Jason Warnick: Yeah. I mean I think marketing is almost always considered a discretionary spend. And so as I mentioned in my earlier response that we’re leaning into marketing, that is always up to reevaluation, up or down, depending on the macro backdrop, how that changes and also how effective the marketing spend is. And so we’ll continue to see how that plays out. and update as we go. In terms of the cost savings that we’re realizing in our core business, I said high single digits to perhaps even 10% of cost reduction there. And we’re redeploying that into new areas of our business, areas that Vlad was highlighting earlier. New growth is certainly discretionary. I’d say that we’ve decided, though, that we’re pursuing these growth opportunities.
And so I wouldn’t expect us to pull back there certainly in 2024. And Will, you did say rates are a push, and I agree with that. I would say that we also continue to see strong kind of double-digit growth in net deposits. And so assets continue to improve year-over-year, and we’re certainly starting with a higher balance at the beginning of ’24 than what we saw in ’23.
Will Nance: Yeah. All that makes sense. And then just questions around — your thought process around the European expansion over the course of this year. what does that play into expectations, if any? And what’s the latest thinking on when this could be a more meaningful part of the story over time? Thanks for taking the questions.
Vlad Tenev: Yeah, I’ll take that one. While it’s still early, we really like the initial traction we’re seeing. We’re already seeing a healthy portion of our user growth coming from outside of the US. And our focus now is really rounding out the product suite, bringing more services to customers across the globe. We think there’s a huge opportunity for international to become a big part of our business.
Operator: Thank you. One moment for four next question. And our next question comes from the line of Steven Chubak from Wolfe Research. Your question please.
Michael Anagnostakis: Hey, good afternoon. This is Michael Anagnostakis filling in for Stephen. I just wanted to…
Vlad Tenev: Michael.
Michael Anagnostakis: Hey glad. How are you doing? So good to hear. I just want touch on sec lend here.. Could you give us an update on where you are in the journey for the fully paid program, how much incremental penetration you think you can drive? And given the uptick has been obscured by what’s a challenging backdrop, can you remind investors what you think that business can deliver from a revenue perspective in a more normal environment? Thanks.
Jason Warnick: Yeah. Thanks, Michael, for the question. We’re really pleased with the progress that we’re making on the inputs of the securities lending business, particularly fully paid securities lending equities enrolled in the program increased from Q3 to Q4 from $10 billion to $14 billion. So really, really pleased with that, added 500,000 customers into the program a sequential quarter basis. I still think that there’s quite a bit of headroom for us to continue to penetrate and get securities lending fully paid into the hands of our customers. It’s a great way to augment yield, as we all know, and the team is hard at work to make sure customers understand that. I think that’s showing up in the progress that we’re making. At the at the moment, the rebate rates that we’re seeing are lower across the industry. But over time, I think as that normalizes a bit, the progress that we’re making on inputs is really going to show through from a revenue basis.
Vlad Tenev: Yeah, we think we still have room to run and we could make meaningful progress towards heightened penetration this year.
Michael Anagnostakis: Got it. Thank you. And then I guess my follow-up, I wanted to briefly hit on expenses again, maybe in a different vein. Now that the headcount reductions are largely in the rear view, how should we be thinking about the direction of travel for expense per head given the scalability of Robinhood coupled with the investments you’re making, particularly international, where I imagine that may drive some incremental headcount growth? Thanks.
Jason Warnick: Yeah. So the plan on headcount is to be roughly flat to slightly up this year. So we feel really good about the head count posture that we have. In terms of the expense per head, there does continue to be opportunity for us to get even more efficient. Today, the vast majority of our of our head count is in higher cost US geographies, and there’s opportunity there over time. I think the real opportunity for us on head count is really just increasing revenue per employee. And there, we feel like we’re just getting started. There’s a lot of opportunity for us to leverage the fixed cost infrastructure that we have at the company as we grow the business over time.
Michael Anagnostakis: Great. Thanks for taking my questions.
Jason Warnick: You bet.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Michael Cyprys from Morgan Stanley. Your question, please.
Michael Cyprys: Hey, good evening, and thanks for taking the question. Wanted to ask about crypto, an area you guys continue to invest in. I was hoping you could elaborate on the investments you’re looking to make here in ’24 and beyond, as well as how you envision crypto contributing to your business as you look out over the next three to five years.
Vlad Tenev: Yeah. I mean, we’re investing a larger amount into crypto, both in the EU and domestically. I think there is a ton of improvements left to make. Last year we were really focusing on the trader experience and providing clarity, which we believe we’ve made significant progress on, in just how much better our pricing is than that of our competitors. And we’ve seen that reflected in crypto trading market share. We’ve also seen, and you probably caught this announcement just in the past couple of days, our on-ramp technology of Robinhood Connect. We’ve been making meaningful progress there. And so if you think about all that we have to be really, really good at to power our retail crypto offering, we’ve gotten really good at quick money movements, getting your fiat dollars into crypto, as seamlessly as possible through building out our transfers products.
Delivering those funds into non-custodial wallets seamlessly. And so Robinhood Connect really leverages that and turns that into a powerful B2B product. We announced a partnership with MetaMask a couple of days ago, and that’s been one of the market leaders in non-custodial wallets. And they do a really nice thing where you can actually compare the use of different on-ramps, and they sort it by which one is the most cost-effective. And when you kind of look on that page, you see Robinhood at the top. So I think it really shows the investments that we’ve made in our platform, and it’s reflected in us being able to offer lower cost, not just for our consumers, but for business partners as well. And I think you’ll see us chipping away at this bit by bit.
We think we can be the leading player in bridging the worlds of traditional finance and crypto. So there’s a lot more where that came from.
Michael Cyprys: Great. Just a follow-up question if I could. On the expense side, you guys continue to drive efficiency in the business. I heard you mentioned you can reduce underlying costs in ’24 by up to 10% or so, understanding you took to reinvest that elsewhere. But — and over the medium-term, you could potentially look to grow expenses at a low-single-digit pace. I was hoping you could maybe elaborate on the top contributors to that level of efficiency, the specific steps you’re taking here in ’24, and how those may — those steps may differ as you look out over the medium-term to hit those particular targets if you want.
Jason Warnick: Yeah. Sure. I mean, we’ve been really kind of fine-tuning our skills over the last couple of years in terms of efficiency. We are focused on business process efficiency using technology. We have a team that we have spun up that helps the business, find opportunities to improve efficiency. One project we just finished was on recruiting. And we think we can save 20% to 40% of our time just on the recruiting process from optimizing our business steps that are involved. As I mentioned earlier, I think there is a opportunity for us over time in terms of place of work, with the vast majority of our employees working in high-cost locations within the US. That’s something that we can make progress on in ’24, as well as beyond. So those are the big levers that I’d point to.
Michael Cyprys: Great. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of John Todaro from Needham & Company. Your question, please.
John Todaro: Great. Thanks for taking my question and congrats on the beats. I guess, I have two here, both on the crypto components. The Bitcoin ETF versus buying Bitcoin directly on the platform, you had mentioned earlier about 5% of overall crypto you thought was flowing into the ETF. So, was that 5% that migrated away from buying Bitcoin directly or was that an additive 5%?
Jason Warnick: Yeah, we saw it was mostly additive. There were some traders that sold out a spot and got to ETF, but that was really more of the exception. And we also offer the ETFs in our retirement accounts, which accounted for some of the pickup as well. So overall, we don’t view this as cannibalization. It’s additive and we think it’s really good for customers as well.
