SoFi Technologies Q1 2025 Earnings Report

SoFi Technologies EPS Results

• Actual EPS: $0.06
• Consensus EPS: $0.03
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: $0.02

SoFi Technologies Revenue Results

• Actual Revenue: $763.81 million
• Expected Revenue: $739.93 million
• Beat/Miss: Beat by +$23.88 million
• YoY Revenue Growth: +32.70%

SoFi Technologies Announcement Details

• Quarter: Q1 2025
• Date: 4/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 8:00AM ET

SoFi Technologies (NASDAQ:SOFI) , short for Social Finance, is an internet-based financial institution headquartered in San Francisco, California. The founder's intent was to create a more affordable means for students to use debt to finance their educations. The founders, including Mike Cagney, are all Stanford alumni and leveraged their college connections to get the business going.

SoFi Technologies was founded in 2011 and launched with an initial investment of roughly $200 million, provided by Stanford alums. By 2012 the company had raised another $77.2 million; by 2013 more than $500 million in equity, debt and credit financing was available for lending. At the end of 2013, the company had serviced more than 2,500 students and the figure is still growing.

Once launched, the company continued to grow and to expand both the institutions it served and the services it had to offer. By 2015 the company was offering personal loans on top of student loans and by 2016 it had received the 1st ever AAA rating given by Moody’s to a digital financial institution. The company will continue to grow until 2020 when it went public via SPAC merger. The merger valued the company at over $9 billion and the growth is not yet over

In 2022 Sofi Technologies received a national bank charter when it purchased Golden Pacific Bancorp. The move allows the company to hold its own loans rather than selling them to outside investors as it had done in the past. Today, SoFi Technologies operates as a digital banking institution with three primary segments. These are Lending, Technology Platforms and Financial Services. Consumers are able to access the platforms via mobile and desktop.

The Lending and Financial Services segments provide a range of traditional banking and lending services. These include deposit accounts and investment services along with student loans, personal loans, and mortgages. Among the many offerings are credit score monitoring, insurance products, and access to the cryptocurrency markets.

The Technology Platform segment provides technology platforms and services to businesses and institutions. Among the company’s technology platforms is Galileo, a payment processing service. This addition allows SoFi to process payments for merchants and consumers. SoFi Technologies also operates Apex, a clearing house service for investment and financial institutions, and Technisys, a cloud-based banking application.

As of 2022, the company had over 4 million active members and had paid out more than $35 million in rewards. SoFi Technologies has issued more than $73 billion in loans with roughly half that amount already repaid.

SoFi Technologies Q1 2025 Earnings Call Transcript

Key Takeaways

• Record Q1 financial performance: Adjusted net revenue increased 33% year-over-year to $771 million, adjusted EBITDA reached a record $210 million (27% margin), and net income was $71 million.
• Robust member and product growth: The company added a record 800,000 new members (+34% YoY) and 1.2 million new products (+35% YoY), bringing totals to 10.9 million members and 15.9 million products.
• Expanding fee-based and non-lending streams: Fee-based revenue hit a quarterly record $315 million (+67% YoY), driving annualized fee revenue to $1.3 billion and supporting a shift toward capital-light growth.
• Loan originations and platform momentum: Total loan originations reached $7.2 billion (+66% YoY), including $1.6 billion via third-party platform partnerships, and platform fees grew ~50% quarter-over-quarter.
• Raised full-year outlook: SoFi raised 2025 guidance to $3.235–3.31 billion in revenue (up 24–27% YoY) and $875–895 million in adjusted EBITDA, reflecting confidence in its diversified fintech ecosystem.

Presentation

[Operator]

Good morning. My name is Adam, and I will be your conference operator today. At this time, I would like to welcome everyone to the SoFi Technologies Q1 twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Thank you. And with that, you may begin your conference.

[Executive]

Thank you, and good morning. Welcome to SoFi's first quarter twenty twenty five earnings conference call. Joining me today to talk about our results and recent events are Anthony Noto, CEO and Chris Lapointe, CFO. You can find the presentation accompanying our earnings release on the Investor Relations section of our website. Unless otherwise stated, we'll be referring to adjusted results for the first quarter of twenty twenty five versus the first quarter of twenty twenty four.

