Record Adjusted Net Revenue with Growth
Accelerating to 30% Driven by 64% Combined Growth in Financial
Services and Tech Platform Segments, representing 49% of Total
Adjusted Net Revenue
35% Growth in Members and Strong Product
Innovation Remain Key Drivers of Growth
Company Recorded $174 Million in Capital Light,
Fee-Based Revenue, Reinforcing Strength of Increased Mix of Higher
ROE Revenue
Management Raises FY24 Guidance
SoFi Technologies, Inc. (NASDAQ: SOFI), a member-centric,
one-stop shop for digital financial services that helps members
borrow, save, spend, invest and protect their money, reported
financial results today for its third quarter ended September 30,
2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241029800153/en/
Note: For additional information on our
company metrics, including the definitions of “Members,” “Total
Products” and “Technology Platform Total Accounts,” see Table 6 in
the “Financial Tables” herein. Beginning in the first quarter of
2024, new member and new product addition metrics for the relevant
period reflect actual growth or declines in members and products
that occurred in that period whereas the total number of members
and products reflects not only the growth or decline of each metric
in the current period but also additions or deletions due to prior
period factors, if any. (1) The company includes SoFi accounts on
the Galileo platform-as-a-service in its total Technology Platform
accounts metric to better align with the presentation of Technology
Platform segment revenue. (Graphic: SoFi Technologies)
Anthony Noto, CEO of SoFi Technologies, Inc. commented: “This
quarter was the strongest quarter in our history. Our results
reflect how SoFi is consistently achieving durable growth, how our
innovation and brand building are attracting more members and
clients to our platform than ever before, and how we are delivering
strong and improving returns.
“Our Financial Services and Tech Platform segments now make up a
record 49% of SoFi's adjusted net revenue, up from 39% a year ago,"
Noto continued. "In the third quarter, these businesses grew
revenue by a combined 64% year-over-year, a testament of our
continued execution and deliberate shift towards capital-light,
higher ROE, fee based revenue streams."
Consolidated Results Summary
Three Months Ended September
30,
% Change
($ in thousands, except per share
amounts)
2024
2023
Consolidated – GAAP
Total net revenue
$
697,121
$
537,209
30
%
Net income (loss)
60,745
(266,684
)
n/m
Net income (loss) attributable to common
stockholders – basic
60,745
(276,873
)
n/m
Net income (loss) attributable to common
stockholders – diluted
58,059
(276,873
)
n/m
Earnings (loss) per share attributable to
common stockholders – basic
0.06
(0.29
)
n/m
Earnings (loss) per share attributable to
common stockholders – diluted
0.05
(0.29
)
n/m
Consolidated – Non-GAAP
Adjusted net revenue(1)
$
689,445
$
530,717
30
%
Adjusted EBITDA(1)
186,237
98,025
90
%
Net income (loss), excluding impact of
goodwill impairment(1)(2)
60,745
(19,510
)
n/m
___________________
(1)
For more information and reconciliations
of these non-GAAP measures to the most comparable GAAP measures,
see “Non-GAAP Financial Measures” and Table 2 to the “Financial
Tables” herein.
(2)
Net income (loss) adjusted to exclude
goodwill impairment losses of $247.2 million for the three months
ended September 30, 2023.
Product Highlights
SoFi's continuous product innovation and brand building yielded
several milestones in the quarter, fueling significant member and
product growth and paving the way for strong future growth. Among
the highlights:
- SoFi Money reached record highs in Accounts, Total
Deposits, and Direct Deposit members.
- SoFi Invest continues to see strong engagement, driven
by new alternative assets, money market funds and mutual funds
which we have rolled out over the past year. We continue to provide
Main Street investors access to unique investment products like
interval funds, private credit, private real estate and private
venture. Currently, 70% of new sign ups are from existing SoFi
members.
- SoFi Credit Card officially launched the Everyday Cash
Rewards and Essential credit cards, enabling SoFi to serve more
people's spending and borrowing needs.
- Loan Platform Business has evolved into an integrated
loan platform experience which now offers just in time lending. The
Loan Platform Business posted record results, driven by a record $1
billion of personal loan volume generated on behalf of third
parties in the quarter.
- Tech Platform signed several new partnerships, launched
advanced fraud protection solutions and a new Secured Credit with
Dynamic Funding offering to promote greater financial inclusion and
help customers build stronger credit.
- Home Loans saw its best refinancing quarter since the
second quarter of 2022. Home purchase and refinancing grew 23%
sequentially, while home equity loan volume grew 44% from the prior
year period.
- Credit performance continues to improve with personal
loan delinquencies and net charge offs decreasing on a percent and
absolute basis in the quarter. On-balance sheet 90 day personal
loan delinquency rate decreased to 57 basis points, from 64 basis
points in the prior quarter, while personal loan annualized
charge-off rate decreased to 3.52% from 3.84% in the prior
quarter.
- SoFi ended the quarter with its highest average unaided
brand awareness of all time, up 40% year-over-year as the
company pursues its vision to become a top ten financial
institution.
Consolidated Results
SoFi reported a number of key financial achievements in the
third quarter of 2024, including total GAAP net revenue of $697.1
million, which increased 30% relative to the prior-year period's
$537.2 million. Third quarter record adjusted net revenue of $689.4
million grew 30% from the corresponding prior-year period of $530.7
million. Third quarter record adjusted EBITDA of $186.2 million, a
27% adjusted EBITDA margin, increased 90% from the same prior year
period's $98.0 million. All three segments achieved record
contribution profit in the quarter.
SoFi reported its fourth consecutive quarter of GAAP net income,
achieving $60.7 million in the third quarter of 2024. Diluted
earnings per share for the third quarter was $0.05. Permanent
equity grew by $220 million during the quarter, ending at $6.1
billion and $5.54 of permanent equity per share. Tangible book
value grew by $236 million during the quarter, ending at $4.4
billion and $4.00 of tangible book value per share.
Net interest income of $431.0 million for the third quarter was
up 25% year-over-year, driven by a 35% increase in average
interest-earning assets, slightly offset by a 44 basis points
decrease in average yields year-over-year. Net interest margin of
5.57% decreased from 5.99% in the year ago quarter, due to mix
shift towards lower yielding secured loans.
The average rate on interest-earning assets decreased by 18
basis points sequentially, while the average rate on
interest-bearing liabilities increased 2 basis points from the
prior quarter. In the third quarter of 2024, the average rate on
deposits was 220 basis points lower than that of warehouse
facilities.
Member and Product Growth
Continued growth in both total members and products in the third
quarter of 2024, along with improving operating efficiency,
reflects the benefits of our broad product suite and unique
Financial Services Productivity Loop (FSPL) strategy.
New member additions were over 756,000 in the third quarter of
2024, and total members reached nearly 9.4 million, up 35% from 7.0
million at the same prior year period.
Product additions were nearly 1.1 million in the third quarter
of 2024, and total products were nearly 13.7 million, up 31% from
10.4 million at the same prior year period, or 37% when excluding
digital assets accounts related to our transfer of crypto services
in 2023.
In the Financial Services segment, total products increased by
33% year-over-year, to 11.8 million from 8.9 million in the third
quarter of 2023, or 40% when excluding digital assets accounts
related to our transfer of crypto services in 2023.
Lending products increased 19% year-over-year to 1.9 million
products, driven primarily by continued demand for personal loan
products as well as steady growth in student and home loan
products.
Technology Platform enabled accounts increased by 17%
year-over-year to 160 million.
Financial Services Segment Results
Financial Services segment net revenue increased 102%
year-over-year to a record $238.3 million in the third quarter of
2024 from the prior year period's total of $118.2 million. Net
interest income of $154.1 million increased 66% year-over-year,
which was primarily driven by growth in consumer deposits.
Noninterest income grew 235% from the prior year period to $84.2
million in the quarter, which represents nearly $340 million in
annualized revenue.
A key driver of noninterest income growth this quarter was our
Loan Platform Business, where we refer pre-qualified borrowers to
origination partners and originate loans on behalf of third
parties. In the quarter, the Loan Platform Business grew 5x, and
generated $55.6 million in loan platform fees, driven by $1.0
billion of personal loans originated on behalf of third parties, as
well as referrals. We also generated $5.5 million in servicing cash
flow, which is recorded in our Lending segment. In total, our Loan
Platform Business added $61.1 million to our consolidated adjusted
net revenue.
