of $8.5 million that will begin to expire in 2040, if not utilized, and state tax credit carryforwards of $9.3 million that do not expire. Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. We had unrecognized tax benefits of approximately $2.2 million and $7.4 million as of December 31, 2019 and 2020. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. We record interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest or penalties during the years ended December 31, 2019 and 2020. The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2019 2020 Unrecognized benefit - beginning of period $ 759 $ 2,177 Gross increases - current year tax positions 797 4,395 Gross increases - prior year tax positions 621 848 Unrecognized benefit - end of period $ 2,177 $ 7,420 We file in U.S. federal, various state and foreign jurisdictions. The tax years from 2013 remain open to examination by the U.S. federal and state authorities, due to carryover of unused net operating losses and tax credits. The tax years from 2018 remain open for the most significant foreign jurisdiction. In March 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The recent tax law changes provided under the CARES Act do not materially impact our income tax provision, and do not change our evaluation of the valuation allowance against deferred tax assets in the U.S. as of December 31, 2020. In June 2020, the Governor of California signed Assembly Bill No. 85 (“AB 85”) as part of California’s 2020 Budget Act. AB 85 temporarily suspends the use of California net operating losses and imposes a cap on the amount of business incentive tax credits companies can utilize against their net income. The recent tax legislation changes provided under AB 85 do not materially impact our income tax provision and do not change our evaluation of the valuation allowance against deferred tax assets in California as of December 31, 2020. |
PROPERTY, SOFTWARE AND EQUIPMEN
PROPERTY, SOFTWARE AND EQUIPMENT, NET | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
PROPERTY, SOFTWARE AND EQUIPMENT, NET | PROPERTY, SOFTWARE AND EQUIPMENT, NET Property, software and equipment are presented net of accumulated depreciation and amortization and summarized as follows: December 31, June 30, (in thousands) 2020 2021 Computer equipment $ 9,203 $ 17,459 Furniture and fixtures 8,024 14,764 Tenant improvements 18,945 38,426 Internally developed software 16,992 18,943 Construction in progress 9,756 7,266 Total 62,920 96,858 Less: accumulated depreciation and amortization (17,086) (25,780) Property, software and equipment, net $ 45,834 $ 71,078 Depreciation expense of property and equipment was $1.3 million and $2.1 million for the three and six months ended June 30, 2020, and $3.4 million and $5.8 million for the three and six months ended June 30, 2021. Amortization expense of internally developed software was $0.9 million and $1.8 million for the three and six months ended June 30, 2020 and $1.5 million and $2.9 million for the three and six months ended June 30, 2021. | PROPERTY, SOFTWARE AND EQUIPMENT, NET Property, software and equipment are recorded net of accumulated depreciation and summarized by as follows: December 31, (in thousands) 2019 2020 Computer equipment $ 4,980 $ 9,203 Furniture and fixtures 3,761 8,024 Tenant improvements 9,522 18,945 Internally developed software 12,029 16,992 Construction in progress 2,957 9,756 Total 33,249 62,920 Less: accumulated depreciation and amortization (7,948) (17,086) Property, software and equipment, net $ 25,301 $ 45,834 Depreciation and amortization expense of property and equipment for the year ended December 31, 2019 and 2020 was $2.1 million and $5.7 million. |
OFFSETTING ASSETS AND LIABILITI
OFFSETTING ASSETS AND LIABILITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Offsetting [Abstract] | ||
OFFSETTING ASSETS AND LIABILITIES | OFFSETTING ASSETS AND LIABILITIESCertain financial instruments are eligible for offset on our unaudited condensed consolidated balance sheets under GAAP. Our securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Our policy is to recognize amounts subject to master netting arrangements on a gross basis on the unaudited condensed consolidated balance sheets. Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | OFFSETTING ASSETS AND LIABILITIESCertain financial instruments are eligible for offset on our consolidated balance sheets under U.S. GAAP. Our securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the U.S. GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Our policy is to recognize amounts subject to master netting arrangements on a gross basis on the consolidated balance sheets. Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
OTHER CURRENT ASSETS | OTHER CURRENT ASSETSOther current assets primarily includes user-held fractional shares for our fractional share program and prepaid expenses, and to a lesser extent securities owned by us for the promotional stock referral and fractional shares program, and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. Prepaid expenses primarily include prepayments on cloud infrastructure and other software services, capitalized deferred offering costs for our IPO and prepayments on insurance. The following table presents the detail of other current assets: December 31, June 30, (in thousands) 2020 2021 User-held fractional shares $ 802,483 $ 1,430,855 Prepaid expenses 28,629 67,412 Securities owned 3,222 18,874 Other 16,804 25,761 Total other current assets $ 851,138 $ 1,542,902 | OTHER CURRENT ASSETS The following table presents the detail of other current assets: December 31, (in thousands) 2019 2020 User-held fractional shares $ — $ 802,483 Prepaid expenses 17,159 28,629 Securities owned 2,997 3,222 Other 8,186 16,804 Total other current assets $ 28,342 $ 851,138 |
FINANCING ACTIVITIES AND OFF-BA
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving credit facilities In September 2019, we entered into a $400.0 million committed and secured line of credit with a maturity date of September 25, 2020 (the “September 2019 Credit Facility”). In June 2020, we amended the September 2019 Credit Facility and increased the aggregate committed and secured revolving line of credit amount to $550.0 million with a maturity date of June 5, 2021. This line of credit was primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit was determined at the time a loan was initiated and the applicable interest rate under this line of credit was calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. There were no outstanding borrowings under the September 2019 Credit Facility at December 31, 2020. We were obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. The September 2019 Credit Facility was terminated in April 2021. In October 2019, we entered into a $200.0 million committed and unsecured revolving line of credit with a syndicate of banks maturing in October 2023 (the “October 2019 Credit Facility”). In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $600.0 million with a maturity date of October 29, 2024. In April 2021, we further increased the aggregate credit amount available under the October 2019 Credit Facility to $625.0 million. Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00% or (b) the Alternative Base Rate. The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from London Interbank Offered Rate (“LIBOR”), multiplied by the Statutory Reserve Rate at the applicable time. The Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50% and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00%. If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent. There were no outstanding borrowings under the October 2019 Credit Facility at December 31, 2020 and June 30, 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10% on any unused amount of the October 2019 Credit Facility. The agreements for the September 2019 Credit Facility and the October 2019 Credit Facility contain customary covenants restricting our ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with all covenants under these facilities as of December 31, 2020 and June 30, 2021. In April 2021, we entered into a $2.2 billion committed and secured revolving line of credit, subject to certain borrowing base limitations, with a maturity date of April 15, 2022 (the “April 2021 Credit Facility”). Borrowings from the April 2021 Credit Facility must be specified to be Tranche A, Tranche B, Tranche C or a combination thereof. Tranche A loans are secured by users’ securities and used primarily to finance margin loans. Tranche B loans are secured by the right to the return from National Securities Clearing Corporation (“NSCC”) of NSCC Margin Deposits and cash and property in a designated collateral account and used for the purpose of satisfying NSCC Deposit Requirements. Tranche C loans are secured by the right to the return of eligible funds from any reserve account of the Borrower and cash and property in a designated collateral account and used for the purpose of satisfying reserve requirements under Rule 15c3-3 of the Securities Exchange Act. Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate is calculated as a per annum rate equal to 1.25% for Tranche A loans and 2.50% for Tranche B and Tranche C loans, plus the Short-Term Funding Rate at the applicable time. The Short-Term Funding Rate is equal to the greatest of (i) the Eurodollar Rate for a one month interest period on such day, which equals to the Eurodollar Base Rate that is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time, (ii) the Federal Funds Effective Rate and (iii) the Overnight Bank Funding Rate in effect on such day. There were no outstanding borrowings under the April 2021 Credit Facility at June 30, 2021. This agreement contains customary covenants restricting RHS’s ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with the covenants as of June 30, 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.50% on any unused amount of the April 2021 Credit Facility. Convertible notes and warrant liability Convertible notes In February 2021, we issued two tranches of convertible notes, consisting of $2.53 billion aggregate principal amount of Tranche I convertible notes and $1.02 billion aggregate principal amount of Tranche II convertible notes. Interest on the convertible notes accrues at 6% per annum, compounding semi-annually in arrears, and is payable in kind. The convertible notes do not have a maturity date. In the event of (a) a public offering of our common stock to the public in an IPO on a nationally-recognized exchange in the United States, (b) upon the effectiveness of a registration statement filed under the Securities Act of 1933, as amended, that registers shares of our existing capital stock for resale not pursuant to an underwritten offering (a “Direct Listing”), or (c) an acquisition by a special purpose acquisition company, and in the case of clauses (a) and (c) resulting in at least $500 million of gross proceeds to us (“Qualifying IPO”) before the 12 month anniversary of the convertible notes issuance date (“Reference Date”), the convertible notes will automatically convert into shares of our Class A common stock at a conversion price equal to the lower of (i) 70% of the cash price per share paid by investors in the Qualifying IPO and (ii) $38.29 (in the case of the Tranche I convertible notes) or $42.12 (in the case of the Tranche II convertible notes). In the event of a sale of our preferred stock, having rights, preference or privileges senior or pari passu to the Series G Preferred Stock before the Reference Date with an aggregate proceed greater than $500 million (“Next Financing”), the convertible notes will convert at the holder’s option, in part or in whole, into our preferred stock at a conversion price equal to the lower of (i) 70% of the price per share in the Next Financing and (ii) $38.29 (in the case of the Tranche I convertible notes) or $42.12 (in the case of the Tranche II convertible notes). Warrant liability We granted to each purchaser of the Tranche I convertible notes a warrant, equal to 15% of the aggregate proceeds invested by such purchaser, to purchase a variable number of equity securities. In aggregate, the maximum purchase amount of all warrants is $379.8 million. The warrants can be exercised by the holder after the earlier of (1) February 12, 2022 and (2) Qualifying IPO or Next Financing. The warrants expire on February 12, 2031. The warrants can be settled in cash or in net shares at the holder’s option. In the event of a cash settlement, the number of equity securities the holder will receive is equal to their maximum purchase amount divided by the strike price, as described below. If a Qualifying IPO occurs prior to the Reference Date, outstanding warrants will become exercisable for shares of our Class A common stock at a strike price equal to the lower of (i) 70% of the price per share in the Qualifying IPO and (ii) $38.29. If a Next Financing occurs prior to the Reference Date, outstanding warrants will become exercisable for shares of our preferred stock issued in the Next Financing at a strike price equal to the lower of (i) 70% of the price per share in the Next Financing and (ii) $38.29. If a Qualifying IPO or Next Financing does not occur by the Reference Date, the outstanding warrants will become exercisable for shares of our series G-1 redeemable convertible preferred stock at a strike price of $18.60. Off-balance sheet risk two one | FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving credit facilities In June 2019, we entered into a $250.0 million committed and secured line of credit with a maturity date of June 12, 2020 (the “June 2019 Credit Facility”). This line of credit was primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit was determined at the time a loan was initiated and the applicable interest rate was calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. Additionally, we were obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. The June 2019 Credit Facility was terminated in September 2019. In September 2019, we entered into a $400.0 million committed and secured line of credit with a maturity date of September 25, 2020 (the “September 2019 Credit Facility”). In June 2020, we amended the September 2019 Credit Facility and increased the aggregate committed and secured revolving line of credit amount to $550.0 million with a maturity date of June 5, 2021. This line of credit is primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate under this line of credit is calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. There were no outstanding borrowings under the September 2019 Credit Facility at December 31, 2019 and 2020. Additionally, we are obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. In October 2019, we entered into a $200.0 million committed and unsecured revolving line of credit with a syndicate of banks (the “October 2019 Credit Facility”) maturing in October 2023. In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $600.0 million with a maturity date of October 29, 2024. Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00% or (b) the Alternative Base Rate. The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time. The Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50% and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00%. If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent. There were no outstanding borrowings under the October 2019 Credit Facility at December 31, 2019 and 2020. Additionally, we are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10% on any unused amount of the October 2019 Credit Facility. The agreements for the September 2019 Credit Facility and the October 2019 Credit Facility contain customary covenants restricting our ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with all covenants under these facilities as of December 31, 2019 and 2020. Off-balance sheet risk two one |
MEZZANINE EQUITY, COMMON STOCK
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT | MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT Redeemable convertible preferred stock The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of June 30, 2021: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 G-1 244,278,204 — 18.6000 — 18.6000 — 658,311,424 412,742,897 $ 2,191,086 $ 2,179,739 Voting The holders of the redeemable convertible preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the redeemable convertible preferred stock is convertible. Except where otherwise specified in our Certificate of Incorporation, holders of preferred stock vote together with the holders of common stock as a single class. The holders of our Series A and Series B redeemable convertible preferred stock are entitled to elect one director each (each, a “Preferred Director”), with each series voting separately as exclusive classes. Holders of common stock, voting exclusively and as a separate class, are entitled to elect four directors, two of which shall be entitled to two votes on any matter before the Board of Directors. The holders of our Series C, Series D, Series E, Series F, Series G and Series G-1 redeemable convertible preferred stock have no voting rights with respect to the election of members of the Board of Directors or the determination of the size of the Board of Directors. As long as 50,000,000 shares of redeemable convertible preferred stock are outstanding, we must obtain approval from the holders of a majority of the then outstanding shares of redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis) in order to, among other actions: (1) amend, alter or repeal any provision of the Certificate of Incorporation or our Bylaws; (2) increase the authorized number of shares of redeemable convertible preferred stock (or any series thereof) or common stock; (3) create, or authorize the creation of, a new class or series of our capital stock unless it ranks junior to the redeemable convertible preferred stock with respect to the distribution of assets in a liquidation, dissolution or winding up, the payment of dividends and rights of redemption; (4) declare or pay any dividend on any shares of shares of redeemable convertible preferred stock or common stock, subject to certain exceptions; (5) liquidate, dissolve or wind up our company, effect any merger or consolidation, or sell, lease, transfer or exclusively license all or substantially all of our assets; (6) increase or decrease the authorized size of the Board of Directors; or (7) effect a repurchase or redemption of, or distribution on, any shares of redeemable convertible preferred stock or common stock, subject to certain exceptions. Liquidation preferences In the event of any liquidation or winding up of our company, the holders of redeemable convertible preferred stock shall be entitled to receive, prior and in preference to the common stockholders, an amount equal to the aggregate original issue price for their shares of redeemable convertible preferred stock, plus any declared but unpaid dividends. After payment of the liquidation preference to the holders of the redeemable convertible preferred stock, our remaining assets are available for distribution to the holders of common stock on a pro rata basis. If the proceeds distributed among the holders of the redeemable convertible preferred stock are insufficient to permit the holders of redeemable convertible preferred stock to receive the full payment noted above, then the entire proceeds legally available for distribution shall be distributed ratably among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount that each such holder is otherwise entitled to receive. Conversion rights Each share of redeemable convertible preferred stock is convertible, at the option of the holder, according to a conversion ratio, which is subject to adjustment for dilutive share issuances. The total number of shares of common stock into which the redeemable convertible preferred stock may be converted is determined by dividing the then-applicable conversion price by the initial conversion price, as shown in the table above. The redeemable convertible preferred stock, with the exception of our Series F redeemable convertible preferred stock, automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of common stock to the public in an IPO at a price of at least $12.4827 per share and resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States (a “Qualified Public Offering”); (2) Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent of each of (i) the holders of the majority of the redeemable convertible preferred stock then outstanding (voting as a single class and on an as-converted basis), (ii) the holders of the majority of the then outstanding shares of Series B, C, G and G-1 redeemable convertible preferred stock (each voting exclusively and as a separate class), (iii) the holders of at least 60% of the then outstanding shares of Series D and E redeemable convertible preferred stock (each voting exclusively and as a separate class), and (iv) the holders of at least 65% of the then outstanding shares of Series A redeemable convertible preferred stock (voting exclusively and as a separate class). The Series F redeemable convertible preferred stock automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of our common stock to the public in the IPO resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States; (2) a Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent from the holders of the majority of the then outstanding Series F redeemable convertible preferred stock. The Series F redeemable convertible preferred stock has a full-ratchet anti-dilution adjustment provision. In the event the price per share of our common stock in an IPO ends up being lower than the Series F redeemable convertible preferred stock conversion price, then the conversion price per share of the Series F redeemable convertible preferred stock will be reduced to the same price per share as the common stock price at the time of the IPO. We may also be obligated to issue additional shares of common stock to the holders of Series F redeemable convertible preferred stock in the event of a direct listing with a deemed trading price below the Series F redeemable convertible preferred stock conversion price. In addition, if we issue any additional common stock below the conversion price of our Series A, B, C, D, E, F, G and G-1 redeemable convertible preferred stock, the conversion price of such series of redeemable convertible preferred stock may be subject to adjustment via a broad-based anti-dilution calculation, subject to certain exceptions. Dividends The holders of shares of redeemable convertible preferred stock are entitled to receive dividends, when and if declared by the Board of Directors. Dividends are paid on a pari-passu basis with other holders of our redeemable convertible preferred stock and in preference to the payment of dividends to holders of our common stock. No dividends have been declared or paid by us as of June 30, 2021. Dividends are noncumulative. Classification The redeemable convertible preferred stock is contingently redeemable upon certain deemed liquidation events such as a merger or sale of substantially all of our assets. The redeemable convertible preferred stock is not mandatory redeemable but, since a deemed liquidation event would constitute a redeemable event outside of our control, all shares of the redeemable convertible preferred stock have been presented outside of permanent equity in mezzanine equity on the unaudited condensed consolidated balance sheets. Common stock Each share of voting common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of redeemable convertible preferred stock outstanding. Equity incentive plans Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan Under our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), shares of common stock are reserved for issuance to eligible participants in connection with incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”) or restricted stock awards. Options may be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted generally vest quarterly on a straight-line basis and the occurrence of a qualifying event, defined as the earlier of (1) the closing of certain, specific change in control transactions, or (2) an IPO. Generally, RSUs expire seven years from the date of grant. Shares of common stock issued under the 2013 Plan and 2020 Plan are subject to certain restrictions, including the right of first refusal by us for sales or transfers of shares to certain parties. Our rights of first refusal terminate upon completion of an IPO. Our 2013 Plan was terminated in connection with adoption of our 2020 Plan (but any awards outstanding under our 2013 Plan will remain in effect in accordance with their terms). No new awards may be granted under our 2013 Plan. As of June 30, 2021, an aggregate of 209,809,164 shares have been authorized for issuance under the 2013 Plan and the 2020 Plan, of which 46,928,833 shares have been issued under the plans, 149,733,898 shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 13,146,433 shares remained available for new grants under the 2020 Plan. 2021 Omnibus Incentive Plan In June 2021, our board of directors and our stockholders approved and adopted our 2021 Omnibus Incentive Plan (the “2021 Plan”). Our 2021 Plan became effective immediately prior to the effective date of the Final Prospectus. Upon effectiveness of the 2021 Plan, no new awards may be granted under our 2020 Plan (but any awards outstanding under our 2020 Plan will remain in effect in accordance with their terms) and any shares remaining available for grant under the 2020 Plan became available for grant under the 2021 plan. Our 2021 Plan provides for the grant of stock options, including ISOs and NSOs, SARs, restricted stock, RSUs, performance units, other equity-based awards and cash-based awards. As of June 30, 2021, no awards were outstanding under the 2021 Plan. The aggregate number of shares available for grant under the 2021 Plan was equal to approximately 14% of the number of shares of our common stock (of all classes) outstanding immediately upon the closing of the IPO. Thereafter, any shares subject to awards under the 2013 Plan or the 2020 Plan that expire or terminate or are forfeited to or repurchased by the Company will become available under the 2021 Plan. In addition, the number of shares available under the 2021 Plan will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 5% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. Stock option activity A summary of stock option activity for the six months ended June 30, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Exercised during the period (3,581,521) 1.87 Cancelled and forfeited during the period (276,657) 4.51 Balance at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options vested and expected to vest at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options exercisable at June 30, 2021 15,905,386 $ 1.75 5.56 $ 576,535 Time-Based RSUs We grant RSUs that vest only upon the satisfaction of both time-based service and performance-based conditions (“Time-Based RSUs”). The following table summarizes the activity related to our Time-Based RSUs for the six months ended June 30, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted 22,899,989 40.88 Forfeited (1,747,048) 16.48 Unvested at June 30, 2021 68,864,590 $ 26.12 Market-Based RSUs We granted 27,663,658 market-based awards in the form of RSUs to certain executives during the year ended December 31, 2019 that were modified in May 2021 (the “2019 Market-Based RSUs”). These awards vest based on (i) achievement of share price targets considered market vesting conditions (5,532,732, 13,831,828, and 8,299,098 RSUs vest upon achievement of share price targets of $30.45, $50.75, and $101.50, respectively, with the initial stock price target measured at the IPO price, and for all remaining RSUs that did not vest upon IPO, measurement of the price targets will be based on a trailing 60-trading-day average of the daily volume weighted average price), (ii) a performance based vesting condition requiring the occurrence of an IPO or other liquidity event, and (iii) continuous employment by each recipient through the vesting date, which is considered a service condition. Prior to the modification, any tranche of 2019 Market-Based RSUs that hadn’t achieved its share price target upon IPO would have been forfeited. The modification allows the awards to continue to be measured against the same price targets as were outlined in the original 2019 grant though December 31, 2025. The 2019 Market-Based RSUs had a weighted-average grant date fair value of $0.29 per RSU. Upon modification, the weighted-average incremental fair value of the 2019 Market-Based RSUs is $21.95 per RSU (see below). In May 2021, we granted 35,520,000 additional market-based awards in the form of RSUs to certain executives (the “2021 Market-Based RSUs”) with a weighted-average grant date fair value of $22.68 per RSU. These awards vest based on our stock price trading performance over a performance period of 8 years from issuance (4,560,000 will vest upon achievement of each of the $120 and $150 share price targets, and 5,280,000 will vest upon achievement of each of the $180, $210, $240, $270, and $300 share price targets, in each case, measured using a trailing-60-day average of the daily volume weighted average price) , and are subject to continuous employment by each recipient to vest, which is considered a service condition. The 2019 Market-Based RSUs and 2021 Market-Based RSUs (collectively, the “Market-Based RSUs”) were unvested as of December 31, 2020 and June 30, 2021. 2021 Employee Share Purchase Plan In June 2021, our board of directors and our stockholders approved and adopted the 2021 Employee Share Purchase Plan (the “ESPP”). Our ESPP became effective immediately prior to the effective date of our the Final Prospectus. The purpose of the ESPP is to enable eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation. The purchase price is equal to 85% of the fair market value of a share of our common stock on the first date of an offering or the date of purchase, whichever is lower. As of June 30, 2021, there were no participants in the ESPP. The aggregate number of shares reserved for issuance under the ESPP was equal to approximately 2% of the number of shares of our common stock (of all classes) outstanding upon the closing of the IPO. The number of shares available under our ESPP will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 1% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. No more than 200,000,000 shares of common stock may be issued under our ESPP. Share-based compensation The following table summarizes the effects of share-based compensation on our unaudited condensed consolidated statements of operations: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Brokerage and transaction $ 6 $ 6 $ 12 $ 12 Technology and development 824 717 2,540 2,025 Operations 8 3 18 6 Marketing 7 41 15 78 General and administrative 520 371 1,192 8,013 Total $ 1,365 $ 1,138 $ 3,777 $ 10,134 We capitalized share-based compensation expense related to internally developed software of $0.3 million and $0.6 million during the three and six months ended June 30, 2020, and $0.1 million during both of the three and six months ended June 30, 2021. As of June 30, 2021, th ere was $4.9 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized over a weighted-average period of 0.94 years . In March 2021, we modified certain Time-Based RSUs of approximately 500 employees to remove the one-year vesting cliff, considered to be an improbable to improbable modification. As of June 30, 2021, no share-based compensation expense had been recognized for such awards with a performance condition based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $39.75 per share will be used to calculate share-based compensation expense once the performance condition becomes probable. As of June 30, 2021 no share-based compensation expense had been recognized for the Time-Based RSUs based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The total unrecognized share-based compensation expense related to our Time-Based RSU s was $1.8 billion as of June 30, 2021. Of this amount, $660.0 million relates to awards for which the time-based vesting condition has been satisfied or partially satisfied while $1.2 billion relates to awards for which the time-based vesting condition had not yet been satisfied. As of June 30, 2021, no share-based compensation expense had been recognized for the 2019 or 2021 Market-Based RSUs as the qualifying event of an IPO was not probable. Because the amendment to the 2019 Market-based RSUs was determined to be a modification of a market condition, we estimated the pre-modification and post-modification fair value of the awards in order to determine the incremental fair value generated by the modification. To value the awards, we used a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets may not be satisfied. The total unrecognized share-based compensation expense relating to the 2019 Market-Based RSUs, including the incremental expense due to modification, was $615.2 million as of June 30, 2021. If a qualifying liquidity event had occurred on June 30, 2021, we would have recorded $203.9 million share-based compensation related to the 2019 Market-Based RSUs. The remaining incremental share-based compensation expense of approximately $411.3 million would be recognized over a remaining weighted-average service period of 1.28 years, based on both explicit service periods and derived service periods based on the median of the passage of time it takes to achieve the price target in the Monte Carlo simulations. If the price targets are met sooner than the derived service period, we will adjust our share-based compensation expense to reflect the cumulative expense associated with the vested award. We estimated the grant date fair value of the 2021 Market-Based RSUs using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets may not be satisfied. We will recognize the total share-based compensation expense over a weighted average derived requisite service period of 4.33 years, considering the Monte Carlo simulation median time to achieve each of the seven separate tranches. The total unrecognized share-based compensation expense relating to the 2021 Market-Based RSU awards was $805.5 million as of June 30, 2021. If a qualifying liquidity event had occurred on June 30, 2021, we would have recorded $18.2 million of share-based compensation expense related to the 2021 Market-Based RSUs based on the derived service period. The remaining incremental share-based compensation expense of approximately $787.3 million would be recognized over a remaining weighted-average derived service period of 4.23 years. If the price targets are met sooner than the derived service period, we will adjust our share-based compensation expense to reflect the cumulative expense associated with the vested award. | MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT Redeemable convertible preferred stock We have authorized 414,033,220 shares of redeemable convertible preferred stock, designated in series, with the rights and preferences of each designated series determined by our Board of Directors as of December 31, 2020. The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of December 31, 2019: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 263,826,920 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 160,526,040 80,263,020 0.6354 50,999 0.6354 50,999 C 87,576,360 43,788,180 2.5121 110,000 2.5121 109,870 D 71,549,522 35,774,761 10.1450 362,935 10.1450 362,670 E 59,854,820 29,887,357 12.4827 373,075 12.4827 372,733 643,333,662 321,626,778 $ 922,786 $ 912,411 Voting The holders of the redeemable convertible preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the redeemable convertible preferred stock is convertible. Except where otherwise specified in our Certificate of Incorporation, holders of preferred stock vote together with the holders of common stock as a single class. The holders of our Series A and Series B redeemable convertible preferred stock are entitled to elect one director each (each, a “Preferred Director”), with each series voting separately as exclusive classes. Holders of common stock, voting exclusively and as a separate class, are entitled to elect four directors, two of which shall be entitled to two votes on any matter before the Board of Directors. The holders of our Series C, Series D, Series E, Series F and Series G redeemable convertible preferred stock have no voting rights with respect to the election of members of the Board of Directors or the determination of the size of the Board of Directors. As long as 50,000,000 shares of redeemable convertible preferred stock are outstanding, we must obtain approval from the holders of a majority of the then outstanding shares of redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis) in order to, among other actions: (1) amend, alter or repeal any provision of the Certificate of Incorporation or our Bylaws; (2) increase the authorized number of shares of redeemable convertible preferred stock (or any series thereof) or common stock; (3) create, or authorize the creation of, a new class or series of our capital stock unless it ranks junior to the redeemable convertible preferred stock with respect to the distribution of assets in a liquidation, dissolution or winding up, the payment of dividends and rights of redemption; (4) declare or pay any dividend on any shares of shares of redeemable convertible preferred stock or common stock, subject to certain exceptions; (5) liquidate, dissolve or wind up our company, effect any merger or consolidation, or sell, lease, transfer or exclusively license all or substantially all of our assets; (6) increase or decrease the authorized size of the Board of Directors; or (7) effect a repurchase or redemption of, or distribution on, any shares of redeemable convertible preferred stock or common stock, subject to certain exceptions. Liquidation preferences In the event of any liquidation or winding up of our company, the holders of redeemable convertible preferred stock shall be entitled to receive, prior and in preference to the common stockholders, an amount equal to the aggregate original issue price for their shares of redeemable convertible preferred stock, plus any declared but unpaid dividends. After payment of the liquidation preference to the holders of the redeemable convertible preferred stock, our remaining assets are available for distribution to the holders of common stock on a pro rata basis. If the proceeds distributed among the holders of the redeemable convertible preferred stock are insufficient to permit the holders of redeemable convertible preferred stock to receive the full payment noted above, then the entire proceeds legally available for distribution shall be distributed ratably among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount that each such holder is otherwise entitled to receive. Conversion rights Each share of redeemable convertible preferred stock is convertible, at the option of the holder, according to a conversion ratio, which is subject to adjustment for dilutive share issuances. The total number of shares of common stock into which the redeemable convertible preferred stock may be converted is determined by dividing the then-applicable conversion price by the initial conversion price, as shown in the table above. The redeemable convertible preferred stock, with the exception of our Series F redeemable convertible preferred stock, automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of common stock to the public in an IPO at a price of at least $12.4827 per share and resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States (a “Qualified Public Offering”); (2) upon the effectiveness of a registration statement filed under the Securities Act of 1933, as amended, that registers shares of our existing capital stock for resale not pursuant to an underwritten offering (“Direct Listing”) on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent of each of (i) the holders of the majority of the redeemable convertible preferred stock then outstanding (voting as a single class and on an as-converted basis), (ii) the holders of the majority of the then outstanding shares of Series B, C and G redeemable convertible preferred stock (each voting exclusively and as a separate class), (iii) the holders of at least 60% of the then outstanding shares of Series D and E redeemable convertible preferred stock (each voting exclusively and as a separate class), and (iv) the holders of at least 65% of the then outstanding shares of Series A redeemable convertible preferred stock (voting exclusively and as a separate class). The Series F redeemable convertible preferred stock automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of our common stock to the public in the IPO resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States; (2) a Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent from the holders of the majority of the then outstanding Series F redeemable convertible preferred stock. In addition, if we issue any additional common stock below the conversion price of our Series A, B, C, D, E, F and G redeemable convertible preferred stock, the conversion price of such series of redeemable convertible preferred stock may be subject to adjustment via a broad-based anti-dilution calculation, subject to certain exceptions. The Series F redeemable convertible preferred stock has a full-ratchet anti-dilution adjustment provision. In the event the price per share of our common stock in an IPO ends up being lower than the Series F redeemable convertible preferred stock conversion price, then the conversion price per share of the Series F redeemable convertible preferred stock will be reduced to the same price per share as the common stock price at the time of the IPO. We may also be obligated to issue additional shares of common stock to the holders of Series F redeemable convertible preferred stock in the event of a direct listing with a deemed trading price below the Series F redeemable convertible preferred stock conversion price. Dividends The holders of shares of redeemable convertible preferred stock are entitled to receive dividends, when and if declared by the Board of Directors. Dividends are paid on a pari-passu basis with other holders of our redeemable convertible preferred stock and in preference to the payment of dividends to holders of our common stock. No dividends have been declared or paid by us as of December 31, 2020. Dividends are noncumulative. Classification The redeemable convertible preferred stock is contingently redeemable upon certain deemed liquidation events such as a merger or sale of substantially all of our assets. The redeemable convertible preferred stock is not mandatory redeemable but, since a deemed liquidation event would constitute a redeemable event outside of our control, all shares of the redeemable convertible preferred stock have been presented outside of permanent equity in mezzanine equity on the consolidated balance sheets. Common stock Each share of voting common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of redeemable convertible preferred stock outstanding. Stock option plan Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan Under our Amended and Restated 2013 Stock Plan, as amended, and our 2020 Equity Incentive Plan, as amended (each, a “Plan,” and together, the “Plans”), shares of common stock are reserved for the issuance of incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights or restricted stock awards to eligible participants. Options may be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then quarterly on a straight-line basis thereafter and the occurrence of a qualifying event, defined as the earlier of (1) the closing of certain, specific change in control transactions, or (2) an IPO. Generally, RSUs expire seven years from the date of grant. Shares of common stock purchased under the Plans are subject to certain restrictions, including the right of first refusal by us for sales or transfers of shares to certain parties. Our rights of first refusal will terminate upon completion of an IPO. As of December 31, 2020, the Plan authorized 154,289,164 shares of common stock to be reserved for issuance on the exercise or settlement of equity awards, of which the right to purchase 14,022,717 shares remained available for issuance. Stock option activity A summary of stock option activity for the year ended December 31, 2020 is as follows: (in thousands, except share and per share data) Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value Balance at December 31, 2019 27,613,830 $ 2.33 7.59 $ 197,536 Granted during the period 324,442 10.10 Exercised during the period (4,310,197) 2.20 Cancelled and forfeited during the period (2,084,247) 5.18 Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options vested and expected to vest at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options exercisable at December 31, 2020 18,793,618 $ 1.58 6.31 $ 277,127 Aggregate intrinsic value represents the difference between our estimated fair value of its common stock and the exercise price of outstanding, “in-the-money” options. Aggregate intrinsic value for stock options exercised in the years ended December 31, 2019 and 2020 was $29.0 million and $45.0 million. The total fair value of shares vested during the year ended December 31, 2019 and 2020 was $7.8 million and $6.5 million. The total weighted average grant-date fair value of options granted was $2.31 and $3.64 and for the years ended December 31, 2019 and 2020. Restricted stock unit activity The following table summarizes the activity related to our time-based RSUs for the year ended December 31, 2020: Number of RSUs Weighted- average grant date fair value Unvested restricted stock at December 31, 2019 24,024,214 $ 8.17 Granted 27,492,086 12.90 Forfeited (3,804,651) 8.84 Unvested restricted stock at December 31, 2020 47,711,649 $ 10.84 In the year ended December 31, 2019, we also granted 27,663,658 RSUs with both performance and market-based conditions to certain executives. These awards have a weighted-average grant date fair value of $0.29 and were unvested as of December 31, 2019 and 2020. Share-based compensation The following table summarizes the effects of share-based compensation on our consolidated statements of operations: Year Ended December 31, (in thousands) 2019 2020 Brokerage and transaction $ 427 $ 227 Technology and development 9,499 18,024 Operations 139 61 Marketing 85 613 General and administrative 16,517 5,405 Total $ 26,667 $ 24,330 The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2019 2020 Dividend yield 0 % 0 % Risk-free interest rate 2.29 % 0.61 % Expected volatility 31.20 % 36.69 % Expected term (years) 6.03 6.04 During the year ended December 31, 2019 and 2020, we capitalized $0.7 million and $0.6 million in share-based compensation expense related to internally developed software. In the year ended December 31, 2020, subsequent to the sale of our Series G redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (“the 2020 Tender”). The 2020 Tender closed on November 13, 2020, when existing employees sold 1.4 million shares of our common stock for an aggregate purchase price of $21.5 million. With the 2020 Tender Offer, we believe that we had established a pattern of cash settlement of immature shares and stock options only during a very discrete set of circumstances in which we opened a tender offer in conjunction with a preferred stock financing. As such, during the 2020 Tender Offer period, we recorded a liability equal to the fair value of the maximum number of options representing immature shares that could have been redeemed in the tender offer. To the extent that this liability exceeded amounts previously recognized in equity, the excess was recognized as additional share-based compensation expense. Following the closing of the 2020 Tender Offer, the remaining liability of $18.6 million was reclassified to additional paid-in capital. We recorded share-based compensation expense of $17.2 million in connection with this tender offer in the year ended December 31, 2020. In the year ended December 31, 2019, subsequent to the sale of our Series E redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (“the 2019 Tender”). The 2019 Tender closed on September 9, 2019, when existing employees sold 5.4 million shares of our common stock for an aggregate purchase price of $67.6 million. As the share price paid in the 2019 Tender was in excess of fair value and a portion of the purchasers were existing stockholders, we recorded share-based compensation expense of $18.7 million for the year ended December 31, 2019. In November 2019, we modified certain stock option grants to extend the post-termination exercise period for 125 employees. During the years ended December 31, 2019 and 2020, share-based compensation expense included $0.8 million and $1.8 million as a result of the modification. We will incur an additional $1.3 million of share-based compensation expense over the remaining vesting periods of these impacted options. As of December 31, 2020, there was $7.8 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized over a weighted-average period of 1.22 years. We grant RSUs that vest only upon the satisfaction of both time-based service and performance-based conditions. As of December 31, 2019 and 2020, no share-based compensation expense had been recognized for such awards with a performance condition based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The total unrecognized share-based compensation expense related to these awards was $517.7 million as of December 31, 2020. Of this amount, $207.2 million relates to awards for which the time-based vesting condition has been satisfied or partially satisfied while $310.5 million relates to awards for which the time-based vesting condition had not yet been satisfied. |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Three Months Ended Six Months Ended 2020 2021 2020 2021 Net income (loss) $ 57,584 $ (501,665) $ 5,082 $ (1,946,468) Less: allocation of earnings to participating securities $ 34,801 $ — $ 3,032 $ — Net income (loss) attributable to common stockholders $ 22,783 $ (501,665) $ 2,050 $ (1,946,468) Weighted-average common stock outstanding - basic 225,091,413 232,223,019 224,953,736 231,459,227 Dilutive effect of stock options and unvested shares 19,246,732 — 19,585,456 — Weighted-average common stock outstanding - diluted 244,338,145 232,223,019 244,539,192 231,459,227 Net income (loss) per share attributable to common stockholders: Basic $ 0.10 $ (2.16) $ 0.01 $ (8.41) Diluted $ 0.09 $ (2.16) $ 0.01 $ (8.41) The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended Six Months Ended 2020 2021 2020 2021 Redeemable convertible preferred stock 366,266,778 412,742,897 366,266,778 412,742,897 RSUs 62,362,190 132,048,248 62,362,190 132,048,248 Stock options 89,110 17,685,650 82,182 17,685,650 Unvested shares 735 128,228 735 128,228 Total anti-dilutive securities 428,718,813 562,605,023 428,711,885 562,605,023 The table above does not include contingently issuable shares due to the conversion of our convertible notes or exercise of the warrants issued in February 2021, described in Note 10. | INCOME (LOSS) PER SHARE The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year Ended December 31, 2019 2020 Net income (loss) $ (106,569) $ 7,449 Less: allocation of earnings to participating securities — 4,601 Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 Weighted-average common stock outstanding - basic 221,664,610 225,748,355 Dilutive effect of stock options and unvested shares — 19,249,033 Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 Diluted $ (0.48) $ 0.01 The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Year Ended December 31, 2019 2020 Redeemable convertible preferred stock 321,626,778 412,742,897 RSUs 51,687,872 75,375,307 Stock options 27,613,830 60,082 Unvested shares 749,943 8,423 Total anti-dilutive securities 401,678,423 488,186,709 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related party transactions may include any transaction between entities under common control or with a related party. We have defined related parties as members of the board of directors, executive officers, principal owners of our outstanding stock and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations. In February 2021, we issued two tranches of convertible notes and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities - see Note 10. Two of the Tranche I | RELATED PARTY TRANSACTIONSRelated party transactions may include any transaction between entities under common control or with a related party. We have defined related parties as members of the board of directors, executive officers, principal owners of our outstanding stock and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations. Aside from the 2019 and 2020 Tenders discussed in Note 11 - Mezzanine equity, common stock and stockholders’ deficit, no other material related party transaction has taken place during the periods presented. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments Leases Our operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park. Our leases have remaining terms of 1 year to 10 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. As of December 31, 2020 and June 30, 2021 we had $49.2 million and $74.7 million of operating right-of-use assets included as other non-current assets other current liabilities other non-current liabilities The components of lease expense were as follows: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Fixed operating lease costs $ 2,693 $ 5,011 $ 5,063 $ 8,790 Variable operating lease costs 704 1,374 1,427 2,452 Short-term lease costs 307 356 313 610 Total lease costs $ 3,704 $ 6,741 $ 6,803 $ 11,852 Fixed operating lease costs primarily consist of monthly base rent amounts due. Variable operating lease costs are primarily related to payments made to our landlords for common area maintenance, property taxes, insurance, and other operating expenses. Other information related to our operating leases was as follows: December 31, June 30, 2020 2021 Weighted-average remaining lease term 5.41 years 5.23 years Weighted-average discount rate 7.02 % 6.21 % Cash flows related to leases were as follows: Six Months Ended (in thousands) 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 9,609 $ 1,070 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,902 $ 31,693 Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of June 30, 2021 are as follows: (in thousands) Remainder of 2021 $ 8,975 2022 25,150 2023 22,841 2024 18,291 2025 17,239 Thereafter 22,270 Total undiscounted lease payments 114,766 Less: imputed interest (17,965) Less: lease incentives (10,051) Total lease liabilities $ 86,750 Contingencies The securities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages. Damages may include, in some cases, punitive damages. Compliance and trading problems that are reported to federal, state and provincial regulators, exchanges or other self-regulatory organizations (“SROs”) by dissatisfied customers are investigated by such regulatory bodies, and, if pursued by such regulatory body or such customers, may rise to the level of arbitration or disciplinary action. We are also subject to periodic regulatory audits and inspections. Like other brokerage firms, 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. Legal and regulatory matters The outcomes of the legal and regulatory matters discussed in this section are inherently uncertain and some of these matters 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. Described below are certain historical matters as well as certain pending matters in which there is at least a reasonable possibility that a material loss could be incurred. We intend to continue to vigorously defend the pending matters. Litigation is inherently uncertain, and any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows. Unless otherwise noted below with respect to a specific matter, we are unable to provide a reasonable estimate of any potential liability given the uncertain nature of litigation and the stage of proceedings in these matters. With respect to all other pending matters not disclosed below, based on current information, we do not believe that such matters, individually or in the aggregate, would have a material adverse impact on our business, financial condition, operating results, or cash flows. Best Execution, Payment for Order Flow, and Sources of Revenue Matters In May 2019, the SEC’s Division of Enforcement (“Enforcement Division”) commenced an investigation into RHF’s best execution and payment for order flow (“PFOF”) practices, as well as statements concerning its sources of revenue, including the fact that, in FAQs on our website describing how it made money, and in certain communications with customers addressing the same issue, RHF had omitted PFOF when it described its revenue sources. On December 17, 2020, RHF, on a neither admit nor deny basis, consented to the entry of an SEC order (i) requiring RHF to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act and Section 17(a) of the Exchange Act and Rule 17a-4 thereunder; (ii) censuring RHF; and (iii) requiring RHF to pay a $65 million civil penalty in December 2020. RHF paid the $65 million penalty in cash and also agreed to engage an independent compliance consultant. Beginning on December 23, 2020, six putative securities fraud class action lawsuits were filed against RHM, RHF and/or RHS. The lawsuits generally allege that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including PFOF). Five of the complaints asserted claims for violations of Section 10(b) of the Exchange Act. All of the complaints asserted state law claims under California or New York law, and sought damages, restitution, disgorgement and other relief. One of the cases was voluntarily dismissed without prejudice. The five remaining actions have been consolidated under the caption In re Robinhood Order Flow Litigation in the United States District Court for the Northern District of California. On June 29, 2021, we filed a motion to dismiss the amended consolidated complaint and a motion to deny class certification. March 2020 Outages Beginning on March 4, 2020, 15 putative class actions and one individual action were filed against RHM, RHF and RHS in state and federal district courts relating to service outages on our stock trading platform on March 2-3, 2020 and March 9, 2020 (the “March 2020 Outages”). One of the putative class actions and the individual action were voluntarily dismissed following settlements between the parties. Thirteen of the remaining putative class actions have been consolidated as In re Robinhood Outage Litigation in the United States District Court for the Northern District of California. The one remaining putative class action, Withouski v. Robinhood Financial LLC, et al. , pending in the Superior Court of the State of California, County of San Mateo, has been stayed by agreement of the parties. The lawsuits generally allege that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and RHM, RHF and RHS failed to implement appropriate backup systems. The lawsuits include, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment and violations of certain California consumer protection statutes. The lawsuits generally seek damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief. Fact discovery has been completed and expert discovery is currently scheduled to be completed in August 2021. We have also received notice that approximately 1,600 jointly represented customers may pursue arbitration of individual claims against us arising out of the March 2020 Outages, in addition to other alleged system outages. The SEC Division of Examinations (“Examinations Division”) conducted an examination and identified a deficiency, to which RHF responded, with respect to RHF’s creation of a reasonably designed business continuity plan. In addition, Financial Industry Regulatory Authority (“FINRA”) conducted an investigation and certain state regulatory authorities are conducting investigations, regarding the March 2020 Outages and related procedures. RHF and RHS are cooperating with the requests from these regulators and RHF has reached a settlement with FINRA with respect to certain matters. See “—FINRA Multi-Matter Settlement” below for more information. Options Trading and Related Customer Communications and Displays The SEC Examinations Division conducted an examination and identified deficiencies, to which RHF responded, with respect to account takeovers, identity theft in connection with new account opening, processes for approving or rejecting certain accounts for options trading, and customer support response times. Certain state regulatory authorities are conducting investigations regarding RHF’s options trading and related customer communications and displays and options trading approval process. RHF is cooperating with the regulators’ requests. FINRA also conducted an investigation and reached a settlement with RHF regarding the same options trading issues. On February 8, 2021, the family of Alexander Kearns, a Robinhood customer who traded options, filed a lawsuit in the Superior Court of the State of California, County of Santa Clara, against RHF, RHS and RHM in connection with Mr. Kearns’s death by suicide in June 2020. This matter was dismissed with prejudice following a settlement between the parties. FINRA Multi-Matter Settlement RHF and RHS are subject to FINRA investigations and enforcement matters, including those described elsewhere in this footnote as well as investigations regarding certain other matters, such as RHF’s margin call procedures, RHS’s fractional share trade reporting, customer support procedures, customer arbitration agreements, processing of corporate actions and displays of historical performance data. On June 30, 2021, RHF resolved with FINRA, on a no admit, no deny basis, certain of these investigations and examinations, including investigations into systems outages, RHF’s options product offering, and margin-related communications with customers, among others. The resolution does not address all the matters FINRA is investigating, including those relating to the Early 2021 Trading Restrictions (as defined below), account takeovers and anti-money laundering issues, RHS’s fractional share trade reporting, customer support procedures or customer arbitration agreements. RHF and RHS will continue to cooperate with FINRA on these matters. The resolution involved the following components: (i) charges of violations of FINRA rules; (ii) a fine of $57.0 million; (iii) customer restitution of approximately $12.6 million, of which approximately $8.1 million already has been paid, $0.75 million has been offered to be paid, and the remaining $3.75 million is to be paid; (iv) a censure; and (v) engagement of an independent consultant. As of June 30, 2021, we had accrued the $57.0 million fine as well as $4.5 million of customer restitution to be paid. RHC Anti-Money Laundering, Cybersecurity and Other Issues On July 24, 2020, the New York State Department of Financial Services (“NYDFS”) issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the NYDFS’s Consumer Protection and Financial Enforcement Division for investigation. In March 2021, the NYDFS informed RHC of certain alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements, including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with the NYDFS, and (iii) cybersecurity and virtual currency requirements, including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security. RHC and the NYDFS have reached a settlement in principle with respect to these allegations, subject to final documentation, in connection with which, among other things, RHC expects to pay a monetary penalty of $30.0 million and engage a monitor. Additionally, on April 14, 2021, the California Attorney General’s Office issued an investigative subpoena to RHC, seeking documents and answers to interrogatories about RHC’s trading platform, business and operations, application of California’s commodities regulations to RHC and other matters. RHC is cooperating with this investigation. We cannot predict the outcome of this investigation or any consequences that might result from it. Account Takeovers In November 2020, FINRA Enforcement commenced an investigation into RHF concerning account takeovers, or circumstances under which an unauthorized actor successfully logs into a customer account, as well as anti-money laundering and cybersecurity issues. Since February 1, 2021, RHF has received requests for documents and information from the SEC’s Enforcement Division in connection with its investigation into account takeovers and, more recently, suspicious activity report filings. Additionally, state regulators, including the NYDFS and the New York Attorney General’s Office, have opened inquiries into RHM, RHF and RHC related to account takeovers. RHM, RHF and RHC are cooperating with these investigations and inquiries. The SEC’s Examinations Division also conducted an examination and identified deficiencies, to which RHF responded, with respect to, among other things, account takeovers and identity theft in connection with new account opening. On January 8, 2021, a putative class action was filed in California Superior Court (Santa Clara County) against RHF and RHS by Siddharth Mehta, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users. RHF and RHS removed this action to the United States District Court for the Northern District of California. Plaintiffs generally allege that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets and seek monetary damages and injunctive relief. In March 2021, RHF and RHS filed a motion to dismiss the amended complaint, which was granted in part and denied in part in May 2021. A second amended complaint was filed by the plaintiffs on May 20, 2021, which RHF and RHS moved to dismiss on June 3, 2021. Massachusetts Securities Division Matter On December 16, 2020, the Enforcement Section of the Massachusetts Securities Division (“MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD in July 2020. The complaint alleges three counts of Massachusetts securities law violations regarding alleged unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020. The initial complaint seeks, among other things, injunctive relief, censure, unspecified restitution, unspecified disgorgement, the appointment of an independent consultant and an unspecified administrative fine. The proposed amended complaint also seeks revocation of RHF's license to operate in Massachusetts. If RHF were to lose its license to operate in Massachusetts, we would not be able to acquire any new customers in Massachusetts, and we expect that our current customers in Massachusetts would be unable to continue utilizing any of the services or products offered on our platform (other than closing their positions) and that we may be forced to transfer such customers’ accounts to other broker-dealers. Additionally, revocation of RHF’s Massachusetts license could trigger similar disqualification or proceedings to restrict or condition RHF’s registration by other state regulators. A revocation of RHF’s license to operate in Massachusetts would result in RHF and RHS being subject to statutory disqualification by FINRA and the SEC, which would then result in RHF needing to obtain relief from FINRA subject to SEC review in order to remain a FINRA member and RHS possibly needing relief from FINRA or other SROs. On April 15, 2021, RHF filed a complaint and motion for preliminary injunction and declaratory relief in Massachusetts state court seeking to enjoin the MSD administrative proceeding and challenging the legality of the Massachusetts fiduciary duty standard. On May 27, 2021, the state court denied RHF’s motion for a preliminary injunction, finding that RHF would not suffer irreparable harm if MSD proceeded with the pending administrative action, but determined that RHF may seek a declaration that the disputed regulation is unlawful without first exhausting its remedies in the administrative action. On June 14, 2021, the state court declined to stay the entire matter pending resolution of the administrative proceeding, finding that RHF is entitled to have the state court decide certain of its challenges to the Massachusetts fiduciary standard without waiting for the MSD to complete its administrative proceeding. RHF has engaged in settlement discussions with the MSD at certain times since the MSD filed its initial complaint, however, such negotiations have not been successful and RHF is currently not engaged in any such settlement discussions with the MSD. Pinchasov v. Robinhood Financial LLC On November 5, 2020, plaintiff Shterna Pinchasov filed a putative class action in the Circuit Court of the 11th Judicial Circuit of Florida in and for Miami-Dade County asserting claims of negligence and breach of fiduciary duty based on allegations that RHF failed to prevent customers from using its interface for stocks that were subject to a “T1 Halt,” and seeking damages. Securities exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market, have the authority to halt and delay trading in a security, and a “T1 Halt” (or regulatory halt) may occur pending the release of material news about a company. RHF removed this action to the U.S. District Court for the Southern District of Florida. The case is now in the fact discovery stage, which is currently scheduled to close in December 2021. Text Message Litigation On October 29, 2019, a putative class action was filed by Isaac Gordon against RHF and RHM in the Superior Court for the State of Washington, County of Spokane. The complaint alleged that RHF and RHM initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington State law. The action was removed to the Eastern District of Washington. On January 25, 2021, the court granted the plaintiff’s motion for class certification. On June 25, 2021, RHF filed a motion to decertify the class and disqualify class counsel. On July 27, 2021, the court granted RHF’s motion to decertify the class, denied the motion to disqualify class counsel, and remanded the case to state court. On August 9, 2021, a new, substantially similar putative class action was filed by Cooper Moore against RHF in the U.S. District Court for the Northern District of California. Early 2021 Trading Restrictions Matters Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (the “Early 2021 Trading Restrictions”). We have become aware of approximately 50 putative class actions and four individual actions that have been filed against one or more of RHM, RHF and RHS in various federal and state courts relating to the Early 2021 Trading Restrictions. On April 1, 2021, the Judicial Panel on Multidistrict Litigation entered an order centralizing the federal cases identified in a motion filed by certain plaintiffs to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions in the United States District Court for the Southern District of Florida captioned In re: January 2021 Short Squeeze Trading Litigation, Case No. 21-2989-MDL-ALTONAGA/Torres (the “MDL”). In May 2021, the court appointed interim lead plaintiffs’ counsel for certain claims. On July 26, 2021, interim lead plaintiffs’ counsel filed two consolidated complaints: the first complaint asserts a federal antitrust claim; the second complaint asserts negligence and breach of fiduciary duty claims. The consolidated complaints seek monetary damages. Other plaintiffs have filed federal securities claims, which are governed by the procedures under the Private Securities Litigation Reform Act of 1995, and will proceed separately. RHM, RHF, RHS and our Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), the U.S. Department of Justice, Antitrust Division, the SEC staff, FINRA, the New York Attorney General’s Office, other state attorneys general offices and a number of state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev’s cell phone. There have been several inquiries based on specific customer complaints. We have also received inquiries from the SEC’s Division of Examinations and FINRA related to employee trading in certain securities that were subject to the Early 2021 Trading Restrictions, including GameStop Corp. and AMC Entertainment Holdings, Inc., during the week of January 25, 2021. These matters include inquiries related to whether any employee trading in these securities may have occurred in advance of the public announcement of the Early 2021 Trading Restrictions on January 28, 2021. In addition, we have received information and testimony requests from certain committees and members of the U.S. Congress and Mr. Tenev, among others, has provided or will provide testimony with respect to the Early 2021 Trading Restrictions. We are cooperating with these investigations and examinations. Due to the preliminary nature of all of these proceedings, we are unable at this time to estimate the likelihood or magnitude of any possible losses related to these matters. “For You” Document Request On May 26, 2021, the SEC’s Enforcement Division issued a request to RHM and RHF seeking documents and information related to the “For You” feature, which was available in the past on our website only and is not currently an active product offering on our website or platform, and other features displaying lists of securities to customers. Robinhood is cooperating with the Staff’s investigation. Dansberger v. Robinhood Securities On June 11, 2021, RHS was sued by Thomas Dansberger on behalf of a putative class in the Circuit Court for Seminole County in Florida seeking monetary damages as well as declaratory and injunctive relief. Mr. Dansberger purports to represent “All Florida residents who purchased Robinhood Gold on or by January 21, 2021 and (b) who were not able to buy or sell cryptocurrencies on January 21, 2021.” The plaintiff alleges that RHS engaged in unfair and deceptive trade practices by advertising and marketing that Robinhood Gold would provide access for customers to buy and sell cryptocurrencies but failed to do so on January 28, 2021 when it allegedly halted the buying and selling of cryptocurrencies. Registration Requirements for Member Personnel On July 26, 2021, RHF received a FINRA investigative request seeking documents and information related to its compliance with FINRA registration requirements for member personnel, including related to the FINRA non-registration status of Mr. Tenev and Co-Founder and Chief Creative Officer Mr. Bhatt. Robinhood is evaluating this matter and is cooperating with the investigation. | COMMITMENTS AND CONTINGENCIES Commitments Leases Our operating leases are comprised of office facilities, with the most significant leases relating to corporate headquarters in Menlo Park. Our leases have remaining terms of 2 year to 11 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. As of December 31, 2019 and 2020 we had $31.2 million and $49.2 million of operating right-of-use assets included as other non-current assets other current liabilities other non-current liabilities The components of lease expense were as follows: Year Ended December 31, (in thousands) 2019 2020 Fixed operating lease costs $ 5,422 $ 11,420 Variable operating lease costs 1,078 3,009 Short-term lease costs 1,188 1,222 Total lease costs $ 7,688 $ 15,651 Variable operating lease costs are primarily related to payments made to our landlords for common area maintenance, property taxes, insurance, and other operating expenses. Other information related to our operating leases was as follows: Year Ended December 31, 2019 2020 Weighted-average remaining lease term 5.11 years 5.41 years Weighted-average discount rate 7.47 % 7.02 % Cash flows related to leases were as follows: Year Ended December 31, (in thousands) 2019 2020 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2020 are as follows: (in thousands) 2021 $ 12,159 2022 16,590 2023 13,779 2024 10,688 2025 9,932 Thereafter 9,724 Total undiscounted lease payments 72,872 Less: present value discount (12,675) Less: lease incentives (6,116) Total lease liabilities $ 54,081 Contingencies The securities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages. Damages may include, in some cases, punitive damages. Compliance and trading problems that are reported to federal, state and provincial regulators, exchanges or other self-regulatory organizations by dissatisfied customers are investigated by such regulatory bodies, and, if pursued by such regulatory body or such customers, may rise to the level of arbitration or disciplinary action. We are also subject to periodic regulatory audits and inspections. Like other brokerage firms, 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. Legal and regulatory matters The outcomes of the legal and regulatory matters discussed in this section are inherently uncertain and some of these matters 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. Described below are certain historic matters as well as certain pending matters in which there is at least a reasonable possibility that a material loss could be incurred. We intend to continue to vigorously defend the pending matters. Litigation is inherently uncertain, and any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows. Unless otherwise noted below with respect to a specific matter, we are unable to provide a reasonable estimate of any potential liability given the uncertain nature of litigation and the stage of proceedings in these matters. With respect to all other pending matters not disclosed below, based on current information, we do not believe that such matters, individually or in the aggregate, would have a material adverse impact on our business, financial condition, operating results, or cash flows. Best Execution, Payment for Order Flow, and Sources of Revenue Matters In May 2019, the U.S. Securities and Exchange Commission’s (“SEC”) Division of Enforcement (“Enforcement Division”) commenced an investigation into RHF’s best execution and payment for order flow practices, as well as statements concerning its sources of revenue. On December 17, 2020, RHF, on a neither admit nor deny basis, consented to the entry of an SEC order (i) requiring RHF to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-4 thereunder; (ii) censuring RHF; and (iii) requiring RHF to pay a $65 million penalty. RHF also agreed to engage an independent compliance consultant to, among other things, perform a comprehensive review of RHF’s supervisory, compliance, and other policies and procedures related to its retail communications and payment for order flow and make recommendations for improvements. RHF paid the $65 million penalty in cash, which was recorded as general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020. Beginning on December 23, 2020, four putative securities fraud class action lawsuits were filed against RHM, RHF, and/or RHS. Three were filed in the United States District Court for the Northern District of California: Kwon v. Robinhood Financial LLC et al., Luparello v. Robinhood Financial LLC et al. , and Nabi v. Robinhood Financial LLC et al . One was filed in the United States District Court for the Southern District of California, but has since been transferred to the Northern District: Ghebrehiwet v. Robinhood Financial LLC et al . The lawsuits generally allege that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including payment for order flow). The three complaints originally filed in the Northern District of California assert claims for violations of Sections 10(b) of the Securities Exchange Act of 1934. All four complaints assert state law claims under California law, and seek damages, restitution, disgorgement, and other relief. March 2020 Outages On March 2-3, 2020, our platform experienced an outage across various services, which prevented customers from using the app, website, and help center. On March 9, 2020, our platform experienced an outage across its trading products, which prevented customers from placing trades (together with the March 2-3 outages, the “March 2020 Outages”). There are many uncertainties associated with these types of incidents and impacts associated with service outages have included, and may in the future include, remediation costs to customers, systems upgrades, increased insurance costs, adverse effects on compliance with laws and regulations, litigation, and reputational damage. To date, we have incurred customer goodwill remediation costs with respect to the March 2020 Outages in the amount of approximately $3.6 million, which was recorded as marketing expenses in our consolidated statements of operations. Beginning on March 4, 2020, putative class actions were filed against RHM, RHF, and RHS in state and federal district courts relating to the March 2020 Outages. All but one of the cases have been consolidated as In re Robinhood Outage Litigation in the United States District Court for the Northern District of California. The remaining putative class action, Withouski v. Robinhood Financial LLC et al. , pending in the Superior Court of the State of California, County of San Mateo, has been stayed by agreement of the parties. The lawsuits generally allege that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and RHM, RHF, and RHS failed to implement appropriate backup systems. The lawsuits include, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment, and violations of certain California consumer protection statutes. The lawsuits generally seek damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief. On February 18, 2021, the court denied our motion to dismiss RHF and RHS but dismissed RHM from the case with leave to amend. The court also denied our motion to strike the class allegations, and ordered the parties to select a mediator within 14 days. A mediation is scheduled for June 22. 2021. Meanwhile, fact discovery is underway and is scheduled to be completed by April 7, 2021. In addition, the SEC staff is conducting an examination, and FINRA and certain state regulatory authorities are conducting investigations, regarding the March 2020 Outages and related procedures. RHF and RHS are cooperating with requests from these regulators. Options Trading and Related Customer Communications and Displays The SEC staff is conducting an examination, and FINRA and certain state regulatory authorities are conducting investigations, regarding RHF’s options trading and related customer communications and displays. The SEC staff, FINRA staff and staff of such state regulatory authorities are reviewing, among other things, how RHF displays cash and buying power to customers and its options trading approval processes. RHF is cooperating with the regulators’ requests. On February 8, 2021, the family of Alexander Kearns, a Robinhood customer who traded options, filed a lawsuit in the Superior Court of the State of California, County of Santa Clara, against RHF, RHS, and RHM in connection with Mr. Kearns’s death by suicide in June 2020. The lawsuit asserts claims for wrongful death, negligent infliction of emotional distress, and unfair business practices under a California statute, and seeks damages and other relief. Potential Resolution of FINRA Matters RHF and RHS are currently engaged in discussions with FINRA staff regarding a possible negotiated resolution of certain FINRA matters, including the March 2020 Outages and options trading and related customer communications and displays noted above. While these discussions are ongoing, RHF and RHS anticipate that any resolution, if reached, would involve charges of violations of FINRA rules, a fine, customer restitution, a censure, and a compliance consultant. We have recorded a charge as general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020 of $26.6 million representing the bottom of the range of our probable losses as no amount within the range is considered a better estimate than any other amount and estimation of any additional loss in excess of the amount of the loss accrued cannot be made. We cannot predict, however, whether these discussions will result in a resolution of these matters. Robinhood Crypto Anti-Money Laundering and Cyber-Related Issues On July 24, 2020, the New York State Department of Financial Services (“NYDFS”) issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the Department’s Consumer Protection and Financial Enforcement Division, which is investigating the matter. In March 2021, NYDFS informed RHC of certain alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements (Part 417, Part 504 and Banking Law § 44), including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with NYDFS, and (iii) cybersecurity and virtual currency (Part 500 and Part 200) requirements, including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security. In connection with these allegations, NYDFS has indicated that it plans to seek a monetary penalty, as well as the appointment of an independent consultant. RHC is cooperating with the NYDFS, and we anticipate that any potential resolution would include a monetary penalty component of at least $10 million, which is our best estimate of the bottom of the range for our probable loss in this matter as no amount within the range is considered a better estimate than any other amount and estimation of any additional loss in excess of the amount of the loss accrued can not be made. We have recorded a charge for such amount under general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020. We cannot predict, however, whether these discussions will result in a resolution of this matter. Account Takeovers In November 2020, FINRA Enforcement commenced an investigation into RHF concerning account takeovers, or circumstances under which an unauthorized actor successfully logs into a customer account, as well as anti-money laundering and cybersecurity issues. On February 1, 2021, RHF received a document request from the SEC’s Division of Enforcement in connection with its investigation into account takeovers at certain online brokers. Additionally, state regulators, including the NYDFS and the New York Attorney General’s Office have opened inquiries related to account takeovers. RHM, RHF, and RHC are cooperating with these investigations and inquiries. On January 8, 2021, a putative class action was filed in California Superior Court (Santa Clara County) against RHF and RHS by Siddharth Mehta, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users from January 1, 2020 to October 16, 2020. On February 9, 2021, RHF and RHS removed this action to the United States District Court for the Northern District of California. An amended complaint, filed on February 26, 2021, added two named class members and expanded the putative class period to the present. Plaintiffs generally allege that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets . Plaintiffs assert eight causes of action for purported violations of common law, a right to privacy, and certain California statutes, including the California Consumer Privacy Act. On March 12, 2021, RHF and RHS filed a motion to dismiss the amended complaint. Massachusetts Securities Division Complaint On December 16, 2020, the Enforcement Section of the Massachusetts Securities Division (the “MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD on or around July 21, 2020. The Complaint alleges three counts of Massachusetts securities law violations regarding unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020. Among other things, MSD alleges that RHF’s product features and marketing strategies, outages, and options trading approval process constitute violations of Massachusetts securities laws. The complaint seeks, among other things, injunctive relief (seeking a permanent cease and desist order), censure, unspecified restitution, unspecified disgorgement, the appointment of an independent consultant, and an unspecified administrative fine. On January 29, 2021, RHF filed an answer to this complaint denying each of the alleged securities law violations, and we are currently engaging in discussions regarding a potential negotiated resolution. Pinchasov v. Robinhood Financial LLC On November 5, 2020, Plaintiff Shterna Pinchasov (“Plaintiff”) filed a putative class action in the Circuit Court of the 11th Judicial Circuit of Florida in and for Miami-Dade County asserting claims of negligence and breach of fiduciary duty based on allegations that RHF failed to prevent customers from using its interface for stocks that were subject to a “T1 Halt,” and seeking damages. Securities exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market, have the authority to halt and delay trading in a security, and a “T1 Halt” (or regulatory halt) may occur pending the release of material news about a company. On November 30, 2020, RHF removed this action to the U.S. District Court for the Southern District of Florida pursuant to the Class Action Fairness Act of 2005. On December 21, 2020, RHF filed a motion to dismiss the complaint. Gordon v. Robinhood Financial LLC On October 29, 2019, a putative class action was filed against RHF and RHM in the Superior Court for the State of Washington, County of Spokane. The complaint alleges that RHF and RHM initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington State law. The action has been removed to the Eastern District of Washington, pursuant to the Class Action Fairness Act of 2005, and the court granted RHM’s motion to dismiss for lack of personal jurisdiction. On January 7, 2020, we filed a motion to dismiss the complaint, which was denied. On January 25, 2021, the court granted the plaintiff’s motion for class certification. A trial date has not been set yet. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
SEBSEQUENT EVENTS | SUBSEQUENT EVENTS Amended and Restated Certificate of Incorporation On August 2, 2021, the “IPO Closing Date”), we amended and restated our certificate of incorporation to effect a reclassification of our outstanding common stock into Class A common stock (with one vote per share) and, with respect to shares held by our founders and certain of their related entities, Class B common stock (with ten votes per share). The amended and restated certificate also provides for Class C common stock (with zero votes per share) of which none is outstanding on the date of this quarterly report. Initial Public Offering On the IPO Closing Date, we closed our IPO of 55,000,000 shares of Class A common stock at a public offering price of $38.00 per share. In the IPO, 52,375,000 shares of Class A common stock were sold by us and 2,625,000 shares of Class A common stock were sold by selling stockholders. Our net proceeds from the sale of Class A common stock by us in the IPO were approximately $1.9 billion after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. In connection with the IPO, 130,155,246 shares of our Class A common stock owned by our founders and their related entities were exchanged for an equivalent number of shares of Class B common stock. In addition, all of the outstanding shares of convertible preferred stock and all of our outstanding convertible notes automatically converted into Class A common stock of 412,742,897 and 137,305,156 shares and all warrants became exercisable at a strike price of $26.60 per share for an aggregate of 14,278,034 shares of Class A common stock. Upon completion of the IPO, approximately $13.4 million of deferred offering costs were reclassified into stockholders’ equity as a reduction of the IPO proceeds and we recognized a one-time cumulative share-based compensation expense of $1.0 billion related to RSUs for which the time-based vesting condition was satisfied or partially satisfied as the performance condition was satisfied. Acquisition of Say On August 13, 2021, the Company completed the acquisition of A Say Inc. and its subsidiaries (collectively “Say”). New York-based Say, founded in 2017, provides an investor communications and shareholder engagement platform that empowers shareholders to access their full ownership rights and facilitates proxy and voting for issuers. The purchase price is approximately $140 million in cash, subject to customary purchase price adjustments. The Company is currently evaluating purchase price allocation. It is not practicable to disclose the preliminary purchase price allocation for this acquisition given the short period of time between the acquisition date and the issuance of these unaudited condensed consolidated financial statements. | SUBSEQUENT EVENTS We have evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the consolidated financial statements. The evaluation was performed through March 22, 2021. Early 2021 Trading Restrictions Beginning on January 28, 2021, due to unprecedented market volatility and related portfolio margin demands imposed on RHS by the clearinghouse National Securities Clearing Corporation, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (“Early 2021 Trading Restrictions”). As of the date the financial statements were available to be issued, we have become aware of approximately 49 putative class actions and three individual actions that have been filed against RHM, RHF, and/or RHS in various federal and state courts relating to the Early 2021 Trading Restrictions. The complaints generally allege breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, breach of fiduciary duty and other common law claims. Several complaints further allege federal securities claims, federal and state antitrust claims and/or certain state consumer protection claims based on similar factual allegations. Approximately 18 of the putative class actions also name other broker-dealers and/or market makers as defendants. On February 5, 2021, certain plaintiffs filed a motion before the Judicial Panel on Multidistrict Litigation ("JPML") to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions into a multidistrict litigation in the Northern District of California (the "Transfer Motion"). On March 1, 2021, we filed a response to the Transfer Motion, in which we supported transfer and coordination or consolidation of the actions into a multidistrict litigation in either the Northern District of California, or in the alternative, the Middle District of Florida. We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously. RHM, RHF, RHS and our Co-Founder and CEO, Vladimir Tenev, have received requests for information, and in some cases subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California ("USAO"), the SEC staff, FINRA, the New York Attorney General’s Office, other state attorneys general offices, and a number of state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev's cell phone. There have also been several inquiries based on specific customer complaints. In addition, we have received information and testimony requests from certain committees and members of the U.S. Congress and Mr. Tenev has provided testimony with respect to the Early 2021 Trading Restrictions. We are cooperating with these investigations and examinations. Due to the very preliminary nature of all of these proceedings, we are unable at this time to estimate the likelihood or magnitude of any possible losses related to these matters. Convertible Note and Warrant Financings |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood Markets, Inc. (“RHM”, together with its subsidiaries, “Robinhood”, the “Company”, “we”, or “us”) was incorporated in the State of Delaware on November 22, 2013. Our most significant, wholly-owned subsidiaries are: • Robinhood Financial LLC (“RHF”), a registered introducing broker-dealer; • Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer; and • Robinhood Crypto, LLC (“RHC”), which provides users the ability to buy and sell cryptocurrencies. Acting as the agent of the user, we facilitate the purchase and sale of equities, options and cryptocurrencies through our platform by routing transactions through market makers, who are responsible for trade execution. Upon execution of a trade, users are legally required to purchase equities, options, or cryptocurrencies for cash from the transaction counterparty or to sell equities, options or cryptocurrencies for cash to the transaction counterparty, depending on the transaction. Acting as agent, we facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade. Our users have ownership of the securities, including those that collateralize margin loans, and cryptocurrencies transacted on our platform and, as a result, any such securities or cryptocurrencies owned by users are not presented in our unaudited condensed consolidated balance sheets. We do not allow users to purchase cryptocurrency on margin. We hold cryptocurrency in custody for our users’ accounts in one or more omnibus cryptocurrency wallets. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus referred to as “COVID-19” to be a global pandemic. The COVID-19 pandemic has negatively impacted the global economy and caused significant volatility in the financial markets. In response to the pandemic, we have enabled nearly all of our employees to work remotely and have restricted business travel. Throughout the COVID-19 pandemic, we have seen substantial growth in our user base, retention, engagement and trading activity metrics, as well as continued gains and periodic all-time highs achieved by the equity markets generally. During the COVID-19 pandemic, we have seen an increasing interest in personal finance and investing, coupled with low interest rates and a positive market environment, especially in the U.S. equity markets, that has encouraged an unprecedented number of first-time retail investors to become our customers and begin trading on our platform. At the same time, the COVID-19 pandemic has resulted, in part, in inefficiencies or delays in our business, operational challenges and additional costs related to business continuity initiatives as our workforce has fully transitioned to remote working. The extent of the impact of COVID-19 on our business and financial results will depend largely on future developments, including the duration of the pandemic, actions taken to contain COVID-19 or address its impact, the ability to reintegrate our workforce or to adapt to the long-term distributed workforce model (with some employees part- or full-time remote, and others not) we expect to adopt, the impact on capital and financial markets and the related impact on the financial circumstances of our customers, all of which are highly uncertain and cannot be predicted. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. The condensed consolidated financial statements are unaudited, and in management’s opinion, include all adjustments, including normal recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year ended December 31, 2021 or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in our final prospectus for our IPO dated July 28, 2021 and filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1934 on July 30, 2021 (the “Final Prospectus”). There have been no material changes in our significant accounting policies as described in our consolidated financial statements included in our audited annual consolidated financial statements for the year ended December 31, 2020, other than the adoption of the accounting pronouncement as described below in Note 2. The unaudited condensed consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our unaudited condensed consolidated financial statements. Deferred offering costs We have capitalized qualified legal, accounting and other direct costs related to our efforts to raise capital through a sale of our common stock in an IPO. Deferred offering costs are included in other current assets on the unaudited condensed consolidated balance sheets and will be deferred until the completion of the IPO, at which time they will be reclassified to additional paid-in capital as a reduction of the IPO proceeds. If we terminate the planned IPO or there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses. As of December 31, 2020 and June 30, 2021, $1.3 million and $9.5 million of deferred offering costs were capitalized. Concentration of credit risk We had transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Market maker: Citadel Securities, LLC 36 % 14 % 34 % 21 % Tai Mo Shan Limited (1) 1 % 29 % 2 % 20 % Entities affiliated with Susquehanna International Group, LLP (2) 21 % 9 % 20 % 11 % Entity affiliated with Jane Street Group 1 % 12 % 1 % 9 % Entities affiliated with Wolverine Holdings, L.P. (3) 8 % 8 % 10 % 8 % All others individually less than 10% 10 % 7 % 9 % 11 % Total as percentage of total revenue: 77 % 79 % 76 % 80 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is our policy to review, as necessary, the credit standing of each counterparty. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Robinhood Markets, Inc. (“RHM”, together with its subsidiaries, “Robinhood”, the “Company”, “we”, or “us”) was incorporated in the State of Delaware on November 22, 2013. Our most significant, wholly-owned subsidiaries are: • Robinhood Financial LLC (“RHF”), a registered introducing broker-dealer; • Robinhood Securities, LLC (“RHS”), a registered clearing broker-dealer; and • Robinhood Crypto, LLC (“RHC”), provides users the ability to buy and sell cryptocurrencies Our mission is to democratize finance for all. We are building products and services that make it easier for people from all backgrounds to participate in the financial system. Our approach is to build easy-to-use and low cost financial products and services for our users. When we first began operating, we started by offering users the ability to buy and sell equities, and have since expanded our brokerage operations to allow retail investors access to other investment vehicles by offering commission-free trading for both options and cryptocurrencies, in addition to equities. We now offer a variety of services to our users to facilitate their trading experience, including a subscription service, Robinhood Gold, which allows users to access premium features such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. We have a fractional shares program which allows users to purchase and sell fractions of a share in certain equities, enabling users to place real-time fractional share orders in dollar amounts or share amounts, with purchases rounded to the nearest penny and the ability to purchase as small as 1/1,000,000 of a share. We also have a cash management program which allows users’ uninvested cash balances to earn interest through a cash sweep program with program banks insured by Federal Deposit Insurance Corporation (“FDIC”) and to be used to make purchases and ATM withdrawals through a co-branded debit card with Mastercard® bearing the logo of Robinhood (“Robinhood debit card”). Acting as the agent of the user, we facilitate the purchase and sale of equities, options and cryptocurrencies through our platform by routing transactions through market makers, who are responsible for trade execution. Upon execution of a trade, users are legally required to purchase equities, options, or cryptocurrencies for cash from the transaction counterparty or to sell equities, options or cryptocurrencies for cash to the transaction counterparty, depending on the transaction. Acting as agent, we facilitate and confirm trades only when there are binding, matched legal obligations from the user and the market maker on both sides of the trade. Our users have ownership of the securities, including those that collateralize margin loans, and cryptocurrencies transacted on our platform and, as a result, any such securities or cryptocurrencies owned by users are not presented in our consolidated balance sheets. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus referred to as “COVID-19” to be a global pandemic. The COVID-19 pandemic has negatively impacted the global economy and caused significant volatility in the financial markets. In response to the pandemic, we have enabled nearly all of our employees to work remotely and have restricted business travel. Throughout the COVID-19 pandemic, we have seen substantial growth in our user base, retention, engagement and trading activity metrics, as well as continued gains and periodic all-time highs achieved by the equity markets generally. During the COVID-19 pandemic, we have seen an increasing interest in personal finance and investing, coupled with low interest rates and a positive market environment, especially in the U.S. equity markets, that has encouraged an unprecedented number of first-time retail investors to become our customers and begin trading on our platform. At the same time, the COVID-19 pandemic has resulted, in part, in inefficiencies or delays in our business, operational challenges and additional costs related to business continuity initiatives as our workforce has fully transitioned to remote working. The extent of the impact of COVID-19 on our business and financial results will depend largely on future developments, including the duration of the pandemic, actions taken to contain COVID-19 or address its impact, the ability to reintegrate our workforce or of our workforce to adapt to the long-term distributed workforce model (with some employees part- or full-time remote, and others not) we expect to adopt, the impact on capital and financial markets and the related impact on the financial circumstances of our customers, all of which are highly uncertain and cannot be predicted. Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the accounts of RHM and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. Segment Information We operate and report financial information in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. All our revenues and substantially all of our assets are attributed to or located in the United States. Revenue recognition Transaction-based revenues We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. Net interest revenues Net interest revenues consist of interest revenues less interest expenses. We earn and incur interest revenues and expense on securities lending transactions. We also earn interest on margin loans to users, which constitute the majority of receivables from users, net in the consolidated balance sheets, and on our segregated cash, cash and cash equivalents, and deposits with clearing organizations. We incur interest expenses in connection with our revolving credit facilities. Other revenues Other revenues primarily consists of Robinhood Gold, a paid subscription service that provides customers with premium features, such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. Our contract with users are for a term of 30 days and renew automatically each month. Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied. Other revenues also consist of proxy rebates and miscellaneous fees charged to users. Proxy rebates are revenues earned through our partnership with a third-party investor communications company. We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms. We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied. Miscellaneous fees are primarily Automated Customer Account Transfer Services (“ACATS”) fees, which are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer. We recognize revenue when our performance obligation of administering the transfer is satisfied. Concentration of credit risk We had revenues from market makers in excess of 10% of total revenues, as follows: Year Ended December 31, 2019 2020 Market maker: Citadel Securities, LLC 29 % 34 % Entities affiliated with Susquehanna International Group, LLP (1) 13 % 18 % Entities affiliated with Wolverine Holdings, L.P. (2) 12 % 10 % All others individually less than 10% 8 % 13 % Total as percentage of total revenue: 62 % 75 % _____________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (2) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions when applicable. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is our policy to review, as necessary, the credit standing of each counterparty. Operating expenses Brokerage and transaction Brokerage and transaction costs primarily consist of fees paid to centralized clearinghouses and regulatory fees, market data expenses, compensation and benefits, including share-based compensation, for employees engaged in clearing and brokerage functions, and allocated overhead. Technology and development Technology and development costs primarily consist of compensation and benefits, including share-based compensation, for engineering, data science, and design personnel, costs incurred to support and improve our platform, costs incurred in connection with the development of new products, costs associated with computer hardware and software, allocated overhead, and amortization of internally developed software. Operations Operations costs primarily consist of customer service related expenses, including compensation and benefits, which includes share-based compensation, for employees engaged in customer support, third-party customer service expenses, customer onboarding and account verification and allocated overhead. Operations costs also include our provision for credit losses primarily in connection with unrecoverable receivables due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (which we refer to as “Fraudulent Deposit Transactions”) as well as chargebacks for unauthorized debit card transactions; and to a lesser extent, losses on margin borrowings. Marketing Marketing costs primarily consist of expenses associated with our stock referral program (the “Robinhood Referral Program”) , production and placement of advertisements in various media outlets, including online and on television, and customer goodwill, which primarily related to costs to remediate losses experienced by our users due to service interruptions on our platform and reimbursement of direct losses that happen due to unauthorized activity that is not the fault of our users. Marketing costs also include compensation and benefits, including share-based compensation, for employees engaged in the marketing function and allocated overhead. Advertising costs are expensed as incurred and were $119.6 million and $157.1 million in the years ended December 31, 2019 and 2020. General and administrative General and administrative costs consist primarily of compensation and benefits, including share-based compensation, for certain executives as well as employees engaged in legal, finance, human resources, risk, and compliance. General and administrative costs also includes certain legal settlements and professional fees, such as, but not limited to, legal, audit and accounting fees, as well as allocated overhead. Research and development costs Research and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred. Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation. Research and development costs recorded in operating expenses under ASC 730 were $27.7 million and $52.2 million for the years ended December 31, 2019 and 2020. Share-based compensation Stock Options We estimate the fair value of stock options granted to employees and directors using the Black-Scholes option-pricing model. The fair value of stock options is recognized as compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for when they occur. The Black-Scholes option-pricing model incorporates various assumptions in estimating the fair value of stock-based awards. These variables include: Fair value of our common stock —Because our common stock is not yet publicly traded, we must estimate the fair value of common stock. Our board of directors considers numerous objective and subjective factors to determine the fair value of our common stock including: contemporaneous third-party valuations of our common stock, sales of our common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our operating and financial performance, the valuation of comparable companies, the lack of marketability, and general and industry specific economic outlook, amongst other factors. Expected volatility —Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since we do not have sufficient trading history of our common stock, we estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies over a period equal to the expected term of the award. Expected term —We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-free interest rate —Based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Expected dividend yield —We utilize a dividend yield of 0% as we have not paid, and do not anticipate paying, dividends on our common stock. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life. Performance-based RSUs We have granted RSUs that vest upon the satisfaction of both time-based service and performance-based conditions. The fair value of these RSUs is estimated based on the fair value of our common stock on the date of grant. The time-based service condition for these awards is generally satisfied over four years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, defined as the earlier of (i) the closing of certain, specific liquidation or change in control transactions, or (ii) an initial public offering (“IPO”). We record share-based compensation expense for performance-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. As of December 31, 2019 and 2020, we had not recognized share-based compensation for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. In the period in which our qualifying event is probable, we will record a cumulative one-time share-based compensation expense determined using the grant-date fair values. Share-based compensation related to remaining time-based service after the qualifying event will be recorded over the remaining requisite service period. Market-Based RSUs We have granted RSUs that vest upon the satisfaction of all the following conditions: time-based service conditions, performance-based conditions, and market-based conditions. The time-based service condition for these awards generally is satisfied over six years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, as described above. The market-based conditions are satisfied upon our achievement of specified initial public offering prices. For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected capital raise percentage. We estimate the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of a qualifying event based on our expectation at the time of measurement of the award’s value. We record share-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. We determine the requisite service period by comparing the derived service period to achieve the market-based condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period. As of December 31, 2019 and 2020, we had not recognized share-based compensation expense for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. In the period in which our qualifying event is probable, we will record a cumulative one-time share-based compensation expense determined using the grant-date fair values. Loss contingencies We are subject to claims and lawsuits in the ordinary course of business, including arbitration, class actions and other litigation, some of which include claims for substantial or unspecified damages. We are also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. We review our lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provide disclosures and record loss contingencies in accordance with the loss contingencies accounting guidance. We establish an accrual for losses at management’s best estimate when we assess that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If no amount within the range is considered a better estimate than any other amount, an accrual for losses is recorded based on the bottom amount of the range. Accrual for loss contingencies are recorded in accounts payable and accrued expenses on the consolidated balance sheets and expensed in general and administrative expenses in our consolidated statements of operations. We monitor these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjust the amount as appropriate. Earnings (loss) per share Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. Our participating securities consist of all series of our redeemable convertible preferred stock. Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses. Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Cash and cash equivalents We consider all highly liquid financial instruments with maturities at the time of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits with banks and money market funds that are not segregated and deposited for regulatory purposes or to meet margin requirements at clearinghouses. We maintain cash in bank accounts at financial institutions that exceed federally insured limits. We also maintain cash in money market funds which are not FDIC insured. We are subject to credit risk to the extent any financial institution with which we conduct business is unable to fulfill contractual obligations on our behalf. As we have not experienced any losses in such accounts and we believe that we have placed our cash on deposit with financial institutions which are financially stable, we do not have an expectation of credit losses for these arrangements. Cash and securities segregated under federal and other regulations We are required to segregate cash and/or qualified securities for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Securities Exchange Act of 1934. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Restricted cash We are required to maintain restricted cash deposits to back letters of credit for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. Fair value of financial instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, our own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: Level 1 Inputs: unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by us Level 2 Inputs: quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly Level 3 Inputs: unobservable inputs that are significant to the fair value of the assets or liabilities A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Receivables from brokers, dealers, and clearing organizations Receivables from brokers, dealers and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers. Orders are trades which users have not specifically instructed to be routed to a particular venue for execution. These receivables are short term and settle within 30 days. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. Receivables from users, net Receivable from users, net is primarily made up of margin receivables. Margin receivables are adequately collateralized by users’ marketable securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses. We monitor margin levels and require users to deposit additional collateral, or reduce margin positions, to meet minimum collateral requirements and avoid automatic liquidation of their positions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for margin loans. We have no expectation of credit losses for margin loans that are fully secured, where the fair value of the collateral securing the loans is equal to or in excess of the loaned amount. This is based on our assessment of the nature of the collateral (liquid investments actively traded), potential future changes in collateral values, and historical credit loss information relating to fully secured receivables. In cases where the fair value of the collateral is less than the outstanding margin balance, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately when the user fails to meet their margin call. Based on historical experience, we have limited expectation of borrowers to replenish their collateral after not meeting a margin call. We also record a full provision for credit losses on receivables from users due to Fraudulent Deposit Transactions. Due to the fraudulent nature of these transactions and based on historical experience, we have no expectation that we will collect these funds. As such, we record a provision for credit loss immediately for the full balance when a Fraudulent Deposit Transaction is identified. The provision for credit losses is recorded as operations expense on the consolidated statement of operations. We write-off unsecured balances when the balance becomes outstanding for over 180 days. Deposits with clearing organizations We are required to maintain cash collateral as deposits with clearing organizations such as Depository Trust & Clearing Corporation and Options Clearing Corporation which allows us to use their security transactions services for trade comparison, clearance and settlement. The clearing organizations establish financial requirements, including deposits, to reduce their risk. The deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility. We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations. As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements. Other current assets Other current assets primarily includes user-held fractional shares, and to a lesser extent securities owned by us for the Robinhood Referral Program, prepaid expenses and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. These prepaid expenses include items such as prepayments on clearing services, rent, insurance, regulatory fees, web services, data feed, research, and software subscriptions. We evaluate certain prepaid expenses and other current assets for credit losses based on historic events, current economic conditions, and our expectations of future economic conditions and record an allowance for credit loss to estimate uncollectible receivables. The allowance for credit losses for prepaid expenses and other assets were immaterial for all periods presented. Robinhood referral program Through our referral program, RHF credits referring and referred users with a stock reward, with the potential value of each share ranging from $2.50 to $225. Approximately 98% of users receive a stock reward having a value ranging from $2.50 to $10. Referring users can earn more than one reward through the Robinhood Referral Program, subject to a maximum of $500 in total rewards earned annually per user. Stock rewards are also available to users who sign up through paid marketing channels. In order for a reward to be earned by the referring and referred user, the referred user must fulfill certain conditions stated in their promotion, such as linking their bank account to the Robinhood platform. After the reward is earned, the user must claim their stock reward in the Robinhood app within 60 days of notification thereof, at which point the stock is deposited to such user’s Robinhood account. Users do not need to provide any cash consideration for the reward. The stock reward is a share or shares, selected randomly from our previously purchased inventory of settled shares held exclusively for this program, which are included in other current assets in our consolidated balance sheets. Each stock reward is assigned at the time the reward is earned and each share cannot be associated with more than one reward at a time. Our inventory of settled shares is initially recorded at cost and marked to fair market value at each reporting period. As the inventory of shares are held specifically for the referral program and not as investments of the Company, gains and losses from changes in the fair market value of the shares are recorded within marketing expense in our consolidated statement of operations until the reward is claimed. Shares are derecognized when they are claimed by the user and delivered to the users’ account. We record an accrued liability within other current liabilities in our consolidated balance sheets at the time the bank account is linked with the expense recorded within marketing expense in our consolidated statement of operations. The liability is initially recorded at the fair market value of the assigned share or shares upon the reward being earned by the referred user (i.e., upon bank linkage) and marked to fair market value until claimed or reversed, with gains and losses also recorded within marketing expense. The liability is derecognized when the share is claimed by the user and delivered to the users’ account. If a user does not claim the stock reward within 60 days of being notified, such reward expires and the liability is reversed. We estimate the amount of unclaimed rewards expected at each reporting period, using historical trends and data, and adjust the accrued liability and marketing expense accordingly. Fractional share program We operate our fractional share program for the benefit of our users and maintain an inventory of securities held exclusively for the fractional share program. This proprietary inventory is recorded within other current assets on our consolidated balance sheets. When a user purchases a fractional share, we record the cash received for the user-held fractional share as pledged collateral recorded within other current assets on our consolidated balance sheets and an offsetting liability to repurchase the shares, recorded within ot |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our unaudited condensed consolidated financial statements. Recently issued accounting pronouncements not yet adopted | RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted accounting pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases. This guidance requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for operating leases with a term greater than one year. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2019 using the optional transition method. Pursuant to the practical expedients, we elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Upon adoption, we recognized $19.3 million of operating right-of-use lease assets and $25.5 million of operating lease liabilities on our consolidated balance sheets. Credit Loss on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This guidance requires entities to use a current expected credit loss impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost within the scope of the standard. The entity’s estimate would consider relevant information about past events, current condition and reasonable and supportable forecasts, which all result in recognition of lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020. The adoption of the guidance did not have a material impact on our consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs should be capitalized. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020 using the prospective transition method. The adoption of the guidance did not have a material impact on our consolidated financial statements. Simplifying Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying Accounting for Income Taxes. This guidance simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in accounting standards. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We early adopted the standard effective April 1, 2020 and it did not have a material impact on our consolidated financial statements. Recent accounting pronouncements not yet adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to contract modifications that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. This guidance is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. We are evaluating the impact of this guidance on our consolidated financial statements. Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this guidance on our consolidated financial statements. |
REVENUE_2
REVENUE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUES | REVENUES Disaggregation of revenues The following table presents our revenue disaggregated by revenue source: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Transaction-based revenues: Options $ 111,148 $ 164,604 $ 170,908 $ 362,464 Cryptocurrencies 5,320 233,103 9,558 320,690 Equities 70,606 52,012 102,195 185,313 Other 339 1,448 383 3,139 Total transaction-based revenues 187,413 451,167 283,044 871,606 Net interest revenues: Securities lending 28,633 39,448 35,138 75,074 Margin interest 10,958 31,230 18,787 58,961 Interest on segregated cash and securities 1,436 931 10,632 2,041 Other interest revenue 526 1,368 2,516 2,197 Interest expenses related to credit facilities (1,555) (5,268) (3,059) (8,067) Total net interest revenues 39,998 67,709 64,014 130,206 Other revenues 16,800 46,457 24,703 85,695 Total net revenues $ 244,211 $ 565,333 $ 371,761 $ 1,087,507 Receivables and Contract Balances Receivables are recognized when we have an unconditional right to invoice and receive payment under a contract with a customer and are derecognized when cash is received. Receivables primarily consist of transaction-based revenue receivables due from market makers and are reported in receivables from brokers, dealers and clearing organizations and other revenue receivables due from our partnership with a third-party investor communications company and are reported in other current assets on the unaudited condensed consolidated balance sheets. The table below sets forth contract receivables balances for the period indicated: (in thousands) Receivables Beginning of period, January 1, 2021 $ 111,871 End of period, June 30, 2021 147,168 Increase in receivables during the period $ 35,297 The difference between the opening and ending balance of our receivables primarily results from the growth of our business over the period and timing differences between our performance and counterparties’ payments. Contract liabilities consist of unearned subscription revenue which are recognized when users remit contractual cash payments in advance of us satisfying our performance obligations under the contract and are recorded as other current liabilities on the unaudited condensed consolidated balance sheets. The table below sets forth contract liabilities balances for the period indicated: (in thousands) Contract Liabilities Beginning of period, January 1, 2021 $ 2,060 End of period, June 30, 2021 3,605 Increase in contract liabilities during the period $ 1,545 | REVENUES Disaggregation of revenues The following table presents our revenue disaggregated by revenue source: Year Ended December 31, (in thousands) 2019 2020 Transaction-based revenues: Options $ 110,656 $ 440,070 Equities 50,688 251,200 Cryptocurrencies 9,487 26,708 Other — 2,155 Total transaction-based revenues 170,831 720,133 Net interest revenues: Securities lending 6,380 98,165 Margin interest 19,104 66,781 Interest on segregated cash and securities 36,281 13,401 Other interest revenue 9,865 3,972 Interest expenses related to credit facilities (991) (4,882) Total net interest revenues 70,639 177,437 Other revenues 36,063 61,263 Total net revenues $ 277,533 $ 958,833 Receivables and Contract Balances Receivables are recognized when we have an unconditional right to invoice and receive payment under a contract with a customer and are derecognized when cash is received. Receivables primarily consist of transaction-based revenue receivables due from market makers and are reported in Receivables from brokers, dealers and clearing organizations on the consolidated balance sheets. The table below sets forth receivables balances for the periods indicated: December 31, (in thousands) 2019 2020 Receivables, beginning of the period $ 9,056 $ 20,577 Receivables, end of the period 20,577 111,871 Increase in receivables during the period $ 11,521 $ 91,294 The difference between the opening and ending balance of our receivables primarily results from the growth of our business over the period as timing of payments from counterparties remained consistent. Contract liabilities consist of unearned subscription revenue which are recognized when users remit contractual cash payments in advance of us satisfying our performance obligations under the contract and are recorded as other current liabilities on the consolidated balance sheets. The table below sets forth contract liabilities balances for the periods indicated: December 31, (in thousands) 2019 2020 Contract liabilities, beginning of the period $ 1,727 $ 954 Contract liabilities, end of the period 954 2,060 Increase/(decrease) in contract liabilities during the period $ (773) $ 1,106 |
ALLOWANCE FOR CREDIT LOSSES_2
ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (“Fraudulent Deposit Transactions”) and to a lesser extent, losses on margin borrowings, for the periods indicated: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Beginning balance $ 27,070 $ 30,875 $ 17,122 $ 34,092 Provision for credit losses 13,985 20,342 23,933 36,745 Write-offs — (15,964) $ — $ (35,584) Ending balance $ 41,055 $ 35,253 $ 41,055 $ 35,253 During the three and six months ended June 30, 2020, the provision for credit losses related to unsecured balances of receivables from users was $13.4 million and $23.3 million while the remaining $0.6 million and $0.6 million was related to other receivables. During the three and six months ended June 30, 2021, the provision for credit losses related to unsecured receivables from users was $19.0 million and $34.9 million while the remaining $1.3 million and $1.8 million was related to other receivables. As of June 30, 2020 and 2021, the ending allowance for credit losses related to unsecured balances of receivables from users was $40.4 million and $32.9 million while the remaining $0.7 million and $2.4 million were related to other receivables. | ALLOWANCE FOR CREDIT LOSSES The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and to a lesser extent, losses on margin borrowings, for the periods indicated: Year Ended December 31, (in thousands) 2019 2020 Beginning balance $ 6,013 $ 17,122 Provision for credit losses 11,109 59,134 Write-offs — (42,164) Ending balance $ 17,122 $ 34,092 During the years ended December 31, 2019 and 2020, the provision for credit losses related to unsecured balances from users was $11.1 million and $58.0 million while the remaining $1.1 million related to December 31, 2020 was related to other receivables. As of December 31, 2019 and 2020, the ending allowance for credit losses related to unsecured balances of receivables from users was $17.1 million and $33.5 million while the remaining $0.6 million in allowance for the year ended December 31, 2020 was related to other receivables. In the year ended December 31, 2020, we implemented our policy to write-off unsecured balances when the balance becomes outstanding for over 180 days. Previously, we did not have sufficient historical information to provide a reasonable basis upon which to write off balances. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 Other current assets: Equity securities - user-held fractional shares 802,483 — — 802,483 Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Other current liabilities: Equity securities - repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 June 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,927,574 $ — $ — $ 1,927,574 U.S. Treasury securities 349,984 — — 349,984 Other current assets: Equity securities - user-held fractional shares 1,430,855 — — 1,430,855 Equity securities - securities owned 18,874 — — 18,874 Total financial assets $ 3,727,287 $ — $ — $ 3,727,287 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 389 $ — $ — $ 389 Other current liabilities: Equity securities - repurchase obligations 1,430,855 — — 1,430,855 Convertible notes: Convertible notes — — 5,189,783 5,189,783 Other non-current liabilities: Warrant liability — — 382,513 382,513 Total financial liabilities $ 1,431,244 $ — $ 5,572,296 $ 7,003,540 We measure our cash equivalents, securities segregated under federal and other regulations, equity securities owned by us for the promotional stock referral and fractional shares programs, and user-held fractional shares at fair value. Repurchase obligations in connection with our fractional shares program and equity securities that were awarded to our users as a part of our promotional stock referral program but had not been claimed as of December 31, 2020 and June 30, 2021 are also measured at fair value. We have evaluated the estimated fair value of financial instruments using available market information such as quoted market prices for the same instrument in active markets. Such instruments are classified within Level 1 of the fair value hierarchy. Convertible notes and warrant liability In February 2021, we issued two tranches of convertible notes (the “convertible notes”) and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities (the “warrant liability”) - see Note 10 for more information. We have elected the fair value option for both tranches of the convertible notes as we believe it best reflects its underlying economics. Under the fair value option, the convertible notes are initially measured at their issuance date estimated fair value and subsequently remeasured at their estimated fair value at each reporting period. The valuation methodology for both the convertible notes and warrant liability is based on unobservable estimates and judgements, and therefore they are classified within Level 3 of the fair value hierarchy. The fair value of the convertible notes is determined using an if-converted approach and the fair value of the warrant liability is determined using a Black-Scholes option-pricing model. The significant unobservable inputs used in the fair value measurement of the convertible notes and warrant liability include: June 30, 2021 Convertible notes Warrant liability Fair value of common stock $ 38.00 $ 38.00 Volatility N/A 56 % Risk free rate N/A 1.42 % Fair value measurements are highly sensitive to changes in these inputs and significant changes in these inputs would result in a significantly different fair value. For the three and six months ended June 30, 2021, we recorded total expense due to changes in fair value of $514.7 million and $1,890.8 million for the convertible notes and $13.4 million and $129.6 million for the warrant liability in our unaudited condensed consolidated statements of operations, none of which is attributable to the change in the instrument-specific credit risk. We have elected to present the component related to accrued interest in the change in fair value of convertible notes and warrant liability. The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,890,752 129,569 End of period, June 30, 2021 $ 5,189,783 $ 382,513 During the six months ended June 30, 2021, we did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. | FAIR VALUE OF FINANCIAL INSTRUMENTS We measure our cash equivalents, securities segregated under federal and other regulations and equity securities owned for the referral program and fractional shares, owned by us and user-held, at fair value. Repurchase obligations in connection with our fractional shares program and stock that were awarded to our users as a part of our promotional stock referral program but not claimed as of December 31, 2019 and 2020 are also measured at fair value. We have evaluated the estimated fair value of financial instruments using available market information. As of December 31, 2019 and 2020, the types of instruments valued based on quoted market prices for the same instrument in active markets include money market funds and publicly traded stocks owned by us. Such instruments are classified within Level 1 of the fair value hierarchy. We did not have any instruments classified within Level 2 or Level 3 as of December 31, 2019 and 2020. Financial assets measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Cash equivalents: Money market funds $ 416,025 $ 416,025 $ 1,026,034 $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities — — 134,994 134,994 Other current assets: Equity securities - user-held fractional shares — — 802,483 802,483 Equity securities - securities owned 2,997 2,997 3,222 3,222 Total financial assets $ 419,022 $ 419,022 $ 1,966,733 $ 1,966,733 Financial liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Accounts payable and accrued expenses: Equity securities - referral program liability $ 303 $ 303 $ 695 $ 695 Other current liabilities: Equity securities - repurchase obligations — — 802,483 802,483 Total financial liabilities $ 303 $ 303 $ 803,178 $ 803,178 During the years ended December 31, 2019 and 2020, we did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. |
INCOME TAXES_2
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | INCOME TAXES Three Months Ended Six Months Ended (in thousands, except percentages) 2020 2021 2020 2021 Income (loss) before income taxes $ 58,118 $ (464,158) $ 5,530 $ (1,897,182) Provision for income taxes 534 37,507 448 49,286 Effective Tax Rate 0.9 % (8.1) % 8.1 % (2.6) % Our tax provision for interim periods is determined using an estimated annual effective tax rate (“ETR”), adjusted for discrete items arising in the period. In each quarter, we update our estimated annual ETR and make a year-to-date calculation of the provision. For the three months ended June 30, 2020, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the three months ended June 30, 2021, the ETR differs from the U.S. federal statutory rate primarily due to the non-deductible change in fair value of the convertible notes and warrant liability, and the change in valuation allowance on our remaining U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the six months ended June 30, 2020, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by our current federal and state taxes payable. For the six months ended June 30, 2021, the ETR differs from the U.S. federal statutory rate primarily due to the non-deductible change in fair value of the convertible notes and warrant liability, and the change in valuation allowance on our remaining U.S. federal and state deferred tax assets partially offset by our current federal and state taxes payable. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence during the six months ended June 30, 2021, we believe it is more likely than not that the tax benefits of the remaining U.S. net deferred tax assets may not be realized. We intend to maintain the full valuation allowance on the U.S. net deferred tax assets until enough positive evidence exists to support a reversal of, or decrease in, the valuation allowance. Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization. | INCOME TAXES The components of income (loss) before income taxes were as follows: December 31, (in thousands) 2019 2020 Domestic $ (104,690) $ 14,773 Foreign (2,897) (943) Income (loss) before income taxes $ (107,587) $ 13,830 The components of the provision for (benefit from) income taxes were as follows: December 31, (in thousands) 2019 2020 Current: Federal $ (58) $ 2,780 State (295) 3,801 Foreign — — Total current tax expense (benefit) (353) 6,581 Deferred: Federal — — State — — Foreign (665) (200) Total deferred tax expense (benefit) (665) (200) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows: December 31, (in thousands) 2019 2020 Federal tax (benefit) at statutory rate (22,593) 2,905 State tax (benefit), net of federal benefit (5,491) (862) Foreign rate differential (57) (2) Share-based compensation (1,221) (2,654) Tender offer compensation 4,229 3,607 Research and development credits (2,104) (10,489) Non-deductible regulatory settlements — 21,000 Permanent differences — 526 Other 905 52 Change in valuation allowance 25,314 (7,702) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 Significant components of our deferred tax assets and liabilities consist of the following: December 31, (in thousands) 2019 2020 Deferred tax assets: Accruals and other liabilities 7,704 14,849 Lease liabilities 9,859 13,794 Tax credit carryforwards 3,198 9,058 Net operating loss carryforwards 23,091 3,141 Share-based compensation 1,442 3,123 Other 686 3,386 Total deferred tax assets 45,980 47,351 Deferred tax liabilities: Right of use assets (8,194) (12,551) Depreciation and amortization (1,914) (6,965) Total deferred tax liabilities (10,108) (19,516) Valuation allowance $ (35,207) $ (26,909) Net deferred tax assets $ 665 $ 926 The realization of tax benefits of net deferred assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on all available evidence for the year ending December 31, 2020, we believe it is more likely than not that the tax benefits of the remaining U.S. federal and state net deferred tax assets may not be realized, and accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $8.3 million for the year ended December 31, 2020. As of December 31, 2020, we have U.S. state net operating loss carryforwards of $32.3 million that will begin to expire in 2034, if not utilized, and non-U.S. net operating loss carryforwards of $4.7 million that do not expire. We have U.S. federal tax credit carryforwards of $8.5 million that will begin to expire in 2040, if not utilized, and state tax credit carryforwards of $9.3 million that do not expire. Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. We had unrecognized tax benefits of approximately $2.2 million and $7.4 million as of December 31, 2019 and 2020. These unrecognized tax benefits, if recognized, would not affect the effective tax rate. We record interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest or penalties during the years ended December 31, 2019 and 2020. The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2019 2020 Unrecognized benefit - beginning of period $ 759 $ 2,177 Gross increases - current year tax positions 797 4,395 Gross increases - prior year tax positions 621 848 Unrecognized benefit - end of period $ 2,177 $ 7,420 We file in U.S. federal, various state and foreign jurisdictions. The tax years from 2013 remain open to examination by the U.S. federal and state authorities, due to carryover of unused net operating losses and tax credits. The tax years from 2018 remain open for the most significant foreign jurisdiction. In March 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The recent tax law changes provided under the CARES Act do not materially impact our income tax provision, and do not change our evaluation of the valuation allowance against deferred tax assets in the U.S. as of December 31, 2020. In June 2020, the Governor of California signed Assembly Bill No. 85 (“AB 85”) as part of California’s 2020 Budget Act. AB 85 temporarily suspends the use of California net operating losses and imposes a cap on the amount of business incentive tax credits companies can utilize against their net income. The recent tax legislation changes provided under AB 85 do not materially impact our income tax provision and do not change our evaluation of the valuation allowance against deferred tax assets in California as of December 31, 2020. |
PROPERTY, SOFTWARE AND EQUIPM_2
PROPERTY, SOFTWARE AND EQUIPMENT, NET | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
PROPERTY, SOFTWARE AND EQUIPMENT, NET | PROPERTY, SOFTWARE AND EQUIPMENT, NET Property, software and equipment are presented net of accumulated depreciation and amortization and summarized as follows: December 31, June 30, (in thousands) 2020 2021 Computer equipment $ 9,203 $ 17,459 Furniture and fixtures 8,024 14,764 Tenant improvements 18,945 38,426 Internally developed software 16,992 18,943 Construction in progress 9,756 7,266 Total 62,920 96,858 Less: accumulated depreciation and amortization (17,086) (25,780) Property, software and equipment, net $ 45,834 $ 71,078 Depreciation expense of property and equipment was $1.3 million and $2.1 million for the three and six months ended June 30, 2020, and $3.4 million and $5.8 million for the three and six months ended June 30, 2021. Amortization expense of internally developed software was $0.9 million and $1.8 million for the three and six months ended June 30, 2020 and $1.5 million and $2.9 million for the three and six months ended June 30, 2021. | PROPERTY, SOFTWARE AND EQUIPMENT, NET Property, software and equipment are recorded net of accumulated depreciation and summarized by as follows: December 31, (in thousands) 2019 2020 Computer equipment $ 4,980 $ 9,203 Furniture and fixtures 3,761 8,024 Tenant improvements 9,522 18,945 Internally developed software 12,029 16,992 Construction in progress 2,957 9,756 Total 33,249 62,920 Less: accumulated depreciation and amortization (7,948) (17,086) Property, software and equipment, net $ 25,301 $ 45,834 Depreciation and amortization expense of property and equipment for the year ended December 31, 2019 and 2020 was $2.1 million and $5.7 million. |
OFFSETTING ASSETS AND LIABILI_2
OFFSETTING ASSETS AND LIABILITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Offsetting [Abstract] | ||
OFFSETTING ASSETS AND LIABILITIES | OFFSETTING ASSETS AND LIABILITIESCertain financial instruments are eligible for offset on our unaudited condensed consolidated balance sheets under GAAP. Our securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Our policy is to recognize amounts subject to master netting arrangements on a gross basis on the unaudited condensed consolidated balance sheets. Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | OFFSETTING ASSETS AND LIABILITIESCertain financial instruments are eligible for offset on our consolidated balance sheets under U.S. GAAP. Our securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the U.S. GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Our policy is to recognize amounts subject to master netting arrangements on a gross basis on the consolidated balance sheets. Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
OTHER CURRENT ASSETS_2
OTHER CURRENT ASSETS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
OTHER CURRENT ASSETS | OTHER CURRENT ASSETSOther current assets primarily includes user-held fractional shares for our fractional share program and prepaid expenses, and to a lesser extent securities owned by us for the promotional stock referral and fractional shares program, and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. Prepaid expenses primarily include prepayments on cloud infrastructure and other software services, capitalized deferred offering costs for our IPO and prepayments on insurance. The following table presents the detail of other current assets: December 31, June 30, (in thousands) 2020 2021 User-held fractional shares $ 802,483 $ 1,430,855 Prepaid expenses 28,629 67,412 Securities owned 3,222 18,874 Other 16,804 25,761 Total other current assets $ 851,138 $ 1,542,902 | OTHER CURRENT ASSETS The following table presents the detail of other current assets: December 31, (in thousands) 2019 2020 User-held fractional shares $ — $ 802,483 Prepaid expenses 17,159 28,629 Securities owned 2,997 3,222 Other 8,186 16,804 Total other current assets $ 28,342 $ 851,138 |
FINANCING ACTIVITIES AND OFF-_2