[Executive]

Our remarks today will include forward looking statements that are based on our current expectations and forecasts and involve risks and uncertainties. These statements include, but are not limited to, our competitive advantage and strategy, macroeconomic conditions and outlook, future products and services, and future business and financial performance. Our GAAP consolidated income statement and all reconciliations can be found in today's earnings release and the subsequent 10 Q filing, which will be made available next month. Our actual results may differ materially from those contemplated by these forward looking statements. Factors that could cause these results to differ materially are described in today's press release and our subsequent filings made with the SEC, including our upcoming Form 10 Q.

[Executive]

Any forward looking statements that we make on this call are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. And now I'd like to turn the call over to Anthony.

[Anthony Noto, CEO at SoFi]

Thank you, and good morning, everyone. We're off to a tremendous start in 2025 as we continue to drive durable growth and strong returns through our product innovation and brand building. Our battle tested strategy and diverse business were instrumental in driving an acceleration in revenue growth to 33% and a 3x year over year increase in earnings. I'll begin by covering our key results for the first quarter starting with our durable growth which continues to be driven by exceptional growth in members and products. We added a record 800,000 new members in Q1 driving 34% year over year growth reaching 10,900,000 SoFi members.

[Anthony Noto, CEO at SoFi]

We also added 1,200,000 new products representing 35% year over year growth to over 15,900,000 products. Our strong member and product growth powered great revenue growth in the first quarter. Adjusted net revenue was a record at $771,000,000 up 33% year over year. This is our highest growth rate in five quarters. Together our financial services and technology platform segments generated $4.00 $7,000,000 of revenue up 66% year over year.

[Anthony Noto, CEO at SoFi]

In our lending segment adjusted net revenue grew 27% year over year to $412,000,000 driven by strong originations in this segment of $5,700,000,000 up 30% from the prior year. Combined with $1,600,000,000 of origination in the loan platform business in Q1, originations reached a record of $7,200,000,000 Total fee based revenue across our business was also a quarterly record at $315,000,000 up 67 from the prior year. This was driven by strong performance from our loan platform business, origination revenue fees, referral revenue, interchange revenue and brokerage fee revenue. On an annualized basis, we are now generating nearly $1,300,000,000 of fee based revenue reflecting the deliberate diversification of our business towards more capital light revenue streams. In addition to delivering strong durable growth, we delivered strong returns and profitability.

[Anthony Noto, CEO at SoFi]

In the first quarter, all three segments delivered strong contribution profit at attractive margins. Adjusted EBITDA for the quarter was a record $210,000,000 up 46 year over year. Our adjusted EBITDA margin for the quarter was 27%. Our incremental EBITDA margin was 35% as we continue to reinvest in the business to drive long term growth and profitability. Net income was $71,000,000 at a margin of nine percent.

[Anthony Noto, CEO at SoFi]

Earnings per share were $06 Finally, our tangible book value ended the quarter at $5,100,000,000 a year over year increase of $946,000,000 Our strong financial performance is the direct result of our continued investments in brand building and product innovation. These investments attract new members and clients into our digital one stop shop ecosystem and lead them to adopt more products over time. This virtuous cycle which we call our Financial Services Productivity Loop or FSPL fuels our growth and ultimately our returns as we scale. In addition to product growth, we also measure the effectiveness of our productivity loop and the success of our strategy based on cross buy. And cross buy continues to be very strong.

[Anthony Noto, CEO at SoFi]

In the first quarter, '30 '2 percent of new products were opened by existing SoFi members. Let me take a moment to discuss some of our recent investments in brand building and product innovation across our businesses. A significant amount of our marketing investment goes towards building the SoFi brand name via broad scale, high reach branded marketing. This investment is centered on building SoFi into a trusted household brand name which we measure based on unaided brand awareness. Having a strong brand creates a halo effect that makes our performance marketing of each product more efficient.

