BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

NOTE 3: BUSINESS COMBINATIONS

Acquisition of X1

On July 3, 2023, we acquired all of the outstanding equity of X1 Inc. (“X1”), a U.S.-based company that offers a no-fee credit card with rewards on each purchase. The acquisition of X1 allows us to provide access to credit for our customers. In August 2023, X1 was renamed Robinhood Credit.

The acquisition date fair value of the consideration transferred for Robinhood Credit was $104 million, which was entirely paid in cash. The purchase price allocation is based on a preliminary valuation and subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available, including certain tax matters, during

the measurement period (up to one year from the acquisition date). The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:


In millions	Fair Value
Cash and cash equivalents	$	14
Receivable from users, net	3
Prepaid expenses	1
Other current assets	48
Goodwill	72
Intangible assets	36
Accounts payable and accrued expenses	(44)
Other current liabilities	(25)
Other non-current liabilities	(1)
Net assets acquired	$	104

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes. Goodwill is primarily attributed to the assembled workforce of Robinhood Credit and anticipated operational synergies. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions at the time of acquisition. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:


(in millions, except years)	Fair Value		Useful Life
Developed technology	$	25	4
Customer relationships	10		7
Trade names	1		1
Total	$	36

The overall weighted average useful life of the identified amortizable intangible assets acquired is 5 years. The estimated fair value of the intangible assets acquired approximate the amounts a market participant would pay for these intangible assets as of July 3, 2023. We used the replacement cost method to estimate the fair value of developed technology, and a multi-period excess earnings method was used to estimate the fair value of customer relationships.

Tangible net assets were valued at their respective carrying amounts as of the acquisition date, as these amounts approximated fair value. During the fourth quarter of 2023, we recorded a $7 million measurement period adjustment to accounts payable and accrued expenses with a corresponding increase to goodwill, and an adjustment to increase other current assets and other current liabilities by $25 million based on facts and circumstances as of the acquisition date.

Pro forma results of operations for Robinhood Credit have not been presented as the effect of this acquisition was not material. From the date of the acquisition through December 31, 2023, Robinhood Credit revenues were not material to our consolidated statements of operations.