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK | FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving credit facilities In September 2019, we entered into a $400.0 million committed and secured line of credit with a maturity date of September 25, 2020 (the “September 2019 Credit Facility”). In June 2020, we amended the September 2019 Credit Facility and increased the aggregate committed and secured revolving line of credit amount to $550.0 million with a maturity date of June 5, 2021. This line of credit was primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit was determined at the time a loan was initiated and the applicable interest rate under this line of credit was calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. There were no outstanding borrowings under the September 2019 Credit Facility at December 31, 2020. We were obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. The September 2019 Credit Facility was terminated in April 2021. In October 2019, we entered into a $200.0 million committed and unsecured revolving line of credit with a syndicate of banks maturing in October 2023 (the “October 2019 Credit Facility”). In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $600.0 million with a maturity date of October 29, 2024. In April 2021, we further increased the aggregate credit amount available under the October 2019 Credit Facility to $625.0 million. Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00% or (b) the Alternative Base Rate. The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from London Interbank Offered Rate (“LIBOR”), multiplied by the Statutory Reserve Rate at the applicable time. The Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50% and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00%. If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent. There were no outstanding borrowings under the October 2019 Credit Facility at December 31, 2020 and June 30, 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10% on any unused amount of the October 2019 Credit Facility. The agreements for the September 2019 Credit Facility and the October 2019 Credit Facility contain customary covenants restricting our ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with all covenants under these facilities as of December 31, 2020 and June 30, 2021. In April 2021, we entered into a $2.2 billion committed and secured revolving line of credit, subject to certain borrowing base limitations, with a maturity date of April 15, 2022 (the “April 2021 Credit Facility”). Borrowings from the April 2021 Credit Facility must be specified to be Tranche A, Tranche B, Tranche C or a combination thereof. Tranche A loans are secured by users’ securities and used primarily to finance margin loans. Tranche B loans are secured by the right to the return from National Securities Clearing Corporation (“NSCC”) of NSCC Margin Deposits and cash and property in a designated collateral account and used for the purpose of satisfying NSCC Deposit Requirements. Tranche C loans are secured by the right to the return of eligible funds from any reserve account of the Borrower and cash and property in a designated collateral account and used for the purpose of satisfying reserve requirements under Rule 15c3-3 of the Securities Exchange Act. Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate is calculated as a per annum rate equal to 1.25% for Tranche A loans and 2.50% for Tranche B and Tranche C loans, plus the Short-Term Funding Rate at the applicable time. The Short-Term Funding Rate is equal to the greatest of (i) the Eurodollar Rate for a one month interest period on such day, which equals to the Eurodollar Base Rate that is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time, (ii) the Federal Funds Effective Rate and (iii) the Overnight Bank Funding Rate in effect on such day. There were no outstanding borrowings under the April 2021 Credit Facility at June 30, 2021. This agreement contains customary covenants restricting RHS’s ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with the covenants as of June 30, 2021. We are obligated to pay a commitment fee calculated as a per annum rate equal to 0.50% on any unused amount of the April 2021 Credit Facility. Convertible notes and warrant liability Convertible notes In February 2021, we issued two tranches of convertible notes, consisting of $2.53 billion aggregate principal amount of Tranche I convertible notes and $1.02 billion aggregate principal amount of Tranche II convertible notes. Interest on the convertible notes accrues at 6% per annum, compounding semi-annually in arrears, and is payable in kind. The convertible notes do not have a maturity date. In the event of (a) a public offering of our common stock to the public in an IPO on a nationally-recognized exchange in the United States, (b) upon the effectiveness of a registration statement filed under the Securities Act of 1933, as amended, that registers shares of our existing capital stock for resale not pursuant to an underwritten offering (a “Direct Listing”), or (c) an acquisition by a special purpose acquisition company, and in the case of clauses (a) and (c) resulting in at least $500 million of gross proceeds to us (“Qualifying IPO”) before the 12 month anniversary of the convertible notes issuance date (“Reference Date”), the convertible notes will automatically convert into shares of our Class A common stock at a conversion price equal to the lower of (i) 70% of the cash price per share paid by investors in the Qualifying IPO and (ii) $38.29 (in the case of the Tranche I convertible notes) or $42.12 (in the case of the Tranche II convertible notes). In the event of a sale of our preferred stock, having rights, preference or privileges senior or pari passu to the Series G Preferred Stock before the Reference Date with an aggregate proceed greater than $500 million (“Next Financing”), the convertible notes will convert at the holder’s option, in part or in whole, into our preferred stock at a conversion price equal to the lower of (i) 70% of the price per share in the Next Financing and (ii) $38.29 (in the case of the Tranche I convertible notes) or $42.12 (in the case of the Tranche II convertible notes). Warrant liability We granted to each purchaser of the Tranche I convertible notes a warrant, equal to 15% of the aggregate proceeds invested by such purchaser, to purchase a variable number of equity securities. In aggregate, the maximum purchase amount of all warrants is $379.8 million. The warrants can be exercised by the holder after the earlier of (1) February 12, 2022 and (2) Qualifying IPO or Next Financing. The warrants expire on February 12, 2031. The warrants can be settled in cash or in net shares at the holder’s option. In the event of a cash settlement, the number of equity securities the holder will receive is equal to their maximum purchase amount divided by the strike price, as described below. If a Qualifying IPO occurs prior to the Reference Date, outstanding warrants will become exercisable for shares of our Class A common stock at a strike price equal to the lower of (i) 70% of the price per share in the Qualifying IPO and (ii) $38.29. If a Next Financing occurs prior to the Reference Date, outstanding warrants will become exercisable for shares of our preferred stock issued in the Next Financing at a strike price equal to the lower of (i) 70% of the price per share in the Next Financing and (ii) $38.29. If a Qualifying IPO or Next Financing does not occur by the Reference Date, the outstanding warrants will become exercisable for shares of our series G-1 redeemable convertible preferred stock at a strike price of $18.60. Off-balance sheet risk two one | FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK Revolving credit facilities In June 2019, we entered into a $250.0 million committed and secured line of credit with a maturity date of June 12, 2020 (the “June 2019 Credit Facility”). This line of credit was primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit was determined at the time a loan was initiated and the applicable interest rate was calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. Additionally, we were obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. The June 2019 Credit Facility was terminated in September 2019. In September 2019, we entered into a $400.0 million committed and secured line of credit with a maturity date of September 25, 2020 (the “September 2019 Credit Facility”). In June 2020, we amended the September 2019 Credit Facility and increased the aggregate committed and secured revolving line of credit amount to $550.0 million with a maturity date of June 5, 2021. This line of credit is primarily collateralized by users’ securities held as collateral for users’ margin loans. Interest for this line of credit is determined at the time a loan is initiated and the applicable interest rate under this line of credit is calculated as a per annum rate equal to 1.25% plus the federal funds rate at the applicable time. There were no outstanding borrowings under the September 2019 Credit Facility at December 31, 2019 and 2020. Additionally, we are obligated to pay a commitment fee calculated as a per annum rate equal to 0.35% on any unused amount of the credit facility. In October 2019, we entered into a $200.0 million committed and unsecured revolving line of credit with a syndicate of banks (the “October 2019 Credit Facility”) maturing in October 2023. In October 2020, we amended the October 2019 Credit Facility and, among other things, increased the aggregate committed and unsecured revolving line of credit amount to $600.0 million with a maturity date of October 29, 2024. Loans under the October 2019 Credit Facility bear interest, at our option, at a per annum rate of either (a) the Eurodollar Rate plus 1.00% or (b) the Alternative Base Rate. The Eurodollar Rate is equal to the Eurodollar Base Rate, which is derived from LIBOR, multiplied by the Statutory Reserve Rate at the applicable time. The Alternative Base Rate is the greatest of (i) the prime rate then in effect, (ii) the Federal Reserve Bank of New York rate then in effect plus 0.50% and (iii) the Eurodollar Rate at such time for a one month interest period plus 1.00%. If LIBOR is unavailable or if we and the administrative agent elect, the Eurodollar Rate will be replaced by a rate calculated with reference to the Secured Overnight Financing Rate as set forth in the October 2019 Credit Facility agreement or an alternate benchmark rate selected by us and the administrative agent. There were no outstanding borrowings under the October 2019 Credit Facility at December 31, 2019 and 2020. Additionally, we are obligated to pay a commitment fee calculated as a per annum rate equal to 0.10% on any unused amount of the October 2019 Credit Facility. The agreements for the September 2019 Credit Facility and the October 2019 Credit Facility contain customary covenants restricting our ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with all covenants under these facilities as of December 31, 2019 and 2020. Off-balance sheet risk two one |
MEZZANINE EQUITY, COMMON STOC_2
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT | MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT Redeemable convertible preferred stock The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of June 30, 2021: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 G-1 244,278,204 — 18.6000 — 18.6000 — 658,311,424 412,742,897 $ 2,191,086 $ 2,179,739 Voting The holders of the redeemable convertible preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the redeemable convertible preferred stock is convertible. Except where otherwise specified in our Certificate of Incorporation, holders of preferred stock vote together with the holders of common stock as a single class. The holders of our Series A and Series B redeemable convertible preferred stock are entitled to elect one director each (each, a “Preferred Director”), with each series voting separately as exclusive classes. Holders of common stock, voting exclusively and as a separate class, are entitled to elect four directors, two of which shall be entitled to two votes on any matter before the Board of Directors. The holders of our Series C, Series D, Series E, Series F, Series G and Series G-1 redeemable convertible preferred stock have no voting rights with respect to the election of members of the Board of Directors or the determination of the size of the Board of Directors. As long as 50,000,000 shares of redeemable convertible preferred stock are outstanding, we must obtain approval from the holders of a majority of the then outstanding shares of redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis) in order to, among other actions: (1) amend, alter or repeal any provision of the Certificate of Incorporation or our Bylaws; (2) increase the authorized number of shares of redeemable convertible preferred stock (or any series thereof) or common stock; (3) create, or authorize the creation of, a new class or series of our capital stock unless it ranks junior to the redeemable convertible preferred stock with respect to the distribution of assets in a liquidation, dissolution or winding up, the payment of dividends and rights of redemption; (4) declare or pay any dividend on any shares of shares of redeemable convertible preferred stock or common stock, subject to certain exceptions; (5) liquidate, dissolve or wind up our company, effect any merger or consolidation, or sell, lease, transfer or exclusively license all or substantially all of our assets; (6) increase or decrease the authorized size of the Board of Directors; or (7) effect a repurchase or redemption of, or distribution on, any shares of redeemable convertible preferred stock or common stock, subject to certain exceptions. Liquidation preferences In the event of any liquidation or winding up of our company, the holders of redeemable convertible preferred stock shall be entitled to receive, prior and in preference to the common stockholders, an amount equal to the aggregate original issue price for their shares of redeemable convertible preferred stock, plus any declared but unpaid dividends. After payment of the liquidation preference to the holders of the redeemable convertible preferred stock, our remaining assets are available for distribution to the holders of common stock on a pro rata basis. If the proceeds distributed among the holders of the redeemable convertible preferred stock are insufficient to permit the holders of redeemable convertible preferred stock to receive the full payment noted above, then the entire proceeds legally available for distribution shall be distributed ratably among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount that each such holder is otherwise entitled to receive. Conversion rights Each share of redeemable convertible preferred stock is convertible, at the option of the holder, according to a conversion ratio, which is subject to adjustment for dilutive share issuances. The total number of shares of common stock into which the redeemable convertible preferred stock may be converted is determined by dividing the then-applicable conversion price by the initial conversion price, as shown in the table above. The redeemable convertible preferred stock, with the exception of our Series F redeemable convertible preferred stock, automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of common stock to the public in an IPO at a price of at least $12.4827 per share and resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States (a “Qualified Public Offering”); (2) Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent of each of (i) the holders of the majority of the redeemable convertible preferred stock then outstanding (voting as a single class and on an as-converted basis), (ii) the holders of the majority of the then outstanding shares of Series B, C, G and G-1 redeemable convertible preferred stock (each voting exclusively and as a separate class), (iii) the holders of at least 60% of the then outstanding shares of Series D and E redeemable convertible preferred stock (each voting exclusively and as a separate class), and (iv) the holders of at least 65% of the then outstanding shares of Series A redeemable convertible preferred stock (voting exclusively and as a separate class). The Series F redeemable convertible preferred stock automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of our common stock to the public in the IPO resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States; (2) a Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent from the holders of the majority of the then outstanding Series F redeemable convertible preferred stock. The Series F redeemable convertible preferred stock has a full-ratchet anti-dilution adjustment provision. In the event the price per share of our common stock in an IPO ends up being lower than the Series F redeemable convertible preferred stock conversion price, then the conversion price per share of the Series F redeemable convertible preferred stock will be reduced to the same price per share as the common stock price at the time of the IPO. We may also be obligated to issue additional shares of common stock to the holders of Series F redeemable convertible preferred stock in the event of a direct listing with a deemed trading price below the Series F redeemable convertible preferred stock conversion price. In addition, if we issue any additional common stock below the conversion price of our Series A, B, C, D, E, F, G and G-1 redeemable convertible preferred stock, the conversion price of such series of redeemable convertible preferred stock may be subject to adjustment via a broad-based anti-dilution calculation, subject to certain exceptions. Dividends The holders of shares of redeemable convertible preferred stock are entitled to receive dividends, when and if declared by the Board of Directors. Dividends are paid on a pari-passu basis with other holders of our redeemable convertible preferred stock and in preference to the payment of dividends to holders of our common stock. No dividends have been declared or paid by us as of June 30, 2021. Dividends are noncumulative. Classification The redeemable convertible preferred stock is contingently redeemable upon certain deemed liquidation events such as a merger or sale of substantially all of our assets. The redeemable convertible preferred stock is not mandatory redeemable but, since a deemed liquidation event would constitute a redeemable event outside of our control, all shares of the redeemable convertible preferred stock have been presented outside of permanent equity in mezzanine equity on the unaudited condensed consolidated balance sheets. Common stock Each share of voting common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of redeemable convertible preferred stock outstanding. Equity incentive plans Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan Under our Amended and Restated 2013 Stock Plan, as amended (the “2013 Plan”), and our 2020 Equity Incentive Plan, as amended (the “2020 Plan”), shares of common stock are reserved for issuance to eligible participants in connection with incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”) or restricted stock awards. Options may be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted generally vest quarterly on a straight-line basis and the occurrence of a qualifying event, defined as the earlier of (1) the closing of certain, specific change in control transactions, or (2) an IPO. Generally, RSUs expire seven years from the date of grant. Shares of common stock issued under the 2013 Plan and 2020 Plan are subject to certain restrictions, including the right of first refusal by us for sales or transfers of shares to certain parties. Our rights of first refusal terminate upon completion of an IPO. Our 2013 Plan was terminated in connection with adoption of our 2020 Plan (but any awards outstanding under our 2013 Plan will remain in effect in accordance with their terms). No new awards may be granted under our 2013 Plan. As of June 30, 2021, an aggregate of 209,809,164 shares have been authorized for issuance under the 2013 Plan and the 2020 Plan, of which 46,928,833 shares have been issued under the plans, 149,733,898 shares were reserved for issuance upon the exercise or settlement of outstanding equity awards under the plans, and 13,146,433 shares remained available for new grants under the 2020 Plan. 2021 Omnibus Incentive Plan In June 2021, our board of directors and our stockholders approved and adopted our 2021 Omnibus Incentive Plan (the “2021 Plan”). Our 2021 Plan became effective immediately prior to the effective date of the Final Prospectus. Upon effectiveness of the 2021 Plan, no new awards may be granted under our 2020 Plan (but any awards outstanding under our 2020 Plan will remain in effect in accordance with their terms) and any shares remaining available for grant under the 2020 Plan became available for grant under the 2021 plan. Our 2021 Plan provides for the grant of stock options, including ISOs and NSOs, SARs, restricted stock, RSUs, performance units, other equity-based awards and cash-based awards. As of June 30, 2021, no awards were outstanding under the 2021 Plan. The aggregate number of shares available for grant under the 2021 Plan was equal to approximately 14% of the number of shares of our common stock (of all classes) outstanding immediately upon the closing of the IPO. Thereafter, any shares subject to awards under the 2013 Plan or the 2020 Plan that expire or terminate or are forfeited to or repurchased by the Company will become available under the 2021 Plan. In addition, the number of shares available under the 2021 Plan will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 5% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. Stock option activity A summary of stock option activity for the six months ended June 30, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Exercised during the period (3,581,521) 1.87 Cancelled and forfeited during the period (276,657) 4.51 Balance at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options vested and expected to vest at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options exercisable at June 30, 2021 15,905,386 $ 1.75 5.56 $ 576,535 Time-Based RSUs We grant RSUs that vest only upon the satisfaction of both time-based service and performance-based conditions (“Time-Based RSUs”). The following table summarizes the activity related to our Time-Based RSUs for the six months ended June 30, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted 22,899,989 40.88 Forfeited (1,747,048) 16.48 Unvested at June 30, 2021 68,864,590 $ 26.12 Market-Based RSUs We granted 27,663,658 market-based awards in the form of RSUs to certain executives during the year ended December 31, 2019 that were modified in May 2021 (the “2019 Market-Based RSUs”). These awards vest based on (i) achievement of share price targets considered market vesting conditions (5,532,732, 13,831,828, and 8,299,098 RSUs vest upon achievement of share price targets of $30.45, $50.75, and $101.50, respectively, with the initial stock price target measured at the IPO price, and for all remaining RSUs that did not vest upon IPO, measurement of the price targets will be based on a trailing 60-trading-day average of the daily volume weighted average price), (ii) a performance based vesting condition requiring the occurrence of an IPO or other liquidity event, and (iii) continuous employment by each recipient through the vesting date, which is considered a service condition. Prior to the modification, any tranche of 2019 Market-Based RSUs that hadn’t achieved its share price target upon IPO would have been forfeited. The modification allows the awards to continue to be measured against the same price targets as were outlined in the original 2019 grant though December 31, 2025. The 2019 Market-Based RSUs had a weighted-average grant date fair value of $0.29 per RSU. Upon modification, the weighted-average incremental fair value of the 2019 Market-Based RSUs is $21.95 per RSU (see below). In May 2021, we granted 35,520,000 additional market-based awards in the form of RSUs to certain executives (the “2021 Market-Based RSUs”) with a weighted-average grant date fair value of $22.68 per RSU. These awards vest based on our stock price trading performance over a performance period of 8 years from issuance (4,560,000 will vest upon achievement of each of the $120 and $150 share price targets, and 5,280,000 will vest upon achievement of each of the $180, $210, $240, $270, and $300 share price targets, in each case, measured using a trailing-60-day average of the daily volume weighted average price) , and are subject to continuous employment by each recipient to vest, which is considered a service condition. The 2019 Market-Based RSUs and 2021 Market-Based RSUs (collectively, the “Market-Based RSUs”) were unvested as of December 31, 2020 and June 30, 2021. 2021 Employee Share Purchase Plan In June 2021, our board of directors and our stockholders approved and adopted the 2021 Employee Share Purchase Plan (the “ESPP”). Our ESPP became effective immediately prior to the effective date of our the Final Prospectus. The purpose of the ESPP is to enable eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation. The purchase price is equal to 85% of the fair market value of a share of our common stock on the first date of an offering or the date of purchase, whichever is lower. As of June 30, 2021, there were no participants in the ESPP. The aggregate number of shares reserved for issuance under the ESPP was equal to approximately 2% of the number of shares of our common stock (of all classes) outstanding upon the closing of the IPO. The number of shares available under our ESPP will automatically increase on the first day of each calendar year beginning on January 1, 2022 and ending with (and including) January 1, 2031. Such annual increase will be equal to the lesser of (i) 1% of the outstanding shares of all classes of our common stock on the last day of the immediately preceding calendar year and (ii) such number of shares determined by the board of directors. No more than 200,000,000 shares of common stock may be issued under our ESPP. Share-based compensation The following table summarizes the effects of share-based compensation on our unaudited condensed consolidated statements of operations: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Brokerage and transaction $ 6 $ 6 $ 12 $ 12 Technology and development 824 717 2,540 2,025 Operations 8 3 18 6 Marketing 7 41 15 78 General and administrative 520 371 1,192 8,013 Total $ 1,365 $ 1,138 $ 3,777 $ 10,134 We capitalized share-based compensation expense related to internally developed software of $0.3 million and $0.6 million during the three and six months ended June 30, 2020, and $0.1 million during both of the three and six months ended June 30, 2021. As of June 30, 2021, th ere was $4.9 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized over a weighted-average period of 0.94 years . In March 2021, we modified certain Time-Based RSUs of approximately 500 employees to remove the one-year vesting cliff, considered to be an improbable to improbable modification. As of June 30, 2021, no share-based compensation expense had been recognized for such awards with a performance condition based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The modified RSUs were revalued at the modification date, and the modified grant date fair value of the awards of $39.75 per share will be used to calculate share-based compensation expense once the performance condition becomes probable. As of June 30, 2021 no share-based compensation expense had been recognized for the Time-Based RSUs based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The total unrecognized share-based compensation expense related to our Time-Based RSU s was $1.8 billion as of June 30, 2021. Of this amount, $660.0 million relates to awards for which the time-based vesting condition has been satisfied or partially satisfied while $1.2 billion relates to awards for which the time-based vesting condition had not yet been satisfied. As of June 30, 2021, no share-based compensation expense had been recognized for the 2019 or 2021 Market-Based RSUs as the qualifying event of an IPO was not probable. Because the amendment to the 2019 Market-based RSUs was determined to be a modification of a market condition, we estimated the pre-modification and post-modification fair value of the awards in order to determine the incremental fair value generated by the modification. To value the awards, we used a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets may not be satisfied. The total unrecognized share-based compensation expense relating to the 2019 Market-Based RSUs, including the incremental expense due to modification, was $615.2 million as of June 30, 2021. If a qualifying liquidity event had occurred on June 30, 2021, we would have recorded $203.9 million share-based compensation related to the 2019 Market-Based RSUs. The remaining incremental share-based compensation expense of approximately $411.3 million would be recognized over a remaining weighted-average service period of 1.28 years, based on both explicit service periods and derived service periods based on the median of the passage of time it takes to achieve the price target in the Monte Carlo simulations. If the price targets are met sooner than the derived service period, we will adjust our share-based compensation expense to reflect the cumulative expense associated with the vested award. We estimated the grant date fair value of the 2021 Market-Based RSUs using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the price targets may not be satisfied. We will recognize the total share-based compensation expense over a weighted average derived requisite service period of 4.33 years, considering the Monte Carlo simulation median time to achieve each of the seven separate tranches. The total unrecognized share-based compensation expense relating to the 2021 Market-Based RSU awards was $805.5 million as of June 30, 2021. If a qualifying liquidity event had occurred on June 30, 2021, we would have recorded $18.2 million of share-based compensation expense related to the 2021 Market-Based RSUs based on the derived service period. The remaining incremental share-based compensation expense of approximately $787.3 million would be recognized over a remaining weighted-average derived service period of 4.23 years. If the price targets are met sooner than the derived service period, we will adjust our share-based compensation expense to reflect the cumulative expense associated with the vested award. | MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT Redeemable convertible preferred stock We have authorized 414,033,220 shares of redeemable convertible preferred stock, designated in series, with the rights and preferences of each designated series determined by our Board of Directors as of December 31, 2020. The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of December 31, 2019: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 263,826,920 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 160,526,040 80,263,020 0.6354 50,999 0.6354 50,999 C 87,576,360 43,788,180 2.5121 110,000 2.5121 109,870 D 71,549,522 35,774,761 10.1450 362,935 10.1450 362,670 E 59,854,820 29,887,357 12.4827 373,075 12.4827 372,733 643,333,662 321,626,778 $ 922,786 $ 912,411 Voting The holders of the redeemable convertible preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the redeemable convertible preferred stock is convertible. Except where otherwise specified in our Certificate of Incorporation, holders of preferred stock vote together with the holders of common stock as a single class. The holders of our Series A and Series B redeemable convertible preferred stock are entitled to elect one director each (each, a “Preferred Director”), with each series voting separately as exclusive classes. Holders of common stock, voting exclusively and as a separate class, are entitled to elect four directors, two of which shall be entitled to two votes on any matter before the Board of Directors. The holders of our Series C, Series D, Series E, Series F and Series G redeemable convertible preferred stock have no voting rights with respect to the election of members of the Board of Directors or the determination of the size of the Board of Directors. As long as 50,000,000 shares of redeemable convertible preferred stock are outstanding, we must obtain approval from the holders of a majority of the then outstanding shares of redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis) in order to, among other actions: (1) amend, alter or repeal any provision of the Certificate of Incorporation or our Bylaws; (2) increase the authorized number of shares of redeemable convertible preferred stock (or any series thereof) or common stock; (3) create, or authorize the creation of, a new class or series of our capital stock unless it ranks junior to the redeemable convertible preferred stock with respect to the distribution of assets in a liquidation, dissolution or winding up, the payment of dividends and rights of redemption; (4) declare or pay any dividend on any shares of shares of redeemable convertible preferred stock or common stock, subject to certain exceptions; (5) liquidate, dissolve or wind up our company, effect any merger or consolidation, or sell, lease, transfer or exclusively license all or substantially all of our assets; (6) increase or decrease the authorized size of the Board of Directors; or (7) effect a repurchase or redemption of, or distribution on, any shares of redeemable convertible preferred stock or common stock, subject to certain exceptions. Liquidation preferences In the event of any liquidation or winding up of our company, the holders of redeemable convertible preferred stock shall be entitled to receive, prior and in preference to the common stockholders, an amount equal to the aggregate original issue price for their shares of redeemable convertible preferred stock, plus any declared but unpaid dividends. After payment of the liquidation preference to the holders of the redeemable convertible preferred stock, our remaining assets are available for distribution to the holders of common stock on a pro rata basis. If the proceeds distributed among the holders of the redeemable convertible preferred stock are insufficient to permit the holders of redeemable convertible preferred stock to receive the full payment noted above, then the entire proceeds legally available for distribution shall be distributed ratably among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount that each such holder is otherwise entitled to receive. Conversion rights Each share of redeemable convertible preferred stock is convertible, at the option of the holder, according to a conversion ratio, which is subject to adjustment for dilutive share issuances. The total number of shares of common stock into which the redeemable convertible preferred stock may be converted is determined by dividing the then-applicable conversion price by the initial conversion price, as shown in the table above. The redeemable convertible preferred stock, with the exception of our Series F redeemable convertible preferred stock, automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of common stock to the public in an IPO at a price of at least $12.4827 per share and resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States (a “Qualified Public Offering”); (2) upon the effectiveness of a registration statement filed under the Securities Act of 1933, as amended, that registers shares of our existing capital stock for resale not pursuant to an underwritten offering (“Direct Listing”) on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent of each of (i) the holders of the majority of the redeemable convertible preferred stock then outstanding (voting as a single class and on an as-converted basis), (ii) the holders of the majority of the then outstanding shares of Series B, C and G redeemable convertible preferred stock (each voting exclusively and as a separate class), (iii) the holders of at least 60% of the then outstanding shares of Series D and E redeemable convertible preferred stock (each voting exclusively and as a separate class), and (iv) the holders of at least 65% of the then outstanding shares of Series A redeemable convertible preferred stock (voting exclusively and as a separate class). The Series F redeemable convertible preferred stock automatically converts into common stock at the applicable conversion rate upon the earliest of: (1) immediately prior to the closing of a public offering of our common stock to the public in the IPO resulting in at least $200 million of gross proceeds to us and resulting in the listing of our common stock on a nationally-recognized exchange in the United States; (2) a Direct Listing on a nationally-recognized exchange in the United States that is approved by the holders of a majority of the then outstanding redeemable convertible preferred stock (voting together as a single class and not as separate series, on as-converted basis); and (3) the date and time, or the occurrence of an event, specified by the vote or written consent from the holders of the majority of the then outstanding Series F redeemable convertible preferred stock. In addition, if we issue any additional common stock below the conversion price of our Series A, B, C, D, E, F and G redeemable convertible preferred stock, the conversion price of such series of redeemable convertible preferred stock may be subject to adjustment via a broad-based anti-dilution calculation, subject to certain exceptions. The Series F redeemable convertible preferred stock has a full-ratchet anti-dilution adjustment provision. In the event the price per share of our common stock in an IPO ends up being lower than the Series F redeemable convertible preferred stock conversion price, then the conversion price per share of the Series F redeemable convertible preferred stock will be reduced to the same price per share as the common stock price at the time of the IPO. We may also be obligated to issue additional shares of common stock to the holders of Series F redeemable convertible preferred stock in the event of a direct listing with a deemed trading price below the Series F redeemable convertible preferred stock conversion price. Dividends The holders of shares of redeemable convertible preferred stock are entitled to receive dividends, when and if declared by the Board of Directors. Dividends are paid on a pari-passu basis with other holders of our redeemable convertible preferred stock and in preference to the payment of dividends to holders of our common stock. No dividends have been declared or paid by us as of December 31, 2020. Dividends are noncumulative. Classification The redeemable convertible preferred stock is contingently redeemable upon certain deemed liquidation events such as a merger or sale of substantially all of our assets. The redeemable convertible preferred stock is not mandatory redeemable but, since a deemed liquidation event would constitute a redeemable event outside of our control, all shares of the redeemable convertible preferred stock have been presented outside of permanent equity in mezzanine equity on the consolidated balance sheets. Common stock Each share of voting common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of redeemable convertible preferred stock outstanding. Stock option plan Amended and Restated 2013 Stock Plan and 2020 Equity Incentive Plan Under our Amended and Restated 2013 Stock Plan, as amended, and our 2020 Equity Incentive Plan, as amended (each, a “Plan,” and together, the “Plans”), shares of common stock are reserved for the issuance of incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units ("RSUs"), stock appreciation rights or restricted stock awards to eligible participants. Options may be granted with an exercise price per share not less than the fair market value at the date of grant. Options granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then monthly on a straight-line basis thereafter. Generally, options granted are exercisable for up to ten years from the date of grant. RSUs granted generally vest over a four-year term from the date of grant, at a rate of 25% after one year, then quarterly on a straight-line basis thereafter and the occurrence of a qualifying event, defined as the earlier of (1) the closing of certain, specific change in control transactions, or (2) an IPO. Generally, RSUs expire seven years from the date of grant. Shares of common stock purchased under the Plans are subject to certain restrictions, including the right of first refusal by us for sales or transfers of shares to certain parties. Our rights of first refusal will terminate upon completion of an IPO. As of December 31, 2020, the Plan authorized 154,289,164 shares of common stock to be reserved for issuance on the exercise or settlement of equity awards, of which the right to purchase 14,022,717 shares remained available for issuance. Stock option activity A summary of stock option activity for the year ended December 31, 2020 is as follows: (in thousands, except share and per share data) Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value Balance at December 31, 2019 27,613,830 $ 2.33 7.59 $ 197,536 Granted during the period 324,442 10.10 Exercised during the period (4,310,197) 2.20 Cancelled and forfeited during the period (2,084,247) 5.18 Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options vested and expected to vest at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options exercisable at December 31, 2020 18,793,618 $ 1.58 6.31 $ 277,127 Aggregate intrinsic value represents the difference between our estimated fair value of its common stock and the exercise price of outstanding, “in-the-money” options. Aggregate intrinsic value for stock options exercised in the years ended December 31, 2019 and 2020 was $29.0 million and $45.0 million. The total fair value of shares vested during the year ended December 31, 2019 and 2020 was $7.8 million and $6.5 million. The total weighted average grant-date fair value of options granted was $2.31 and $3.64 and for the years ended December 31, 2019 and 2020. Restricted stock unit activity The following table summarizes the activity related to our time-based RSUs for the year ended December 31, 2020: Number of RSUs Weighted- average grant date fair value Unvested restricted stock at December 31, 2019 24,024,214 $ 8.17 Granted 27,492,086 12.90 Forfeited (3,804,651) 8.84 Unvested restricted stock at December 31, 2020 47,711,649 $ 10.84 In the year ended December 31, 2019, we also granted 27,663,658 RSUs with both performance and market-based conditions to certain executives. These awards have a weighted-average grant date fair value of $0.29 and were unvested as of December 31, 2019 and 2020. Share-based compensation The following table summarizes the effects of share-based compensation on our consolidated statements of operations: Year Ended December 31, (in thousands) 2019 2020 Brokerage and transaction $ 427 $ 227 Technology and development 9,499 18,024 Operations 139 61 Marketing 85 613 General and administrative 16,517 5,405 Total $ 26,667 $ 24,330 The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2019 2020 Dividend yield 0 % 0 % Risk-free interest rate 2.29 % 0.61 % Expected volatility 31.20 % 36.69 % Expected term (years) 6.03 6.04 During the year ended December 31, 2019 and 2020, we capitalized $0.7 million and $0.6 million in share-based compensation expense related to internally developed software. In the year ended December 31, 2020, subsequent to the sale of our Series G redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (“the 2020 Tender”). The 2020 Tender closed on November 13, 2020, when existing employees sold 1.4 million shares of our common stock for an aggregate purchase price of $21.5 million. With the 2020 Tender Offer, we believe that we had established a pattern of cash settlement of immature shares and stock options only during a very discrete set of circumstances in which we opened a tender offer in conjunction with a preferred stock financing. As such, during the 2020 Tender Offer period, we recorded a liability equal to the fair value of the maximum number of options representing immature shares that could have been redeemed in the tender offer. To the extent that this liability exceeded amounts previously recognized in equity, the excess was recognized as additional share-based compensation expense. Following the closing of the 2020 Tender Offer, the remaining liability of $18.6 million was reclassified to additional paid-in capital. We recorded share-based compensation expense of $17.2 million in connection with this tender offer in the year ended December 31, 2020. In the year ended December 31, 2019, subsequent to the sale of our Series E redeemable convertible preferred stock, certain employees sold shares of common stock to new and existing stockholders in a tender offer (“the 2019 Tender”). The 2019 Tender closed on September 9, 2019, when existing employees sold 5.4 million shares of our common stock for an aggregate purchase price of $67.6 million. As the share price paid in the 2019 Tender was in excess of fair value and a portion of the purchasers were existing stockholders, we recorded share-based compensation expense of $18.7 million for the year ended December 31, 2019. In November 2019, we modified certain stock option grants to extend the post-termination exercise period for 125 employees. During the years ended December 31, 2019 and 2020, share-based compensation expense included $0.8 million and $1.8 million as a result of the modification. We will incur an additional $1.3 million of share-based compensation expense over the remaining vesting periods of these impacted options. As of December 31, 2020, there was $7.8 million of unrecognized compensation cost related to outstanding stock options that is expected to be recognized over a weighted-average period of 1.22 years. We grant RSUs that vest only upon the satisfaction of both time-based service and performance-based conditions. As of December 31, 2019 and 2020, no share-based compensation expense had been recognized for such awards with a performance condition based on the occurrence of a qualifying event, such as an IPO, as such qualifying event was not probable. The total unrecognized share-based compensation expense related to these awards was $517.7 million as of December 31, 2020. Of this amount, $207.2 million relates to awards for which the time-based vesting condition has been satisfied or partially satisfied while $310.5 million relates to awards for which the time-based vesting condition had not yet been satisfied. |
INCOME (LOSS) PER SHARE_2