[Anthony Noto, CEO at SoFi]

Our unaided brand awareness continued to be very strong through the quarter at 7%. During the first quarter, we completed the inaugural season of TGL presented by SoFi, a new tech driven stadium golf league with 14 of the top 25 golfers in the world including Rory McIlroy and Tiger Woods. TGL presented by SoFi attracted over 20,000,000 total viewers on ESPN in its inaugural season. Since the SoFi brand goes everywhere the TGL brand goes, we capitalize on not just the broadcast audience reach that exceeded our expectations, but also the massive social presence as well as the exciting gameplay. We launched a promotion for SoFi Invest tied to players performance during the playoffs.

[Anthony Noto, CEO at SoFi]

This on air and online integrated marketing effort helped drive record engagement levels for SoFi Invest. We also continue to benefit from SoFi Stadium as well as the continuity of our branding with the NBA and key sports ambassadors in Wyndham Clark, Cameron Brink, Jayson Tatum, and of course, the OG SoFi partner athlete Justin Herbert. Additionally, we became the presenting partner of the Country Music Association's CMA Fest. This is our first ever music partnership and an incredible platform to introduce more people to SoFi through the live event broadcast and social media channels. This partnership will also allow us to enhance the fan experience for SoFi Plus members through exclusive perks.

[Anthony Noto, CEO at SoFi]

Turning now to product innovation in our segments. Financial services is our fastest growing segment doubling its revenue year over year to over $300,000,000 I'll touch on a few of the most significant contributions to this growth starting with our SoFi Money business. To scale this business as rapidly as we have, we've invested significant capital to build the strong operational and regulatory capabilities that are required to have a nationally regulated bank with insured deposits as well as earn the trust of our members. The investment, while not always obvious externally, has been transformational for our business. We've grown annualized debit spending to over $14,000,000,000 just one of our high margin fee based revenue streams.

[Anthony Noto, CEO at SoFi]

We've also grown our total deposits to $27,300,000,000 lowering our funding expense by an estimated $515,000,000 per year. Along the way, we've more than tripled our money products since the end of twenty twenty one to nearly $5,500,000 today by offering an unmatched value proposition with a high APY, P2P payments, bill pay, autopilot, Vaults, Zelle, two day early paycheck, dollars 3,000,000 of FDIC insurance and unmatched rewards for checking and savings accounts and so much more. Even with the success of SoFi Money, we are continuously finding ways to improve the member experience. For example, this quarter we completed the rollout of self-service wires which gives members another frictionless way to move money. We are now the only company that offers digital person to person payments via phone number or email address and the ability to send money via Zelle, ACH or self serve wires.

[Anthony Noto, CEO at SoFi]

Given the performance of SoFi Money, we expect it to become our second billion dollar revenue business. Another key contributor to growth in financial services is our loan platform business where we produce loans on behalf of third parties. In less than a year, we've grown the business to an annualized run rate of over $6,000,000,000 of originations and more than $380,000,000 of additional high margin, high return fee based revenue. And we continue to see strong demand for these loans. This year we finalized a $5,000,000,000 deal with Blue Owl, a $2,000,000,000 extension with Fortress and a $1,200,000,000 joint venture between Fortress and Edge Focus.

[Anthony Noto, CEO at SoFi]

These additional deals will accelerate the quarterly originations well above the current level of $1,600,000,000 Importantly, the LPB loans do not present any ongoing credit risk and contribute to member growth as we hold the relationship and can benefit from cross buying to other SoFi products. So far, the vast majority of our LPB loans have been within our prime credit box, but over and above the volume we want to put in our balance sheet. However, we have the ability to also meet demand from buyers who want near prime loans with higher WACC. We can even extend this program to other loan types in the future. We are incredibly optimistic about the depth and breadth of the growth opportunities in the loan platform business and we see it becoming our third billion dollar revenue business.

[Anthony Noto, CEO at SoFi]

Turning to SoFi Invest. In January, we shared that we are accelerating our investment in SoFi Invest and that decision is already bearing fruit. Q1 twenty twenty five marked an acceleration in product growth to 2,700,000 products, up 21% year over year and we expect further acceleration in InVEST product growth throughout the year. The first quarter also marked our best quarter ever of member engagement even compared to when we offered cryptocurrency or launched IPOs and alternative assets. In the first quarter, we made significant improvements to our single stock presentations which provide members with insights to help make more informed investment decisions.