In addition to our Loan Platform Business, we continued to see
healthy growth in interchange, up 211% year-over-year as a result
of $12 billion in total annualized spend in the quarter across
Money and Credit Card.
The Financial Services segment posted a contribution profit of
$99.8 million for the third quarter of 2024, a $96.5 million
improvement from the prior year quarter, while contribution margin
grew nearly 11 percentage points sequentially to 42%. At the same
time, operating leverage is evident, as the segment generated
$120.1 million in incremental revenue, with only $23.6 million in
incremental directly attributable expenses year-over-year.
Financial Services – Segment Results of
Operations
Three Months Ended September
30,
($ in thousands)
2024
2023
% Change
Net interest income
$
154,143
$
93,101
66
%
Noninterest income
84,165
25,146
235
%
Total net revenue – Financial
Services
238,308
118,247
102
%
Directly attributable expenses
(138,550
)
(114,987
)
20
%
Contribution profit – Financial
Services
$
99,758
$
3,260
n/m
Contribution margin – Financial
Services(1)
42
%
3
%
___________________
(1)
Contribution margin is defined for each of
our reportable segments as contribution profit (loss), divided by
net revenue.
By continuously innovating with new and relevant offerings,
features and rewards for members, SoFi grew total Financial
Services products by 2.9 million, or 33%, year-over-year, bringing
the total to 11.8 million at quarter-end, or 40% when excluding
digital assets accounts related to our transfer of crypto services
in 2023. SoFi Money reached 4.7 million products, Relay reached 4.2
million products and SoFi Invest reached 2.4 million products by
the end of the third quarter.
Monetization continues to improve across all products, with
annualized revenue per product of $81, up 52% year-over-year from
$53 in the prior year quarter.
SoFi Money continues to offer a top tier APY of up to 4.30% as
of October 29, 2024, no minimum balance requirement nor balance
limits, FDIC insurance through a network of participating banks of
up to $2 million, a host of free features and a unique rewards
program.
Total deposits grew to $24.4 billion, with over 90% of SoFi
Money deposits (inclusive of Checking and Savings and cash
management accounts) coming from direct deposit members. For new
direct deposit accounts opened in the third quarter of 2024, the
median FICO score was 743, with more than half of newly funded SoFi
Money accounts setting up direct deposit by day 30.
Financial Services – Products
September 30,
2024
2023
% Change
Money(1)
4,720,305
3,063,778
54
%
Invest(3)
2,394,367
2,465,072
(3
)%
Credit Card
264,937
235,791
12
%
Referred loans(2)
73,090
51,301
42
%
Relay
4,199,602
2,958,497
42
%
At Work
107,668
79,461
35
%
Total financial services products(3)
11,759,969
8,853,900
33
%
___________________
(1)
Includes checking and savings accounts
held at SoFi Bank, and cash management accounts.
(2)
Limited to loans wherein we provide third
party fulfillment services as part of our Loan Platform
Business.
(3)
Year-over-year product growth for Invest
and total financial services products was 20% and 40%,
respectively, when excluding digital assets accounts related to our
transfer of crypto services in 2023.
Lending Segment Results
For the third quarter of 2024, Lending segment GAAP net revenue
of $396.2 million increased 14% from the prior year period, while
adjusted net revenue for the segment of $391.9 million increased
14% from the prior year period. Lending segment performance was
driven by net interest income, which rose 19% year-over-year and
now makes up 81% of segment adjusted net revenue. This was driven
by a 35% year-over-year increase in average interest-earning
assets, slightly offset by a 44 basis points year-over-year
decrease in average yields. Net interest income of $316.3 million
significantly exceeded directly attributable segment expenses of
$153.0 million for the third quarter of 2024.
Lending segment contribution profit was $238.9 million in the
quarter, up 17% from $204.0 million in the same prior-year period.
Lending segment adjusted contribution margin for the third quarter
of 2024 increased to 61% from 60% in the same prior-year period.
These strong margins reflect SoFi’s ability to capitalize on
continued strong demand for its lending products.
Lending – Segment Results of
Operations
Three Months Ended September
30,
($ in thousands)
2024
2023
% Change
Net interest income
$
316,268
$
265,215
19
%
Noninterest income
79,977
83,758
(5
)%
Total net revenue – Lending
396,245
348,973
14
%
Servicing rights – change in valuation
inputs or assumptions
(4,362
)
(7,420
)
(41
)%
Residual interests classified as
debt – change in valuation inputs or assumptions
9
928
(99
)%
Directly attributable expenses
(152,964
)
(138,525
)
10
%
Contribution profit – Lending
$
238,928
$
203,956
17
%
Contribution margin – Lending(1)
60
%
58
%
Adjusted net revenue – Lending
(non-GAAP)(2)
$
391,892
$
342,481
14
%
Adjusted contribution margin – Lending
(non-GAAP)(2)
61
%
60
%
___________________
(1)
Contribution margin is defined for each of
our reportable segments as contribution profit (loss), divided by
net revenue.
(2)
For more information and a reconciliation
of these non-GAAP financial measures to the most comparable GAAP
measure, see “Non-GAAP Financial Measures” and Table 2 to the
“Financial Tables” herein.
Lending – Loans At Fair Value
($ in thousands)
Personal Loans
Student Loans
Home Loans
Total
September 30,
2024
Unpaid principal
$
16,199,604
$
7,437,305
$
80,115
$
23,717,024
Accumulated interest
118,169
34,956
42
153,167
Cumulative fair value adjustments(1)
925,051
404,406
1,533
1,330,990
Total fair value of loans(2)(3)
$
17,242,824
$
7,876,667
$
81,690
$
25,201,181
June 30,
2024
Unpaid principal
$
15,040,190
$
6,915,550
$
94,673
$
22,050,413
Accumulated interest
111,308
29,957
71
141,336
Cumulative fair value adjustments(1)
645,930
249,255
1,393
896,578
Total fair value of loans(2)(3)
$
15,797,428
$
7,194,762
$
96,137
$
23,088,327
___________________
(1)
During the three months ended September
30, 2024, the cumulative fair value adjustments for personal loans
were primarily impacted by higher unpaid principal balance, lower
default rate, as well as lower discount rate. The lower discount
rate was driven by a 113 basis points decrease in benchmark rates
and offset by 16 basis points of spread widening. The decreases in
default rate and discount rate were slightly offset by a lower
coupon rate. The cumulative fair value adjustments for student
loans were primarily impacted by higher unpaid principal balance,
higher coupon rate, lower prepayment rate, as well as a lower
discount rate. The lower discount rate was driven by a 87 basis
points decrease in benchmark rates and offset by 42 basis points of
spread widening. This was slightly offset by higher default
rate.
(2)
Each component of the fair value of loans
is impacted by charge-offs during the period. Our fair value
assumption for annual default rate incorporates fair value
markdowns on loans beginning when they are 10 days or more
delinquent, with additional markdowns at 30, 60 and 90 days past
due.
(3)
Student loans are classified as loans held
for investment, and personal loans and home loans are classified as
loans held for sale.
The following table summarizes the significant inputs to the
fair value model for personal and student loans:
Personal Loans
Student Loans
September 30, 2024
June 30, 2024
September 30, 2024
June 30, 2024
Weighted average coupon rate(1)
13.5
%
13.6
%
5.9
%
5.7
%
Weighted average annual default rate
4.5
%
4.8
%
0.7
%
0.6
%
Weighted average conditional prepayment
rate
26.1
%
26.1
%
10.7
%
11.0
%
Weighted average discount rate
4.78
%
5.75
%
3.99
%
4.44
%
Benchmark rate(2)
3.4
%
4.6
%
3.3
%
4.1
%
___________________
(1)
Represents the average coupon rate on
loans held on balance sheet, weighted by unpaid principal balance
outstanding at the balance sheet date.
(2)
Corresponds with two-year SOFR for
personal loans, and four-year SOFR for student loans.
Third quarter Lending segment total origination volume increased
23% year-over-year, as a result of continued strong demand for
personal loans and stable growth in student loan and home loan
originations.