INCOME (LOSS) PER SHARE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Three Months Ended Six Months Ended 2020 2021 2020 2021 Net income (loss) $ 57,584 $ (501,665) $ 5,082 $ (1,946,468) Less: allocation of earnings to participating securities $ 34,801 $ — $ 3,032 $ — Net income (loss) attributable to common stockholders $ 22,783 $ (501,665) $ 2,050 $ (1,946,468) Weighted-average common stock outstanding - basic 225,091,413 232,223,019 224,953,736 231,459,227 Dilutive effect of stock options and unvested shares 19,246,732 — 19,585,456 — Weighted-average common stock outstanding - diluted 244,338,145 232,223,019 244,539,192 231,459,227 Net income (loss) per share attributable to common stockholders: Basic $ 0.10 $ (2.16) $ 0.01 $ (8.41) Diluted $ 0.09 $ (2.16) $ 0.01 $ (8.41) The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended Six Months Ended 2020 2021 2020 2021 Redeemable convertible preferred stock 366,266,778 412,742,897 366,266,778 412,742,897 RSUs 62,362,190 132,048,248 62,362,190 132,048,248 Stock options 89,110 17,685,650 82,182 17,685,650 Unvested shares 735 128,228 735 128,228 Total anti-dilutive securities 428,718,813 562,605,023 428,711,885 562,605,023 The table above does not include contingently issuable shares due to the conversion of our convertible notes or exercise of the warrants issued in February 2021, described in Note 10. | INCOME (LOSS) PER SHARE The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year Ended December 31, 2019 2020 Net income (loss) $ (106,569) $ 7,449 Less: allocation of earnings to participating securities — 4,601 Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 Weighted-average common stock outstanding - basic 221,664,610 225,748,355 Dilutive effect of stock options and unvested shares — 19,249,033 Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 Diluted $ (0.48) $ 0.01 The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Year Ended December 31, 2019 2020 Redeemable convertible preferred stock 321,626,778 412,742,897 RSUs 51,687,872 75,375,307 Stock options 27,613,830 60,082 Unvested shares 749,943 8,423 Total anti-dilutive securities 401,678,423 488,186,709 |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related party transactions may include any transaction between entities under common control or with a related party. We have defined related parties as members of the board of directors, executive officers, principal owners of our outstanding stock and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations. In February 2021, we issued two tranches of convertible notes and granted to each purchaser of the Tranche I convertible notes a warrant to purchase equity securities - see Note 10. Two of the Tranche I | RELATED PARTY TRANSACTIONSRelated party transactions may include any transaction between entities under common control or with a related party. We have defined related parties as members of the board of directors, executive officers, principal owners of our outstanding stock and any immediate family members of each such related party, as well as any other person or entity with significant influence over our management or operations. Aside from the 2019 and 2020 Tenders discussed in Note 11 - Mezzanine equity, common stock and stockholders’ deficit, no other material related party transaction has taken place during the periods presented. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments Leases Our operating leases are comprised of office facilities, with the most significant leases relating to our corporate headquarters in Menlo Park. Our leases have remaining terms of 1 year to 10 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. As of December 31, 2020 and June 30, 2021 we had $49.2 million and $74.7 million of operating right-of-use assets included as other non-current assets other current liabilities other non-current liabilities The components of lease expense were as follows: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Fixed operating lease costs $ 2,693 $ 5,011 $ 5,063 $ 8,790 Variable operating lease costs 704 1,374 1,427 2,452 Short-term lease costs 307 356 313 610 Total lease costs $ 3,704 $ 6,741 $ 6,803 $ 11,852 Fixed operating lease costs primarily consist of monthly base rent amounts due. Variable operating lease costs are primarily related to payments made to our landlords for common area maintenance, property taxes, insurance, and other operating expenses. Other information related to our operating leases was as follows: December 31, June 30, 2020 2021 Weighted-average remaining lease term 5.41 years 5.23 years Weighted-average discount rate 7.02 % 6.21 % Cash flows related to leases were as follows: Six Months Ended (in thousands) 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 9,609 $ 1,070 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,902 $ 31,693 Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of June 30, 2021 are as follows: (in thousands) Remainder of 2021 $ 8,975 2022 25,150 2023 22,841 2024 18,291 2025 17,239 Thereafter 22,270 Total undiscounted lease payments 114,766 Less: imputed interest (17,965) Less: lease incentives (10,051) Total lease liabilities $ 86,750 Contingencies The securities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages. Damages may include, in some cases, punitive damages. Compliance and trading problems that are reported to federal, state and provincial regulators, exchanges or other self-regulatory organizations (“SROs”) by dissatisfied customers are investigated by such regulatory bodies, and, if pursued by such regulatory body or such customers, may rise to the level of arbitration or disciplinary action. We are also subject to periodic regulatory audits and inspections. Like other brokerage firms, 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. Legal and regulatory matters The outcomes of the legal and regulatory matters discussed in this section are inherently uncertain and some of these matters 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. Described below are certain historical matters as well as certain pending matters in which there is at least a reasonable possibility that a material loss could be incurred. We intend to continue to vigorously defend the pending matters. Litigation is inherently uncertain, and any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows. Unless otherwise noted below with respect to a specific matter, we are unable to provide a reasonable estimate of any potential liability given the uncertain nature of litigation and the stage of proceedings in these matters. With respect to all other pending matters not disclosed below, based on current information, we do not believe that such matters, individually or in the aggregate, would have a material adverse impact on our business, financial condition, operating results, or cash flows. Best Execution, Payment for Order Flow, and Sources of Revenue Matters In May 2019, the SEC’s Division of Enforcement (“Enforcement Division”) commenced an investigation into RHF’s best execution and payment for order flow (“PFOF”) practices, as well as statements concerning its sources of revenue, including the fact that, in FAQs on our website describing how it made money, and in certain communications with customers addressing the same issue, RHF had omitted PFOF when it described its revenue sources. On December 17, 2020, RHF, on a neither admit nor deny basis, consented to the entry of an SEC order (i) requiring RHF to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act and Section 17(a) of the Exchange Act and Rule 17a-4 thereunder; (ii) censuring RHF; and (iii) requiring RHF to pay a $65 million civil penalty in December 2020. RHF paid the $65 million penalty in cash and also agreed to engage an independent compliance consultant. Beginning on December 23, 2020, six putative securities fraud class action lawsuits were filed against RHM, RHF and/or RHS. The lawsuits generally allege that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including PFOF). Five of the complaints asserted claims for violations of Section 10(b) of the Exchange Act. All of the complaints asserted state law claims under California or New York law, and sought damages, restitution, disgorgement and other relief. One of the cases was voluntarily dismissed without prejudice. The five remaining actions have been consolidated under the caption In re Robinhood Order Flow Litigation in the United States District Court for the Northern District of California. On June 29, 2021, we filed a motion to dismiss the amended consolidated complaint and a motion to deny class certification. March 2020 Outages Beginning on March 4, 2020, 15 putative class actions and one individual action were filed against RHM, RHF and RHS in state and federal district courts relating to service outages on our stock trading platform on March 2-3, 2020 and March 9, 2020 (the “March 2020 Outages”). One of the putative class actions and the individual action were voluntarily dismissed following settlements between the parties. Thirteen of the remaining putative class actions have been consolidated as In re Robinhood Outage Litigation in the United States District Court for the Northern District of California. The one remaining putative class action, Withouski v. Robinhood Financial LLC, et al. , pending in the Superior Court of the State of California, County of San Mateo, has been stayed by agreement of the parties. The lawsuits generally allege that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and RHM, RHF and RHS failed to implement appropriate backup systems. The lawsuits include, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment and violations of certain California consumer protection statutes. The lawsuits generally seek damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief. Fact discovery has been completed and expert discovery is currently scheduled to be completed in August 2021. We have also received notice that approximately 1,600 jointly represented customers may pursue arbitration of individual claims against us arising out of the March 2020 Outages, in addition to other alleged system outages. The SEC Division of Examinations (“Examinations Division”) conducted an examination and identified a deficiency, to which RHF responded, with respect to RHF’s creation of a reasonably designed business continuity plan. In addition, Financial Industry Regulatory Authority (“FINRA”) conducted an investigation and certain state regulatory authorities are conducting investigations, regarding the March 2020 Outages and related procedures. RHF and RHS are cooperating with the requests from these regulators and RHF has reached a settlement with FINRA with respect to certain matters. See “—FINRA Multi-Matter Settlement” below for more information. Options Trading and Related Customer Communications and Displays The SEC Examinations Division conducted an examination and identified deficiencies, to which RHF responded, with respect to account takeovers, identity theft in connection with new account opening, processes for approving or rejecting certain accounts for options trading, and customer support response times. Certain state regulatory authorities are conducting investigations regarding RHF’s options trading and related customer communications and displays and options trading approval process. RHF is cooperating with the regulators’ requests. FINRA also conducted an investigation and reached a settlement with RHF regarding the same options trading issues. On February 8, 2021, the family of Alexander Kearns, a Robinhood customer who traded options, filed a lawsuit in the Superior Court of the State of California, County of Santa Clara, against RHF, RHS and RHM in connection with Mr. Kearns’s death by suicide in June 2020. This matter was dismissed with prejudice following a settlement between the parties. FINRA Multi-Matter Settlement RHF and RHS are subject to FINRA investigations and enforcement matters, including those described elsewhere in this footnote as well as investigations regarding certain other matters, such as RHF’s margin call procedures, RHS’s fractional share trade reporting, customer support procedures, customer arbitration agreements, processing of corporate actions and displays of historical performance data. On June 30, 2021, RHF resolved with FINRA, on a no admit, no deny basis, certain of these investigations and examinations, including investigations into systems outages, RHF’s options product offering, and margin-related communications with customers, among others. The resolution does not address all the matters FINRA is investigating, including those relating to the Early 2021 Trading Restrictions (as defined below), account takeovers and anti-money laundering issues, RHS’s fractional share trade reporting, customer support procedures or customer arbitration agreements. RHF and RHS will continue to cooperate with FINRA on these matters. The resolution involved the following components: (i) charges of violations of FINRA rules; (ii) a fine of $57.0 million; (iii) customer restitution of approximately $12.6 million, of which approximately $8.1 million already has been paid, $0.75 million has been offered to be paid, and the remaining $3.75 million is to be paid; (iv) a censure; and (v) engagement of an independent consultant. As of June 30, 2021, we had accrued the $57.0 million fine as well as $4.5 million of customer restitution to be paid. RHC Anti-Money Laundering, Cybersecurity and Other Issues On July 24, 2020, the New York State Department of Financial Services (“NYDFS”) issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the NYDFS’s Consumer Protection and Financial Enforcement Division for investigation. In March 2021, the NYDFS informed RHC of certain alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements, including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with the NYDFS, and (iii) cybersecurity and virtual currency requirements, including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security. RHC and the NYDFS have reached a settlement in principle with respect to these allegations, subject to final documentation, in connection with which, among other things, RHC expects to pay a monetary penalty of $30.0 million and engage a monitor. Additionally, on April 14, 2021, the California Attorney General’s Office issued an investigative subpoena to RHC, seeking documents and answers to interrogatories about RHC’s trading platform, business and operations, application of California’s commodities regulations to RHC and other matters. RHC is cooperating with this investigation. We cannot predict the outcome of this investigation or any consequences that might result from it. Account Takeovers In November 2020, FINRA Enforcement commenced an investigation into RHF concerning account takeovers, or circumstances under which an unauthorized actor successfully logs into a customer account, as well as anti-money laundering and cybersecurity issues. Since February 1, 2021, RHF has received requests for documents and information from the SEC’s Enforcement Division in connection with its investigation into account takeovers and, more recently, suspicious activity report filings. Additionally, state regulators, including the NYDFS and the New York Attorney General’s Office, have opened inquiries into RHM, RHF and RHC related to account takeovers. RHM, RHF and RHC are cooperating with these investigations and inquiries. The SEC’s Examinations Division also conducted an examination and identified deficiencies, to which RHF responded, with respect to, among other things, account takeovers and identity theft in connection with new account opening. On January 8, 2021, a putative class action was filed in California Superior Court (Santa Clara County) against RHF and RHS by Siddharth Mehta, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users. RHF and RHS removed this action to the United States District Court for the Northern District of California. Plaintiffs generally allege that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets and seek monetary damages and injunctive relief. In March 2021, RHF and RHS filed a motion to dismiss the amended complaint, which was granted in part and denied in part in May 2021. A second amended complaint was filed by the plaintiffs on May 20, 2021, which RHF and RHS moved to dismiss on June 3, 2021. Massachusetts Securities Division Matter On December 16, 2020, the Enforcement Section of the Massachusetts Securities Division (“MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD in July 2020. The complaint alleges three counts of Massachusetts securities law violations regarding alleged unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020. The initial complaint seeks, among other things, injunctive relief, censure, unspecified restitution, unspecified disgorgement, the appointment of an independent consultant and an unspecified administrative fine. The proposed amended complaint also seeks revocation of RHF's license to operate in Massachusetts. If RHF were to lose its license to operate in Massachusetts, we would not be able to acquire any new customers in Massachusetts, and we expect that our current customers in Massachusetts would be unable to continue utilizing any of the services or products offered on our platform (other than closing their positions) and that we may be forced to transfer such customers’ accounts to other broker-dealers. Additionally, revocation of RHF’s Massachusetts license could trigger similar disqualification or proceedings to restrict or condition RHF’s registration by other state regulators. A revocation of RHF’s license to operate in Massachusetts would result in RHF and RHS being subject to statutory disqualification by FINRA and the SEC, which would then result in RHF needing to obtain relief from FINRA subject to SEC review in order to remain a FINRA member and RHS possibly needing relief from FINRA or other SROs. On April 15, 2021, RHF filed a complaint and motion for preliminary injunction and declaratory relief in Massachusetts state court seeking to enjoin the MSD administrative proceeding and challenging the legality of the Massachusetts fiduciary duty standard. On May 27, 2021, the state court denied RHF’s motion for a preliminary injunction, finding that RHF would not suffer irreparable harm if MSD proceeded with the pending administrative action, but determined that RHF may seek a declaration that the disputed regulation is unlawful without first exhausting its remedies in the administrative action. On June 14, 2021, the state court declined to stay the entire matter pending resolution of the administrative proceeding, finding that RHF is entitled to have the state court decide certain of its challenges to the Massachusetts fiduciary standard without waiting for the MSD to complete its administrative proceeding. RHF has engaged in settlement discussions with the MSD at certain times since the MSD filed its initial complaint, however, such negotiations have not been successful and RHF is currently not engaged in any such settlement discussions with the MSD. Pinchasov v. Robinhood Financial LLC On November 5, 2020, plaintiff Shterna Pinchasov filed a putative class action in the Circuit Court of the 11th Judicial Circuit of Florida in and for Miami-Dade County asserting claims of negligence and breach of fiduciary duty based on allegations that RHF failed to prevent customers from using its interface for stocks that were subject to a “T1 Halt,” and seeking damages. Securities exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market, have the authority to halt and delay trading in a security, and a “T1 Halt” (or regulatory halt) may occur pending the release of material news about a company. RHF removed this action to the U.S. District Court for the Southern District of Florida. The case is now in the fact discovery stage, which is currently scheduled to close in December 2021. Text Message Litigation On October 29, 2019, a putative class action was filed by Isaac Gordon against RHF and RHM in the Superior Court for the State of Washington, County of Spokane. The complaint alleged that RHF and RHM initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington State law. The action was removed to the Eastern District of Washington. On January 25, 2021, the court granted the plaintiff’s motion for class certification. On June 25, 2021, RHF filed a motion to decertify the class and disqualify class counsel. On July 27, 2021, the court granted RHF’s motion to decertify the class, denied the motion to disqualify class counsel, and remanded the case to state court. On August 9, 2021, a new, substantially similar putative class action was filed by Cooper Moore against RHF in the U.S. District Court for the Northern District of California. Early 2021 Trading Restrictions Matters Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (the “Early 2021 Trading Restrictions”). We have become aware of approximately 50 putative class actions and four individual actions that have been filed against one or more of RHM, RHF and RHS in various federal and state courts relating to the Early 2021 Trading Restrictions. On April 1, 2021, the Judicial Panel on Multidistrict Litigation entered an order centralizing the federal cases identified in a motion filed by certain plaintiffs to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions in the United States District Court for the Southern District of Florida captioned In re: January 2021 Short Squeeze Trading Litigation, Case No. 21-2989-MDL-ALTONAGA/Torres (the “MDL”). In May 2021, the court appointed interim lead plaintiffs’ counsel for certain claims. On July 26, 2021, interim lead plaintiffs’ counsel filed two consolidated complaints: the first complaint asserts a federal antitrust claim; the second complaint asserts negligence and breach of fiduciary duty claims. The consolidated complaints seek monetary damages. Other plaintiffs have filed federal securities claims, which are governed by the procedures under the Private Securities Litigation Reform Act of 1995, and will proceed separately. RHM, RHF, RHS and our Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), the U.S. Department of Justice, Antitrust Division, the SEC staff, FINRA, the New York Attorney General’s Office, other state attorneys general offices and a number of state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev’s cell phone. There have been several inquiries based on specific customer complaints. We have also received inquiries from the SEC’s Division of Examinations and FINRA related to employee trading in certain securities that were subject to the Early 2021 Trading Restrictions, including GameStop Corp. and AMC Entertainment Holdings, Inc., during the week of January 25, 2021. These matters include inquiries related to whether any employee trading in these securities may have occurred in advance of the public announcement of the Early 2021 Trading Restrictions on January 28, 2021. In addition, we have received information and testimony requests from certain committees and members of the U.S. Congress and Mr. Tenev, among others, has provided or will provide testimony with respect to the Early 2021 Trading Restrictions. We are cooperating with these investigations and examinations. Due to the preliminary nature of all of these proceedings, we are unable at this time to estimate the likelihood or magnitude of any possible losses related to these matters. “For You” Document Request On May 26, 2021, the SEC’s Enforcement Division issued a request to RHM and RHF seeking documents and information related to the “For You” feature, which was available in the past on our website only and is not currently an active product offering on our website or platform, and other features displaying lists of securities to customers. Robinhood is cooperating with the Staff’s investigation. Dansberger v. Robinhood Securities On June 11, 2021, RHS was sued by Thomas Dansberger on behalf of a putative class in the Circuit Court for Seminole County in Florida seeking monetary damages as well as declaratory and injunctive relief. Mr. Dansberger purports to represent “All Florida residents who purchased Robinhood Gold on or by January 21, 2021 and (b) who were not able to buy or sell cryptocurrencies on January 21, 2021.” The plaintiff alleges that RHS engaged in unfair and deceptive trade practices by advertising and marketing that Robinhood Gold would provide access for customers to buy and sell cryptocurrencies but failed to do so on January 28, 2021 when it allegedly halted the buying and selling of cryptocurrencies. Registration Requirements for Member Personnel On July 26, 2021, RHF received a FINRA investigative request seeking documents and information related to its compliance with FINRA registration requirements for member personnel, including related to the FINRA non-registration status of Mr. Tenev and Co-Founder and Chief Creative Officer Mr. Bhatt. Robinhood is evaluating this matter and is cooperating with the investigation. | COMMITMENTS AND CONTINGENCIES Commitments Leases Our operating leases are comprised of office facilities, with the most significant leases relating to corporate headquarters in Menlo Park. Our leases have remaining terms of 2 year to 11 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. As of December 31, 2019 and 2020 we had $31.2 million and $49.2 million of operating right-of-use assets included as other non-current assets other current liabilities other non-current liabilities The components of lease expense were as follows: Year Ended December 31, (in thousands) 2019 2020 Fixed operating lease costs $ 5,422 $ 11,420 Variable operating lease costs 1,078 3,009 Short-term lease costs 1,188 1,222 Total lease costs $ 7,688 $ 15,651 Variable operating lease costs are primarily related to payments made to our landlords for common area maintenance, property taxes, insurance, and other operating expenses. Other information related to our operating leases was as follows: Year Ended December 31, 2019 2020 Weighted-average remaining lease term 5.11 years 5.41 years Weighted-average discount rate 7.47 % 7.02 % Cash flows related to leases were as follows: Year Ended December 31, (in thousands) 2019 2020 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2020 are as follows: (in thousands) 2021 $ 12,159 2022 16,590 2023 13,779 2024 10,688 2025 9,932 Thereafter 9,724 Total undiscounted lease payments 72,872 Less: present value discount (12,675) Less: lease incentives (6,116) Total lease liabilities $ 54,081 Contingencies The securities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages. Damages may include, in some cases, punitive damages. Compliance and trading problems that are reported to federal, state and provincial regulators, exchanges or other self-regulatory organizations by dissatisfied customers are investigated by such regulatory bodies, and, if pursued by such regulatory body or such customers, may rise to the level of arbitration or disciplinary action. We are also subject to periodic regulatory audits and inspections. Like other brokerage firms, 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. Legal and regulatory matters The outcomes of the legal and regulatory matters discussed in this section are inherently uncertain and some of these matters 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. Described below are certain historic matters as well as certain pending matters in which there is at least a reasonable possibility that a material loss could be incurred. We intend to continue to vigorously defend the pending matters. Litigation is inherently uncertain, and any judgment entered against us, or any adverse settlement, could materially and adversely impact our business, financial condition, operating results, and cash flows. Unless otherwise noted below with respect to a specific matter, we are unable to provide a reasonable estimate of any potential liability given the uncertain nature of litigation and the stage of proceedings in these matters. With respect to all other pending matters not disclosed below, based on current information, we do not believe that such matters, individually or in the aggregate, would have a material adverse impact on our business, financial condition, operating results, or cash flows. Best Execution, Payment for Order Flow, and Sources of Revenue Matters In May 2019, the U.S. Securities and Exchange Commission’s (“SEC”) Division of Enforcement (“Enforcement Division”) commenced an investigation into RHF’s best execution and payment for order flow practices, as well as statements concerning its sources of revenue. On December 17, 2020, RHF, on a neither admit nor deny basis, consented to the entry of an SEC order (i) requiring RHF to cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-4 thereunder; (ii) censuring RHF; and (iii) requiring RHF to pay a $65 million penalty. RHF also agreed to engage an independent compliance consultant to, among other things, perform a comprehensive review of RHF’s supervisory, compliance, and other policies and procedures related to its retail communications and payment for order flow and make recommendations for improvements. RHF paid the $65 million penalty in cash, which was recorded as general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020. Beginning on December 23, 2020, four putative securities fraud class action lawsuits were filed against RHM, RHF, and/or RHS. Three were filed in the United States District Court for the Northern District of California: Kwon v. Robinhood Financial LLC et al., Luparello v. Robinhood Financial LLC et al. , and Nabi v. Robinhood Financial LLC et al . One was filed in the United States District Court for the Southern District of California, but has since been transferred to the Northern District: Ghebrehiwet v. Robinhood Financial LLC et al . The lawsuits generally allege that we violated the duty of best execution and misled putative class members by publishing misleading statements and omissions in customer communications relating to the execution of trades and revenue sources (including payment for order flow). The three complaints originally filed in the Northern District of California assert claims for violations of Sections 10(b) of the Securities Exchange Act of 1934. All four complaints assert state law claims under California law, and seek damages, restitution, disgorgement, and other relief. March 2020 Outages On March 2-3, 2020, our platform experienced an outage across various services, which prevented customers from using the app, website, and help center. On March 9, 2020, our platform experienced an outage across its trading products, which prevented customers from placing trades (together with the March 2-3 outages, the “March 2020 Outages”). There are many uncertainties associated with these types of incidents and impacts associated with service outages have included, and may in the future include, remediation costs to customers, systems upgrades, increased insurance costs, adverse effects on compliance with laws and regulations, litigation, and reputational damage. To date, we have incurred customer goodwill remediation costs with respect to the March 2020 Outages in the amount of approximately $3.6 million, which was recorded as marketing expenses in our consolidated statements of operations. Beginning on March 4, 2020, putative class actions were filed against RHM, RHF, and RHS in state and federal district courts relating to the March 2020 Outages. All but one of the cases have been consolidated as In re Robinhood Outage Litigation in the United States District Court for the Northern District of California. The remaining putative class action, Withouski v. Robinhood Financial LLC et al. , pending in the Superior Court of the State of California, County of San Mateo, has been stayed by agreement of the parties. The lawsuits generally allege that putative class members were unable to execute trades during the March 2020 Outages because our platform was inadequately designed to handle customer demand and RHM, RHF, and RHS failed to implement appropriate backup systems. The lawsuits include, among other things, claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, unjust enrichment, and violations of certain California consumer protection statutes. The lawsuits generally seek damages, restitution, and/or disgorgement, as well as declaratory and injunctive relief. On February 18, 2021, the court denied our motion to dismiss RHF and RHS but dismissed RHM from the case with leave to amend. The court also denied our motion to strike the class allegations, and ordered the parties to select a mediator within 14 days. A mediation is scheduled for June 22. 2021. Meanwhile, fact discovery is underway and is scheduled to be completed by April 7, 2021. In addition, the SEC staff is conducting an examination, and FINRA and certain state regulatory authorities are conducting investigations, regarding the March 2020 Outages and related procedures. RHF and RHS are cooperating with requests from these regulators. Options Trading and Related Customer Communications and Displays The SEC staff is conducting an examination, and FINRA and certain state regulatory authorities are conducting investigations, regarding RHF’s options trading and related customer communications and displays. The SEC staff, FINRA staff and staff of such state regulatory authorities are reviewing, among other things, how RHF displays cash and buying power to customers and its options trading approval processes. RHF is cooperating with the regulators’ requests. On February 8, 2021, the family of Alexander Kearns, a Robinhood customer who traded options, filed a lawsuit in the Superior Court of the State of California, County of Santa Clara, against RHF, RHS, and RHM in connection with Mr. Kearns’s death by suicide in June 2020. The lawsuit asserts claims for wrongful death, negligent infliction of emotional distress, and unfair business practices under a California statute, and seeks damages and other relief. Potential Resolution of FINRA Matters RHF and RHS are currently engaged in discussions with FINRA staff regarding a possible negotiated resolution of certain FINRA matters, including the March 2020 Outages and options trading and related customer communications and displays noted above. While these discussions are ongoing, RHF and RHS anticipate that any resolution, if reached, would involve charges of violations of FINRA rules, a fine, customer restitution, a censure, and a compliance consultant. We have recorded a charge as general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020 of $26.6 million representing the bottom of the range of our probable losses as no amount within the range is considered a better estimate than any other amount and estimation of any additional loss in excess of the amount of the loss accrued cannot be made. We cannot predict, however, whether these discussions will result in a resolution of these matters. Robinhood Crypto Anti-Money Laundering and Cyber-Related Issues On July 24, 2020, the New York State Department of Financial Services (“NYDFS”) issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the Department’s Consumer Protection and Financial Enforcement Division, which is investigating the matter. In March 2021, NYDFS informed RHC of certain alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements (Part 417, Part 504 and Banking Law § 44), including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with NYDFS, and (iii) cybersecurity and virtual currency (Part 500 and Part 200) requirements, including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security. In connection with these allegations, NYDFS has indicated that it plans to seek a monetary penalty, as well as the appointment of an independent consultant. RHC is cooperating with the NYDFS, and we anticipate that any potential resolution would include a monetary penalty component of at least $10 million, which is our best estimate of the bottom of the range for our probable loss in this matter as no amount within the range is considered a better estimate than any other amount and estimation of any additional loss in excess of the amount of the loss accrued can not be made. We have recorded a charge for such amount under general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2020. We cannot predict, however, whether these discussions will result in a resolution of this matter. Account Takeovers In November 2020, FINRA Enforcement commenced an investigation into RHF concerning account takeovers, or circumstances under which an unauthorized actor successfully logs into a customer account, as well as anti-money laundering and cybersecurity issues. On February 1, 2021, RHF received a document request from the SEC’s Division of Enforcement in connection with its investigation into account takeovers at certain online brokers. Additionally, state regulators, including the NYDFS and the New York Attorney General’s Office have opened inquiries related to account takeovers. RHM, RHF, and RHC are cooperating with these investigations and inquiries. On January 8, 2021, a putative class action was filed in California Superior Court (Santa Clara County) against RHF and RHS by Siddharth Mehta, purportedly on behalf of approximately 2,000 Robinhood customers whose accounts were allegedly accessed by unauthorized users from January 1, 2020 to October 16, 2020. On February 9, 2021, RHF and RHS removed this action to the United States District Court for the Northern District of California. An amended complaint, filed on February 26, 2021, added two named class members and expanded the putative class period to the present. Plaintiffs generally allege that RHF and RHS breached commitments made and duties owed to customers to safeguard customer data and assets . Plaintiffs assert eight causes of action for purported violations of common law, a right to privacy, and certain California statutes, including the California Consumer Privacy Act. On March 12, 2021, RHF and RHS filed a motion to dismiss the amended complaint. Massachusetts Securities Division Complaint On December 16, 2020, the Enforcement Section of the Massachusetts Securities Division (the “MSD”) filed an administrative complaint against RHF, which stems from an investigation initiated by the MSD on or around July 21, 2020. The Complaint alleges three counts of Massachusetts securities law violations regarding unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard, which became effective on March 6, 2020 and had an effective enforcement date beginning September 1, 2020. Among other things, MSD alleges that RHF’s product features and marketing strategies, outages, and options trading approval process constitute violations of Massachusetts securities laws. The complaint seeks, among other things, injunctive relief (seeking a permanent cease and desist order), censure, unspecified restitution, unspecified disgorgement, the appointment of an independent consultant, and an unspecified administrative fine. On January 29, 2021, RHF filed an answer to this complaint denying each of the alleged securities law violations, and we are currently engaging in discussions regarding a potential negotiated resolution. Pinchasov v. Robinhood Financial LLC On November 5, 2020, Plaintiff Shterna Pinchasov (“Plaintiff”) filed a putative class action in the Circuit Court of the 11th Judicial Circuit of Florida in and for Miami-Dade County asserting claims of negligence and breach of fiduciary duty based on allegations that RHF failed to prevent customers from using its interface for stocks that were subject to a “T1 Halt,” and seeking damages. Securities exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market, have the authority to halt and delay trading in a security, and a “T1 Halt” (or regulatory halt) may occur pending the release of material news about a company. On November 30, 2020, RHF removed this action to the U.S. District Court for the Southern District of Florida pursuant to the Class Action Fairness Act of 2005. On December 21, 2020, RHF filed a motion to dismiss the complaint. Gordon v. Robinhood Financial LLC On October 29, 2019, a putative class action was filed against RHF and RHM in the Superior Court for the State of Washington, County of Spokane. The complaint alleges that RHF and RHM initiated or assisted in the transmission of commercial electronic text messages to Washington State residents without their consent in violation of Washington State law. The action has been removed to the Eastern District of Washington, pursuant to the Class Action Fairness Act of 2005, and the court granted RHM’s motion to dismiss for lack of personal jurisdiction. On January 7, 2020, we filed a motion to dismiss the complaint, which was denied. On January 25, 2021, the court granted the plaintiff’s motion for class certification. A trial date has not been set yet. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
SEBSEQUENT EVENTS | SUBSEQUENT EVENTS Amended and Restated Certificate of Incorporation On August 2, 2021, the “IPO Closing Date”), we amended and restated our certificate of incorporation to effect a reclassification of our outstanding common stock into Class A common stock (with one vote per share) and, with respect to shares held by our founders and certain of their related entities, Class B common stock (with ten votes per share). The amended and restated certificate also provides for Class C common stock (with zero votes per share) of which none is outstanding on the date of this quarterly report. Initial Public Offering On the IPO Closing Date, we closed our IPO of 55,000,000 shares of Class A common stock at a public offering price of $38.00 per share. In the IPO, 52,375,000 shares of Class A common stock were sold by us and 2,625,000 shares of Class A common stock were sold by selling stockholders. Our net proceeds from the sale of Class A common stock by us in the IPO were approximately $1.9 billion after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. In connection with the IPO, 130,155,246 shares of our Class A common stock owned by our founders and their related entities were exchanged for an equivalent number of shares of Class B common stock. In addition, all of the outstanding shares of convertible preferred stock and all of our outstanding convertible notes automatically converted into Class A common stock of 412,742,897 and 137,305,156 shares and all warrants became exercisable at a strike price of $26.60 per share for an aggregate of 14,278,034 shares of Class A common stock. Upon completion of the IPO, approximately $13.4 million of deferred offering costs were reclassified into stockholders’ equity as a reduction of the IPO proceeds and we recognized a one-time cumulative share-based compensation expense of $1.0 billion related to RSUs for which the time-based vesting condition was satisfied or partially satisfied as the performance condition was satisfied. Acquisition of Say On August 13, 2021, the Company completed the acquisition of A Say Inc. and its subsidiaries (collectively “Say”). New York-based Say, founded in 2017, provides an investor communications and shareholder engagement platform that empowers shareholders to access their full ownership rights and facilitates proxy and voting for issuers. The purchase price is approximately $140 million in cash, subject to customary purchase price adjustments. The Company is currently evaluating purchase price allocation. It is not practicable to disclose the preliminary purchase price allocation for this acquisition given the short period of time between the acquisition date and the issuance of these unaudited condensed consolidated financial statements. | SUBSEQUENT EVENTS We have evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the consolidated financial statements. The evaluation was performed through March 22, 2021. Early 2021 Trading Restrictions Beginning on January 28, 2021, due to unprecedented market volatility and related portfolio margin demands imposed on RHS by the clearinghouse National Securities Clearing Corporation, RHS temporarily restricted or limited its customers’ purchase of certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., on our platform (“Early 2021 Trading Restrictions”). As of the date the financial statements were available to be issued, we have become aware of approximately 49 putative class actions and three individual actions that have been filed against RHM, RHF, and/or RHS in various federal and state courts relating to the Early 2021 Trading Restrictions. The complaints generally allege breach of contract, breach of the implied covenant of good faith and fair dealing, negligence, breach of fiduciary duty and other common law claims. Several complaints further allege federal securities claims, federal and state antitrust claims and/or certain state consumer protection claims based on similar factual allegations. Approximately 18 of the putative class actions also name other broker-dealers and/or market makers as defendants. On February 5, 2021, certain plaintiffs filed a motion before the Judicial Panel on Multidistrict Litigation ("JPML") to transfer and coordinate or consolidate the actions filed in connection with the Early 2021 Trading Restrictions into a multidistrict litigation in the Northern District of California (the "Transfer Motion"). On March 1, 2021, we filed a response to the Transfer Motion, in which we supported transfer and coordination or consolidation of the actions into a multidistrict litigation in either the Northern District of California, or in the alternative, the Middle District of Florida. We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously. RHM, RHF, RHS and our Co-Founder and CEO, Vladimir Tenev, have received requests for information, and in some cases subpoenas and requests for testimony, related to investigations and examinations of the Early 2021 Trading Restrictions from the United States Attorney’s Office for the Northern District of California ("USAO"), the SEC staff, FINRA, the New York Attorney General’s Office, other state attorneys general offices, and a number of state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev's cell phone. There have also been several inquiries based on specific customer complaints. In addition, we have received information and testimony requests from certain committees and members of the U.S. Congress and Mr. Tenev has provided testimony with respect to the Early 2021 Trading Restrictions. We are cooperating with these investigations and examinations. Due to the very preliminary nature of all of these proceedings, we are unable at this time to estimate the likelihood or magnitude of any possible losses related to these matters. Convertible Note and Warrant Financings |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Use of estimates | Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our unaudited condensed consolidated financial statements. | Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. |
Segment information | Segment Information We operate and report financial information in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. All our revenues and substantially all of our assets are attributed to or located in the United States. | |
Revenue recognition/Operating expenses | Revenue recognition Transaction-based revenues We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. Net interest revenues Net interest revenues consist of interest revenues less interest expenses. We earn and incur interest revenues and expense on securities lending transactions. We also earn interest on margin loans to users, which constitute the majority of receivables from users, net in the consolidated balance sheets, and on our segregated cash, cash and cash equivalents, and deposits with clearing organizations. We incur interest expenses in connection with our revolving credit facilities. Other revenues Other revenues primarily consists of Robinhood Gold, a paid subscription service that provides customers with premium features, such as enhanced instant access to deposits, professional research, Nasdaq Level II market data and, upon approval, access to margin investing. Our contract with users are for a term of 30 days and renew automatically each month. Subscription revenue is recognized ratably over the subscription period as the performance obligation is satisfied. Other revenues also consist of proxy rebates and miscellaneous fees charged to users. Proxy rebates are revenues earned through our partnership with a third-party investor communications company. We provide certain shareholder information to the third-party company, which is used to send investor materials to shareholders, such as materials related to shareholder meetings and voting instruction forms. We earn a share of the revenue the third-party company receives from issuers, and recognize the revenue when the performance obligation of providing data is satisfied. Miscellaneous fees are primarily Automated Customer Account Transfer Services (“ACATS”) fees, which are charged to users for facilitating the transfer of part or all of their accounts to another broker-dealer. We recognize revenue when our performance obligation of administering the transfer is satisfied. We are engaged in various trading and brokerage activities in which the counterparties primarily include broker-dealers, banks, and other financial institutions when applicable. In the event our counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is our policy to review, as necessary, the credit standing of each counterparty. Operating expenses Brokerage and transaction Brokerage and transaction costs primarily consist of fees paid to centralized clearinghouses and regulatory fees, market data expenses, compensation and benefits, including share-based compensation, for employees engaged in clearing and brokerage functions, and allocated overhead. Technology and development Technology and development costs primarily consist of compensation and benefits, including share-based compensation, for engineering, data science, and design personnel, costs incurred to support and improve our platform, costs incurred in connection with the development of new products, costs associated with computer hardware and software, allocated overhead, and amortization of internally developed software. Operations Operations costs primarily consist of customer service related expenses, including compensation and benefits, which includes share-based compensation, for employees engaged in customer support, third-party customer service expenses, customer onboarding and account verification and allocated overhead. Operations costs also include our provision for credit losses primarily in connection with unrecoverable receivables due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (which we refer to as “Fraudulent Deposit Transactions”) as well as chargebacks for unauthorized debit card transactions; and to a lesser extent, losses on margin borrowings. Marketing Marketing costs primarily consist of expenses associated with our stock referral program (the “Robinhood Referral Program”) | |
Advertising costs | Advertising costs are expensed as incurred | |
Research and development costs | Research and development costsResearch and development costs described in Accounting Standards Codification (“ASC”) 730, Research and Development, are expensed as incurred. Our research and development costs consist primarily of employee compensation and benefits for our engineering and research teams, including share-based compensation. | |
Share-based compensation | Share-based compensation Stock Options We estimate the fair value of stock options granted to employees and directors using the Black-Scholes option-pricing model. The fair value of stock options is recognized as compensation on a straight-line basis over the requisite service period. Forfeitures are accounted for when they occur. The Black-Scholes option-pricing model incorporates various assumptions in estimating the fair value of stock-based awards. These variables include: Fair value of our common stock —Because our common stock is not yet publicly traded, we must estimate the fair value of common stock. Our board of directors considers numerous objective and subjective factors to determine the fair value of our common stock including: contemporaneous third-party valuations of our common stock, sales of our common and redeemable convertible preferred stock to third-party investors in arms-length transactions, our operating and financial performance, the valuation of comparable companies, the lack of marketability, and general and industry specific economic outlook, amongst other factors. Expected volatility —Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since we do not have sufficient trading history of our common stock, we estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of comparable publicly-traded companies over a period equal to the expected term of the award. Expected term —We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-free interest rate —Based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Expected dividend yield —We utilize a dividend yield of 0% as we have not paid, and do not anticipate paying, dividends on our common stock. Assumptions used in valuing non-employee stock options are generally consistent with those used for employee stock options with the exception that the expected term is over the contractual life. Performance-based RSUs We have granted RSUs that vest upon the satisfaction of both time-based service and performance-based conditions. The fair value of these RSUs is estimated based on the fair value of our common stock on the date of grant. The time-based service condition for these awards is generally satisfied over four years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, defined as the earlier of (i) the closing of certain, specific liquidation or change in control transactions, or (ii) an initial public offering (“IPO”). We record share-based compensation expense for performance-based equity awards on an accelerated attribution method over the requisite service period, and only if performance-based conditions are considered probable to be satisfied. As of December 31, 2019 and 2020, we had not recognized share-based compensation for awards with performance-based conditions because the qualifying event described above had not occurred and, therefore, could not be considered probable. In the period in which our qualifying event is probable, we will record a cumulative one-time share-based compensation expense determined using the grant-date fair values. Share-based compensation related to remaining time-based service after the qualifying event will be recorded over the remaining requisite service period. Market-Based RSUs We have granted RSUs that vest upon the satisfaction of all the following conditions: time-based service conditions, performance-based conditions, and market-based conditions. The time-based service condition for these awards generally is satisfied over six years. The performance-based conditions are satisfied upon the occurrence of a qualifying event, as described above. The market-based conditions are satisfied upon our achievement of specified initial public offering prices. For market-based awards, we determine the grant-date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected capital raise percentage. We estimate the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” We estimate the expected date of a qualifying event based on our expectation at the time of measurement of the award’s value. | |