[Anthony Noto, CEO at SoFi]

Our new experience is clearer, easier to navigate and more informative, driving positive feedback and importantly an increase in engagement. We also made it easier to roll over four zero one ks assets with a more intuitive design and stronger back end engineering which improves completion rates and provides another great way to build long term durable relationships with members. We continue to expand on our unmatched selection including investment opportunities that have been typically reserved for the high net wealth segment. Following our highly successful SPV for SpaceX last year, we've expanded our partnership with Templum so members can invest in another privately held company Anthropic. We're also accelerating our product investment to improve the invest user experience and drive more personalization as well as better discovery of our invest product offerings within our app.

[Anthony Noto, CEO at SoFi]

We want to ensure that members are aware of all we have to offer and are getting valuable insights and information that are tailored to their specific needs. The more we service our great investment selection, the more engagement we see. So Invest stands alone in the breadth of our offering, including the ability to buy and sell single stocks without commissions or fees. Our award winning robo advisory product that offers three different themes with a total of 15 unique strategies. Four SoFi branded ETFs that are specifically tailored to our members' needs, IPOs and level two options.

[Anthony Noto, CEO at SoFi]

We are also providing access to alternative assets including private equity, private credit, private real estate, venture capital, long short hedge funds and private individual company investments. We continue to add more selection and by the end of the year if all goes as planned we will add both level one options and certain crypto or blockchain offerings. Given the evolving regulatory landscape we see an opportunity to reenter the crypto and blockchain business more comprehensively. In addition to enabling members to invest in crypto coins, we will enter other areas over the next six to twenty four months, but potentially much sooner via acquisition or if the changing regulatory landscape allows. Our aspirations over time are as broad and deep as they are for existing SoFi business, including developing crypto and blockchain offerings across borrowing, investing, paying, saving and our technology platform services for third parties.

[Anthony Noto, CEO at SoFi]

Turning to our tech platform segment. Here the market for digitally native financial product platform is significant and continues to evolve. Recognizing the longer lead times associated with large scale core banking conversions and consolidation among smaller FinTech clients, we found innovative ways to broaden our client base. For example, this quarter we launched a first of its kind reward debit program with Wyndham Hotels and Resorts. Later this year we expect to launch similar co brand debit card programs with other travel and hospitality companies further expanding our footprint among consumer brands.

[Anthony Noto, CEO at SoFi]

And we recently signed a deal with Mercantile Banco, which offers personal and business banking services in Panama and will use our Cyberbank digital banking platform. We are pleased with the demand from new client opportunities for the tech platform business and expect these wins and others in the RFP process to have an impact on our revenue in 2026 and beyond. Now turning to our lending segment, starting with our home loans business. Our 2023 acquisition of Wyndham Mortgage strengthened our technology and fulfillment capabilities creating significant capacity for growth. In Q1, this helped us grow home loan originations by 54%.

[Anthony Noto, CEO at SoFi]

At the same time, we've expanded to offer home equity loans, a great value to members given the fact that they are sitting on low rate mortgages that they do not want to touch in a higher rate environment. This product, which we didn't have a year ago, accounted for more than one third of our home lending volume during the first quarter. It was our best quarter ever for home equity originations and should only go higher from here. As interest rates come down, we expect in our planning for significant acceleration in the demand for home loans for both home purchase and refinance. We're also launching new personal loan and student loan refinancing products.

[Anthony Noto, CEO at SoFi]

The new personal loan product launching next month will be for prime credit card customers that carry revolving balance and are making mostly interest only payments. These are commonly referred to as revolvers. Members will now get a fairly priced deal instead of being gouged by credit card companies and big banks who charge 20 plus percent interest to earn an ROE of 50% on some of these prime credit revolvers. We will meaningfully cut the cost of debt for this prime borrower reducing monthly payments by as much as 40% while generating an attractive target ROE in line with the 30% that we generate on our broader personal loan portfolio. So all you premium credit card holders out there that somehow found yourself with 10,000 to 30 thousand dollars or more of debt on your credit card that you're now only making minimum payments on, we are here to help get rid of that debt and get your money right.