Personal loan record originations of $4.9 billion in the third
quarter of 2024 were up 26% year-over-year, and increased 17%
sequentially, inclusive of $1.0 billion originated on behalf of
third parties for our Loan Platform Business. Third quarter student
loan volume of $944 million was up 3% year-over-year, and increased
28% sequentially. Third quarter home loan volume of $490 million
was up 38% year-over-year, and 17% sequentially.
In the quarter, loan sales reached nearly $1.3 billion in total,
and nearly $5.0 billion in the last twelve months, exclusive of
$1.0 billion of Loan Platform Business sales.
Cumulative fair value adjustments from delinquent personal loans
peaked in the first quarter of 2024, along with delinquencies on an
absolute and percentage basis. We continued to improve credit
performance in the third quarter, with on-balance sheet 90 day
personal loan delinquency rate of 57 basis points, a decrease from
64 basis points in the prior quarter.
Personal loan annualized charge-off rate decreased to 3.52% from
3.84% in the prior quarter, including the impact of asset sales,
new originations and the delinquency sale in the quarter. Had we
not sold these late stage delinquencies, we estimate that,
including recoveries between 90-120 days delinquent, we would have
had an all-in annualized net charge off rate for personal loans of
approximately 5.0% vs. 5.4% last quarter.
SoFi's credit discipline continues to result in strong credit
performance, as observed on the cumulative net losses of several of
the company's personal loan vintages, relative to the 7% to 8%
maximum life of loan loss assumption, inline with our underwriting
tolerance.
The 2017 personal loan vintage was the last yearly vintage that
approached 8% life of loan loss. When looking at the Q4 2022 - Q4
2023 vintages, at roughly 49% of remaining unpaid principal
balance, net cumulative losses of 3.33% are below the 4.77%
observed in the 2017 vintage at the same point of 49% remaining
principal balance.
Looking at Q1 2020 through Q2 2024 personal loan originations,
only 43% of unpaid principal remains. Among the 57% of principal
that has already been paid down, we have seen 6% in net cumulative
losses. For life of loan losses on this entire cohort of loans to
reach 8% net cumulative losses, the remaining unpaid principal
would need to be charged-off at a rate of more than 10%. Past
vintages have performed meaningfully better after this point in the
seasoning curve.
Lending – Originations and Average
Balances
Three Months Ended September
30,
% Change
2024
2023
Origination volume ($ in thousands, during
period)
Personal loans(1)
$
4,892,040
$
3,885,967
26
%
Student loans
943,584
919,330
3
%
Home loans
489,767
355,698
38
%
Total
$
6,325,391
$
5,160,995
23
%
Average loan balance ($, as of period
end)(2)
Personal loans
$
25,063
$
24,221
3
%
Student loans
42,713
44,828
(5
)%
Home loans
283,948
285,773
(1
)%
_________________
(1)
Inclusive of origination volume related to
our Loan Platform Business.
(2)
Within each loan product category, average
loan balance is defined as the total unpaid principal balance of
the loans divided by the number of loans that have a balance
greater than zero dollars as of the reporting date. Average loan
balance includes loans on our balance sheet, as well as transferred
loans and referred loans with which we have a continuing
involvement through our servicing agreements.
Lending – Products
September 30,
2024
2023
% Change
Personal loans(1)
1,305,246
1,057,995
23
%
Student loans
551,838
507,567
9
%
Home loans
33,677
28,344
19
%
Total lending products
1,890,761
1,593,906
19
%
_________________
(1)
Includes loans which we originate as part
of our Loan Platform Business.
Technology Platform Segment Results
Technology Platform segment net revenue of $102.5 million for
the third quarter of 2024 increased 14% year-over-year.
Contribution profit of $33.0 million for the third quarter of 2024
increased 2% year-over-year, for a contribution margin of 32%.
In the third quarter of 2024, growth was driven by strong
contribution from new clients, as well as growth in Latin America,
consumer brands in the US, and clients with innovative use cases
like earned wage access and money movement.
Technology Platform – Segment Results
of Operations
Three Months Ended September
30,
($ in thousands)
2024
2023
% Change
Net interest income
$
629
$
573
10
%
Noninterest income
101,910
89,350
14
%
Total net revenue – Technology
Platform
102,539
89,923
14
%
Directly attributable expenses
(69,584
)
(57,732
)
21
%
Contribution profit
$
32,955
$
32,191
2
%
Contribution margin – Technology
Platform(1)
32
%
36
%
___________________
(1)
Contribution margin is defined for each of
our reportable segments as contribution profit (loss), divided by
net revenue.
Technology Platform total enabled client accounts increased 17%
year-over-year, to 160.2 million up from 136.7 million in the
year-prior period.
Our pipeline spans banks, brands, and fintechs across consumer
and B2B, which offer larger and more durable revenue. The pipeline
is in a stronger spot than it has ever been, and the investments
made in this segment have greatly expanded the market
opportunity.
Technology Platform
September 30,
2024
2023
% Change
Total accounts
160,179,299
136,739,131
17
%
Guidance and Outlook
For the full year 2024, management now expects to deliver
adjusted net revenue of $2.535 to $2.550 billion, which is $85
million higher than the prior guidance range of $2.43 to $2.47
billion. This implies 22 to 23% annual growth versus 17 to 19%
previously. This guidance now assumes lending adjusted net revenue
will be at least 100% of 2023 levels, Financial Services segment
revenue to grow more than 80% year-over-year, and for Tech Platform
revenue to grow low-to-high teens percentage year-over-year.
Management now expects to deliver adjusted EBITDA of $640 to
$645 million, above prior guidance of $605 to $615 million. This
represents a 25% adjusted EBITDA margin. We now expect full-year
GAAP net income of $204 to $206 million, above prior guidance of
$175 to $185 million, and GAAP EPS of $0.11 to $0.12, above prior
guidance of $0.09 to $0.10.
Management now expects growth in tangible book value of
approximately $1 to $1.05 billion and continues to expect to end
the year with a total capital ratio north of 16%.
We continue to expect to add at least 2.3 million new members in
2024, which represents 30% growth from 2023 levels.
Management will further address full-year guidance on the
quarterly earnings conference call. Management has not reconciled
forward-looking non-GAAP measures to their most directly comparable
GAAP measures of total net revenue, net income and net income
margin. This is because the company cannot predict with reasonable
certainty and without unreasonable efforts the ultimate outcome of
certain GAAP components of such reconciliations due to
market-related assumptions that are not within our control as well
as certain legal or advisory costs, tax costs or other costs that
may arise. For these reasons, management is unable to assess the
probable significance of the unavailable information, which could
materially impact the amount of the future directly comparable GAAP
measures.
Earnings Webcast
SoFi’s executive management team will host a live audio webcast
beginning at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time) today
to discuss the quarter’s financial results and business highlights.
All interested parties are invited to listen to the live webcast at
https://investors.sofi.com. A replay of the webcast will be
available on the SoFi Investor Relations website for 30 days.