Loss contingencies | Loss contingencies We are subject to claims and lawsuits in the ordinary course of business, including arbitration, class actions and other litigation, some of which include claims for substantial or unspecified damages. We are also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. We review our lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provide disclosures and record loss contingencies in accordance with the loss contingencies accounting guidance. We establish an accrual for losses at management’s best estimate when we assess that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If no amount within the range is considered a better estimate than any other amount, an accrual for losses is recorded based on the bottom amount of the range. Accrual for loss contingencies are recorded in accounts payable and accrued expenses on the consolidated balance sheets and expensed in general and administrative expenses in our consolidated statements of operations. We monitor these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjust the amount as appropriate. | |
Earnings (loss) per share | Earnings (loss) per share Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. Our participating securities consist of all series of our redeemable convertible preferred stock. Under the two-class method, net loss is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in our losses. Basic earnings per share is computed by dividing net income available to our common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. | |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid financial instruments with maturities at the time of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits with banks and money market funds that are not segregated and deposited for regulatory purposes or to meet margin | |
Restricted cash | Restricted cashWe are required to maintain restricted cash deposits to back letters of credit for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. | |
Cash and securities segregated under federal and other regulations | Cash and securities segregated under federal and other regulations We are required to segregate cash and/or qualified securities for the exclusive benefit of customers and proprietary accounts of brokers in accordance with the provision of Rule 15c3-3 under the Securities Exchange Act of 1934. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. | |
Fair value of financial instruments | Fair value of financial instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, we may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, our own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: Level 1 Inputs: unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by us Level 2 Inputs: quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly Level 3 Inputs: unobservable inputs that are significant to the fair value of the assets or liabilities A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | |
Receivables from brokers, dealers, and clearing organizations | Receivables from brokers, dealers, and clearing organizations Receivables from brokers, dealers and clearing organizations include receivables from market makers for routing user orders for execution and other receivables from third-party brokers. Orders are trades which users have not specifically instructed to be routed to a particular venue for execution. These receivables are short term and settle within 30 days. We continually review the credit quality of our counterparties and have not experienced a default. As a result, we do not have an expectation of credit losses for these arrangements. | |
Receivables from users, net | Receivables from users, net Receivable from users, net is primarily made up of margin receivables. Margin receivables are adequately collateralized by users’ marketable securities balances and are reported at their outstanding principal balance, net of an allowance for credit losses. We monitor margin levels and require users to deposit additional collateral, or reduce margin positions, to meet minimum collateral requirements and avoid automatic liquidation of their positions. We apply the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for margin loans. We have no expectation of credit losses for margin loans that are fully secured, where the fair value of the collateral securing the loans is equal to or in excess of the loaned amount. This is based on our assessment of the nature of the collateral (liquid investments actively traded), potential future changes in collateral values, and historical credit loss information relating to fully secured receivables. In cases where the fair value of the collateral is less than the outstanding margin balance, we recognize an allowance for credit losses in the amount of the difference, or unsecured balance, immediately when the user fails to meet their margin call. Based on historical experience, we have limited expectation of borrowers to replenish their collateral after not meeting a margin call. We also record a full provision for credit losses on receivables from users due to Fraudulent Deposit Transactions. Due to the fraudulent nature of these transactions and based on historical experience, we have no expectation that we will collect these funds. As such, we record a provision for credit loss immediately for the full balance when a Fraudulent Deposit Transaction is identified. The provision for credit losses is recorded as operations expense on the consolidated statement of operations. We write-off unsecured balances when the balance becomes outstanding for over 180 days. | |
Deposits with clearing organizations | Deposits with clearing organizations We are required to maintain cash collateral as deposits with clearing organizations such as Depository Trust & Clearing Corporation and Options Clearing Corporation which allows us to use their security transactions services for trade comparison, clearance and settlement. The clearing organizations establish financial requirements, including deposits, to reduce their risk. The deposits may fluctuate significantly from time to time based upon the nature and size of users’ trading activity and market volatility. We earn interest on these deposits which is included as net interest revenues in the consolidated statements of operations. As we have not experienced historic defaults, we do not have an expectation of credit losses for these arrangements. | |
Other current assets | Other current assets Other current assets primarily includes user-held fractional shares, and to a lesser extent securities owned by us for the Robinhood Referral Program, prepaid expenses and other receivables. We classify prepayments made under contracts as prepaid expenses and expense them over the contract terms. These prepaid expenses include items such as prepayments on clearing services, rent, insurance, regulatory fees, web services, data feed, research, and software subscriptions. We evaluate certain prepaid expenses and other current assets for credit losses based on historic events, current economic conditions, and our expectations of future economic conditions and record an allowance for credit loss to estimate uncollectible receivables. The allowance for credit losses for prepaid expenses and other assets were immaterial for all periods presented. | |
Property, software and equipment | Property, software and equipment Property, software and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Furniture and fixtures 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Repairs and maintenance that do not enhance or extend the asset’s function and/or useful life are charged to expenses as incurred. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. | |
Leases | LeasesWe elected to apply the short-term lease measurement and recognition practical expedient to our leases where applicable, thus leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease right-of-use assets and operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date for each lease. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate that we would pay to borrow on a collateralized basis with similar terms and payments as the lease. Operating lease right-of-use assets also include any prepaid lease payments and lease incentives. Our lease agreements generally contain lease and non-lease components. Non-lease components, which primarily include payments for maintenance and utilities, are combined with lease payments and accounted for as a single lease component. We include the fixed non-lease components in the determination of the right-of-use assets and operating lease liabilities. We record the amortization of the right of use asset and the accretion of lease liability as rent expense and allocate as overhead in the consolidated statement of operations. | |
Payables to users | Payables to usersPayables to users represent users’ funds on deposit, and/or funds accruing to users as a result of settled trades and other security related transactions. | |
Securities borrowed and loaned | Securities borrowed and loaned Securities borrowed and loaned result from transactions with other brokers, dealers or financial institutions. Securities borrowing transactions require us to deposit cash with the lender whereas securities lending transactions result in us receiving cash collateral, with both requiring cash in an amount generally in excess of the market value of the securities. We earn interest revenue on cash collateral deposited with us, and can earn or incur additional revenue or expense for lending certain securities based on demand for that security. All securities borrow and loan transactions have an open contractual term and, upon notice by either party, may be terminated within three | |
Other current liabilities | Other current liabilities Other current liabilities primarily includes repurchase obligations related to our fractional share program. For our fractional shares program, we concluded that we did not meet the criteria for transfers under the accounting guidance, accordingly our repurchase obligations are presented in our consolidated balance sheets as a liability. | |
Cryptocurrencies | Cryptocurrencies We act as an agent in the cryptocurrency transactions of our users. We have determined we are an agent because we do not control the cryptocurrency before delivery to the user, we are not primarily responsible for the delivery of cryptocurrency to our users, we are not exposed to risks arising from fluctuations of the market price of cryptocurrency before delivery to the customer and we do not set the prices charged to users. | |
Income taxes | Income taxes Income tax expense is an estimate of current income taxes payable in the current fiscal year based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences and carryforwards that we recognize for financial reporting and income tax purposes at enacted tax rates expected to be in effect when taxes are actually paid or recovered. We account for income taxes under the liability approach for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements, but have not been reflected in our taxable income. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe that they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets including, but not limited to, historical cumulative loss experience and expectations of future earnings, tax planning strategies, and the carry-forward periods available for tax reporting purposes. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our tax provision would increase or decrease in the period in which the assessment is changed. We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. We account for uncertain tax positions, including net interest and penalties, as a component of income tax expense or benefit. We make adjustments to these uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. To the extent that the final tax outcome of these matters is different from the | |
Recently adopted accounting pronouncements/Recent accounting pronouncements not yet adopted | Recently adopted accounting pronouncements Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our unaudited condensed consolidated financial statements. Recently issued accounting pronouncements not yet adopted | Recently adopted accounting pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases. This guidance requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for operating leases with a term greater than one year. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2019 using the optional transition method. Pursuant to the practical expedients, we elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Upon adoption, we recognized $19.3 million of operating right-of-use lease assets and $25.5 million of operating lease liabilities on our consolidated balance sheets. Credit Loss on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This guidance requires entities to use a current expected credit loss impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost within the scope of the standard. The entity’s estimate would consider relevant information about past events, current condition and reasonable and supportable forecasts, which all result in recognition of lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020. The adoption of the guidance did not have a material impact on our consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs should be capitalized. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020 using the prospective transition method. The adoption of the guidance did not have a material impact on our consolidated financial statements. Simplifying Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying Accounting for Income Taxes. This guidance simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in accounting standards. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We early adopted the standard effective April 1, 2020 and it did not have a material impact on our consolidated financial statements. Recent accounting pronouncements not yet adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to contract modifications that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. This guidance is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. We are evaluating the impact of this guidance on our consolidated financial statements. Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this guidance on our consolidated financial statements. |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Use of estimates | Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our unaudited condensed consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, the valuation of the convertible notes and warrant liability, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our unaudited condensed consolidated financial statements. | Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, and other assumptions we believe to be reasonable under the circumstances, which together form the basis for making judgments about the carrying values of assets and liabilities. Assumptions and estimates used in preparing our consolidated financial statements include those related to the determination of allowances for credit losses, the capitalization and estimated useful life of internally developed software, contingent liabilities, useful lives of property and equipment, the incremental borrowing rate used to determine the present value of lease payments, the valuation and recognition of share-based compensation, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ from these estimates and could have a material adverse effect on our consolidated financial statements. |
Deferred offering costs | Deferred offering costsWe have capitalized qualified legal, accounting and other direct costs related to our efforts to raise capital through a sale of our common stock in an IPO. Deferred offering costs are included in other current assets on the unaudited condensed consolidated balance sheets and will be deferred until the completion of the IPO, at which time they will be reclassified to additional paid-in capital as a reduction of the IPO proceeds. If we terminate the planned IPO or there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses. | |
Recently adopted accounting pronouncements/Recent accounting pronouncements not yet adopted | Recently adopted accounting pronouncements Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity. This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2021 using the full retrospective method. The adoption of the guidance did not have a material impact on our unaudited condensed consolidated financial statements. Recently issued accounting pronouncements not yet adopted | Recently adopted accounting pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases. This guidance requires lessees to recognize a lease liability and a corresponding right-of-use asset on the balance sheet for operating leases with a term greater than one year. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2019 using the optional transition method. Pursuant to the practical expedients, we elected not to reassess: (i) whether expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or, (iii) initial direct costs for any existing leases. Upon adoption, we recognized $19.3 million of operating right-of-use lease assets and $25.5 million of operating lease liabilities on our consolidated balance sheets. Credit Loss on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This guidance requires entities to use a current expected credit loss impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost within the scope of the standard. The entity’s estimate would consider relevant information about past events, current condition and reasonable and supportable forecasts, which all result in recognition of lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020. The adoption of the guidance did not have a material impact on our consolidated financial statements. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs should be capitalized. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance effective January 1, 2020 using the prospective transition method. The adoption of the guidance did not have a material impact on our consolidated financial statements. Simplifying Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying Accounting for Income Taxes. This guidance simplifies the accounting for income taxes as part of its overall initiative to reduce complexity in accounting standards. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We early adopted the standard effective April 1, 2020 and it did not have a material impact on our consolidated financial statements. Recent accounting pronouncements not yet adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to contract modifications that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. This guidance is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. We are evaluating the impact of this guidance on our consolidated financial statements. Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity . This guidance simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, amends the accounting guidance for evaluating the classification of certain contracts in an entity’s own equity, and modifies the diluted earnings per share calculations for convertible instruments. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this guidance on our consolidated financial statements. |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT, USEFUL LIFE | Property, software and equipment are presented net of accumulated depreciation and amortization and summarized as follows: December 31, June 30, (in thousands) 2020 2021 Computer equipment $ 9,203 $ 17,459 Furniture and fixtures 8,024 14,764 Tenant improvements 18,945 38,426 Internally developed software 16,992 18,943 Construction in progress 9,756 7,266 Total 62,920 96,858 Less: accumulated depreciation and amortization (17,086) (25,780) Property, software and equipment, net $ 45,834 $ 71,078 | Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Furniture and fixtures 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Property, software and equipment are recorded net of accumulated depreciation and summarized by as follows: December 31, (in thousands) 2019 2020 Computer equipment $ 4,980 $ 9,203 Furniture and fixtures 3,761 8,024 Tenant improvements 9,522 18,945 Internally developed software 12,029 16,992 Construction in progress 2,957 9,756 Total 33,249 62,920 Less: accumulated depreciation and amortization (7,948) (17,086) Property, software and equipment, net $ 25,301 $ 45,834 |
SCHEDULE OF CONCENTRATION OF CREDIT RISK | We had transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Market maker: Citadel Securities, LLC 36 % 14 % 34 % 21 % Tai Mo Shan Limited (1) 1 % 29 % 2 % 20 % Entities affiliated with Susquehanna International Group, LLP (2) 21 % 9 % 20 % 11 % Entity affiliated with Jane Street Group 1 % 12 % 1 % 9 % Entities affiliated with Wolverine Holdings, L.P. (3) 8 % 8 % 10 % 8 % All others individually less than 10% 10 % 7 % 9 % 11 % Total as percentage of total revenue: 77 % 79 % 76 % 80 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC | We had revenues from market makers in excess of 10% of total revenues, as follows: Year Ended December 31, 2019 2020 Market maker: Citadel Securities, LLC 29 % 34 % Entities affiliated with Susquehanna International Group, LLP (1) 13 % 18 % Entities affiliated with Wolverine Holdings, L.P. (2) 12 % 10 % All others individually less than 10% 8 % 13 % Total as percentage of total revenue: 62 % 75 % _____________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (2) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUE DISAGGREGATED BY REVENUE SOURCE | The following table presents our revenue disaggregated by revenue source: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Transaction-based revenues: Options $ 111,148 $ 164,604 $ 170,908 $ 362,464 Cryptocurrencies 5,320 233,103 9,558 320,690 Equities 70,606 52,012 102,195 185,313 Other 339 1,448 383 3,139 Total transaction-based revenues 187,413 451,167 283,044 871,606 Net interest revenues: Securities lending 28,633 39,448 35,138 75,074 Margin interest 10,958 31,230 18,787 58,961 Interest on segregated cash and securities 1,436 931 10,632 2,041 Other interest revenue 526 1,368 2,516 2,197 Interest expenses related to credit facilities (1,555) (5,268) (3,059) (8,067) Total net interest revenues 39,998 67,709 64,014 130,206 Other revenues 16,800 46,457 24,703 85,695 Total net revenues $ 244,211 $ 565,333 $ 371,761 $ 1,087,507 | The following table presents our revenue disaggregated by revenue source: Year Ended December 31, (in thousands) 2019 2020 Transaction-based revenues: Options $ 110,656 $ 440,070 Equities 50,688 251,200 Cryptocurrencies 9,487 26,708 Other — 2,155 Total transaction-based revenues 170,831 720,133 Net interest revenues: Securities lending 6,380 98,165 Margin interest 19,104 66,781 Interest on segregated cash and securities 36,281 13,401 Other interest revenue 9,865 3,972 Interest expenses related to credit facilities (991) (4,882) Total net interest revenues 70,639 177,437 Other revenues 36,063 61,263 Total net revenues $ 277,533 $ 958,833 |
RECEIVABLES AND CONTRACT BALANCES | The table below sets forth contract receivables balances for the period indicated: (in thousands) Receivables Beginning of period, January 1, 2021 $ 111,871 End of period, June 30, 2021 147,168 Increase in receivables during the period $ 35,297 The table below sets forth contract liabilities balances for the period indicated: (in thousands) Contract Liabilities Beginning of period, January 1, 2021 $ 2,060 End of period, June 30, 2021 3,605 Increase in contract liabilities during the period $ 1,545 | The table below sets forth receivables balances for the periods indicated: December 31, (in thousands) 2019 2020 Receivables, beginning of the period $ 9,056 $ 20,577 Receivables, end of the period 20,577 111,871 Increase in receivables during the period $ 11,521 $ 91,294 The table below sets forth contract liabilities balances for the periods indicated: December 31, (in thousands) 2019 2020 Contract liabilities, beginning of the period $ 1,727 $ 954 Contract liabilities, end of the period 954 2,060 Increase/(decrease) in contract liabilities during the period $ (773) $ 1,106 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
ALLOWANCE FOR CREDIT LOSSES OF RECEIVABLES FROM USERS | The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (“Fraudulent Deposit Transactions”) and to a lesser extent, losses on margin borrowings, for the periods indicated: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Beginning balance $ 27,070 $ 30,875 $ 17,122 $ 34,092 Provision for credit losses 13,985 20,342 23,933 36,745 Write-offs — (15,964) $ — $ (35,584) Ending balance $ 41,055 $ 35,253 $ 41,055 $ 35,253 | The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and to a lesser extent, losses on margin borrowings, for the periods indicated: Year Ended December 31, (in thousands) 2019 2020 Beginning balance $ 6,013 $ 17,122 Provision for credit losses 11,109 59,134 Write-offs — (42,164) Ending balance $ 17,122 $ 34,092 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS | Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 Other current assets: Equity securities - user-held fractional shares 802,483 — — 802,483 Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Other current liabilities: Equity securities - repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 June 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,927,574 $ — $ — $ 1,927,574 U.S. Treasury securities 349,984 — — 349,984 Other current assets: Equity securities - user-held fractional shares 1,430,855 — — 1,430,855 Equity securities - securities owned 18,874 — — 18,874 Total financial assets $ 3,727,287 $ — $ — $ 3,727,287 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 389 $ — $ — $ 389 Other current liabilities: Equity securities - repurchase obligations 1,430,855 — — 1,430,855 Convertible notes: Convertible notes — — 5,189,783 5,189,783 Other non-current liabilities: Warrant liability — — 382,513 382,513 Total financial liabilities $ 1,431,244 $ — $ 5,572,296 $ 7,003,540 | Financial assets measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Cash equivalents: Money market funds $ 416,025 $ 416,025 $ 1,026,034 $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities — — 134,994 134,994 Other current assets: Equity securities - user-held fractional shares — — 802,483 802,483 Equity securities - securities owned 2,997 2,997 3,222 3,222 Total financial assets $ 419,022 $ 419,022 $ 1,966,733 $ 1,966,733 Financial liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Accounts payable and accrued expenses: Equity securities - referral program liability $ 303 $ 303 $ 695 $ 695 Other current liabilities: Equity securities - repurchase obligations — — 802,483 802,483 Total financial liabilities $ 303 $ 303 $ 803,178 $ 803,178 |
SCHEDULE OF SIGNIFICANT UNOBSERVABLE INPUTS | The significant unobservable inputs used in the fair value measurement of the convertible notes and warrant liability include: June 30, 2021 Convertible notes Warrant liability Fair value of common stock $ 38.00 $ 38.00 Volatility N/A 56 % Risk free rate N/A 1.42 % | |
SCHEDULE OF CHANGES IN ESTIMATED FAIR VALUE OF CONVERTIBLE NOTES AND WARRANT LIABILITY | The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,890,752 129,569 End of period, June 30, 2021 $ 5,189,783 $ 382,513 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
SCHEDULE OF COMPONENTS OF INCOME (LOSS) BEFORE INCOME TAXES | The components of income (loss) before income taxes were as follows: December 31, (in thousands) 2019 2020 Domestic $ (104,690) $ 14,773 Foreign (2,897) (943) Income (loss) before income taxes $ (107,587) $ 13,830 | |
SCHEDULE OF INCOME TAX PROVISION (BENEFIT) | Three Months Ended Six Months Ended (in thousands, except percentages) 2020 2021 2020 2021 Income (loss) before income taxes $ 58,118 $ (464,158) $ 5,530 $ (1,897,182) Provision for income taxes 534 37,507 448 49,286 Effective Tax Rate 0.9 % (8.1) % 8.1 % (2.6) % | The components of the provision for (benefit from) income taxes were as follows: December 31, (in thousands) 2019 2020 Current: Federal $ (58) $ 2,780 State (295) 3,801 Foreign — — Total current tax expense (benefit) (353) 6,581 Deferred: Federal — — State — — Foreign (665) (200) Total deferred tax expense (benefit) (665) (200) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 |
SCHEDULE OF RECONCILIATION OF FEDERAL STATUTORY INCOME TAX TO PROVISION FOR (BENEFIT FROM) INCOME TAXES | The reconciliation of federal statutory income tax to our provision for (benefit from) income taxes was as follows: December 31, (in thousands) 2019 2020 Federal tax (benefit) at statutory rate (22,593) 2,905 State tax (benefit), net of federal benefit (5,491) (862) Foreign rate differential (57) (2) Share-based compensation (1,221) (2,654) Tender offer compensation 4,229 3,607 Research and development credits (2,104) (10,489) Non-deductible regulatory settlements — 21,000 Permanent differences — 526 Other 905 52 Change in valuation allowance 25,314 (7,702) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 | |
SCHEDULE OF SIGNIFICANT COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES | Significant components of our deferred tax assets and liabilities consist of the following: December 31, (in thousands) 2019 2020 Deferred tax assets: Accruals and other liabilities 7,704 14,849 Lease liabilities 9,859 13,794 Tax credit carryforwards 3,198 9,058 Net operating loss carryforwards 23,091 3,141 Share-based compensation 1,442 3,123 Other 686 3,386 Total deferred tax assets 45,980 47,351 Deferred tax liabilities: Right of use assets (8,194) (12,551) Depreciation and amortization (1,914) (6,965) Total deferred tax liabilities (10,108) (19,516) Valuation allowance $ (35,207) $ (26,909) Net deferred tax assets $ 665 $ 926 | |
SCHEDULE OF RECONCILIATION OF UNRECOGNIZED TAX BENEFITS | The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2019 2020 Unrecognized benefit - beginning of period $ 759 $ 2,177 Gross increases - current year tax positions 797 4,395 Gross increases - prior year tax positions 621 848 Unrecognized benefit - end of period $ 2,177 $ 7,420 |
PROPERTY, SOFTWARE AND EQUIPM_3
PROPERTY, SOFTWARE AND EQUIPMENT, NET (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT | Property, software and equipment are presented net of accumulated depreciation and amortization and summarized as follows: December 31, June 30, (in thousands) 2020 2021 Computer equipment $ 9,203 $ 17,459 Furniture and fixtures 8,024 14,764 Tenant improvements 18,945 38,426 Internally developed software 16,992 18,943 Construction in progress 9,756 7,266 Total 62,920 96,858 Less: accumulated depreciation and amortization (17,086) (25,780) Property, software and equipment, net $ 45,834 $ 71,078 | Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Furniture and fixtures 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Property, software and equipment are recorded net of accumulated depreciation and summarized by as follows: December 31, (in thousands) 2019 2020 Computer equipment $ 4,980 $ 9,203 Furniture and fixtures 3,761 8,024 Tenant improvements 9,522 18,945 Internally developed software 12,029 16,992 Construction in progress 2,957 9,756 Total 33,249 62,920 Less: accumulated depreciation and amortization (7,948) (17,086) Property, software and equipment, net $ 25,301 $ 45,834 |
OFFSETTING ASSETS AND LIABILI_3
OFFSETTING ASSETS AND LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Offsetting [Abstract] | ||
SCHEDULE OF ASSETS SUBJECT TO MASTER NETTING ARRANGEMENT | Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
SCHEDULE OF LIABILITIES SUBJECT TO MASTER NETTING ARRANGEMENT | Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
DETAIL OF OTHER CURRENT ASSETS | The following table presents the detail of other current assets: December 31, June 30, (in thousands) 2020 2021 User-held fractional shares $ 802,483 $ 1,430,855 Prepaid expenses 28,629 67,412 Securities owned 3,222 18,874 Other 16,804 25,761 Total other current assets $ 851,138 $ 1,542,902 | The following table presents the detail of other current assets: December 31, (in thousands) 2019 2020 User-held fractional shares $ — $ 802,483 Prepaid expenses 17,159 28,629 Securities owned 2,997 3,222 Other 8,186 16,804 Total other current assets $ 28,342 $ 851,138 |
MEZZANINE EQUITY, COMMON STOC_3
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
SCHEDULE OF REDEEMABLE CONVERTIBLE PREFERRED STOCK | The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of June 30, 2021: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 G-1 244,278,204 — 18.6000 — 18.6000 — 658,311,424 412,742,897 $ 2,191,086 $ 2,179,739 | The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of December 31, 2019: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 263,826,920 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 160,526,040 80,263,020 0.6354 50,999 0.6354 50,999 C 87,576,360 43,788,180 2.5121 110,000 2.5121 109,870 D 71,549,522 35,774,761 10.1450 362,935 10.1450 362,670 E 59,854,820 29,887,357 12.4827 373,075 12.4827 372,733 643,333,662 321,626,778 $ 922,786 $ 912,411 |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock option activity for the six months ended June 30, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Exercised during the period (3,581,521) 1.87 Cancelled and forfeited during the period (276,657) 4.51 Balance at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options vested and expected to vest at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options exercisable at June 30, 2021 15,905,386 $ 1.75 5.56 $ 576,535 | A summary of stock option activity for the year ended December 31, 2020 is as follows: (in thousands, except share and per share data) Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value Balance at December 31, 2019 27,613,830 $ 2.33 7.59 $ 197,536 Granted during the period 324,442 10.10 Exercised during the period (4,310,197) 2.20 Cancelled and forfeited during the period (2,084,247) 5.18 Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options vested and expected to vest at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options exercisable at December 31, 2020 18,793,618 $ 1.58 6.31 $ 277,127 |
SCHEDULE OF ACTIVITY RELATED TO TIME-BASED RSUs | The following table summarizes the activity related to our Time-Based RSUs for the six months ended June 30, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted 22,899,989 40.88 Forfeited (1,747,048) 16.48 Unvested at June 30, 2021 68,864,590 $ 26.12 | The following table summarizes the activity related to our time-based RSUs for the year ended December 31, 2020: Number of RSUs Weighted- average grant date fair value Unvested restricted stock at December 31, 2019 24,024,214 $ 8.17 Granted 27,492,086 12.90 Forfeited (3,804,651) 8.84 Unvested restricted stock at December 31, 2020 47,711,649 $ 10.84 |
SCHEDULE OF SHARE-BASED COMPENSATION | The following table summarizes the effects of share-based compensation on our unaudited condensed consolidated statements of operations: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Brokerage and transaction $ 6 $ 6 $ 12 $ 12 Technology and development 824 717 2,540 2,025 Operations 8 3 18 6 Marketing 7 41 15 78 General and administrative 520 371 1,192 8,013 Total $ 1,365 $ 1,138 $ 3,777 $ 10,134 | The following table summarizes the effects of share-based compensation on our consolidated statements of operations: Year Ended December 31, (in thousands) 2019 2020 Brokerage and transaction $ 427 $ 227 Technology and development 9,499 18,024 Operations 139 61 Marketing 85 613 General and administrative 16,517 5,405 Total $ 26,667 $ 24,330 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR STOCK OPTIONS | The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2019 2020 Dividend yield 0 % 0 % Risk-free interest rate 2.29 % 0.61 % Expected volatility 31.20 % 36.69 % Expected term (years) 6.03 6.04 |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
CALCULATION OF BASIC AND DILUTED INCOME (LOSS) PER SHARE | The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Three Months Ended Six Months Ended 2020 2021 2020 2021 Net income (loss) $ 57,584 $ (501,665) $ 5,082 $ (1,946,468) Less: allocation of earnings to participating securities $ 34,801 $ — $ 3,032 $ — Net income (loss) attributable to common stockholders $ 22,783 $ (501,665) $ 2,050 $ (1,946,468) Weighted-average common stock outstanding - basic 225,091,413 232,223,019 224,953,736 231,459,227 Dilutive effect of stock options and unvested shares 19,246,732 — 19,585,456 — Weighted-average common stock outstanding - diluted 244,338,145 232,223,019 244,539,192 231,459,227 Net income (loss) per share attributable to common stockholders: Basic $ 0.10 $ (2.16) $ 0.01 $ (8.41) Diluted $ 0.09 $ (2.16) $ 0.01 $ (8.41) | The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year Ended December 31, 2019 2020 Net income (loss) $ (106,569) $ 7,449 Less: allocation of earnings to participating securities — 4,601 Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 Weighted-average common stock outstanding - basic 221,664,610 225,748,355 Dilutive effect of stock options and unvested shares — 19,249,033 Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 Diluted $ (0.48) $ 0.01 |
POTENTIAL COMMON SHARES EXCLUDED FROM THE CALCULATION OF DILUTED NET INCOME (LOSS) PER SHARE | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended Six Months Ended 2020 2021 2020 2021 Redeemable convertible preferred stock 366,266,778 412,742,897 366,266,778 412,742,897 RSUs 62,362,190 132,048,248 62,362,190 132,048,248 Stock options 89,110 17,685,650 82,182 17,685,650 Unvested shares 735 128,228 735 128,228 Total anti-dilutive securities 428,718,813 562,605,023 428,711,885 562,605,023 | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Year Ended December 31, 2019 2020 Redeemable convertible preferred stock 321,626,778 412,742,897 RSUs 51,687,872 75,375,307 Stock options 27,613,830 60,082 Unvested shares 749,943 8,423 Total anti-dilutive securities 401,678,423 488,186,709 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
SCHEDULE OF COMPONENTS OF LEASE EXPENSE, OTHER INFORMATION AND CASH FLOWS | The components of lease expense were as follows: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Fixed operating lease costs $ 2,693 $ 5,011 $ 5,063 $ 8,790 Variable operating lease costs 704 1,374 1,427 2,452 Short-term lease costs 307 356 313 610 Total lease costs $ 3,704 $ 6,741 $ 6,803 $ 11,852 Other information related to our operating leases was as follows: December 31, June 30, 2020 2021 Weighted-average remaining lease term 5.41 years 5.23 years Weighted-average discount rate 7.02 % 6.21 % Cash flows related to leases were as follows: Six Months Ended (in thousands) 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 9,609 $ 1,070 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,902 $ 31,693 | The components of lease expense were as follows: Year Ended December 31, (in thousands) 2019 2020 Fixed operating lease costs $ 5,422 $ 11,420 Variable operating lease costs 1,078 3,009 Short-term lease costs 1,188 1,222 Total lease costs $ 7,688 $ 15,651 Other information related to our operating leases was as follows: Year Ended December 31, 2019 2020 Weighted-average remaining lease term 5.11 years 5.41 years Weighted-average discount rate 7.47 % 7.02 % Cash flows related to leases were as follows: Year Ended December 31, (in thousands) 2019 2020 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS | Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of June 30, 2021 are as follows: (in thousands) Remainder of 2021 $ 8,975 2022 25,150 2023 22,841 2024 18,291 2025 17,239 Thereafter 22,270 Total undiscounted lease payments 114,766 Less: imputed interest (17,965) Less: lease incentives (10,051) Total lease liabilities $ 86,750 | Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2020 are as follows: (in thousands) 2021 $ 12,159 2022 16,590 2023 13,779 2024 10,688 2025 9,932 Thereafter 9,724 Total undiscounted lease payments 72,872 Less: present value discount (12,675) Less: lease incentives (6,116) Total lease liabilities $ 54,081 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
SCHEDULE OF CONCENTRATION OF CREDIT RISK | We had transaction-based revenues from individual market makers in excess of 10% of total revenues, as follows: Three Months Ended Six Months Ended 2020 2021 2020 2021 Market maker: Citadel Securities, LLC 36 % 14 % 34 % 21 % Tai Mo Shan Limited (1) 1 % 29 % 2 % 20 % Entities affiliated with Susquehanna International Group, LLP (2) 21 % 9 % 20 % 11 % Entity affiliated with Jane Street Group 1 % 12 % 1 % 9 % Entities affiliated with Wolverine Holdings, L.P. (3) 8 % 8 % 10 % 8 % All others individually less than 10% 10 % 7 % 9 % 11 % Total as percentage of total revenue: 77 % 79 % 76 % 80 % ________________ (1) Member of Jump Trading Group (2) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (3) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC | We had revenues from market makers in excess of 10% of total revenues, as follows: Year Ended December 31, 2019 2020 Market maker: Citadel Securities, LLC 29 % 34 % Entities affiliated with Susquehanna International Group, LLP (1) 13 % 18 % Entities affiliated with Wolverine Holdings, L.P. (2) 12 % 10 % All others individually less than 10% 8 % 13 % Total as percentage of total revenue: 62 % 75 % _____________ (1) Consists of Global Execution Brokers, LP and G1X Execution Services, LLC (2) Consists of Wolverine Execution Services, LLC and Wolverine Securities LLC |
REVENUE (Tables)_2
REVENUE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
REVENUE DISAGGREGATED BY REVENUE SOURCE | The following table presents our revenue disaggregated by revenue source: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Transaction-based revenues: Options $ 111,148 $ 164,604 $ 170,908 $ 362,464 Cryptocurrencies 5,320 233,103 9,558 320,690 Equities 70,606 52,012 102,195 185,313 Other 339 1,448 383 3,139 Total transaction-based revenues 187,413 451,167 283,044 871,606 Net interest revenues: Securities lending 28,633 39,448 35,138 75,074 Margin interest 10,958 31,230 18,787 58,961 Interest on segregated cash and securities 1,436 931 10,632 2,041 Other interest revenue 526 1,368 2,516 2,197 Interest expenses related to credit facilities (1,555) (5,268) (3,059) (8,067) Total net interest revenues 39,998 67,709 64,014 130,206 Other revenues 16,800 46,457 24,703 85,695 Total net revenues $ 244,211 $ 565,333 $ 371,761 $ 1,087,507 | The following table presents our revenue disaggregated by revenue source: Year Ended December 31, (in thousands) 2019 2020 Transaction-based revenues: Options $ 110,656 $ 440,070 Equities 50,688 251,200 Cryptocurrencies 9,487 26,708 Other — 2,155 Total transaction-based revenues 170,831 720,133 Net interest revenues: Securities lending 6,380 98,165 Margin interest 19,104 66,781 Interest on segregated cash and securities 36,281 13,401 Other interest revenue 9,865 3,972 Interest expenses related to credit facilities (991) (4,882) Total net interest revenues 70,639 177,437 Other revenues 36,063 61,263 Total net revenues $ 277,533 $ 958,833 |
RECEIVABLES AND CONTRACT BALANCES | The table below sets forth contract receivables balances for the period indicated: (in thousands) Receivables Beginning of period, January 1, 2021 $ 111,871 End of period, June 30, 2021 147,168 Increase in receivables during the period $ 35,297 The table below sets forth contract liabilities balances for the period indicated: (in thousands) Contract Liabilities Beginning of period, January 1, 2021 $ 2,060 End of period, June 30, 2021 3,605 Increase in contract liabilities during the period $ 1,545 | The table below sets forth receivables balances for the periods indicated: December 31, (in thousands) 2019 2020 Receivables, beginning of the period $ 9,056 $ 20,577 Receivables, end of the period 20,577 111,871 Increase in receivables during the period $ 11,521 $ 91,294 The table below sets forth contract liabilities balances for the periods indicated: December 31, (in thousands) 2019 2020 Contract liabilities, beginning of the period $ 1,727 $ 954 Contract liabilities, end of the period 954 2,060 Increase/(decrease) in contract liabilities during the period $ (773) $ 1,106 |
ALLOWANCE FOR CREDIT LOSSES (_2
ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
ALLOWANCE FOR CREDIT LOSSES OF RECEIVABLES FROM USERS | The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to fraudulent, unlawful or otherwise inappropriate customer behavior, such as when customers initiate deposits into their accounts, make trades on our platform using a short-term extension of credit from us, and then repatriate or reverse the deposits, resulting in a loss to us of the credited amount (“Fraudulent Deposit Transactions”) and to a lesser extent, losses on margin borrowings, for the periods indicated: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Beginning balance $ 27,070 $ 30,875 $ 17,122 $ 34,092 Provision for credit losses 13,985 20,342 23,933 36,745 Write-offs — (15,964) $ — $ (35,584) Ending balance $ 41,055 $ 35,253 $ 41,055 $ 35,253 | The following table summarizes the allowance for credit losses, which primarily relate to unsecured balances of receivables from users due to Fraudulent Deposit Transactions and to a lesser extent, losses on margin borrowings, for the periods indicated: Year Ended December 31, (in thousands) 2019 2020 Beginning balance $ 6,013 $ 17,122 Provision for credit losses 11,109 59,134 Write-offs — (42,164) Ending balance $ 17,122 $ 34,092 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS | Financial assets and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our unaudited condensed consolidated balance sheets as follows: December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,026,034 $ — $ — $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities 134,994 — — 134,994 Other current assets: Equity securities - user-held fractional shares 802,483 — — 802,483 Equity securities - securities owned 3,222 — — 3,222 Total financial assets $ 1,966,733 $ — $ — $ 1,966,733 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 695 $ — $ — $ 695 Other current liabilities: Equity securities - repurchase obligations 802,483 — — 802,483 Total financial liabilities $ 803,178 $ — $ — $ 803,178 June 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 1,927,574 $ — $ — $ 1,927,574 U.S. Treasury securities 349,984 — — 349,984 Other current assets: Equity securities - user-held fractional shares 1,430,855 — — 1,430,855 Equity securities - securities owned 18,874 — — 18,874 Total financial assets $ 3,727,287 $ — $ — $ 3,727,287 Liabilities Accounts payable and accrued expenses: Equity securities - referral program liability $ 389 $ — $ — $ 389 Other current liabilities: Equity securities - repurchase obligations 1,430,855 — — 1,430,855 Convertible notes: Convertible notes — — 5,189,783 5,189,783 Other non-current liabilities: Warrant liability — — 382,513 382,513 Total financial liabilities $ 1,431,244 $ — $ 5,572,296 $ 7,003,540 | Financial assets measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Cash equivalents: Money market funds $ 416,025 $ 416,025 $ 1,026,034 $ 1,026,034 Cash and securities segregated under federal and other regulations: U.S. Treasury securities — — 134,994 134,994 Other current assets: Equity securities - user-held fractional shares — — 802,483 802,483 Equity securities - securities owned 2,997 2,997 3,222 3,222 Total financial assets $ 419,022 $ 419,022 $ 1,966,733 $ 1,966,733 Financial liabilities measured at fair value on a recurring basis as of the date indicated below were presented on our consolidated balance sheets as follows: December 31, 2019 December 31, 2020 (in thousands) Level 1 Total Level 1 Total Accounts payable and accrued expenses: Equity securities - referral program liability $ 303 $ 303 $ 695 $ 695 Other current liabilities: Equity securities - repurchase obligations — — 802,483 802,483 Total financial liabilities $ 303 $ 303 $ 803,178 $ 803,178 |
SCHEDULE OF SIGNIFICANT UNOBSERVABLE INPUTS | The significant unobservable inputs used in the fair value measurement of the convertible notes and warrant liability include: June 30, 2021 Convertible notes Warrant liability Fair value of common stock $ 38.00 $ 38.00 Volatility N/A 56 % Risk free rate N/A 1.42 % | |
SCHEDULE OF CHANGES IN ESTIMATED FAIR VALUE OF CONVERTIBLE NOTES AND WARRANT LIABILITY | The following table sets forth a summary of the changes in the estimated fair value of our convertible notes and warrant liability: (in thousands) Convertible notes Warrant liability Beginning of period, January 1, 2021 $ — $ — Issued during the period 3,299,031 252,944 Change in fair value 1,890,752 129,569 End of period, June 30, 2021 $ 5,189,783 $ 382,513 |
INCOME TAXES (Tables)_2
INCOME TAXES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
