ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2023

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

NOTE 7: ALLOWANCE FOR CREDIT LOSSES

Our allowance for credit losses relates to unsecured balances of receivables from users due to Fraudulent Deposit Transactions, losses on margin lending, and reserves on proxy revenue receivables. Fraudulent Deposit Transactions occur when users 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. The following table summarizes the allowance for credit losses as a reduction of receivables from users, net on the unaudited condensed consolidated balance sheet:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2023		2022		2023
Beginning balance	$	18	$	20	$	40	$	18
Provision for credit losses	9		4		28		19
Write-offs	(9)		(7)		(50)		(20)
Ending balance	$	18	$	17	$	18	$	17

Credit Card Expected Loss Liability

Under the Program Agreement with Coastal Bank, Robinhood Credit is responsible to pay Coastal Bank customer balances that are ultimately charged off or deemed uncollectible, generally when balances become outstanding for over 180 days. Robinhood Credit estimates the related expected credit losses liability using a current expected credit losses model by evaluating historical collection data as well as

considering charge off trends and market data by FICO cohort. The following table summarizes the credit card expected loss liability, a new liability in this quarter, as part of accounts payable and accrued expenses on the unaudited condensed consolidated balance sheet:

	Three and Nine Months Ended September 30,
(in millions)	2023
Beginning balance	$	—
Opening balance from acquisition of Robinhood Credit	16
Provision for credit losses	10
Payments to Coastal Bank	(4)
Ending balance	$	22