Investor information, including supplemental financial information,
is available on SoFi’s Investor Relations website at
https://investors.sofi.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain of the statements above are forward-looking and as such
are not historical facts. This includes, without limitation,
statements regarding our expectations regarding full year 2024
adjusted net revenue (including segment revenue), adjusted EBITDA,
adjusted EBITDA margin, GAAP net income, year end total capital
ratio, member and product count growth, and expected growth in
tangible book value, our expectations regarding our ability to
shift towards capital-light, fee based revenue streams, our
expectations regarding our ability to continue to grow our business
and launch new business lines and products, improve our financials
and increase our member, product and total accounts count, our
ability to achieve diversified, and more durable growth, our
ability to navigate the macroeconomic environment and the financial
position, business strategy and plans and objectives of management
for our future operations, including our goal of becoming a top ten
financial institution. These forward-looking statements are not
guarantees of performance. Such statements can be identified by the
fact that they do not relate strictly to historical or current
facts. Words such as “achieve”, “believe”, “continue”, “expect”,
“growth”, “may”, “plan”, “strategy”, “will be”, “will continue”,
and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is
not forward-looking. Factors that could cause actual results to
differ materially from those contemplated by these forward-looking
statements include: (i) the effect of and our ability to respond
and adapt to changing market and economic conditions, including
economic downturns, fluctuating inflation and interest rates, and
volatility from global events; (ii) our ability to achieve and
maintain profitability, operating efficiencies and continued growth
across our segments in the future, as well as our ability to
continue to achieve GAAP net income profitability and expected GAAP
net income margins and our ability to grow tangible book value or
increase earnings per share; (iii) the impact on our business of
the regulatory environment and complexities with compliance related
to such environment; (iv) our ability to realize the benefits of
being a bank holding company and operating SoFi Bank, including
continuing to grow high quality deposits and our rewards program
for members; (v) our ability to continue to drive brand awareness
and realize the benefits or our marketing and advertising
campaigns; (vi) our ability to vertically integrate our businesses
and accelerate the pace of innovation of our financial products;
(vii) our ability to manage our growth effectively and our
expectations regarding the development and expansion of our
business; (viii) our ability to access sources of capital on
acceptable terms or at all; (ix) the success of our continued
investments in our Financial Services segment and in our business
generally; (x) our ability to expand our member base and increase
our product adds; (xi) our ability to maintain our leadership
position in certain categories of our business and to grow market
share in existing markets or any new markets we may enter; (xii)
our ability to develop new products, features and functionality
that are competitive and meet market needs; (xiii) our ability to
realize the benefits of our strategy, including what we refer to as
our FSPL; (xiv) our ability to make accurate credit and pricing
decisions or effectively forecast our loss rates; (xv) our ability
to establish and maintain an effective system of internal controls
over financial reporting; (xvi) our ability to maintain the
security and reliability of our products; and (xvii) the outcome of
any legal or governmental proceedings that may be instituted
against us. The foregoing list of factors is not exhaustive. You
should carefully consider the foregoing factors and the other risks
and uncertainties set forth in the section titled “Risk Factors” in
our last quarterly report on Form 10-Q, as filed with the
Securities and Exchange Commission, and those that are included in
any of our future filings with the Securities and Exchange
Commission, including our annual report on Form 10-K, under the
Exchange Act. These forward-looking statements are based on
information available as of the date hereof and current
expectations, forecasts and assumptions, and involve a number of
judgments, risks and uncertainties. Accordingly, forward-looking
statements should not be relied upon as representing our views as
of any subsequent date, and we do not undertake any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws.
As a result of a number of known and unknown risks and
uncertainties, our actual results or performance may be materially
different from those expressed or implied by these forward-looking
statements. You should not place undue reliance on these
forward-looking statements.
Non-GAAP Financial Measures
This press release presents information about certain non-GAAP
financial measures provided as supplements to the results provided
in accordance with accounting principles generally accepted in the
United States (GAAP). Our management and Board of Directors uses
these non-GAAP measures to evaluate our operating performance,
formulate business plans, help better assess our overall liquidity
position, and make strategic decisions, including those relating to
operating expenses and the allocation of internal resources.
Accordingly, we believe that these non-GAAP measures provide useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management and
Board of Directors. These non-GAAP measures have limitations as
analytical tools, and should not be considered in isolation from,
or as a substitute for, the analysis of other GAAP financial
measures. Other companies may not use these non-GAAP measures or
may use similar measures that are defined in a different manner.
Therefore, SoFi's non-GAAP measures may not be directly comparable
to similarly titled measures of other companies.
Reconciliations of these non-GAAP measures to the most directly
comparable GAAP financial measures are provided in Table 2 to the
“Financial Tables” herein.
About SoFi
SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for
digital financial services on a mission to help people achieve
financial independence to realize their ambitions. The company’s
full suite of financial products and services helps its nearly 9.4
million SoFi members borrow, save, spend, invest, and protect their
money better by giving them fast access to the tools they need to
get their money right, all in one app. SoFi also equips members
with the resources they need to get ahead – like credentialed
financial planners, exclusive experiences and events, and a
thriving community – on their path to financial independence.
SoFi innovates across three business segments: Lending,
Financial Services – which includes SoFi Checking and Savings, SoFi
Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and
Technology Platform, which offers the only end-to-end vertically
integrated financial technology stack. SoFi Bank, N.A., an
affiliate of SoFi, is a nationally chartered bank, regulated by the
OCC and FDIC and SoFi is a bank holding company regulated by the
Federal Reserve. The company is also the naming rights partner of
SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles
Rams. For more information, visit https://www.sofi.com or download
our iOS and Android apps.
Availability of Other Information About SoFi
Investors and others should note that we communicate with our
investors and the public using our website (https://www.sofi.com),
the investor relations website (https://investors.sofi.com), and on
social media (X and LinkedIn), including but not limited to
investor presentations and investor fact sheets, Securities and
Exchange Commission filings, press releases, public conference
calls and webcasts. The information that SoFi posts on these
channels and websites could be deemed to be material information.
As a result, SoFi encourages investors, the media, and others
interested in SoFi to review the information that is posted on
these channels, including the investor relations website, on a
regular basis. This list of channels may be updated from time to
time on SoFi’s investor relations website and may include
additional social media channels. The contents of SoFi’s website or
these channels, or any other website that may be accessed from its
website or these channels, shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933, as
amended.
SOFI-F
FINANCIAL TABLES (Unaudited)
1. Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss)
2. Reconciliation of GAAP to Non-GAAP Financial Measures
3. Condensed Consolidated Balance Sheets
4. Average Balances and Net Interest Earnings Analysis
5. Condensed Consolidated Cash Flow Data
6. Company Metrics
7. Segment Financials
Table 1
SoFi Technologies,
Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In Thousands, Except for
Share and Per Share Data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Interest income
Loans and securitizations
$
671,976
$
539,927
$
1,913,265
$
1,345,169
Other
51,398
24,343
150,615
60,661
Total interest income
723,374
564,270
2,063,880
1,405,830
Interest expense
Securitizations and warehouses
31,093
63,847
89,376
181,231
Deposits
248,292
145,563
691,558
325,208
Corporate borrowings
12,871
9,784
36,307
26,951
Other
108
113
327
341
Total interest expense
292,364
219,307
817,568
533,731
Net interest income
431,010
344,963
1,246,312
872,099
Noninterest income
Loan origination, sales, and
securitizations
70,085
75,385
181,957
288,883
Servicing
9,927
8,009
23,560
29,803
Technology products and solutions
90,896
81,856
262,434
236,946
Loan platform fees
55,641
9,066
78,373
24,261
Other
39,562
17,930
148,098
55,393
Total noninterest income
266,111
192,246
694,422
635,286
Total net revenue
697,121
537,209
1,940,734
1,507,385
Noninterest expense
Technology and product development
139,714
125,698
402,801
369,602
Sales and marketing
214,904
186,719
567,032
544,695
Cost of operations
123,714
98,258
333,478
276,051
General and administrative
148,921
124,457
439,167
379,326
Goodwill impairment
—
247,174
—
247,174
Provision for credit losses
6,013
21,831
24,835
42,853
Total noninterest expense
633,266
804,137
1,767,313
1,859,701
Income (loss) before income taxes
63,855
(266,928
)
173,421
(352,316
)
Income tax (expense) benefit
(3,110
)
244
(7,229
)
3,661
Net income (loss)
$
60,745
$
(266,684
)
$
166,192
$
(348,655
)
Earnings (loss) per share
Earnings (loss) per share – basic
$
0.06
$
(0.29
)
$
0.14
$
(0.40
)
Earnings (loss) per share – diluted
$
0.05
$
(0.29
)
$
0.08
$
(0.40
)
Weighted average common stock
outstanding – basic
1,071,159,746
951,183,107
1,037,579,399
939,070,185
Weighted average common stock
outstanding – diluted
1,104,450,416
951,183,107
1,078,402,421
939,070,185
Table 2
Non-GAAP Financial Measures (Unaudited)
Adjusted Net Revenue
Adjusted net revenue is defined as total net revenue, adjusted
to exclude the fair value changes in servicing rights and residual
interests classified as debt due to valuation inputs and
assumptions changes, which relate only to our Lending segment, as
well as gains and losses on extinguishment of debt. We adjust total
net revenue to exclude these items, as they are non-cash charges
that are not realized during the period or not indicative of our
core operating performance, and therefore positive or negative
changes do not impact the cash available to fund our operations.
Management believes this measure is useful because it enables
management and investors to assess our underlying operating
performance and cash available to fund our operations. In addition,
management uses this measure to better decide on the proper
expenses to authorize for each of our operating segments, to
ultimately help achieve target contribution profit margins.