SCHEDULE OF INCOME TAX PROVISION (BENEFIT) | Three Months Ended Six Months Ended (in thousands, except percentages) 2020 2021 2020 2021 Income (loss) before income taxes $ 58,118 $ (464,158) $ 5,530 $ (1,897,182) Provision for income taxes 534 37,507 448 49,286 Effective Tax Rate 0.9 % (8.1) % 8.1 % (2.6) % | The components of the provision for (benefit from) income taxes were as follows: December 31, (in thousands) 2019 2020 Current: Federal $ (58) $ 2,780 State (295) 3,801 Foreign — — Total current tax expense (benefit) (353) 6,581 Deferred: Federal — — State — — Foreign (665) (200) Total deferred tax expense (benefit) (665) (200) Total provision for (benefit from) income taxes $ (1,018) $ 6,381 |
PROPERTY, SOFTWARE AND EQUIPM_4
PROPERTY, SOFTWARE AND EQUIPMENT, NET (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT | Property, software and equipment are presented net of accumulated depreciation and amortization and summarized as follows: December 31, June 30, (in thousands) 2020 2021 Computer equipment $ 9,203 $ 17,459 Furniture and fixtures 8,024 14,764 Tenant improvements 18,945 38,426 Internally developed software 16,992 18,943 Construction in progress 9,756 7,266 Total 62,920 96,858 Less: accumulated depreciation and amortization (17,086) (25,780) Property, software and equipment, net $ 45,834 $ 71,078 | Depreciation and amortization is recorded on a straight-line basis over the useful life of the asset, which is as follows: Property, Software, and Equipment Useful Life Computer equipment 3 years Furniture and fixtures 7 years Tenant improvements Shorter of estimated useful life or lease term Internally developed software 3 years Property, software and equipment are recorded net of accumulated depreciation and summarized by as follows: December 31, (in thousands) 2019 2020 Computer equipment $ 4,980 $ 9,203 Furniture and fixtures 3,761 8,024 Tenant improvements 9,522 18,945 Internally developed software 12,029 16,992 Construction in progress 2,957 9,756 Total 33,249 62,920 Less: accumulated depreciation and amortization (7,948) (17,086) Property, software and equipment, net $ 25,301 $ 45,834 |
OFFSETTING ASSETS AND LIABILI_4
OFFSETTING ASSETS AND LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Offsetting [Abstract] | ||
SCHEDULE OF ASSETS SUBJECT TO MASTER NETTING ARRANGEMENT | Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
SCHEDULE OF LIABILITIES SUBJECT TO MASTER NETTING ARRANGEMENT | Our assets and liabilities subject to master netting arrangements are as follows: December 31, June 30, (in thousands) 2020 2021 Assets Securities borrowed Gross amount of securities borrowed $ 372 $ 754 Gross amount offset on the unaudited condensed consolidated balance sheets — — Amounts of assets presented on the unaudited condensed consolidated balance sheets (1) 372 754 Gross amount of securities borrowed not offset in the unaudited condensed consolidated balance sheets: Securities borrowed 372 754 Security collateral received (361) (727) Net amount $ 11 $ 27 Liabilities Securities loaned Gross amount of securities loaned $ 1,921,118 $ 2,642,900 Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets — — Amounts of liabilities presented on the unaudited condensed consolidated balance sheets 1,921,118 2,642,900 Gross amount of securities loaned not offset on the unaudited condensed consolidated balance sheets: Securities loaned 1,921,118 2,642,900 Security collateral pledged (1,787,819) (2,531,114) Net amount $ 133,299 $ 111,786 ________________ (1) Securities borrowed are included in receivable from brokers, dealers and clearing organizations in the unaudited condensed consolidated balance sheets. | Our assets and liabilities subject to master netting arrangements are as follows: December 31, (in thousands) 2019 2020 Assets Securities borrowed Gross amount of securities borrowed $ 438 $ 372 Gross amount offset on the consolidated balance sheets — — Amounts of assets presented on the consolidated balance sheets (1) 438 372 Gross amount of securities borrowed not offset in the consolidated balance sheets: Securities borrowed 438 372 Security collateral received (425) (361) Net amount $ 13 $ 11 Liabilities Securities loaned Gross amount of securities loaned $ 674,029 $ 1,921,118 Gross amount of securities loaned offset on the consolidated balance sheets — — Amounts of liabilities presented on the consolidated balance sheets 674,029 1,921,118 Gross amount of securities loaned not offset on the consolidated balance sheets: Securities loaned 674,029 1,921,118 Security collateral pledged (654,589) (1,787,819) Net amount $ 19,440 $ 133,299 ________________ (1) Securities borrowed is included in receivable from brokers, dealers and clearing organizations in the consolidated balance sheets. |
OTHER CURRENT ASSETS (Tables)_2
OTHER CURRENT ASSETS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
DETAIL OF OTHER CURRENT ASSETS | The following table presents the detail of other current assets: December 31, June 30, (in thousands) 2020 2021 User-held fractional shares $ 802,483 $ 1,430,855 Prepaid expenses 28,629 67,412 Securities owned 3,222 18,874 Other 16,804 25,761 Total other current assets $ 851,138 $ 1,542,902 | The following table presents the detail of other current assets: December 31, (in thousands) 2019 2020 User-held fractional shares $ — $ 802,483 Prepaid expenses 17,159 28,629 Securities owned 2,997 3,222 Other 8,186 16,804 Total other current assets $ 28,342 $ 851,138 |
MEZZANINE EQUITY, COMMON STOC_4
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
SCHEDULE OF REDEEMABLE CONVERTIBLE PREFERRED STOCK | The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of June 30, 2021: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 G-1 244,278,204 — 18.6000 — 18.6000 — 658,311,424 412,742,897 $ 2,191,086 $ 2,179,739 | The following table is a summary of redeemable convertible preferred stock as of December 31, 2020: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 131,913,460 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 80,263,020 80,263,020 0.6354 50,999 0.6354 50,999 C 43,788,180 43,788,180 2.5121 110,000 2.5121 109,870 D 35,774,761 35,774,761 10.1450 362,935 10.1450 362,670 E 29,887,357 29,887,357 12.4827 373,075 12.4827 372,733 F 48,000,000 48,000,000 12.5000 600,000 12.5000 599,284 G 44,406,442 43,116,119 15.5000 668,300 15.5000 668,044 414,033,220 412,742,897 $ 2,191,086 $ 2,179,739 The following table is a summary of redeemable convertible preferred stock as of December 31, 2019: (in thousands, except share data and per share amounts) Series Shares Authorized Shares Issued and Outstanding Per Share Liquidation Preference Liquidation Amount Per Share Initial Conversion Price Carrying Value of Stock, Net of Issuance Costs A 263,826,920 131,913,460 $ 0.1954 $ 25,777 $ 0.1954 $ 16,139 B 160,526,040 80,263,020 0.6354 50,999 0.6354 50,999 C 87,576,360 43,788,180 2.5121 110,000 2.5121 109,870 D 71,549,522 35,774,761 10.1450 362,935 10.1450 362,670 E 59,854,820 29,887,357 12.4827 373,075 12.4827 372,733 643,333,662 321,626,778 $ 922,786 $ 912,411 |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock option activity for the six months ended June 30, 2021 is as follows: Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value (in thousands) Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Exercised during the period (3,581,521) 1.87 Cancelled and forfeited during the period (276,657) 4.51 Balance at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options vested and expected to vest at June 30, 2021 17,685,650 $ 2.22 5.76 $ 632,774 Options exercisable at June 30, 2021 15,905,386 $ 1.75 5.56 $ 576,535 | A summary of stock option activity for the year ended December 31, 2020 is as follows: (in thousands, except share and per share data) Number of Shares Weighted-Average Exercise Price Weighted- Average Remaining Life Total Intrinsic Value Balance at December 31, 2019 27,613,830 $ 2.33 7.59 $ 197,536 Granted during the period 324,442 10.10 Exercised during the period (4,310,197) 2.20 Cancelled and forfeited during the period (2,084,247) 5.18 Balance at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options vested and expected to vest at December 31, 2020 21,543,828 $ 2.19 6.52 $ 304,590 Options exercisable at December 31, 2020 18,793,618 $ 1.58 6.31 $ 277,127 |
SCHEDULE OF ACTIVITY RELATED TO TIME-BASED RSUs | The following table summarizes the activity related to our Time-Based RSUs for the six months ended June 30, 2021: Number of RSUs Weighted- average grant date fair value Unvested at December 31, 2020 47,711,649 $ 10.84 Granted 22,899,989 40.88 Forfeited (1,747,048) 16.48 Unvested at June 30, 2021 68,864,590 $ 26.12 | The following table summarizes the activity related to our time-based RSUs for the year ended December 31, 2020: Number of RSUs Weighted- average grant date fair value Unvested restricted stock at December 31, 2019 24,024,214 $ 8.17 Granted 27,492,086 12.90 Forfeited (3,804,651) 8.84 Unvested restricted stock at December 31, 2020 47,711,649 $ 10.84 |
SCHEDULE OF SHARE-BASED COMPENSATION | The following table summarizes the effects of share-based compensation on our unaudited condensed consolidated statements of operations: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Brokerage and transaction $ 6 $ 6 $ 12 $ 12 Technology and development 824 717 2,540 2,025 Operations 8 3 18 6 Marketing 7 41 15 78 General and administrative 520 371 1,192 8,013 Total $ 1,365 $ 1,138 $ 3,777 $ 10,134 | The following table summarizes the effects of share-based compensation on our consolidated statements of operations: Year Ended December 31, (in thousands) 2019 2020 Brokerage and transaction $ 427 $ 227 Technology and development 9,499 18,024 Operations 139 61 Marketing 85 613 General and administrative 16,517 5,405 Total $ 26,667 $ 24,330 |
INCOME (LOSS) PER SHARE (Tabl_2
INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
CALCULATION OF BASIC AND DILUTED INCOME (LOSS) PER SHARE | The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Three Months Ended Six Months Ended 2020 2021 2020 2021 Net income (loss) $ 57,584 $ (501,665) $ 5,082 $ (1,946,468) Less: allocation of earnings to participating securities $ 34,801 $ — $ 3,032 $ — Net income (loss) attributable to common stockholders $ 22,783 $ (501,665) $ 2,050 $ (1,946,468) Weighted-average common stock outstanding - basic 225,091,413 232,223,019 224,953,736 231,459,227 Dilutive effect of stock options and unvested shares 19,246,732 — 19,585,456 — Weighted-average common stock outstanding - diluted 244,338,145 232,223,019 244,539,192 231,459,227 Net income (loss) per share attributable to common stockholders: Basic $ 0.10 $ (2.16) $ 0.01 $ (8.41) Diluted $ 0.09 $ (2.16) $ 0.01 $ (8.41) | The following table presents the calculation of basic and diluted income (loss) per share: (in thousands, except per share data) Year Ended December 31, 2019 2020 Net income (loss) $ (106,569) $ 7,449 Less: allocation of earnings to participating securities — 4,601 Net income (loss) attributable to common stockholders $ (106,569) $ 2,848 Weighted-average common stock outstanding - basic 221,664,610 225,748,355 Dilutive effect of stock options and unvested shares — 19,249,033 Weighted-average common stock outstanding - diluted 221,664,610 244,997,388 Net income (loss) per share attributable to common stockholders: Basic $ (0.48) $ 0.01 Diluted $ (0.48) $ 0.01 |
POTENTIAL COMMON SHARES EXCLUDED FROM THE CALCULATION OF DILUTED NET INCOME (LOSS) PER SHARE | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Three Months Ended Six Months Ended 2020 2021 2020 2021 Redeemable convertible preferred stock 366,266,778 412,742,897 366,266,778 412,742,897 RSUs 62,362,190 132,048,248 62,362,190 132,048,248 Stock options 89,110 17,685,650 82,182 17,685,650 Unvested shares 735 128,228 735 128,228 Total anti-dilutive securities 428,718,813 562,605,023 428,711,885 562,605,023 | The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Year Ended December 31, 2019 2020 Redeemable convertible preferred stock 321,626,778 412,742,897 RSUs 51,687,872 75,375,307 Stock options 27,613,830 60,082 Unvested shares 749,943 8,423 Total anti-dilutive securities 401,678,423 488,186,709 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
SCHEDULE OF COMPONENTS OF LEASE EXPENSE, OTHER INFORMATION AND CASH FLOWS | The components of lease expense were as follows: Three Months Ended Six Months Ended (in thousands) 2020 2021 2020 2021 Fixed operating lease costs $ 2,693 $ 5,011 $ 5,063 $ 8,790 Variable operating lease costs 704 1,374 1,427 2,452 Short-term lease costs 307 356 313 610 Total lease costs $ 3,704 $ 6,741 $ 6,803 $ 11,852 Other information related to our operating leases was as follows: December 31, June 30, 2020 2021 Weighted-average remaining lease term 5.41 years 5.23 years Weighted-average discount rate 7.02 % 6.21 % Cash flows related to leases were as follows: Six Months Ended (in thousands) 2020 2021 Operating cash flows: Payments for operating lease liabilities $ 9,609 $ 1,070 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,902 $ 31,693 | The components of lease expense were as follows: Year Ended December 31, (in thousands) 2019 2020 Fixed operating lease costs $ 5,422 $ 11,420 Variable operating lease costs 1,078 3,009 Short-term lease costs 1,188 1,222 Total lease costs $ 7,688 $ 15,651 Other information related to our operating leases was as follows: Year Ended December 31, 2019 2020 Weighted-average remaining lease term 5.11 years 5.41 years Weighted-average discount rate 7.47 % 7.02 % Cash flows related to leases were as follows: Year Ended December 31, (in thousands) 2019 2020 Operating cash flows: Payments for operating lease liabilities $ 4,755 $ 12,781 Supplemental cash flow data: Lease liabilities arising from obtaining right-of-use assets $ 14,816 $ 25,958 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS | Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of June 30, 2021 are as follows: (in thousands) Remainder of 2021 $ 8,975 2022 25,150 2023 22,841 2024 18,291 2025 17,239 Thereafter 22,270 Total undiscounted lease payments 114,766 Less: imputed interest (17,965) Less: lease incentives (10,051) Total lease liabilities $ 86,750 | Future minimum lease payments under non-cancellable operating leases (with initial lease terms in excess of one year) as of December 31, 2020 are as follows: (in thousands) 2021 $ 12,159 2022 16,590 2023 13,779 2024 10,688 2025 9,932 Thereafter 9,724 Total undiscounted lease payments 72,872 Less: present value discount (12,675) Less: lease incentives (6,116) Total lease liabilities $ 54,081 |
DESCRIPTION OF BUSINESS AND S_7
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)periodsegment$ / shares | Dec. 31, 2019USD ($) | |
Concentration Risk [Line Items] | ||
Minimum shares allowed to purchase under fractional shares program | 0.000001 | |
Number of operating segments | segment | 1 | |
Term of user contract | 30 days | |
Advertising costs | $ | $ 157,100,000 | $ 119,600,000 |
Research and development costs | $ | $ 52,200,000 | $ 27,700,000 |
Dividend yield | 0.00% | |
Settlement period for receivables from brokers, dealers, and clearing organizations | 30 days | |
Percentage of users to receive stock reward | 98.00% | |
Maximum annual reward earned by user | $ | $ 500 | |
Claim period of reward | 60 days | |
Realized and unrealized gains and losses | $ | $ 3,000,000 | |
Contractual termination period for securities borrowed and loaned | 3 days | |
Performance-based RSUs | ||
Concentration Risk [Line Items] | ||
Vesting period | 4 years | |
Market-Based RSUs | ||
Concentration Risk [Line Items] | ||
Vesting period | 6 years | |
Number of service periods | period | 2 | |
Minimum | ||
Concentration Risk [Line Items] | ||
Potential value of stock reward (in dollars per share) | $ / shares | $ 2.50 | |
Actual value of stock reward (in dollars per share) | $ / shares | 2.50 | |
Maximum | ||
Concentration Risk [Line Items] | ||
Potential value of stock reward (in dollars per share) | $ / shares | 225 | |
Actual value of stock reward (in dollars per share) | $ / shares | $ 10 |
DESCRIPTION OF BUSINESS AND S_8
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT, USEFUL LIFE (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Internally developed software | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
DESCRIPTION OF BUSINESS AND S_9
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF CONCENTRATION OF CREDIT RISK (Details) - Customer Concentration Risk - Revenue Benchmark | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Citadel Securities, LLC | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 14.00% | 36.00% | 21.00% | 34.00% | 34.00% | 29.00% |
Entities affiliated with Susquehanna International Group, LLP | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 9.00% | 21.00% | 11.00% | 20.00% | 18.00% | 13.00% |
Entities affiliated with Wolverine Holdings, L.P. | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 8.00% | 8.00% | 8.00% | 10.00% | 10.00% | 12.00% |
All others individually less than 10% | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 7.00% | 10.00% | 11.00% | 9.00% | 13.00% | 8.00% |
Total as percentage of total revenue | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 79.00% | 77.00% | 80.00% | 76.00% | 75.00% | 62.00% |
RECENT ACCOUNTING PRONOUNCEME_3
RECENT ACCOUNTING PRONOUNCEMENTS - NARRATIVE (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 74,700 | $ 49,200 | $ 31,200 | |
Total lease liabilities | $ 86,750 | $ 54,081 | $ 37,800 | |
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 19,300 | |||
Total lease liabilities | $ 25,500 |
REVENUE - REVENUE DISAGGREGATED
REVENUE - REVENUE DISAGGREGATED BY REVENUE SOURCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Securities lending | 39,448 | 28,633 | 75,074 | 35,138 | 98,165 | 6,380 |
Margin interest | 31,230 | 10,958 | 58,961 | 18,787 | 66,781 | 19,104 |
Interest on segregated cash and securities | 931 | 1,436 | 2,041 | 10,632 | 13,401 | 36,281 |
Other interest revenue | 1,368 | 526 | 2,197 | 2,516 | 3,972 | 9,865 |
Interest expenses related to credit facilities | (5,268) | (1,555) | (8,067) | (3,059) | (4,882) | (991) |
Net interest revenues | 67,709 | 39,998 | 130,206 | 64,014 | 177,437 | 70,639 |
Total net revenues | 565,333 | 244,211 | 1,087,507 | 371,761 | 958,833 | 277,533 |
Options | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 164,604 | 111,148 | 362,464 | 170,908 | 440,070 | 110,656 |
Equities | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 52,012 | 70,606 | 185,313 | 102,195 | 251,200 | 50,688 |
Cryptocurrencies | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 233,103 | 5,320 | 320,690 | 9,558 | 26,708 | 9,487 |
Other | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 1,448 | 339 | 3,139 | 383 | 2,155 | 0 |
Other revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 46,457 | $ 16,800 | $ 85,695 | $ 24,703 | $ 61,263 | $ 36,063 |
REVENUE - RECEIVABLES AND CONTR
REVENUE - RECEIVABLES AND CONTRACT LIABILITIES BALANCES (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract with Customer, Asset [Roll Forward] | |||
Beginning of period, January 1, 2021 | $ 111,871 | $ 20,577 | $ 9,056 |
End of period, June 30, 2021 | 147,168 | 111,871 | 20,577 |
Increase in receivables during the period | 35,297 | 91,294 | 11,521 |
Contract with Customer, Liability [Roll Forward] | |||
Beginning of period, January 1, 2021 | 2,060 | 954 | 1,727 |
End of period, June 30, 2021 | 3,605 | 2,060 | 954 |
Increase in contract liabilities during the period | $ 1,545 | $ 1,106 | $ (773) |
ALLOWANCE FOR CREDIT LOSSES - A
ALLOWANCE FOR CREDIT LOSSES - ALLOWANCE FOR CREDIT LOSSES OF RECEIVABLES FROM USERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Beginning balance | $ 30,875 | $ 27,070 | $ 34,092 | $ 17,122 | $ 17,122 | $ 6,013 |
Provision for credit losses | 20,342 | 13,985 | 36,745 | 23,933 | 59,134 | 11,109 |
Write-offs | (15,964) | 0 | (35,584) | 0 | (42,164) | 0 |
Ending balance | $ 35,253 | $ 41,055 | $ 35,253 | $ 41,055 | $ 34,092 | $ 17,122 |
ALLOWANCE FOR CREDIT LOSSES - N
ALLOWANCE FOR CREDIT LOSSES - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | $ (20,342) | $ (13,985) | $ (36,745) | $ (23,933) | $ (59,134) | $ (11,109) | |||
Allowance for credit losses | 35,253 | 41,055 | 35,253 | 41,055 | 34,092 | 17,122 | $ 30,875 | $ 27,070 | $ 6,013 |
Transaction-based revenues | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | 19,000 | 13,400 | 34,900 | 23,300 | (58,000) | (11,100) | |||
Allowance for credit losses | 32,900 | 40,400 | 32,900 | 40,400 | 33,500 | $ 17,100 | |||
Other revenues | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | 1,300 | 600 | 1,800 | 600 | 1,100 | ||||
Allowance for credit losses | $ 2,400 | $ 700 | $ 2,400 | $ 700 | $ 600 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Total financial assets | $ 3,727,287 | $ 1,966,733 | $ 419,022 |
Liabilities | |||
Total financial liabilities | 7,003,540 | 803,178 | 303 |
Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 1,430,855 | 802,483 | 0 |
Equity securities - securities owned | |||
Assets | |||
Other current assets | 18,874 | 3,222 | 2,997 |
Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 389 | 695 | 303 |
Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 1,430,855 | 802,483 | 0 |
Money market funds | |||
Assets | |||
Cash equivalents | 1,927,574 | 1,026,034 | 416,025 |
U.S. Treasury securities | |||
Assets | |||
Cash equivalents | 349,984 | 134,994 | 0 |
Level 1 | |||
Assets | |||
Total financial assets | 3,727,287 | 1,966,733 | 419,022 |
Liabilities | |||
Total financial liabilities | 1,431,244 | 803,178 | 303 |
Level 1 | Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 1,430,855 | 802,483 | 0 |
Level 1 | Equity securities - securities owned | |||
Assets | |||
Other current assets | 18,874 | 3,222 | 2,997 |
Level 1 | Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 389 | 695 | 303 |
Level 1 | Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 1,430,855 | 802,483 | 0 |
Level 1 | Money market funds | |||
Assets | |||
Cash equivalents | 1,927,574 | 1,026,034 | 416,025 |
Level 1 | U.S. Treasury securities | |||
Assets | |||
Cash equivalents | $ 349,984 | $ 134,994 | $ 0 |
INCOME TAXES - SCHEDULE OF COMP
INCOME TAXES - SCHEDULE OF COMPONENTS OF INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Domestic | $ 14,773 | $ (104,690) | ||||
Foreign | (943) | (2,897) | ||||
Income (loss) before income taxes | $ (464,158) | $ 58,118 | $ (1,897,182) | $ 5,530 | $ 13,830 | $ (107,587) |
INCOME TAXES - SCHEDULE OF INCO
INCOME TAXES - SCHEDULE OF INCOME TAX PROVISION (BENEFIT) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||||||
Federal | $ 2,780 | $ (58) | ||||
State | 3,801 | (295) | ||||
Foreign | 0 | 0 | ||||
Total current tax expense (benefit) | 6,581 | (353) | ||||
Deferred: | ||||||
Federal | 0 | 0 | ||||
State | 0 | 0 | ||||
Foreign | (200) | (665) | ||||
Total deferred tax expense (benefit) | (200) | (665) | ||||
Provision for income taxes | $ 37,507 | $ 534 | $ 49,286 | $ 448 | 6,381 | (1,018) |
Income (loss) before income taxes | $ (464,158) | $ 58,118 | $ (1,897,182) | $ 5,530 | $ 13,830 | $ (107,587) |
INCOME TAXES - SCHEDULE OF RECO
INCOME TAXES - SCHEDULE OF RECONCILIATION OF FEDERAL STATUTORY INCOME TAX TO PROVISION FOR (BENEFIT FROM) INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Federal tax (benefit) at statutory rate | $ 2,905 | $ (22,593) | ||||
State tax (benefit), net of federal benefit | (862) | (5,491) | ||||
Foreign rate differential | (2) | (57) | ||||
Share-based compensation | (2,654) | (1,221) | ||||
Tender offer compensation | 3,607 | 4,229 | ||||
Research and development credits | (10,489) | (2,104) | ||||
Non-deductible regulatory settlements | 21,000 | 0 | ||||
Permanent differences | 526 | 0 | ||||
Other | 52 | 905 | ||||
Change in valuation allowance | (7,702) | 25,314 | ||||
Provision for income taxes | $ 37,507 | $ 534 | $ 49,286 | $ 448 | $ 6,381 | $ (1,018) |
INCOME TAXES - SCHEDULE OF SIGN
INCOME TAXES - SCHEDULE OF SIGNIFICANT COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Accruals and other liabilities | $ 14,849 | $ 7,704 |
Lease liabilities | 13,794 | 9,859 |
Tax credit carryforwards | 9,058 | 3,198 |
Net operating loss carryforwards | 3,141 | 23,091 |
Share-based compensation | 3,123 | 1,442 |
Other | 3,386 | 686 |
Total deferred tax assets | 47,351 | 45,980 |
Deferred tax liabilities: | ||
Right of use assets | (12,551) | (8,194) |
Depreciation and amortization | (6,965) | (1,914) |
Total deferred tax liabilities | (19,516) | (10,108) |
Valuation allowance | (26,909) | (35,207) |
Net deferred tax assets | $ 926 | $ 665 |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | |||
Decrease in valuation allowance | $ 8,300 | ||
U.S. state net operating loss carryforwards | 32,300 | ||
Unrecognized tax benefits | 7,420 | $ 2,177 | $ 759 |
Non-U.S. | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards not subject to expiration | 4,700 | ||
U.S. | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforward subject to expiration | 8,500 | ||
State | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards not subject to expiration | $ 9,300 |
INCOME TAXES - SCHEDULE OF RE_2
INCOME TAXES - SCHEDULE OF RECONCILIATION OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized benefit - beginning of period | $ 2,177 | $ 759 |
Gross increases - current year tax positions | 4,395 | 797 |
Gross increases - prior year tax positions | 848 | 621 |
Unrecognized benefit - end of period | $ 7,420 | $ 2,177 |
PROPERTY, SOFTWARE AND EQUIPM_5
PROPERTY, SOFTWARE AND EQUIPMENT, NET - SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | $ 96,858 | $ 62,920 | $ 33,249 |
Less: accumulated depreciation and amortization | (25,780) | (17,086) | (7,948) |
Property, software and equipment, net | 71,078 | 45,834 | 25,301 |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 17,459 | 9,203 | 4,980 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 14,764 | 8,024 | 3,761 |
Tenant improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 38,426 | 18,945 | 9,522 |
Internally developed software | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 18,943 | 16,992 | 12,029 |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | $ 7,266 | $ 9,756 | $ 2,957 |
PROPERTY, SOFTWARE AND EQUIPM_6
PROPERTY, SOFTWARE AND EQUIPMENT, NET - NARRATIVE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense of property and equipment | $ 3.4 | $ 1.3 | $ 5.8 | $ 2.1 | $ 5.7 | $ 2.1 |
Amortization expense of internally developed software | $ 1.5 | $ 0.9 | $ 2.9 | $ 1.8 | $ 4.2 | $ 3.3 |
OFFSETTING ASSETS AND LIABILI_5
OFFSETTING ASSETS AND LIABILITIES - SCHEDULE OF ASSETS AND LIABILITIES SUBJECT TO MASTER NETTING ARRANGEMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Gross amount of securities borrowed | $ 754 | $ 372 | $ 438 |
Gross amount offset on the unaudited condensed consolidated balance sheets | 0 | 0 | 0 |
Amounts of assets presented on the unaudited condensed consolidated balance sheets | 754 | 372 | 438 |
Securities borrowed | 754 | 372 | 438 |
Security collateral received | (727) | (361) | (425) |
Net amount | 27 | 11 | 13 |
Liabilities | |||
Gross amount of securities loaned | 2,642,900 | 1,921,118 | 674,029 |
Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets | 0 | 0 | 0 |
Amounts of liabilities presented on the unaudited condensed consolidated balance sheets | 2,642,900 | 1,921,118 | 674,029 |
Securities loaned | 2,642,900 | 1,921,118 | 674,029 |
Security collateral pledged | (2,531,114) | (1,787,819) | (654,589) |
Net amount | $ 111,786 | $ 133,299 | $ 19,440 |
OFFSETTING ASSETS AND LIABILI_6
OFFSETTING ASSETS AND LIABILITIES - NARRATIVE (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting [Abstract] | |||
Fair value of securities re-pledged | $ 7,517,000 | $ 4,632,600 | $ 896,200 |
Security collateral received | $ 727 | $ 361 | $ 425 |
OTHER CURRENT ASSETS - DETAIL O
OTHER CURRENT ASSETS - DETAIL OF OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
User-held fractional shares | $ 1,430,855 | $ 802,483 | $ 0 |
Prepaid expenses | 67,412 | 28,629 | 17,159 |
Securities owned | 18,874 | 3,222 | 2,997 |
Other | 25,761 | 16,804 | 8,186 |
Other current assets | $ 1,542,902 | $ 851,138 | $ 28,342 |
FINANCING ACTIVITIES AND OFF-_3
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK - NARRATIVE (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||||||
Oct. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2021 | Apr. 30, 2021 | Dec. 31, 2020 | Oct. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||||||
Settlement date basis, equities | 2 days | ||||||||
Settlement date basis, options | 1 day | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 200,000,000 | ||||||||
Commitment fee percentage | 0.10% | ||||||||
Outstanding borrowings, long-term | $ 0 | $ 0 | $ 0 | ||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Federal Reserve Bank of New York Rate | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 0.50% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar, One Month Interest Period | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility, As Amended | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 625,000,000 | $ 600,000,000 | |||||||
Revolving Credit Facility | Line of Credit | June 2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 250,000,000 | ||||||||
Commitment fee percentage | 0.35% | ||||||||
Revolving Credit Facility | Line of Credit | June 2019 Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 400,000,000 | ||||||||
Outstanding borrowings, short-term | $ 0 | $ 0 | |||||||
Commitment fee percentage | 0.35% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility, As Amended | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 550,000,000 |
MEZZANINE EQUITY, COMMON STOC_5
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF REDEEMABLE CONVERTIBLE PREFERRED STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 658,311,424 | 414,033,220 | 643,333,662 |
Shares issued (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, outstanding (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Liquidation Amount | $ 2,191,086 | $ 2,191,086 | $ 922,786 |
Redeemable convertible preferred stock | $ 2,179,739 | $ 2,179,739 | $ 912,411 |
Series A | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 131,913,460 | 131,913,460 | 263,826,920 |
Shares issued (in shares) | 131,913,460 | 131,913,460 | 131,913,460 |
Redeemable convertible preferred stock, outstanding (in shares) | 131,913,460 | 131,913,460 | 131,913,460 |
Per Share Liquidation Preference (in dollars per share) | $ 0.1954 | $ 0.1954 | $ 0.1954 |
Liquidation Amount | $ 25,777 | $ 25,777 | $ 25,777 |
Per Share Initial Conversion Price (in dollars per share) | $ 0.1954 | $ 0.1954 | $ 0.1954 |
Redeemable convertible preferred stock | $ 16,139 | $ 16,139 | $ 16,139 |
Series B | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 80,263,020 | 80,263,020 | 160,526,040 |
Shares issued (in shares) | 80,263,020 | 80,263,020 | 80,263,020 |
Redeemable convertible preferred stock, outstanding (in shares) | 80,263,020 | 80,263,020 | 80,263,020 |
Per Share Liquidation Preference (in dollars per share) | $ 0.6354 | $ 0.6354 | $ 0.6354 |
Liquidation Amount | $ 50,999 | $ 50,999 | $ 50,999 |
Per Share Initial Conversion Price (in dollars per share) | $ 0.6354 | $ 0.6354 | $ 0.6354 |
Redeemable convertible preferred stock | $ 50,999 | $ 50,999 | $ 50,999 |
Series C | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 43,788,180 | 43,788,180 | 87,576,360 |
Shares issued (in shares) | 43,788,180 | 43,788,180 | 43,788,180 |
Redeemable convertible preferred stock, outstanding (in shares) | 43,788,180 | 43,788,180 | 43,788,180 |
Per Share Liquidation Preference (in dollars per share) | $ 2.5121 | $ 2.5121 | $ 2.5121 |
Liquidation Amount | $ 110,000 | $ 110,000 | $ 110,000 |
Per Share Initial Conversion Price (in dollars per share) | $ 2.5121 | $ 2.5121 | $ 2.5121 |
Redeemable convertible preferred stock | $ 109,870 | $ 109,870 | $ 109,870 |
Series D | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 35,774,761 | 35,774,761 | 71,549,522 |
Shares issued (in shares) | 35,774,761 | 35,774,761 | 35,774,761 |
Redeemable convertible preferred stock, outstanding (in shares) | 35,774,761 | 35,774,761 | 35,774,761 |
Per Share Liquidation Preference (in dollars per share) | $ 10.1450 | $ 10.1450 | $ 10.1450 |
Liquidation Amount | $ 362,935 | $ 362,935 | $ 362,935 |
Per Share Initial Conversion Price (in dollars per share) | $ 10.1450 | $ 10.1450 | $ 10.1450 |
Redeemable convertible preferred stock | $ 362,670 | $ 362,670 | $ 362,670 |
Series E | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 29,887,357 | 29,887,357 | 59,854,820 |
Shares issued (in shares) | 29,887,357 | 29,887,357 | 29,887,357 |
Redeemable convertible preferred stock, outstanding (in shares) | 29,887,357 | 29,887,357 | 29,887,357 |
Per Share Liquidation Preference (in dollars per share) | $ 12.4827 | $ 12.4827 | $ 12.4827 |
Liquidation Amount | $ 373,075 | $ 373,075 | $ 373,075 |
Per Share Initial Conversion Price (in dollars per share) | $ 12.4827 | $ 12.4827 | $ 12.4827 |
Redeemable convertible preferred stock | $ 372,733 | $ 372,733 | $ 372,733 |
Series F | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 48,000,000 | 48,000,000 | |
Shares issued (in shares) | 48,000,000 | 48,000,000 | |
Redeemable convertible preferred stock, outstanding (in shares) | 48,000,000 | 48,000,000 | |
Per Share Liquidation Preference (in dollars per share) | $ 12.5000 | $ 12.5000 | |
Liquidation Amount | $ 600,000 | $ 600,000 | |
Per Share Initial Conversion Price (in dollars per share) | $ 12.5000 | $ 12.5000 | |
Redeemable convertible preferred stock | $ 599,284 | $ 599,284 | |
Series G | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 44,406,442 | 44,406,442 | |
Shares issued (in shares) | 43,116,119 | 43,116,119 | |
Redeemable convertible preferred stock, outstanding (in shares) | 43,116,119 | 43,116,119 | |
Per Share Liquidation Preference (in dollars per share) | $ 15.5000 | $ 15.5000 | |
Liquidation Amount | $ 668,300 | $ 668,300 | |
Per Share Initial Conversion Price (in dollars per share) | $ 15.5000 | $ 15.5000 | |
Redeemable convertible preferred stock | $ 668,044 | $ 668,044 |
MEZZANINE EQUITY, COMMON STOC_6
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - NARRATIVE (Details) | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Nov. 13, 2020USD ($)shares | Sep. 09, 2019USD ($)shares | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | May 31, 2021$ / sharesshares | Mar. 31, 2021employee$ / shares | Nov. 30, 2019employee | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)holdervotedirector$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common stock, number of elected directors entitled to holders | director | 4 | 4 | 4 | 4 | 4 | ||||||||
Number of holders entitled to matters before the board of directors | holder | 2 | 2 | 2 | 2 | 2 | ||||||||
Number of votes on matters before the board of directors | vote | 2 | 2 | 2 | 2 | 2 | ||||||||
Number of voting rights per share | vote | 1 | 1 | 1 | 1 | 1 | ||||||||
Aggregate intrinsic value for stock options exercised | $ 45,000,000 | $ 29,000,000 | |||||||||||
Total weighted average grant-date fair value of options granted (in dollars per share) | $ / shares | $ 3.64 | $ 2.31 | |||||||||||
Total fair value of shares vested | $ 6,500,000 | $ 7,800,000 | |||||||||||
Capitalized share-based compensation expense | $ 100,000 | $ 300,000 | $ 100,000 | $ 600,000 | 600,000 | 700,000 | |||||||
Remaining liability reclassified to additional paid-in capital | 1,169,000 | 1,631,000 | 10,222,000 | 4,314,000 | 24,926,000 | 27,328,000 | |||||||
Share-based compensation | $ 1,138,000 | $ 1,365,000 | $ 10,134,000 | $ 3,777,000 | $ 24,330,000 | 26,667,000 | |||||||
2020 Plan | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares of common stock authorized (in shares) | shares | 154,289,164 | ||||||||||||
Shares remaining available for issuance (in shares) | shares | 13,146,433 | 13,146,433 | 13,146,433 | 13,146,433 | 14,022,717 | ||||||||
ESPP | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Shares of common stock authorized (in shares) | shares | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||
Maximum payroll deduction for ESPP, percentage | 15.00% | 15.00% | 15.00% | 15.00% | |||||||||
ESPP purchase price discount, percentage | 85.00% | ||||||||||||
Percentage of shares outstanding after close of offering | 2.00% | ||||||||||||
Annual increase as a percentage of outstanding shares | 1.00% | ||||||||||||
Dividend Declared | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Dividends | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Dividend Paid | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Dividends | 0 | 0 | 0 | $ 0 | $ 0 | ||||||||
Stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Exercisable, period (up to) | 10 years | 10 years | |||||||||||
Vesting rate, percentage | 25.00% | 25.00% | |||||||||||
Vesting period | 4 years | 4 years | |||||||||||
Unrecognized compensation cost | 4,900,000 | 4,900,000 | 4,900,000 | $ 4,900,000 | $ 7,800,000 | ||||||||
Unrecognized compensation cost related to outstanding stock options, weighted-average period | 11 months 8 days | 1 year 2 months 19 days | |||||||||||
Number of employees affected | employee | 125 | ||||||||||||
Additional share-based compensation expense | $ 1,300,000 | ||||||||||||
Incremental share-based compensation expense | $ 1,800,000 | $ 800,000 | |||||||||||
Stock options | Share-based Payment Arrangement, Tranche One | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 1 year | 1 year | |||||||||||
RSUs | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Exercisable, period (up to) | 7 years | 7 years | |||||||||||
Vesting rate, percentage | 25.00% | ||||||||||||
Vesting period | 8 years | 1 year | 4 years | ||||||||||
Granted (in shares) | shares | 35,520,000 | 22,899,989 | 27,492,086 | 27,663,658 | |||||||||
Granted, Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.68 | $ 40.88 | $ 12.90 | $ 0.29 | |||||||||
Weighted-average incremental fair value (in dollars per share) | $ / shares | 21.95 | ||||||||||||
Unrecognized compensation cost | $ 1,800,000,000 | $ 1,800,000,000 | $ 1,800,000,000 | $ 1,800,000,000 | $ 517,700,000 | ||||||||
Number of employees affected | employee | 500 | ||||||||||||
Modified grant date fair value (in dollars per share) | $ / shares | $ 26.12 | $ 26.12 | $ 39.75 | $ 26.12 | $ 26.12 | $ 10.84 | $ 8.17 | ||||||
RSUs | Certain Executives | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Granted (in shares) | shares | 27,663,658 | ||||||||||||
Granted, Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 0.29 | $ 0.29 | |||||||||||
Unrecognized compensation cost | $ 8,000,000 | ||||||||||||
RSUs | 2019 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized share-based compensation expense, including incremental expense due to modification | $ 615,200,000 | $ 615,200,000 | $ 615,200,000 | $ 615,200,000 | |||||||||
Incremental share-based compensation expense | $ 411,300,000 | ||||||||||||
Remaining weighted-average service period | 1 year 3 months 10 days | ||||||||||||
RSUs | 2019 | Pro Forma | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Additional share-based compensation expense | 203,900,000 | ||||||||||||
RSUs | 2021 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | $ 805,500,000 | $ 805,500,000 | $ 805,500,000 | $ 805,500,000 | |||||||||
Incremental share-based compensation expense | $ 787,300,000 | ||||||||||||
Remaining weighted-average service period | 4 years 2 months 23 days | ||||||||||||
Requisite service period | 4 years 3 months 29 days | ||||||||||||
Number of tranches | tranche | 7 | 7 | 7 | 7 | |||||||||
RSUs | 2021 | Pro Forma | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Additional share-based compensation expense | $ 18,200,000 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche One | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vesting period | 1 year | ||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 4,560,000 | 5,532,732 | |||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 120 | $ 30.45 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Two | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 4,560,000 | 13,831,828 | |||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 150 | $ 50.75 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Three | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | 8,299,098 | |||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 180 | $ 101.50 | |||||||||||
RSUs | Share-based Payment Arrangement, Tranche Four | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 210 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Five | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 240 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Six | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 270 | ||||||||||||
RSUs | Share-based Payment Arrangement, Tranche Seven | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 300 | ||||||||||||
RSUs | Vesting Condition, Satisfied or Partially Satisfied | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | 660,000,000 | $ 660,000,000 | $ 660,000,000 | $ 660,000,000 | $ 207,200,000 | ||||||||
RSUs | Vesting Condition, Satisfied or Partially Satisfied | Certain Executives | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | 2,800,000 | ||||||||||||
RSUs | Vesting Condition, Not Yet Satisfied | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | 310,500,000 | ||||||||
RSUs | Vesting Condition, Not Yet Satisfied | Certain Executives | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | 1,200,000 | ||||||||||||
RSUs | Vesting Condition, Performance Condition Only | Certain Executives | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Unrecognized compensation cost | 4,000,000 | ||||||||||||
2020 Tender | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Aggregate shares of common stock sold (in shares) | shares | 1,400,000 | ||||||||||||
Aggregate purchase price of common stock | $ 21,500,000 | ||||||||||||
Remaining liability reclassified to additional paid-in capital | 18,600,000 | ||||||||||||
Share-based compensation | $ 17,200,000 | ||||||||||||
2019 Tender | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Aggregate shares of common stock sold (in shares) | shares | 5,400,000 | ||||||||||||
Aggregate purchase price of common stock | $ 67,600,000 | ||||||||||||
Share-based compensation | $ 18,700,000 | ||||||||||||
Redeemable convertible preferred stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Threshold outstanding to obtain approval (in shares) | shares | 50,000,000 | 50,000,000 | |||||||||||
Series F | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 12.5000 | $ 12.5000 | $ 12.5000 | $ 12.5000 | $ 12.5000 | ||||||||
Series F | IPO | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 12.4827 | $ 12.4827 | $ 12.4827 | $ 12.4827 | $ 12.4827 | ||||||||
Proceeds to trigger conversion of redeemable convertible preferred stock | $ 200,000,000 | $ 200,000,000 | |||||||||||
Series A and B | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Preferred stock, number of elected directors entitled to holders | director | 1 | 1 | 1 | 1 | 1 | ||||||||
Series D and E | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Conversion, percentage of outstanding shares | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | ||||||||
Series A | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | |||||||
Conversion, percentage of outstanding shares | 65.00% | 65.00% | 65.00% | 65.00% | 65.00% |
MEZZANINE EQUITY, COMMON STOC_7
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Beginning balance (in shares) | 21,543,828 | 27,613,830 | |
Granted during the period (in shares) | 324,442 | ||
Exercised during the period (in shares) | (3,581,521) | (4,310,197) | |
Cancelled and forfeited during the period (in shares) | (276,657) | (2,084,247) | |
Ending balance (in shares) | 17,685,650 | 21,543,828 | 27,613,830 |
Options vested and expected to vest (in shares) | 17,685,650 | 21,543,828 | |
Options exercisable (in shares) | 15,905,386 | 18,793,618 | |
Weighted-Average Exercise Price | |||
Beginning balance, Weighted-Average Exercise Price (in dollars per share) | $ 2.19 | $ 2.33 | |
Granted during the period, Weighted-Average Exercise Price (in dollars per share) | 10.10 | ||
Exercised during the period, Weighted-Average Exercise Price (in dollars per share) | 1.87 | 2.20 | |
Cancelled and forfeited during the period, Weighted-Average Exercise Price (in dollars per share) | 4.51 | 5.18 | |
Ending balance, Weighted-Average Exercise Price (in dollars per share) | 2.22 | 2.19 | $ 2.33 |
Options vested and expected to vest, Weighted-Average Exercise Price (in dollars per share) | 2.22 | 2.19 | |
Options exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 1.75 | $ 1.58 | |
Weighted- Average Remaining Life | |||
Weighted- Average Remaining Life | 5 years 9 months 3 days | 6 years 6 months 7 days | 7 years 7 months 2 days |
Options vested and expected to vest, Weighted-Average Remaining Life | 5 years 9 months 3 days | 6 years 6 months 7 days | |
Options exercisable, Weighted-Average Remaining Life | 5 years 6 months 21 days | 6 years 3 months 21 days | |
Total Intrinsic Value (in thousands) | |||
Total Intrinsic Value (in thousands) | $ 632,774 | $ 304,590 | $ 197,536 |
Options vested and expected to vest, Total Intrinsic Value | 632,774 | 304,590 | |
Options exercisable, Total Intrinsic Value | $ 576,535 | $ 277,127 |
MEZZANINE EQUITY, COMMON STOC_8
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' DEFICIT - SCHEDULE OF ACTIVITY RELATED TO TIME-BASED RSUs (Details) - RSUs - $ / shares | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
May 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of RSUs | ||||
Unvested restricted stock, beginning balance (in shares) | 47,711,649 | 24,024,214 | ||
Granted (in shares) | 35,520,000 | 22,899,989 | 27,492,086 | 27,663,658 |
Forfeited (in shares) | (1,747,048) | (3,804,651) | ||
Unvested restricted stock, ending balance (in shares) | 68,864,590 | 47,711,649 | 24,024,214 | |
Weighted- average grant date fair value | ||||
Unvested restricted stock, Weighted-average grant date fair value, beginning balance (in dollars per share) | $ 10.84 | $ 8.17 | ||
Granted, Weighted-average grant date fair value (in dollars per share) | $ 22.68 | 40.88 | 12.90 | $ 0.29 |
Forfeited, Weighted-average grant date fair value (in dollars per share) | 16.48 | 8.84 | ||
Unvested restricted stock, Weighted-average grant date fair value, ending balance (in dollars per share) | $ 26.12 | $ 10.84 | $ 8.17 |
MEZZANINE EQUITY, COMMON STOC_9
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | $ 1,138 | $ 1,365 | $ 10,134 | $ 3,777 | $ 24,330 | $ 26,667 |
Brokerage and transaction | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 6 | 6 | 12 | 12 | 227 | 427 |
Technology and development | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 717 | 824 | 2,025 | 2,540 | 18,024 | 9,499 |
Operations | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 3 | 8 | 6 | 18 | 61 | 139 |
Marketing | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 41 | 7 | 78 | 15 | 613 | 85 |
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | $ 371 | $ 520 | $ 8,013 | $ 1,192 | $ 5,405 | $ 16,517 |
MEZZANINE EQUITY, COMMON STO_10
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' DEFICIT - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR STOCK OPTIONS (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 0.61% | 2.29% |
Expected volatility | 36.69% | 31.20% |
Expected term (years) | 6 years 14 days | 6 years 10 days |
INCOME (LOSS) PER SHARE - CALCU
INCOME (LOSS) PER SHARE - CALCULATION OF BASIC AND DILUTED INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ (501,665) | $ 57,584 | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Less: allocation of earnings to participating securities | 0 | 34,801 | 0 | 3,032 | 4,601 | 0 |
Net income (loss) attributable to common stockholders | (501,665) | 22,783 | (1,946,468) | 2,050 | 2,848 | (106,569) |
Net income (loss) attributable to common stockholders | $ (501,665) | $ 22,783 | $ (1,946,468) | $ 2,050 | $ 2,848 | $ (106,569) |
Weighted-average common stock outstanding - basic (in shares) | 232,223,019 | 225,091,413 | 231,459,227 | 224,953,736 | 225,748,355 | 221,664,610 |
Dilutive effect of stock options and unvested shares (in shares) | 0 | 19,246,732 | 0 | 19,585,456 | 19,249,033 | 0 |
Weighted-average common stock outstanding - diluted (in shares) | 232,223,019 | 244,338,145 | 231,459,227 | 244,539,192 | 244,997,388 | 221,664,610 |
Net income (loss) per share attributable to common stockholders: | ||||||
Net income (loss) per share attributable to common stockholders, Basic (in dollars per share) | $ (2.16) | $ 0.10 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Net income (loss) per share attributable to common stockholders, Diluted (in dollars per share) | $ (2.16) | $ 0.09 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
INCOME (LOSS) PER SHARE - POTEN
INCOME (LOSS) PER SHARE - POTENTIAL COMMON SHARES EXCLUDED FROM THE CALCULATION OF DILUTED NET INCOME (LOSS) PER SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 562,605,023 | 428,718,813 | 562,605,023 | 428,711,885 | 488,186,709 | 401,678,423 |
RSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 132,048,248 | 62,362,190 | 132,048,248 | 62,362,190 | 75,375,307 | 51,687,872 |
Stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 17,685,650 | 89,110 | 17,685,650 | 82,182 | 60,082 | 27,613,830 |
Unvested shares | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 128,228 | 735 | 128,228 | 735 | 8,423 | 749,943 |
Redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 412,742,897 | 366,266,778 | 412,742,897 | 366,266,778 | 412,742,897 | 321,626,778 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) tranche in Thousands, plaintiff in Thousands, $ in Thousands | Feb. 26, 2021lawsuit | Jan. 28, 2021lawsuit | Jan. 08, 2021trancheplaintiff | Dec. 23, 2020lawsuit | Dec. 16, 2020lawsuit | Mar. 04, 2020lawsuit | Dec. 31, 2020USD ($)option | Dec. 31, 2020USD ($)option | Dec. 31, 2020USD ($)lawsuitoption | Jun. 30, 2021USD ($)option | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |||||||||||
Number of renewal options (or more) | option | 1 | 1 | 1 | 1 | |||||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Non-current assets | Non-current assets | Non-current assets | Non-current assets | Non-current assets | ||||||
Operating lease right-of-use assets | $ 49,200 | $ 49,200 | $ 49,200 | $ 74,700 | $ 31,200 | ||||||