[Anthony Noto, CEO at SoFi]

In the midst of uncertainty around student loan options in the market, we just launched an innovative member centric refinancing solution known as Smart Start. This allows for lower payments in the early part of the loan and steps up into paying regular payments after this introductory period helping members find their footing and build long term savings. Yet another way we innovate to help our members spend less than they make and invest the rest. Let me wrap up the discussion on our results, branding and product innovation with a perspective on SoFi Relay and SoFi Plus. Both products make their footprint bigger than their foot and are critical elements of our financial services productivity loop.

[Anthony Noto, CEO at SoFi]

SoFi Relay allows members to easily track and manage all their SoFi and non SoFi financial products and accounts on our digital platform through an easy to use dashboard. Relay is our second largest product at $5,000,000 which is up 41% year over year. Although Relay doesn't generate revenue directly, it is a lightweight starting point and serves as the tip of the sword with very attractive cross buy patterns into other SoFi products. As an example of Relay's impact, one third of the RelayFirst members that cross buy adopt at least three products with the most common sequence being Relay to Money to Invest. Turning to SoFi Plus, our premium membership tier that brings together the best of all we have to offer through America's most rewarding financial membership unlocking over $1,000 in value each year.

[Anthony Noto, CEO at SoFi]

Previously members needed a direct deposit with us to be a SoFi Plus member, but during the first quarter, we added a fee based subscription option as well. While this option is new, we're already seeing some promising behaviors among early subscribers. Nearly 90% of the new Plus members were already existing members, demonstrating the validation of making this product more accessible via a pay option not just via direct deposit. The product has also been a catalyst for our FSPL driving the second order effects of cross buy among these members with nearly 30% adopting an additional product within thirty days of enrollment. Among SoFi plus subscribers who are completely new to SoFi, over 75% adopt at least a second product and over 40% adopt a third product within thirty days of enrollment.

[Anthony Noto, CEO at SoFi]

Importantly, these members are adopting products across our platform beyond just SoFi money. This data demonstrates that members truly value the one stop shop model and by exposing members to our complete offering we can accelerate cross buy. Hopefully it is as clear to you as it is to me that our strategy continues to deliver great results. That is why we have decided to further accelerate our rate of innovation while still being able to increase our full year guidance. Our value proposition has never been more relevant to the members and clients we serve.

[Anthony Noto, CEO at SoFi]

We are stepping on the gas to launch new products faster and iterate to improve our existing products at an even more rapid pace. The opportunity in front of us is too massive to risk under investing to capture it. I'll be back after Chris covers the detailed financial results and guidance to spend a few more minutes talking about this important topic and the strength of our competitive position.

[Chris Lapointe, CFO at SoFi]

Thank you, Anthony. It has been a strong start to the year as we continue to drive durable growth and strong returns. We exceeded each metric that we guided to during our last call on the way to delivering accelerating revenue growth in our sixth consecutive profitable quarter. For the quarter, revenue grew 33% year over year to a record $771,000,000 Adjusted EBITDA was also a record at $210,000,000 and a margin of 27%. Net income was $71,000,000 at a margin of 9% and earnings per share was $06 This included a small benefit of about zero one dollars related to a lower than expected effective tax rate.

[Chris Lapointe, CFO at SoFi]

An important driver of the acceleration of growth was the increased contribution from capital light non lending as well as fee based revenue sources. Our non lending businesses generated $4.00 $7,000,000 of revenue, up 66% year over year and we also generated record fee based revenue across all businesses of $315,000,000 up 67% year over year. Turning now to our segment performance. In terms of financial services, for the first quarter, net revenue was $3.00 $3,000,000 more than double that of Q1 twenty twenty four. Contribution profit was $148,000,000 up 4x from last year.

[Chris Lapointe, CFO at SoFi]

Contribution margin was 49%, almost double what it was last year. Net interest income for this segment was $173,000,000 up 45% year over year, which was primarily driven by growth in member deposits. Non interest income grew 3.2 times to $130,000,000 in the quarter, which equates to over $05,000,000,000 in high quality fee based income on an annualized basis. Importantly, improved monetization continues its strong contribution to revenue growth. Financial services revenue per product increased from $59 in the first quarter of twenty twenty four to $88 in the first quarter of twenty twenty five.