The following table reconciles adjusted
net revenue to total net revenue, the most directly comparable GAAP
measure:
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2024
2023
2024
2023
Total net revenue (GAAP)
$
697,121
$
537,209
$
1,940,734
$
1,507,385
Servicing rights – change in valuation
inputs or assumptions(1)
(4,362
)
(7,420
)
(11,242
)
(28,105
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
9
928
83
415
Gain on extinguishment of debt(3)
(3,323
)
—
(62,517
)
—
Adjusted net revenue (non-GAAP)
$
689,445
$
530,717
$
1,867,058
$
1,479,695
___________________
(1)
Reflects changes in fair value inputs and
assumptions on servicing rights, including conditional prepayment,
default rates and discount rates. These assumptions are highly
sensitive to market interest rate changes and are not indicative of
our performance or results of operations. Moreover, these non-cash
charges are unrealized during the period and, therefore, have no
impact on our cash flows from operations.
(2)
Reflects changes in fair value inputs and
assumptions on residual interests classified as debt, including
conditional prepayment, default rates and discount rates. When
third parties finance our consolidated securitization VIEs by
purchasing residual interests, we receive proceeds at the time of
the closing of the securitization and, thereafter, pass along
contractual cash flows to the residual interest owner. These
residual debt obligations are measured at fair value on a recurring
basis, but they have no impact on our initial financing proceeds,
our future obligations to the residual interest owner (because
future residual interest claims are limited to contractual
securitization collateral cash flows), or the general operations of
our business.
(3)
Reflects gain on extinguishment of debt.
Gains and losses are recognized during the period of extinguishment
for the difference between the net carrying amount of debt
extinguished and the fair value of equity securities issued.
The following table reconciles adjusted net revenue for the
Lending segment to total net revenue, the most directly comparable
GAAP measure for the Lending segment:
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2024
2023
2024
2023
Lending
Total net revenue – Lending (GAAP)
$
396,245
$
348,973
$
1,067,426
$
1,017,495
Servicing rights – change in valuation
inputs or assumptions(1)
(4,362
)
(7,420
)
(11,242
)
(28,105
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
9
928
83
415
Adjusted net revenue – Lending
(non-GAAP)
$
391,892
$
342,481
$
1,056,267
$
989,805
___________________
(1)
See footnote (1) to the table above.
(2)
See footnote (2) to the table above.
Adjusted Noninterest Income
Adjusted noninterest income is a non-GAAP measure. Adjusted
noninterest income is defined as noninterest income, adjusted to
exclude the fair value changes in servicing rights and residual
interests classified as debt due to valuation inputs and
assumptions changes, which relate only to our Lending segment, as
well as gains and losses on extinguishment of debt. We adjust
noninterest income to exclude these items, as they are non-cash
charges that are not realized during the period or not indicative
of our core operating performance, and therefore positive or
negative changes do not impact the cash available to fund our
operations. Management believes this measure is useful because it
enables management and investors to assess our underlying operating
performance and cash available to fund our operations.
The following table reconciles adjusted noninterest income to
noninterest income, the most directly comparable GAAP measure:
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2024
2023
2024
2023
Noninterest income (GAAP)
$
266,111
$
192,246
$
694,422
$
635,286
Servicing rights – change in valuation
inputs or assumptions(1)
(4,362
)
(7,420
)
(11,242
)
(28,105
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
9
928
83
415
Gain on extinguishment of debt(3)
(3,323
)
—
(62,517
)
—
Adjusted noninterest income (non-GAAP)
$
258,435
$
185,754
$
620,746
$
607,596
___________________
(1)
Reflects changes in fair value inputs and
assumptions on servicing rights, including conditional prepayment,
default rates and discount rates. These assumptions are highly
sensitive to market interest rate changes and are not indicative of
our performance or results of operations. Moreover, these non-cash
charges are unrealized during the period and, therefore, have no
impact on our cash flows from operations.
(2)
Reflects changes in fair value inputs and
assumptions on residual interests classified as debt, including
conditional prepayment, default rates and discount rates. When
third parties finance our consolidated securitization VIEs by
purchasing residual interests, we receive proceeds at the time of
the closing of the securitization and, thereafter, pass along
contractual cash flows to the residual interest owner. These
residual debt obligations are measured at fair value on a recurring
basis, but they have no impact on our initial financing proceeds,
our future obligations to the residual interest owner (because
future residual interest claims are limited to contractual
securitization collateral cash flows), or the general operations of
our business.
(3)
Reflects gain on extinguishment of debt.
Gains and losses are recognized during the period of extinguishment
for the difference between the net carrying amount of debt
extinguished and the fair value of equity securities issued.
The following table reconciles adjusted noninterest income for
the Lending segment to noninterest income, the most directly
comparable GAAP measure for the Lending segment:
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2024
2023
2024
2023
Lending
Noninterest income – Lending (GAAP)
$
79,977
$
83,758
$
205,410
$
319,348
Servicing rights – change in valuation
inputs or assumptions(1)
(4,362
)
(7,420
)
(11,242
)
(28,105
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
9
928
83
415
Adjusted noninterest income – Lending
(non-GAAP)
$
75,624
$
77,266
$
194,251
$
291,658
___________________
(1)
See footnote (1) to the table above.
(2)
See footnote (2) to the table above.
Adjusted Contribution Margin and Incremental Adjusted
Contribution Margin — Lending
Adjusted contribution margin and incremental adjusted
contribution margin are non-GAAP measures and relate only to our
Lending segment. Adjusted contribution margin is defined as segment
contribution profit (loss) for the Lending segment, divided by
adjusted net revenue for the Lending segment, a non-GAAP measure.
Incremental adjusted contribution margin is defined as the change
in segment contribution profit (loss) for our Lending segment,
divided by change in adjusted net revenue for the Lending segment.
See ‘Adjusted Net Revenue’ above for a reconciliation of Lending
segment adjusted net revenue.
Management believes adjusted contribution margin metrics are
useful because they enable management and investors to assess the
underlying operating performance of our Lending segment, by
removing the impacts of changes in volume over periods to present a
comparable view of segment contribution profit (loss), which is a
measure of the direct profitability of each of our reportable
segments, as a percentage of segment adjusted net revenue for the
Lending segment during each period.
The following table presents a reconciliation of adjusted
contribution margin and incremental adjusted contribution margin
for our reportable Lending segment:
Three Months Ended September
30,
2024 vs 2023
Nine Months Ended
September 30,
2024 vs 2023
($ in thousands)
2024
2023
$ Change
2024
2023
$ Change
Lending
Contribution profit – Lending (GAAP)
$
238,928
$
203,956
$
34,972
$
644,585
$
597,163
$
47,422
Net revenue – Lending (GAAP)
396,245
348,973
47,272
1,067,426
1,017,495
49,931
Contribution margin – Lending
(GAAP)(1)
60
%
58
%
60
%
59
%
Incremental contribution margin – Lending
(GAAP)(1)
74
%
95
%
Adjusted net revenue – Lending
(non-GAAP)(2)
$
391,892
$
342,481
$
49,411
$
1,056,267
$
989,805
$
66,462
Adjusted contribution margin – Lending
(non-GAAP)
61
%
60
%
61
%
60
%
Incremental adjusted contribution margin –
Lending (non-GAAP)
71
%
71
%
___________________
(1)
Contribution margin is defined for each of
our reportable segments as contribution profit (loss), divided by
net revenue. Incremental contribution margin for each of our
reportable segments is defined as the change in segment
contribution profit (loss), divided by change in net revenue.
(2)
Refer to ‘Adjusted Net Revenue’ above for
reconciliation of this non-GAAP measure.
Adjusted EBITDA, Adjusted EBITDA Margin and Incremental
Adjusted EBITDA Margin
Adjusted EBITDA is defined as net income (loss), adjusted to
exclude, as applicable: (i) corporate borrowing-based interest
expense (our adjusted EBITDA measure is not adjusted for warehouse
or securitization-based interest expense, nor deposit interest
expense and finance lease liability interest expense, as these are
direct operating expenses), (ii) income tax expense (benefit),
(iii) depreciation and amortization, (iv) share-based expense
(inclusive of equity-based payments to non-employees), (v)
restructuring charges, (vi) impairment expense (inclusive of
goodwill impairment and property, equipment and software
abandonments), (vii) transaction-related expenses, (viii) foreign
currency impacts related to operations in highly inflationary
countries, (ix) fair value changes in warrant liabilities, (x) fair
value changes in each of servicing rights and residual interests
classified as debt due to valuation assumptions, (xi) gain on
extinguishment of debt, and (xii) other charges, as appropriate,
that are not expected to recur and are not indicative of our core
operating performance.