Total lease liabilities | $ 54,081 | $ 54,081 | $ 54,081 | $ 86,750 | $ 37,800 | ||||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | Other current liabilities | Other current liabilities | Other current liabilities | ||||||
Operating lease liabilities | $ 6,100 | $ 6,100 | $ 6,100 | $ 12,800 | $ 10,400 | ||||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | ||||||
Operating lease liabilities, net of current portion | $ 48,000 | $ 48,000 | $ 48,000 | $ 73,900 | $ 27,400 | ||||||
Customer goodwill remediation costs | $ 3,600 | ||||||||||
Unfavorable Regulatory Action, FINRA Matters | General and administrative | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Bottom range of probable losses | 26,600 | ||||||||||
Unfavorable Regulatory Action, NYDFS | General and administrative | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Bottom range of probable losses | $ 10,000 | ||||||||||
Unfavorable Regulatory Action, MSD | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 3 | ||||||||||
Best Execution, Payment for Order Flow, and Source of Revenue Matters | Unfavorable Regulatory Action | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Fine, amount | $ 65,000 | ||||||||||
Putative Securities Fraud Class Action Lawsuit, RHM, RHF, and/or RHS | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 4 | ||||||||||
Putative Securities Fraud Class Action Lawsuit, United States District Court for the Northern District of California | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 3 | ||||||||||
Putative Securities Fraud Class Action Lawsuit, United States District Court for the Southern District of California | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 1 | ||||||||||
Putative Class Actions | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 50 | 15 | 49 | ||||||||
Number of customers | tranche | 2 | ||||||||||
Putative Class Actions | Subsequent Event | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 8 | ||||||||||
Number of customers | plaintiff | 2 | ||||||||||
Minimum | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Remaining lease term | 2 years | 2 years | 2 years | 1 year | |||||||
Maximum | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Remaining lease term | 11 years | 11 years | 11 years | 10 years |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF COMPONENTS OF LEASE EXPENSE, OTHER INFORMATION AND CASH FLOWS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | ||||||
Fixed operating lease costs | $ 5,011 | $ 2,693 | $ 8,790 | $ 5,063 | $ 11,420 | $ 5,422 |
Variable operating lease costs | 1,374 | 704 | 2,452 | 1,427 | 3,009 | 1,078 |
Short-term lease costs | 356 | 307 | 610 | 313 | 1,222 | 1,188 |
Total lease costs | $ 6,741 | $ 3,704 | $ 11,852 | 6,803 | $ 15,651 | $ 7,688 |
Weighted Average Remaining Lease Term and Discount Rate [Abstract] | ||||||
Weighted-average remaining lease term | 5 years 2 months 23 days | 5 years 2 months 23 days | 5 years 4 months 28 days | 5 years 1 month 9 days | ||
Weighted-average discount rate | 6.21% | 6.21% | 7.02% | 7.47% | ||
Operating cash flows: | ||||||
Payments for operating lease liabilities | $ 1,070 | 9,609 | $ 12,781 | $ 4,755 | ||
Supplemental cash flow data: | ||||||
Lease liabilities arising from obtaining right-of-use assets | $ 31,693 | $ 14,902 | $ 25,958 | $ 14,816 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
2021 | $ 25,150 | $ 12,159 | |
2022 | 22,841 | 16,590 | |
2023 | 18,291 | 13,779 | |
2024 | 17,239 | 10,688 | |
2025 | 9,932 | ||
Thereafter | 9,724 | ||
Total undiscounted lease payments | 114,766 | 72,872 | |
Less: present value discount | (17,965) | (12,675) | |
Less: lease incentives | (10,051) | (6,116) | |
Total lease liabilities | $ 86,750 | $ 54,081 | $ 37,800 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Feb. 26, 2021lawsuit | Jan. 28, 2021lawsuit | Mar. 04, 2020lawsuit | Feb. 28, 2021USD ($)tranche$ / shares | Dec. 31, 2020lawsuit |
Tranche 1 Convertible Note Holders | |||||
Subsequent Event [Line Items] | |||||
Aggregate proceeds invested, percentage | 15.00% | ||||
Maximum amount of all warrants | $ 379,800,000 | ||||
Convertible notes | |||||
Subsequent Event [Line Items] | |||||
Number of tranches issued | tranche | 2 | ||||
Interest rate on loan | 6.00% | ||||
Convertible notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price percentage, convertible debt | 70.00% | ||||
Convertible notes | Tranche I Convertible Notes | |||||
Subsequent Event [Line Items] | |||||
Notes issued | $ 2,530,000,000 | ||||
Convertible notes | Tranche I Convertible Notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price (in dollars per share) | $ / shares | $ 38.29 | ||||
Convertible notes | Tranche II Convertible Notes | |||||
Subsequent Event [Line Items] | |||||
Notes issued | $ 1,020,000,000 | ||||
Convertible notes | Tranche II Convertible Notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price (in dollars per share) | $ / shares | $ 42.12 | ||||
Subsequent Event | Tranche 1 Convertible Note Holders | |||||
Subsequent Event [Line Items] | |||||
Aggregate proceeds invested, percentage | 15.00% | ||||
Maximum amount of all warrants | $ 379,800,000 | ||||
Subsequent Event | Convertible notes | |||||
Subsequent Event [Line Items] | |||||
Number of tranches issued | tranche | 2 | ||||
Interest rate on loan | 6.00% | ||||
Subsequent Event | Convertible notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price percentage, convertible debt | 70.00% | ||||
Subsequent Event | Convertible notes | Tranche I Convertible Notes | |||||
Subsequent Event [Line Items] | |||||
Notes issued | $ 2,530,000,000 | ||||
Subsequent Event | Convertible notes | Tranche I Convertible Notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price (in dollars per share) | $ / shares | $ 38.29 | ||||
Subsequent Event | Convertible notes | Tranche II Convertible Notes | |||||
Subsequent Event [Line Items] | |||||
Notes issued | $ 1,020,000,000 | ||||
Subsequent Event | Convertible notes | Tranche II Convertible Notes | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Conversion price (in dollars per share) | $ / shares | $ 42.12 | ||||
Putative Class Actions | |||||
Subsequent Event [Line Items] | |||||
Number of lawsuits | lawsuit | 50 | 15 | 49 | ||
Putative Class Actions | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of lawsuits | lawsuit | 8 | ||||
Early 2021 Trading Restrictions | |||||
Subsequent Event [Line Items] | |||||
Number of lawsuits | lawsuit | 4 | 3 |
DESCRIPTION OF BUSINESS AND _10
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Deferred offering costs | $ 9.5 | $ 1.3 |
DESCRIPTION OF BUSINESS AND _11
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF CONCENTRATION OF CREDIT RISK (Details) - Customer Concentration Risk - Revenue Benchmark | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Citadel Securities, LLC | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 14.00% | 36.00% | 21.00% | 34.00% | 34.00% | 29.00% |
Tai Mo Shan Limited | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 29.00% | 1.00% | 20.00% | 2.00% | ||
Entities affiliated with Susquehanna International Group, LLP | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 9.00% | 21.00% | 11.00% | 20.00% | 18.00% | 13.00% |
Entity affiliated with Jane Street Group | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 12.00% | 1.00% | 9.00% | 1.00% | ||
Entities affiliated with Wolverine Holdings, L.P. | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 8.00% | 8.00% | 8.00% | 10.00% | 10.00% | 12.00% |
All others individually less than 10% | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 7.00% | 10.00% | 11.00% | 9.00% | 13.00% | 8.00% |
Total as percentage of total revenue | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 79.00% | 77.00% | 80.00% | 76.00% | 75.00% | 62.00% |
REVENUE - REVENUE DISAGGREGAT_2
REVENUE - REVENUE DISAGGREGATED BY REVENUE SOURCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 451,167 | $ 187,413 | $ 871,606 | $ 283,044 | $ 720,133 | $ 170,831 |
Securities lending | 39,448 | 28,633 | 75,074 | 35,138 | 98,165 | 6,380 |
Margin interest | 31,230 | 10,958 | 58,961 | 18,787 | 66,781 | 19,104 |
Interest on segregated cash and securities | 931 | 1,436 | 2,041 | 10,632 | 13,401 | 36,281 |
Other interest revenue | 1,368 | 526 | 2,197 | 2,516 | 3,972 | 9,865 |
Interest expenses related to credit facilities | (5,268) | (1,555) | (8,067) | (3,059) | (4,882) | (991) |
Net interest revenues | 67,709 | 39,998 | 130,206 | 64,014 | 177,437 | 70,639 |
Total net revenues | 565,333 | 244,211 | 1,087,507 | 371,761 | 958,833 | 277,533 |
Options | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 164,604 | 111,148 | 362,464 | 170,908 | 440,070 | 110,656 |
Cryptocurrencies | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 233,103 | 5,320 | 320,690 | 9,558 | 26,708 | 9,487 |
Equities | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 52,012 | 70,606 | 185,313 | 102,195 | 251,200 | 50,688 |
Other | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | 1,448 | 339 | 3,139 | 383 | 2,155 | 0 |
Other revenues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenues | $ 46,457 | $ 16,800 | $ 85,695 | $ 24,703 | $ 61,263 | $ 36,063 |
REVENUE - RECEIVABLES AND CON_2
REVENUE - RECEIVABLES AND CONTRACT LIABILITIES BALANCES (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract with Customer, Asset [Roll Forward] | |||
Beginning of period, January 1, 2021 | $ 111,871 | $ 20,577 | $ 9,056 |
End of period, June 30, 2021 | 147,168 | 111,871 | 20,577 |
Increase in receivables during the period | 35,297 | 91,294 | 11,521 |
Contract with Customer, Liability [Roll Forward] | |||
Beginning of period, January 1, 2021 | 2,060 | 954 | 1,727 |
End of period, June 30, 2021 | 3,605 | 2,060 | 954 |
Increase in contract liabilities during the period | $ 1,545 | $ 1,106 | $ (773) |
ALLOWANCE FOR CREDIT LOSSES -_2
ALLOWANCE FOR CREDIT LOSSES - ALLOWANCE FOR CREDIT LOSSES OF RECEIVABLES FROM USERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract with Customer, Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Beginning balance | $ 30,875 | $ 27,070 | $ 34,092 | $ 17,122 | $ 17,122 | $ 6,013 |
Provision for credit losses | 20,342 | 13,985 | 36,745 | 23,933 | 59,134 | 11,109 |
Write-offs | (15,964) | 0 | (35,584) | 0 | (42,164) | 0 |
Ending balance | $ 35,253 | $ 41,055 | $ 35,253 | $ 41,055 | $ 34,092 | $ 17,122 |
ALLOWANCE FOR CREDIT LOSSES -_3
ALLOWANCE FOR CREDIT LOSSES - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | $ (20,342) | $ (13,985) | $ (36,745) | $ (23,933) | $ (59,134) | $ (11,109) | |||
Allowance for credit losses | 35,253 | 41,055 | 35,253 | 41,055 | 34,092 | 17,122 | $ 30,875 | $ 27,070 | $ 6,013 |
Transaction-based revenues | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | 19,000 | 13,400 | 34,900 | 23,300 | (58,000) | (11,100) | |||
Allowance for credit losses | 32,900 | 40,400 | 32,900 | 40,400 | 33,500 | $ 17,100 | |||
Other revenues | |||||||||
Disaggregation of Revenue [Line Items] | |||||||||
Provision for credit losses | 1,300 | 600 | 1,800 | 600 | 1,100 | ||||
Allowance for credit losses | $ 2,400 | $ 700 | $ 2,400 | $ 700 | $ 600 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Total financial assets | $ 3,727,287 | $ 1,966,733 | $ 419,022 |
Liabilities | |||
Convertible notes | 5,189,783 | ||
Warrant liability | 382,513 | ||
Total financial liabilities | 7,003,540 | 803,178 | 303 |
Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 1,430,855 | 802,483 | 0 |
Equity securities - securities owned | |||
Assets | |||
Other current assets | 18,874 | 3,222 | 2,997 |
U.S. Treasury securities | |||
Assets | |||
Cash and securities segregated under federal and other regulations | 134,994 | ||
Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 389 | 695 | 303 |
Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 1,430,855 | 802,483 | 0 |
Money market funds | |||
Assets | |||
Cash equivalents | 1,927,574 | 1,026,034 | 416,025 |
U.S. Treasury securities | |||
Assets | |||
Cash equivalents | 349,984 | 134,994 | 0 |
Level 1 | |||
Assets | |||
Total financial assets | 3,727,287 | 1,966,733 | 419,022 |
Liabilities | |||
Convertible notes | 0 | ||
Warrant liability | 0 | ||
Total financial liabilities | 1,431,244 | 803,178 | 303 |
Level 1 | Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 1,430,855 | 802,483 | 0 |
Level 1 | Equity securities - securities owned | |||
Assets | |||
Other current assets | 18,874 | 3,222 | 2,997 |
Level 1 | U.S. Treasury securities | |||
Assets | |||
Cash and securities segregated under federal and other regulations | 134,994 | ||
Level 1 | Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 389 | 695 | 303 |
Level 1 | Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 1,430,855 | 802,483 | 0 |
Level 1 | Money market funds | |||
Assets | |||
Cash equivalents | 1,927,574 | 1,026,034 | 416,025 |
Level 1 | U.S. Treasury securities | |||
Assets | |||
Cash equivalents | 349,984 | 134,994 | $ 0 |
Level 2 | |||
Assets | |||
Total financial assets | 0 | 0 | |
Liabilities | |||
Convertible notes | 0 | ||
Warrant liability | 0 | ||
Total financial liabilities | 0 | 0 | |
Level 2 | Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 0 | 0 | |
Level 2 | Equity securities - securities owned | |||
Assets | |||
Other current assets | 0 | 0 | |
Level 2 | U.S. Treasury securities | |||
Assets | |||
Cash and securities segregated under federal and other regulations | 0 | ||
Level 2 | Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 0 | 0 | |
Level 2 | Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 0 | 0 | |
Level 2 | Money market funds | |||
Assets | |||
Cash equivalents | 0 | 0 | |
Level 2 | U.S. Treasury securities | |||
Assets | |||
Cash equivalents | 0 | ||
Level 3 | |||
Assets | |||
Total financial assets | 0 | 0 | |
Liabilities | |||
Convertible notes | 5,189,783 | ||
Warrant liability | 382,513 | ||
Total financial liabilities | 5,572,296 | 0 | |
Level 3 | Equity securities - user-held fractional shares | |||
Assets | |||
Other current assets | 0 | 0 | |
Level 3 | Equity securities - securities owned | |||
Assets | |||
Other current assets | 0 | 0 | |
Level 3 | U.S. Treasury securities | |||
Assets | |||
Cash and securities segregated under federal and other regulations | 0 | ||
Level 3 | Equity securities - referral program liability | |||
Liabilities | |||
Accounts payable and accrued expenses | 0 | 0 | |
Level 3 | Equity securities - repurchase obligations | |||
Liabilities | |||
Other current liabilities | 0 | 0 | |
Level 3 | Money market funds | |||
Assets | |||
Cash equivalents | 0 | $ 0 | |
Level 3 | U.S. Treasury securities | |||
Assets | |||
Cash equivalents | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF SIGNIFICANT UNOBSERVABLE INPUTS (Details) | Jun. 30, 2021 |
Convertible notes | Fair value of common stock | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Convertible notes, measurement input | 38 |
Warrant liability | Fair value of common stock | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 38 |
Warrant liability | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.56 |
Warrant liability | Risk free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.0142 |
FAIR VALUE OF FINANCIAL INSTR_8
FAIR VALUE OF FINANCIAL INSTRUMENTS - NARRATIVE (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Feb. 28, 2021tranche | Feb. 28, 2021segment | |
Convertible notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Total loss due to changes in fair value | $ (514,700) | $ (1,890,752) | ||
Warrant liability | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Total loss due to changes in fair value | $ (13,400) | $ (129,569) | ||
Convertible notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of tranches issued | tranche | 2 | |||
Convertible notes | Investor | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of tranches issued | 2 | 2 |
FAIR VALUE OF FINANCIAL INSTR_9
FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF CHANGES IN ESTIMATED FAIR VALUE OF CONVERTIBLE NOTES AND WARRANT LIABILITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Convertible notes | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period, January 1, 2021 | $ 0 | |
Issued during the period | 3,299,031 | |
Change in fair value | $ 514,700 | 1,890,752 |
End of period, June 30, 2021 | 5,189,783 | 5,189,783 |
Warrant liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period, January 1, 2021 | 0 | |
Issued during the period | 252,944 | |
Change in fair value | 13,400 | 129,569 |
End of period, June 30, 2021 | $ 382,513 | $ 382,513 |
INCOME TAXES - SCHEDULE OF IN_2
INCOME TAXES - SCHEDULE OF INCOME TAX PROVISION (BENEFIT) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Income (loss) before income taxes | $ (464,158) | $ 58,118 | $ (1,897,182) | $ 5,530 | $ 13,830 | $ (107,587) |
Provision for income taxes | $ 37,507 | $ 534 | $ 49,286 | $ 448 | $ 6,381 | $ (1,018) |
Effective Tax Rate | (8.10%) | 0.90% | (2.60%) | 8.10% |
PROPERTY, SOFTWARE AND EQUIPM_7
PROPERTY, SOFTWARE AND EQUIPMENT, NET - SCHEDULE OF PROPERTY, SOFTWARE AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | $ 96,858 | $ 62,920 | $ 33,249 |
Less: accumulated depreciation and amortization | (25,780) | (17,086) | (7,948) |
Property, software and equipment, net | 71,078 | 45,834 | 25,301 |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 17,459 | 9,203 | 4,980 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 14,764 | 8,024 | 3,761 |
Tenant improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 38,426 | 18,945 | 9,522 |
Internally developed software | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | 18,943 | 16,992 | 12,029 |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, software and equipment, gross | $ 7,266 | $ 9,756 | $ 2,957 |
PROPERTY, SOFTWARE AND EQUIPM_8
PROPERTY, SOFTWARE AND EQUIPMENT, NET - NARRATIVE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense of property and equipment | $ 3.4 | $ 1.3 | $ 5.8 | $ 2.1 | $ 5.7 | $ 2.1 |
Amortization expense of internally developed software | $ 1.5 | $ 0.9 | $ 2.9 | $ 1.8 | $ 4.2 | $ 3.3 |
OFFSETTING ASSETS AND LIABILI_7
OFFSETTING ASSETS AND LIABILITIES - SCHEDULE OF ASSETS AND LIABILITIES SUBJECT TO MASTER NETTING ARRANGEMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Gross amount of securities borrowed | $ 754 | $ 372 | $ 438 |
Gross amount offset on the unaudited condensed consolidated balance sheets | 0 | 0 | 0 |
Amounts of assets presented on the unaudited condensed consolidated balance sheets | 754 | 372 | 438 |
Securities borrowed | 754 | 372 | 438 |
Security collateral received | (727) | (361) | (425) |
Net amount | 27 | 11 | 13 |
Liabilities | |||
Gross amount of securities loaned | 2,642,900 | 1,921,118 | 674,029 |
Gross amount of securities loaned offset on the unaudited condensed consolidated balance sheets | 0 | 0 | 0 |
Amounts of liabilities presented on the unaudited condensed consolidated balance sheets | 2,642,900 | 1,921,118 | 674,029 |
Securities loaned | 2,642,900 | 1,921,118 | 674,029 |
Security collateral pledged | (2,531,114) | (1,787,819) | (654,589) |
Net amount | $ 111,786 | $ 133,299 | $ 19,440 |
OFFSETTING ASSETS AND LIABILI_8
OFFSETTING ASSETS AND LIABILITIES - NARRATIVE (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting [Abstract] | |||
Fair value of securities re-pledged | $ 7,517,000 | $ 4,632,600 | $ 896,200 |
Security collateral received | 727 | $ 361 | $ 425 |
Amount re-pledged with clearing organizations to meet deposit requirements | $ 165,500 |
OTHER CURRENT ASSETS - DETAIL_2
OTHER CURRENT ASSETS - DETAIL OF OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
User-held fractional shares | $ 1,430,855 | $ 802,483 | $ 0 |
Prepaid expenses | 67,412 | 28,629 | 17,159 |
Securities owned | 18,874 | 3,222 | 2,997 |
Other | 25,761 | 16,804 | 8,186 |
Other current assets | $ 1,542,902 | $ 851,138 | $ 28,342 |
FINANCING ACTIVITIES AND OFF-_4
FINANCING ACTIVITIES AND OFF-BALANCE SHEET RISK - NARRATIVE (Details) | 1 Months Ended | 6 Months Ended | |||||||
Apr. 30, 2021USD ($) | Feb. 28, 2021USD ($)tranche$ / shares | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||||||
Settlement date basis, equities | 2 days | ||||||||
Settlement date basis, options | 1 day | ||||||||
Tranche 1 Convertible Note Holders | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate proceeds invested, percentage | 15.00% | ||||||||
Maximum amount of all warrants | $ 379,800,000 | ||||||||
Common Class A | Tranche 1 Convertible Note Holders | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price percentage, warrant | 70.00% | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Preferred Stock | Tranche 1 Convertible Note Holders | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price percentage, warrant | 70.00% | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Outstanding warrants strike price (in dollars per share) | $ / shares | $ 18.60 | ||||||||
Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of tranches issued | tranche | 2 | ||||||||
Interest rate on loan | 6.00% | ||||||||
Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Gross proceeds from IPO offering to trigger convesion | $ 500,000,000 | ||||||||
Conversion price percentage, convertible debt | 70.00% | ||||||||
Convertible notes | Preferred Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Gross proceeds from IPO offering to trigger convesion | $ 500,000,000 | ||||||||
Conversion price percentage, convertible debt | 70.00% | ||||||||
Tranche I Convertible Notes | Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes issued | $ 2,530,000,000 | ||||||||
Tranche I Convertible Notes | Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Tranche I Convertible Notes | Convertible notes | Preferred Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 38.29 | ||||||||
Tranche II Convertible Notes | Convertible notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Notes issued | $ 1,020,000,000 | ||||||||
Tranche II Convertible Notes | Convertible notes | Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 42.12 | ||||||||
Tranche II Convertible Notes | Convertible notes | Preferred Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 42.12 | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 200,000,000 | ||||||||
Commitment fee percentage | 0.10% | ||||||||
Outstanding borrowings, long-term | $ 0 | $ 0 | $ 0 | ||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Federal Reserve Bank of New York Rate | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 0.50% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility | Eurodollar, One Month Interest Period | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.00% | ||||||||
Revolving Credit Facility | October 2019 Credit Facility, As Amended | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 625,000,000 | $ 600,000,000 | |||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 400,000,000 | ||||||||
Outstanding borrowings, short-term | $ 0 | $ 0 | |||||||
Commitment fee percentage | 0.35% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | September 2019 Credit Facility, As Amended | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 550,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, amount entered into | $ 2,200,000,000 | ||||||||
Outstanding borrowings, short-term | $ 0 | ||||||||
Commitment fee percentage | 0.50% | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility, Tranche A | Short-Term Funding Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | April 2021 Credit Facility, Tranche B and C | Short-Term Funding Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate on loan | 2.50% |
MEZZANINE EQUITY, COMMON STO_11
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF REDEEMABLE CONVERTIBLE PREFERRED STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 658,311,424 | 414,033,220 | 643,333,662 |
Shares issued (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Redeemable convertible preferred stock, outstanding (in shares) | 412,742,897 | 412,742,897 | 321,626,778 |
Liquidation Amount | $ 2,191,086 | $ 2,191,086 | $ 922,786 |
Redeemable convertible preferred stock | $ 2,179,739 | $ 2,179,739 | $ 912,411 |
Series A | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 131,913,460 | 131,913,460 | 263,826,920 |
Shares issued (in shares) | 131,913,460 | 131,913,460 | 131,913,460 |
Redeemable convertible preferred stock, outstanding (in shares) | 131,913,460 | 131,913,460 | 131,913,460 |
Per Share Liquidation Preference (in dollars per share) | $ 0.1954 | $ 0.1954 | $ 0.1954 |
Liquidation Amount | $ 25,777 | $ 25,777 | $ 25,777 |
Per Share Initial Conversion Price (in dollars per share) | $ 0.1954 | $ 0.1954 | $ 0.1954 |
Redeemable convertible preferred stock | $ 16,139 | $ 16,139 | $ 16,139 |
Series B | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 80,263,020 | 80,263,020 | 160,526,040 |
Shares issued (in shares) | 80,263,020 | 80,263,020 | 80,263,020 |
Redeemable convertible preferred stock, outstanding (in shares) | 80,263,020 | 80,263,020 | 80,263,020 |
Per Share Liquidation Preference (in dollars per share) | $ 0.6354 | $ 0.6354 | $ 0.6354 |
Liquidation Amount | $ 50,999 | $ 50,999 | $ 50,999 |
Per Share Initial Conversion Price (in dollars per share) | $ 0.6354 | $ 0.6354 | $ 0.6354 |
Redeemable convertible preferred stock | $ 50,999 | $ 50,999 | $ 50,999 |
Series C | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 43,788,180 | 43,788,180 | 87,576,360 |
Shares issued (in shares) | 43,788,180 | 43,788,180 | 43,788,180 |
Redeemable convertible preferred stock, outstanding (in shares) | 43,788,180 | 43,788,180 | 43,788,180 |
Per Share Liquidation Preference (in dollars per share) | $ 2.5121 | $ 2.5121 | $ 2.5121 |
Liquidation Amount | $ 110,000 | $ 110,000 | $ 110,000 |
Per Share Initial Conversion Price (in dollars per share) | $ 2.5121 | $ 2.5121 | $ 2.5121 |
Redeemable convertible preferred stock | $ 109,870 | $ 109,870 | $ 109,870 |
Series D | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 35,774,761 | 35,774,761 | 71,549,522 |
Shares issued (in shares) | 35,774,761 | 35,774,761 | 35,774,761 |
Redeemable convertible preferred stock, outstanding (in shares) | 35,774,761 | 35,774,761 | 35,774,761 |
Per Share Liquidation Preference (in dollars per share) | $ 10.1450 | $ 10.1450 | $ 10.1450 |
Liquidation Amount | $ 362,935 | $ 362,935 | $ 362,935 |
Per Share Initial Conversion Price (in dollars per share) | $ 10.1450 | $ 10.1450 | $ 10.1450 |
Redeemable convertible preferred stock | $ 362,670 | $ 362,670 | $ 362,670 |
Series E | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 29,887,357 | 29,887,357 | 59,854,820 |
Shares issued (in shares) | 29,887,357 | 29,887,357 | 29,887,357 |
Redeemable convertible preferred stock, outstanding (in shares) | 29,887,357 | 29,887,357 | 29,887,357 |
Per Share Liquidation Preference (in dollars per share) | $ 12.4827 | $ 12.4827 | $ 12.4827 |
Liquidation Amount | $ 373,075 | $ 373,075 | $ 373,075 |
Per Share Initial Conversion Price (in dollars per share) | $ 12.4827 | $ 12.4827 | $ 12.4827 |
Redeemable convertible preferred stock | $ 372,733 | $ 372,733 | $ 372,733 |
Series F | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 48,000,000 | 48,000,000 | |
Shares issued (in shares) | 48,000,000 | 48,000,000 | |
Redeemable convertible preferred stock, outstanding (in shares) | 48,000,000 | 48,000,000 | |
Per Share Liquidation Preference (in dollars per share) | $ 12.5000 | $ 12.5000 | |
Liquidation Amount | $ 600,000 | $ 600,000 | |
Per Share Initial Conversion Price (in dollars per share) | $ 12.5000 | $ 12.5000 | |
Redeemable convertible preferred stock | $ 599,284 | $ 599,284 | |
Series G | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 44,406,442 | 44,406,442 | |
Shares issued (in shares) | 43,116,119 | 43,116,119 | |
Redeemable convertible preferred stock, outstanding (in shares) | 43,116,119 | 43,116,119 | |
Per Share Liquidation Preference (in dollars per share) | $ 15.5000 | $ 15.5000 | |
Liquidation Amount | $ 668,300 | $ 668,300 | |
Per Share Initial Conversion Price (in dollars per share) | $ 15.5000 | $ 15.5000 | |
Redeemable convertible preferred stock | $ 668,044 | $ 668,044 | |
Series G-1 | |||
Temporary Equity [Line Items] | |||
Shares Authorized (in shares) | 244,278,204 | ||
Shares issued (in shares) | 0 | ||
Redeemable convertible preferred stock, outstanding (in shares) | 0 | ||
Per Share Liquidation Preference (in dollars per share) | $ 18.6000 | ||
Liquidation Amount | $ 0 | ||
Per Share Initial Conversion Price (in dollars per share) | $ 18.6000 | ||
Redeemable convertible preferred stock | $ 0 |
MEZZANINE EQUITY, COMMON STO_12
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - NARRATIVE (Details) | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | May 31, 2021$ / sharesshares | Mar. 31, 2021employee$ / shares | Nov. 30, 2019employee | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)votedirectortrancheholder$ / sharesshares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)holdervotedirector$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock, number of elected directors entitled to holders | director | 4 | 4 | 4 | 4 | 4 | ||||||
Number of holders entitled to matters before the board of directors | holder | 2 | 2 | 2 | 2 | 2 | ||||||
Number of votes on matters before the board of directors | vote | 2 | 2 | 2 | 2 | 2 | ||||||
Number of voting rights per share | vote | 1 | 1 | 1 | 1 | 1 | ||||||
Capitalized share-based compensation expense | $ 100,000 | $ 300,000 | $ 100,000 | $ 600,000 | $ 600,000 | $ 700,000 | |||||
2013 and 2020 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares of common stock authorized (in shares) | shares | 209,809,164 | 209,809,164 | 209,809,164 | 209,809,164 | |||||||
Aggregate shares of common stock sold (in shares) | shares | 46,928,833 | ||||||||||
Common stock reserved for issuance (in shares) | shares | 149,733,898 | ||||||||||
2020 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares of common stock authorized (in shares) | shares | 154,289,164 | ||||||||||
Shares remaining available for issuance (in shares) | shares | 13,146,433 | 13,146,433 | 13,146,433 | 13,146,433 | 14,022,717 | ||||||
2021 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage of shares reserved for issuance under equity incentive plan | 14.00% | ||||||||||
Annual increase as a percentage of outstanding shares | 5.00% | ||||||||||
ESPP | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares of common stock authorized (in shares) | shares | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||
Annual increase as a percentage of outstanding shares | 1.00% | ||||||||||
Maximum payroll deduction for ESPP, percentage | 15.00% | 15.00% | 15.00% | 15.00% | |||||||
ESPP purchase price discount, percentage | 85.00% | ||||||||||
Percentage of shares outstanding after close of offering | 2.00% | ||||||||||
Dividend Declared | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Dividends | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Dividend Paid | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Dividends | 0 | 0 | 0 | $ 0 | $ 0 | ||||||
Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercisable, period (up to) | 10 years | 10 years | |||||||||
Vesting rate, percentage | 25.00% | 25.00% | |||||||||
Vesting period | 4 years | 4 years | |||||||||
Unrecognized compensation cost | 4,900,000 | 4,900,000 | 4,900,000 | $ 4,900,000 | $ 7,800,000 | ||||||
Unrecognized compensation cost related to outstanding stock options, weighted-average period | 11 months 8 days | 1 year 2 months 19 days | |||||||||
Number of employees affected | employee | 125 | ||||||||||
Qualifying liquidity event, share-based compensation expense | $ 1,300,000 | ||||||||||
Incremental share-based compensation expense | $ 1,800,000 | $ 800,000 | |||||||||
Stock options | Share-based Payment Arrangement, Tranche One | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 1 year | 1 year | |||||||||
RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercisable, period (up to) | 7 years | 7 years | |||||||||
Vesting rate, percentage | 25.00% | ||||||||||
Vesting period | 8 years | 1 year | 4 years | ||||||||
Granted (in shares) | shares | 35,520,000 | 22,899,989 | 27,492,086 | 27,663,658 | |||||||
Granted, Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 22.68 | $ 40.88 | $ 12.90 | $ 0.29 | |||||||
Weighted-average incremental fair value (in dollars per share) | $ / shares | 21.95 | ||||||||||
Unrecognized compensation cost | $ 1,800,000,000 | $ 1,800,000,000 | $ 1,800,000,000 | $ 1,800,000,000 | $ 517,700,000 | ||||||
Number of employees affected | employee | 500 | ||||||||||
Modified grant date fair value (in dollars per share) | $ / shares | $ 26.12 | $ 26.12 | $ 39.75 | $ 26.12 | $ 26.12 | $ 10.84 | 8.17 | ||||
RSUs | 2019 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized share-based compensation expense, including incremental expense due to modification | $ 615,200,000 | $ 615,200,000 | $ 615,200,000 | $ 615,200,000 | |||||||
Incremental share-based compensation expense | $ 411,300,000 | ||||||||||
Remaining weighted-average service period | 1 year 3 months 10 days | ||||||||||
RSUs | 2019 | Pro Forma | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Qualifying liquidity event, share-based compensation expense | 203,900,000 | ||||||||||
RSUs | 2021 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation cost | $ 805,500,000 | $ 805,500,000 | $ 805,500,000 | $ 805,500,000 | |||||||
Incremental share-based compensation expense | $ 787,300,000 | ||||||||||
Remaining weighted-average service period | 4 years 2 months 23 days | ||||||||||
Requisite service period | 4 years 3 months 29 days | ||||||||||
Number of tranches | tranche | 7 | 7 | 7 | 7 | |||||||
RSUs | 2021 | Pro Forma | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Qualifying liquidity event, share-based compensation expense | $ 18,200,000 | ||||||||||
RSUs | Share-based Payment Arrangement, Tranche One | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 1 year | ||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 4,560,000 | 5,532,732 | |||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 120 | $ 30.45 | |||||||||
RSUs | Share-based Payment Arrangement, Tranche Two | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 4,560,000 | 13,831,828 | |||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 150 | $ 50.75 | |||||||||
RSUs | Share-based Payment Arrangement, Tranche Three | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | 8,299,098 | |||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 180 | $ 101.50 | |||||||||
RSUs | Share-based Payment Arrangement, Tranche Four | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 210 | ||||||||||
RSUs | Share-based Payment Arrangement, Tranche Five | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 240 | ||||||||||
RSUs | Share-based Payment Arrangement, Tranche Six | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 270 | ||||||||||
RSUs | Share-based Payment Arrangement, Tranche Seven | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vested shares upon achievement of price targets (in shares) | shares | 5,280,000 | ||||||||||
Price targets, vested (in dollars per share) | $ / shares | $ 300 | ||||||||||
RSUs | Vesting Condition, Satisfied or Partially Satisfied | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation cost | 660,000,000 | $ 660,000,000 | $ 660,000,000 | $ 660,000,000 | $ 207,200,000 | ||||||
RSUs | Vesting Condition, Not Yet Satisfied | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized compensation cost | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | $ 310,500,000 | ||||||
Redeemable convertible preferred stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Threshold outstanding to obtain approval (in shares) | shares | 50,000,000 | 50,000,000 | |||||||||
Series F | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 12.5000 | $ 12.5000 | $ 12.5000 | $ 12.5000 | $ 12.5000 | ||||||
Series F | IPO | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 12.4827 | $ 12.4827 | $ 12.4827 | $ 12.4827 | $ 12.4827 | ||||||
Proceeds to trigger conversion of redeemable convertible preferred stock | $ 200,000,000 | $ 200,000,000 | |||||||||
Series A and B | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Preferred stock, number of elected directors entitled to holders | director | 1 | 1 | 1 | 1 | 1 | ||||||
Series D and E | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Conversion, percentage of outstanding shares | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | ||||||
Series A | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Per Share Liquidation Preference (in dollars per share) | $ / shares | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | $ 0.1954 | |||||
Conversion, percentage of outstanding shares | 65.00% | 65.00% | 65.00% | 65.00% | 65.00% |
MEZZANINE EQUITY, COMMON STO_13
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | |||
Beginning balance (in shares) | 21,543,828 | 27,613,830 | |
Exercised during the period (in shares) | (3,581,521) | (4,310,197) | |
Cancelled and forfeited during the period (in shares) | (276,657) | (2,084,247) | |
Ending balance (in shares) | 17,685,650 | 21,543,828 | 27,613,830 |
Options vested and expected to vest (in shares) | 17,685,650 | 21,543,828 | |
Options exercisable (in shares) | 15,905,386 | 18,793,618 | |
Weighted-Average Exercise Price | |||
Beginning balance, Weighted-Average Exercise Price (in dollars per share) | $ 2.19 | $ 2.33 | |
Exercised during the period, Weighted-Average Exercise Price (in dollars per share) | 1.87 | 2.20 | |
Cancelled and forfeited during the period, Weighted-Average Exercise Price (in dollars per share) | 4.51 | 5.18 | |
Ending balance, Weighted-Average Exercise Price (in dollars per share) | 2.22 | 2.19 | $ 2.33 |
Options vested and expected to vest, Weighted-Average Exercise Price (in dollars per share) | 2.22 | 2.19 | |
Options exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 1.75 | $ 1.58 | |
Weighted- Average Remaining Life | |||
Weighted- Average Remaining Life | 5 years 9 months 3 days | 6 years 6 months 7 days | 7 years 7 months 2 days |
Options vested and expected to vest, Weighted-Average Remaining Life | 5 years 9 months 3 days | 6 years 6 months 7 days | |
Options exercisable, Weighted-Average Remaining Life | 5 years 6 months 21 days | 6 years 3 months 21 days | |
Total Intrinsic Value (in thousands) | |||
Total Intrinsic Value (in thousands) | $ 632,774 | $ 304,590 | $ 197,536 |
Options vested and expected to vest, Total Intrinsic Value | 632,774 | 304,590 | |
Options exercisable, Total Intrinsic Value | $ 576,535 | $ 277,127 |
MEZZANINE EQUITY, COMMON STO_14
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS' DEFICIT - SCHEDULE OF ACTIVITY RELATED TO TIME-BASED RSUs (Details) - RSUs - $ / shares | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
May 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of RSUs | ||||
Unvested restricted stock, beginning balance (in shares) | 47,711,649 | 24,024,214 | ||
Granted (in shares) | 35,520,000 | 22,899,989 | 27,492,086 | 27,663,658 |
Forfeited (in shares) | (1,747,048) | (3,804,651) | ||
Unvested restricted stock, ending balance (in shares) | 68,864,590 | 47,711,649 | 24,024,214 | |
Weighted- average grant date fair value | ||||
Unvested restricted stock, Weighted-average grant date fair value, beginning balance (in dollars per share) | $ 10.84 | $ 8.17 | ||
Granted, Weighted-average grant date fair value (in dollars per share) | $ 22.68 | 40.88 | 12.90 | $ 0.29 |
Forfeited, Weighted-average grant date fair value (in dollars per share) | 16.48 | 8.84 | ||
Unvested restricted stock, Weighted-average grant date fair value, ending balance (in dollars per share) | $ 26.12 | $ 10.84 | $ 8.17 |
MEZZANINE EQUITY, COMMON STO_15
MEZZANINE EQUITY, COMMON STOCK AND STOCKHOLDERS’ DEFICIT - SCHEDULE OF SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | $ 1,138 | $ 1,365 | $ 10,134 | $ 3,777 | $ 24,330 | $ 26,667 |
Brokerage and transaction | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 6 | 6 | 12 | 12 | 227 | 427 |
Technology and development | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 717 | 824 | 2,025 | 2,540 | 18,024 | 9,499 |
Operations | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 3 | 8 | 6 | 18 | 61 | 139 |
Marketing | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | 41 | 7 | 78 | 15 | 613 | 85 |
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation | $ 371 | $ 520 | $ 8,013 | $ 1,192 | $ 5,405 | $ 16,517 |
INCOME (LOSS) PER SHARE - CAL_2
INCOME (LOSS) PER SHARE - CALCULATION OF BASIC AND DILUTED INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ (501,665) | $ 57,584 | $ (1,946,468) | $ 5,082 | $ 7,449 | $ (106,569) |
Less: allocation of earnings to participating securities | 0 | 34,801 | 0 | 3,032 | 4,601 | 0 |
Net income (loss) attributable to common stockholders | (501,665) | 22,783 | (1,946,468) | 2,050 | 2,848 | (106,569) |
Net income (loss) attributable to common stockholders | $ (501,665) | $ 22,783 | $ (1,946,468) | $ 2,050 | $ 2,848 | $ (106,569) |
Weighted-average common stock outstanding - basic (in shares) | 232,223,019 | 225,091,413 | 231,459,227 | 224,953,736 | 225,748,355 | 221,664,610 |
Dilutive effect of stock options and unvested shares (in shares) | 0 | 19,246,732 | 0 | 19,585,456 | 19,249,033 | 0 |
Weighted-average common stock outstanding - diluted (in shares) | 232,223,019 | 244,338,145 | 231,459,227 | 244,539,192 | 244,997,388 | 221,664,610 |
Net income (loss) per share attributable to common stockholders: | ||||||
Net income (loss) per share attributable to common stockholders, Basic (in dollars per share) | $ (2.16) | $ 0.10 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
Net income (loss) per share attributable to common stockholders, Diluted (in dollars per share) | $ (2.16) | $ 0.09 | $ (8.41) | $ 0.01 | $ 0.01 | $ (0.48) |
INCOME (LOSS) PER SHARE - POT_2
INCOME (LOSS) PER SHARE - POTENTIAL COMMON SHARES EXCLUDED FROM THE CALCULATION OF DILUTED NET INCOME (LOSS) PER SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 562,605,023 | 428,718,813 | 562,605,023 | 428,711,885 | 488,186,709 | 401,678,423 |
RSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 132,048,248 | 62,362,190 | 132,048,248 | 62,362,190 | 75,375,307 | 51,687,872 |
Stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 17,685,650 | 89,110 | 17,685,650 | 82,182 | 60,082 | 27,613,830 |
Unvested shares | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 128,228 | 735 | 128,228 | 735 | 8,423 | 749,943 |
Redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Anti-dilutive securities (in shares) | 412,742,897 | 366,266,778 | 412,742,897 | 366,266,778 | 412,742,897 | 321,626,778 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Millions | Jun. 30, 2021USD ($)party | Feb. 28, 2021tranche | Feb. 28, 2021segment |
Convertible notes | |||
Related Party Transaction [Line Items] | |||
Number of tranches issued | tranche | 2 | ||
Investor | |||
Related Party Transaction [Line Items] | |||
Number of related parties | party | 2 | ||
Convertible notes | $ 182.6 | ||
Warrant liabilities | $ 18.9 | ||
Investor | Convertible notes | |||
Related Party Transaction [Line Items] | |||
Number of tranches issued | 2 | 2 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) tranche in Thousands, $ in Thousands | Jul. 26, 2021lawsuit | Jun. 30, 2021USD ($)option | Feb. 26, 2021lawsuit | Jan. 28, 2021lawsuit | Jan. 08, 2021trancheplaintiff | Dec. 23, 2020lawsuit | Jul. 24, 2020USD ($) | Mar. 04, 2020plaintifflawsuit | Dec. 31, 2020USD ($)option | Dec. 31, 2020USD ($)lawsuitoption | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |||||||||||
Number of renewal options (or more) | option | 1 | 1 | 1 | ||||||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Non-current assets | Non-current assets | Non-current assets | Non-current assets | |||||||
Operating lease right-of-use assets | $ 74,700 | $ 49,200 | $ 49,200 | $ 31,200 | |||||||
Total lease liabilities | $ 86,750 | $ 54,081 | $ 54,081 | $ 37,800 | |||||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | Other current liabilities | Other current liabilities | |||||||
Operating lease liabilities | $ 12,800 | $ 6,100 | $ 6,100 | $ 10,400 | |||||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | Other non-current liabilities | |||||||
Operating lease liabilities, net of current portion | $ 73,900 | $ 48,000 | $ 48,000 | $ 27,400 | |||||||
Best Execution, Payment for Order Flow, and Source of Revenue Matters | Unfavorable Regulatory Action | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Fine, amount | 65,000 | ||||||||||
Penalty paid in cash | $ 65,000 | ||||||||||
Putative Securities Fraud Class Action Lawsuit | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 6 | ||||||||||
Putative Class Actions | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 50 | 15 | 49 | ||||||||
Number of customers | tranche | 2 | ||||||||||
Putative Class Actions | Subsequent Event | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 8 | ||||||||||
Number of customers | plaintiff | 2,000 | ||||||||||
Individual Action | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 1 | ||||||||||
March 2020 Outages | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of customers | plaintiff | 1,600 | ||||||||||
FINRA Multi-Matter Settlement | Unfavorable Regulatory Action | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Fine, amount | 57,000 | ||||||||||
Accrued fine | 57,000 | ||||||||||
FINRA Multi-Matter Settlement | Unfavorable Regulatory Action, Customer Restitution | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Fine, amount | 12,600 | ||||||||||
Customer restitution payment | 8,100 | ||||||||||
Amount offered to be paid | 750 | ||||||||||
Remaining to be paid | 3,750 | ||||||||||
Customer restitution to be paid | $ 4,500 | ||||||||||
RHC Anti-Money Laundering, Cybersecurity and Other Issues | Unfavorable Regulatory Action | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Expected monetary penalty | $ 30,000 | ||||||||||
Early 2021 Trading Restrictions | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 4 | 3 | |||||||||
Consolidated Claims | Subsequent Event | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Number of lawsuits | lawsuit | 2 | ||||||||||
Minimum | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Remaining lease term | 1 year | 2 years | 2 years | ||||||||
Maximum | |||||||||||
Lessee, Lease, Description [Line Items] | |||||||||||
Remaining lease term | 10 years | 11 years | 11 years |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF COMPONENTS OF LEASE EXPENSE, OTHER INFORMATION AND CASH FLOWS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | ||||||
Fixed operating lease costs | $ 5,011 | $ 2,693 | $ 8,790 | $ 5,063 | $ 11,420 | $ 5,422 |
Variable operating lease costs | 1,374 | 704 | 2,452 | 1,427 | 3,009 | 1,078 |
Short-term lease costs | 356 | 307 | 610 | 313 | 1,222 | 1,188 |
Total lease costs | $ 6,741 | $ 3,704 | $ 11,852 | 6,803 | $ 15,651 | $ 7,688 |
Weighted Average Remaining Lease Term and Discount Rate [Abstract] | ||||||
Weighted-average remaining lease term | 5 years 2 months 23 days | 5 years 2 months 23 days | 5 years 4 months 28 days | 5 years 1 month 9 days | ||
Weighted-average discount rate | 6.21% | 6.21% | 7.02% | 7.47% | ||
Operating cash flows: | ||||||
Payments for operating lease liabilities | $ 1,070 | 9,609 | $ 12,781 | $ 4,755 | ||
Supplemental cash flow data: | ||||||
Lease liabilities arising from obtaining right-of-use assets | $ 31,693 | $ 14,902 | $ 25,958 | $ 14,816 |
COMMITMENTS AND CONTINGENCIES_8
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
Remainder of 2021 | $ 8,975 | ||
2022 | 25,150 | $ 12,159 | |
2023 | 22,841 | 16,590 | |
2024 | 18,291 | 13,779 | |
2025 | 17,239 | 10,688 | |
Thereafter | 22,270 | ||
Total undiscounted lease payments | 114,766 | 72,872 | |
Less: present value discount | (17,965) | (12,675) | |
Less: lease incentives | (10,051) | (6,116) | |
Total lease liabilities | $ 86,750 | $ 54,081 | $ 37,800 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | Aug. 13, 2021USD ($) | Aug. 02, 2021USD ($)vote$ / sharesshares | Jun. 30, 2021USD ($)voteshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)voteshares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)voteshares | Dec. 31, 2019USD ($)shares |
Subsequent Event [Line Items] | ||||||||
Number of voting rights per share | vote | 1 | 1 | 1 | |||||
Common stock, shares outstanding (in shares) | 232,609,957 | 232,609,957 | 229,031,546 | 224,802,545 | ||||
Deferred offering costs | $ | $ 9,500 | $ 9,500 | $ 1,300 | |||||
Share-based compensation | $ | $ 1,138 | $ 1,365 | $ 10,134 | $ 3,777 | $ 24,330 | $ 26,667 | ||
Subsequent Event | Say | ||||||||
Subsequent Event [Line Items] | ||||||||
Purchase price in cash | $ | $ 140,000 | |||||||
Subsequent Event | IPO | ||||||||
Subsequent Event [Line Items] | ||||||||
Deferred offering costs | $ | $ 13,400 | |||||||
Subsequent Event | IPO | RSUs | ||||||||
Subsequent Event [Line Items] | ||||||||
Share-based compensation | $ | $ 1,000,000 | |||||||
Subsequent Event | Common Class A | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of voting rights per share | vote | 1 | |||||||
Subsequent Event | Common Class A | IPO | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued in IPO (in shares) | 55,000,000 | |||||||
Offering price in IPO (in dollars per share) | $ / shares | $ 38 | |||||||
Net proceeds from sale in IPO | $ | $ 1,900,000 | |||||||
Conversion of Stock, Shares Converted | 130,155,246 | |||||||
Conversion of convertible preferred stock (in shares) | 412,742,897 | |||||||
Convertible notes converted to common stock (in shares) | 137,305,156 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 26.60 | |||||||
Aggregate warrants exercisable (in shares) | 14,278,034 | |||||||
Subsequent Event | Common Class A | IPO - Shares from Company | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued in IPO (in shares) | 52,375,000 | |||||||
Subsequent Event | Common Class A | IPO - Shares from Existing Shareholders | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued in IPO (in shares) | 2,625,000 | |||||||
Subsequent Event | Common Class B | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of voting rights per share | vote | 10 | |||||||
Subsequent Event | Common Class C | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of voting rights per share | vote | 0 | |||||||
Common stock, shares outstanding (in shares) | 0 |