[Chris Lapointe, CFO at SoFi]

That's up nearly 50% and we see continued upside as newer products mature. In Q1, our loan platform business generated $96,000,000 in adjusted net revenue, up 44% from just last quarter. Of this, 93,000,000 was driven by the $1,600,000,000 of personal loans originated on behalf of third parties as well as referrals. I would note that these originations were up 41% quarter over quarter, while the associated platform fees increased approximately 50% reflecting stronger monetization within this business. Additionally, LPB generated $3,000,000 from servicing cash flow, which is recorded in our lending segment.

[Chris Lapointe, CFO at SoFi]

The growth opportunity for this business continues to be strong. On the heels of launching our $5,000,000,000 partnership with Blue Owl Capital in Q1, we are pleased to have recently secured an additional $3,200,000,000 through a one year two billion dollars extension with Fortress and a two year one point two billion dollars agreement with a joint venture between Fortress and Edge Focus. These partnerships continue to demonstrate the attractiveness of our loan production to investors. In addition to our LPB revenue, we continue to see healthy growth in interchange, up 90 year over year driven by close to $16,000,000,000 in total annualized spend in the quarter across money and credit card. Shifting to our tech platform.

[Chris Lapointe, CFO at SoFi]

For the first quarter, we delivered net revenue of $103,000,000 up 10% year over year. Contribution profit was $31,000,000 at a contribution margin of 30%. Revenue growth was driven by continued monetization of existing clients along with new deals signed in new client segments. We saw a slight decrease in accounts to $158,000,000 or 6% year over year, while revenue still grew 10% year over year with similar growth and potential acceleration in Q2. This was driven by a large client's decision last year to diversify their processing providers, which was factored into our outlook for 2025.

[Chris Lapointe, CFO at SoFi]

We continue to diversify our client base by winning new business and we expect these wins to drive financial performance and an offset in 2026. Turning now to our lending segment. For the first quarter, net revenue was $412,000,000 up 27% from the same period last year. Contribution profit was $239,000,000 with a 58% contribution margin. These strong results were primarily driven by growth in net interest income which increased 35% year over year to $361,000,000 During the last quarter, we had record total loan originations of $7,200,000,000 up 66% year over year.

[Chris Lapointe, CFO at SoFi]

Personal loan originations were a record at $5,500,000,000 of which $1,600,000,000 was originated on behalf of third parties through LPB. In total, personal loan originations were up 69 year over year. Student loan originations were $1,200,000,000 up 59% from the same period last year. Home loan originations were $518,000,000 a 54% year over year increase. Capital markets activity was very strong in the first quarter.

[Chris Lapointe, CFO at SoFi]

We sold and transferred through our loan platform business $3,100,000,000 of personal and home loans. In terms of personal loans, we closed $1,100,000,000 of sales in whole loan form at a blended execution of 106.2%. All deals had similar structures to other recent personal loan sales with cash proceeds at or near par and the majority of the premium consisting of contractual servicing fees that are capitalized. These sales included a small loss share provision that is above our base assumption of losses and immaterial relative to the exposure we would have otherwise had if we had held on to the loans. Additionally, we sold $90,000,000 of late stage delinquent personal loans.

[Chris Lapointe, CFO at SoFi]

By selling these loans, we're able to generate positive incremental value over time versus selling after they charge off both from our improved recovery capabilities and by maintaining servicing. In terms of home loan sales, we closed $322,000,000 at a blended execution of 102.1%. In addition to our personal and home loan sales, we executed a $698,000,000 securitization of loans originated through our loan platform business. This was the first securitization of new collateral in our SoFi consumer loan program or SCLP since 2021 and the first using collateral originated in the loan platform business. Importantly, this channel provides our partners with meaningful liquidity to support their ongoing investment in the loan platform business.