Adjusted EBITDA margin is computed as adjusted EBITDA divided by
adjusted net revenue. Incremental adjusted EBITDA margin is defined
as the change in adjusted EBITDA, divided by change in adjusted net
revenue. See ‘Adjusted Net Revenue’ above for a reconciliation of
this non-GAAP measure.
Management believes adjusted EBITDA, adjusted EBITDA margin and
incremental adjusted EBITDA margin are useful measures for period
over period comparisons of our business. These measures enable
management and investors to assess our core operating performance
or results of operations by removing the effects of certain non
cash items and charges, as well as the impact of changes in volume
over periods as applicable. In addition, management uses these
measures to help evaluate cash flows generated from operations and
the extent of additional capital, if any, required to invest in
strategic initiatives.
The following table reconciles adjusted EBITDA to net income
(loss), the most directly comparable GAAP measure, and presents the
computations of adjusted EBITDA margin and incremental adjusted
EBITDA margin:
Three Months Ended September
30,
2024 vs 2023
Nine Months Ended
September 30,
2024 vs 2023
($ in thousands)
2024
2023
$ Change
2024
2023
$ Change
Net income (loss) (GAAP)
$
60,745
$
(266,684
)
$
327,429
$
166,192
$
(348,655
)
$
514,847
Non-GAAP adjustments:
Interest expense – corporate
borrowings(1)
12,871
9,784
3,087
36,307
26,951
9,356
Income tax expense (benefit)(2)
3,110
(244
)
3,354
7,229
(3,661
)
10,890
Depreciation and amortization(3)
51,791
52,516
(725
)
149,953
147,967
1,986
Share-based expense
63,646
62,005
1,641
179,785
202,109
(22,324
)
Restructuring charges(4)
1,275
—
1,275
1,275
4,953
(3,678
)
Impairment expense(5)
—
247,174
(247,174
)
—
248,417
(248,417
)
Foreign currency impact of highly
inflationary subsidiaries(6)
475
—
475
843
—
843
Transaction-related expense(7)
—
(34
)
34
615
142
473
Servicing rights – change in valuation
inputs or assumptions(8)
(4,362
)
(7,420
)
3,058
(11,242
)
(28,105
)
16,863
Residual interests classified as
debt – change in valuation inputs or assumptions(9)
9
928
(919
)
83
415
(332
)
Gain on extinguishment of debt(10)
(3,323
)
—
(3,323
)
(62,517
)
—
(62,517
)
Total adjustments
125,492
364,709
(239,217
)
302,331
599,188
(296,857
)
Adjusted EBITDA (non-GAAP)
$
186,237
$
98,025
$
88,212
$
468,523
$
250,533
$
217,990
Net income (loss) (GAAP)
$
60,745
$
(266,684
)
$
327,429
$
166,192
$
(348,655
)
$
514,847
Total net revenue (GAAP)
697,121
537,209
159,912
1,940,734
1,507,385
433,349
Net income (loss) margin (GAAP)
9
%
(50
)%
9
%
(23
)%
Incremental net income (loss) margin
(GAAP)
205
%
119
%
Adjusted net revenue (non-GAAP)(11)
$
689,445
$
530,717
$
158,728
$
1,867,058
$
1,479,695
$
387,363
Adjusted EBITDA margin (non-GAAP)
27
%
18
%
25
%
17
%
Incremental adjusted EBITDA margin
(non-GAAP)
56
%
56
%
___________________
(1)
Our adjusted EBITDA measure adjusts for
corporate borrowing-based interest expense, as these expenses are a
function of our capital structure. Corporate borrowing-based
interest expense includes interest on our revolving credit
facility, as well as interest expense and the amortization of debt
discount and debt issuance costs on our convertible notes.
Convertible note interest expense in the 2024 periods increased
related to the issuance of interest-bearing convertible senior
notes during the first quarter of 2024.
(2)
Our income tax positions in both the 2024
and 2023 periods were impacted by income tax expenses associated
with the profitability of SoFi Bank in state jurisdictions where
separate filings are required, as well as federal taxes where our
tax credits and loss carryforwards may be limited. Our income tax
benefit position in the 2023 period was primarily attributable to
income tax benefits from foreign losses in jurisdictions in Latin
America with net deferred tax liabilities.
(3)
Depreciation and amortization expense
increased for the nine months ended September 30, 2024 compared to
the prior year period, primarily in connection with growth in our
internally-developed software balance.
(4)
Restructuring charges in the three and
nine month 2024 periods relate to legal entity restructuring.
Restructuring charges in the nine month 2023 period primarily
included employee-related wages, benefits and severance associated
with a reduction in headcount in our Technology Platform segment in
the first quarter of 2023, which do not reflect expected future
operating expenses and are not indicative of our core operating
performance.
(5)
Impairment expense includes $247,174
related to goodwill impairment in the three and nine month 2023
periods, and $1,243 related to a sublease arrangement in the
nine-month 2023 period, which are not indicative of our core
operating performance.
(6)
Foreign currency charges reflect the
impacts of highly inflationary accounting for our operations in
Argentina, which are related to our Technology Platform segment and
commenced in the first quarter of 2022 with the Technisys Merger.
For the year ended December 31, 2023, all amounts were reflected in
the fourth quarter, as inter-quarter amounts were determined to be
immaterial.
(7)
Transaction-related expense in the 2023
and 2024 periods included financial advisory and professional
services costs associated with our acquisition of Wyndham.
(8)
Reflects changes in fair value inputs and
assumptions, including market servicing costs, conditional
prepayment, default rates and discount rates. This non-cash change
is unrealized during the period and, therefore, has no impact on
our cash flows from operations. As such, these positive and
negative changes in fair value attributable to assumption changes
are adjusted out of net income (loss) to provide management and
financial users with better visibility into the earnings available
to finance our operations.
(9)
Reflects changes in fair value inputs and
assumptions, including conditional prepayment, default rates and
discount rates. When third parties finance our consolidated VIEs
through purchasing residual interests, we receive proceeds at the
time of the securitization close and, thereafter, pass along
contractual cash flows to the residual interest owner. These
obligations are measured at fair value on a recurring basis, which
has no impact on our initial financing proceeds, our future
obligations to the residual interest owner (because future residual
interest claims are limited to contractual securitization
collateral cash flows), or the general operations of our business.
As such, these positive and negative non-cash changes in fair value
attributable to assumption changes are adjusted out of net income
(loss) to provide management and financial users with better
visibility into the earnings available to finance our
operations.
(10)
Reflects gain on extinguishment of debt.
Gains and losses are recognized during the period of extinguishment
for the difference between the net carrying amount of debt
extinguished and the fair value of equity securities issued.
(11)
Refer to 'Adjusted Net Revenue' above for
reconciliation of this non-GAAP measure.
Tangible Book Value and Tangible Book Value per Common
Share
Tangible book value is defined as permanent equity, adjusted to
exclude goodwill and intangible assets. Tangible book value per
common share represents tangible book value at period-end, a
non-GAAP measure, divided by diluted weighted average common stock
outstanding during the period.
These measures are utilized by management in assessing our use
of equity and capital adequacy. We believe that tangible book value
presents a meaningful measure of net asset value, and tangible book
value per share provides additional useful information to investors
to assess capital adequacy.
The following table reconciles tangible book value to permanent
equity, the most directly comparable GAAP measure, and presents the
computation of permanent equity per common share and tangible book
value per common share for the periods presented:
Three Months Ended September
30,
($ in thousands, except share data and
per share amounts)
2024
2023
Permanent equity (GAAP)
$
6,121,481
$
5,053,388
Non-GAAP adjustments:
Goodwill
(1,393,505
)
(1,393,505
)
Intangible assets
(314,959
)
(387,307
)
Tangible book value (as of period end)
(non-GAAP)
$
4,413,017
$
3,272,576
Weighted average common stock
outstanding – diluted (GAAP)
1,104,450,416
951,183,107
Permanent equity per common share
(GAAP)
$
5.54
$
5.31
Tangible book value per common share
(non-GAAP)
$
4.00
$
3.44
Net Income (Loss), Excluding Impact of Goodwill
Impairment
Net income (loss) excluding impact of goodwill impairment is a
non-GAAP measure, and is defined as net income (loss), less
goodwill impairment.
Management believes this measure is useful for
period-over-period comparisons of our business. This measure
enables management and investors to assess our underlying operating
performance or results of operations by removing the effects of
goodwill impairment charges that are a non-cash item and not
indicative of our core operating performance.
The following table reconciles net income (loss), excluding
impact of goodwill impairment to net income (loss), the most
directly comparable GAAP measure:
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2024
2023
2024
2023
Net income (loss) (GAAP)
$
60,745
$
(266,684
)
$
166,192
$
(348,655
)
Goodwill impairment expense
—
247,174
—
247,174
Net income (loss), excluding impact of
goodwill impairment (non-GAAP)
$
60,745
$
(19,510
)
$
166,192
$
(101,481
)
Table 3
SoFi Technologies,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(In Thousands, Except for
Share Data)
September 30,
2024
December 31,
2023
Assets
Cash and cash equivalents
$
2,354,965
$
3,085,020
Restricted cash and restricted cash
equivalents
614,794
530,558
Investment securities (includes
available-for-sale securities of $1,478,066 and $595,187 at fair
value with associated amortized cost of $1,468,146 and $596,757, as
of September 30, 2024 and December 31, 2023, respectively)
1,554,285
701,935
Loans held for sale, at fair value
17,324,514
15,396,771
Loans held for investment, at fair
value
7,876,667
6,725,484
Loans held for investment, at amortized
cost (less allowance for credit losses of $48,419 and $54,695, as
of September 30, 2024 and December 31, 2023, respectively)
1,417,262
836,159
Servicing rights
296,127
180,469
Property, equipment and software
266,226
216,908
Goodwill
1,393,505
1,393,505
Intangible assets
314,959
364,048
Operating lease right-of-use assets
84,149
89,635
Other assets (less allowance for credit
losses of $2,651 and $1,837, as of September 30, 2024 and December
31, 2023, respectively)
882,723
554,366
Total assets
$
34,380,176
$
30,074,858
Liabilities, temporary equity and
permanent equity
Liabilities:
Deposits:
Interest-bearing deposits
$
24,351,778
$
18,568,993
Noninterest-bearing deposits
56,008
51,670
Total deposits
24,407,786
18,620,663
Accounts payable, accruals and other
liabilities
569,018
549,748
Operating lease liabilities
101,028
108,649
Debt
3,180,205
5,233,416
Residual interests classified as debt
658
7,396
Total liabilities
28,258,695
24,519,872
Commitments, guarantees, concentrations
and contingencies
Temporary equity:
Redeemable preferred stock, $0.00 par
value: 100,000,000 and 100,000,000 shares authorized; — and
3,234,000 shares issued and outstanding as of September 30, 2024
and December 31, 2023, respectively
—
320,374
Permanent equity:
Common stock, $0.00 par value:
3,100,000,000 and 3,100,000,000 shares authorized; 1,084,136,516
and 975,861,793 shares issued and outstanding as of September 30,
2024 and December 31, 2023, respectively
108
97
Additional paid-in capital
7,751,335
7,039,987
Accumulated other comprehensive income
(loss)
8,109
(1,209
)
Accumulated deficit
(1,638,071
)
(1,804,263
)
Total permanent equity
6,121,481
5,234,612
Total liabilities, temporary equity and
permanent equity
$
34,380,176
$
30,074,858
Table 4
SoFi Technologies,
Inc.
Average Balances and Net
Interest Earnings Analysis
(Unaudited)
Three Months Ended September
30, 2024
Three Months Ended September
30, 2023
($ in thousands)
Average Balances
Interest
Income/Expense
Average Yield/Rate
Average Balances
Interest
Income/Expense
Average Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits with banks
$
2,593,113
$
29,353
4.50
%
$
2,342,361
$
24,485
4.15
%
Investment securities
1,596,756
23,894
5.95
517,786
1,838
1.41
Loans
26,589,180
670,127
10.03
19,996,570
537,947
10.67
Total interest-earning assets
30,779,049
723,374
9.35
22,856,717
564,270
9.79
Total noninterest-earning assets
3,291,442
3,116,217
Total assets
$
34,070,491
$
25,972,934
Liabilities, Temporary Equity and
Permanent Equity
Interest-bearing liabilities:
Demand deposits
$
2,189,118
$
11,489
2.09
%
$
2,355,243
$
12,837
2.16
%
Savings deposits
19,534,413
213,760
4.35
9,416,236
104,375
4.40
Time deposits
1,847,094
23,043
4.96
2,244,196
28,351
5.01
Total interest-bearing deposits
23,570,625
248,292
4.19
14,015,675
145,563
4.12
Warehouse facilities
1,789,921
28,773
6.40
3,223,333
51,257
6.31
Securitization debt
117,172
1,031
3.50
724,063
9,374
5.14
Other debt
1,798,092
14,268
3.16
1,644,295
13,113
3.16
Total debt
3,705,185
44,072
4.73
5,591,691
73,744
5.23
Residual interests classified as debt
688
—
—
10,744
—
—
Total interest-bearing liabilities
27,276,498
292,364
4.26
19,618,110
219,307
4.44
Total noninterest-bearing liabilities
794,151
783,925
Total liabilities
28,070,649
20,402,035
Total temporary equity
—
320,374
Total permanent equity
5,999,842
5,250,525
Total liabilities, temporary equity and
permanent equity
$
34,070,491
$
25,972,934
Net interest income
$
431,010
$
344,963
Net interest margin
5.57
%
5.99
%
Table 5
SoFi Technologies,
Inc.
Condensed Consolidated Cash
Flow Data
(Unaudited)
(In Thousands)
Nine Months Ended September
30,
2024
2023
Net cash used in operating activities
$
(919,704
)
$
(6,979,198
)
Net cash used in investing activities
(3,540,106
)
(476,335
)
Net cash provided by financing
activities
3,813,743
8,906,046
Effect of exchange rates on cash and cash
equivalents
248
202
Net (decrease) increase in cash, cash
equivalents, restricted cash and restricted cash equivalents
$
(645,819
)
$
1,450,715
Cash, cash equivalents, restricted cash
and restricted cash equivalents at beginning of period
3,615,578
1,846,302
Cash, cash equivalents, restricted cash
and restricted cash equivalents at end of period
$
2,969,759
$
3,297,017
Table 6
Company Metrics
September 30,
2024
June 30, 2024
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
Members
9,372,615
8,774,236
8,131,720
7,541,860
6,957,187
6,240,091
5,655,711
5,222,533
4,742,673
Total Products
13,650,730
12,776,430
11,830,128
11,142,476
10,447,806
9,401,025
8,554,363
7,894,636
7,199,298
Total Products — Lending segment
1,890,761
1,786,580
1,705,155
1,663,006
1,593,906
1,503,892
1,416,122
1,340,597
1,280,493
Total Products — Financial Services
segment
11,759,969
10,989,850
10,124,973
9,479,470
8,853,900
7,897,133
7,138,241
6,554,039
5,918,805
Total Accounts — Technology Platform
segment
160,179,299
158,485,125
151,049,375
145,425,391
136,739,131
129,356,203
126,326,916
130,704,351
124,332,810
Total Products, excluding digital
assets(1)
13,650,730
12,776,430
11,830,128
10,876,881
9,984,685
8,965,949
8,139,065
7,497,761
6,825,104
Total Products, excluding digital assets —
Financial Services segment(1)
11,759,969
10,989,850
10,124,973
9,213,875
8,390,779
7,462,057
6,722,943
6,157,164
5,544,611
SoFi Invest, excluding digital
assets(1)
2,394,367
2,332,045
2,224,705
2,115,046
2,001,951
1,880,701
1,795,617
1,761,989
1,693,427
___________________
(1)
In the fourth quarter of 2023, we
transferred the crypto services provided by SoFi Digital Assets,
LLC, and began closing existing digital assets accounts and
removing the account from Invest products. This process was
completed in the first quarter of 2024.
Members
We refer to our customers as “members”. We define a member as
someone who has a lending relationship with us through origination
and/or ongoing servicing, opened a financial services account,
linked an external account to our platform, or signed up for our
credit score monitoring service. Our members have continuous access
to our CFPs, our member events, our content, educational material,
news, and our tools and calculators, which are provided at no cost
to the member. We view members as an indication not only of the
size and a measurement of growth of our business, but also as a
measure of the significant value of the data we have collected over
time.
Once someone becomes a member, they are always considered a
member unless they are removed in accordance with our terms of
service, in which case, we adjust our total number of members. This
could occur for a variety of reasons—including fraud or pursuant to
certain legal processes—and, as our terms of service evolve
together with our business practices, product offerings and
applicable regulations, our grounds for removing members from our
total member count could change. The determination that a member
should be removed in accordance with our terms of service is
subject to an evaluation process, following the completion, and
based on the results, of which, relevant members and their
associated products are removed from our total member count in the
period in which such evaluation process concludes. However,
depending on the length of the evaluation process, that removal may
not take place in the same period in which the member was added to
our member count or the same period in which the circumstances
leading to their removal occurred. For this reason, our total
member count may not yet reflect adjustments that may be made once
ongoing evaluation processes, if any, conclude. Beginning in the
first quarter of 2024, we aligned our methodology for calculating
member and product metrics with our member and product definitions
to include co-borrowers, co-signers, and joint- and co-account
holders, as applicable. Quarterly amounts for prior periods were
determined to be immaterial and were not recast.
Total Products
Total products refers to the aggregate number of lending and
financial services products that our members have selected on our
platform since our inception through the reporting date, whether or
not the members are still registered for such products. Total
products is a primary indicator of the size and reach of our
Lending and Financial Services segments. Management relies on total
products metrics to understand the effectiveness of our member
acquisition efforts and to gauge the propensity for members to use
more than one product.
In our Lending segment, total products refers to the number of
personal loans, student loans and home loans that have been
originated through our platform through the reporting date,
inclusive of loans which we originate as part of our Loan Platform
Business, whether or not such loans have been paid off. If a member
has multiple loan products of the same loan product type, such as
two personal loans, that is counted as a single product. However,
if a member has multiple loan products across loan product types,
such as one personal loan and one home loan, that is counted as two
products. The account of a co-borrower or co-signer is not
considered a separate lending product.
In our Financial Services segment, total products refers to the
number of SoFi Money accounts (inclusive of checking and savings
accounts held at SoFi Bank and cash management accounts), SoFi
Invest accounts, SoFi Credit Card accounts (including accounts with
a zero dollar balance at the reporting date), referred loans (which
are originated by a third-party partner to which we provide
pre-qualified borrower referrals), SoFi At Work accounts and SoFi
Relay accounts (with either credit score monitoring enabled or
external linked accounts) that have been opened through our
platform through the reporting date. Checking and savings accounts
are considered one account within our total products metric. Our
SoFi Invest service is composed of two products: active investing
accounts and robo-advisory accounts. Our members can select any one
or combination of the types of SoFi Invest products. If a member
has multiple SoFi Invest products of the same account type, such as
two active investing accounts, that is counted as a single product.
However, if a member has multiple SoFi Invest products across
account types, such as one active investing account and one
robo-advisory account, those separate account types are considered
separate products. The account of a joint- or co-account holder is
considered a separate financial services product. In the event a
member is removed in accordance with our terms of service, as
discussed under “Members” above, the member’s associated products
are also removed.
Technology Platform Total Accounts
In our Technology Platform segment, total accounts refers to the
number of open accounts at Galileo as of the reporting date. We
include intercompany accounts on the Galileo platform-as-a-service
in our total accounts metric to better align with the Technology
Platform segment revenue which includes intercompany revenue.
Intercompany revenue is eliminated in consolidation. Total accounts
is a primary indicator of the accounts dependent upon our
technology platform to use virtual card products, virtual wallets,
make peer-to-peer and bank-to-bank transfers, receive early
paychecks, separate savings from spending balances, make debit
transactions and rely upon real-time authorizations, all of which
result in revenues for the Technology Platform segment. We do not
measure total accounts for the Technisys products and solutions, as
the revenue model is not primarily dependent upon being a fully
integrated, stand-ready service.
Table 7
Segment Financials
(Unaudited)
Quarter Ended
($ in thousands, except share and per
share data)
September 30,
2024
June 30, 2024
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
Lending
Net interest income
$
316,268
$
279,212
$
266,536
$
262,626
$
265,215
$
231,885
$
201,047
$
183,607
$
139,516
Total noninterest income
79,977
61,493
63,940
90,500
83,758
99,556
136,034
144,584
162,178
Total net revenue
396,245
340,705
330,476
353,126
348,973
331,441
337,081
328,191
301,694
Adjusted net revenue – Lending(1)
391,892
339,052
325,323
346,541
342,481
322,238
325,086
314,930
296,965
Contribution profit – Lending(2)
238,928
197,938
207,719
226,110
203,956
183,309
209,898
208,799
180,562
Technology Platform
Net interest income
$
629
$
555
$
501
$
941
$
573
$
—
$
—
$
—
$
—
Total noninterest income
101,910
94,883
93,865
95,966
89,350
87,623
77,887
85,652
84,777
Total net revenue(2)
102,539
95,438
94,366
96,907
89,923
87,623
77,887
85,652
84,777
Contribution profit – Technology
Platform
32,955
31,151
30,742
30,584
32,191
17,154
14,857
16,881
19,536
Financial Services
Net interest income
$
154,143
$
139,229
$
119,713
$
109,072
$
93,101
$
74,637
$
58,037
$
45,609
$
28,158
Total noninterest income
84,165
36,903
30,838
30,043
25,146
23,415
23,064
19,208
20,795
Total net revenue
238,308
176,132
150,551
139,115
118,247
98,052
81,101
64,817
48,953
Contribution profit (loss) – Financial
Services(2)
99,758
55,220
37,174
25,060
3,260
(4,347
)
(24,235
)
(43,588
)
(52,623
)
Corporate/Other
Net interest income (expense)
$
(40,030
)
$
(6,412
)
$
15,968
$
17,002
$
(13,926
)
$
(15,396
)
$
(23,074
)
$
(20,632
)
$
(9,824
)
Total noninterest income (loss)
59
(7,245
)
53,634
9,254
(6,008
)
(3,702
)
(837
)
(1,349
)
(1,615
)
Total net revenue (loss)(2)
(39,971
)
(13,657
)
69,602
26,256
(19,934
)
(19,098
)
(23,911
)
(21,981
)
(11,439
)
Consolidated
Net interest income
$
431,010
$
412,584
$
402,718
$
389,641
$
344,963
$
291,126
$
236,010
$
208,584
$
157,850
Total noninterest income
266,111
186,034
242,277
225,763
192,246
206,892
236,148
248,095
266,135
Total net revenue
697,121
598,618
644,995
615,404
537,209
498,018
472,158
456,679
423,985
Adjusted net revenue(1)
689,445
596,965
580,648
594,245
530,717
488,815
460,163
443,418
419,256
Net income (loss)
60,745
17,404
88,043
47,913
(266,684
)
(47,549
)
(34,422
)
(40,006
)
(74,209
)
Adjusted EBITDA(1)
186,237
137,901
144,385
181,204
98,025
76,819
75,689
70,060
44,298
___________________
(1)
Adjusted net revenue and adjusted EBITDA
are non-GAAP financial measures. For additional information on
these measures and reconciliations to the most directly comparable
GAAP measures, see “Non-GAAP Financial Measures” and Table 2 to the
“Financial Tables” herein.
(2)
Technology Platform segment total net
revenue includes intercompany fees. The equal and offsetting
intercompany expenses are reflected within all three segments’
directly attributable expenses, as well as within expenses not
allocated to segments. The intercompany revenues and expenses are
eliminated in consolidation. The revenues are eliminated within
Corporate/Other and the expenses represent a reconciling item of
segment contribution profit (loss) to consolidated income (loss)
before income taxes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029800153/en/
Investors: SoFi Investor Relations IR@sofi.com
Media: SoFi Media Relations PR@sofi.com
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