[Chris Lapointe, CFO at SoFi]

The transaction priced at an industry leading cost of funds levels with a weighted average spread of 87 basis points and an all in yield of 5.1%. Turning to credit performance. The health of our consumer remains strong. Despite the market volatility, we are not seeing signs of weakness. Our personal loan borrowers have a weighted average income of $158,000 and a weighted average FICO score of 743, while our student loan borrowers have a weighted average income of $134,000 with a weighted average FICO score of 769.

[Chris Lapointe, CFO at SoFi]

Our credit trends continue to be strong after seeing delinquencies peak one year ago in the first quarter of twenty twenty four. For personal loans, the on balance sheet ninety day delinquency rate was forty six basis points in the quarter, a decrease of nine basis points sequentially. The annualized charge off rate also declined to 3.31% versus 3.37% in the prior quarter. Had we not sold any late stage delinquencies, we estimate that including recoveries between 9,120 delinquent, we would have had an all in annualized net charge off rate for personal loans of approximately 4.8% versus 4.9% last quarter. For student loans, the on balance sheet ninety day delinquency rate was in line with last quarter at 13 basis points while our annualized charge off rate decreased 15 basis points to 47 basis points.

[Chris Lapointe, CFO at SoFi]

The data continues to support our 7% to 8% maximum life alone loss assumption for personal loans in line with our underwriting tolerance although we continue to trend below these levels. Our recent vintages originated from Q4 twenty twenty two to Q2 twenty twenty four have net cumulative losses of 4.09% with 43% unpaid principal balance remaining. This is well below the 5.53% observed at the same point in time for the 2017 vintage, the last vintage that approached our 7% to 8% tolerance. The gap between the newer cohort curve and the 2017 cohort curve widened by a more favorable 16 basis points after widening improvements of 15 basis points in Q4. Additionally, looking at our Q1 twenty twenty through Q4 twenty twenty four originations, 59% of principal has already been paid down with 6.7% in net cumulative losses.

[Chris Lapointe, CFO at SoFi]

Therefore, for life of loan losses on this entire cohort of loans to reach 8%, the charge off rate on the remaining 41% of unpaid principal would need to be approximately 10%. This would be well above past levels further underscoring our confidence in achieving loss rates below our 8% tolerance. Turning to our fair value marks and key assumptions. As a reminder, we mark our loans at fair value each quarter which considers a number of factors including the weighted average coupon, the constant default rate, the conditional prepayment rate and the discount rate comprised of benchmark rates and spreads. At the end of the first quarter, our personal loans were marked at 105.5%, up 55 basis points from the end of the prior quarter.

[Chris Lapointe, CFO at SoFi]

This change was primarily a function of the discount rate decreasing by 42 basis points to 4.87% due to the underlying benchmark rate decreasing by 34 basis points and spreads tightening by eight basis points. As we've previously noted, both of these changes are empirical based on actual market data not assumptions. Additionally, any fair value impacts that resulted from interest rates increasing were offset nearly one for one by hedge losses. Additionally, the annual default rate decreased by 18 basis points. Slightly offsetting these impacts was a 14 basis point decrease in the weighted average coupon and a 52 basis point increase in our conditional prepayment rate.

[Chris Lapointe, CFO at SoFi]

When a borrower prepays, we are still capturing the principal and the impact of the value of the asset is only based on the premium above par at a given point in time, which is very small relative to the principal outstanding. At the end of the first quarter, our student loans were marked at 105.2%, up 107 basis points from the end of the prior quarter. This change was a function of the discount rate decreasing by 18 basis points to 4.22% driven by the underlying benchmark rate decreasing by 38 basis points partially offset by 20 basis points of spread widening and a 10 basis point increase in the weighted average coupon. There were no material changes to the annual default rate or the conditional prepayment rate. Turning to our balance sheet.

[Chris Lapointe, CFO at SoFi]

In the first quarter, total assets grew by $1,500,000,000 driven by $1,600,000,000 of loan growth and approximately $265,000,000 of growth in cash, cash equivalents and investment securities, partially offset by a reduction in other assets. Total company wide cash at quarter end was $2,700,000,000 On the liability side, member deposits grew by 2,200,000,000 for the quarter, bringing total deposits to over 27,000,000,000 Net interest margin was 6.01% for the quarter up 10 basis points sequentially reflecting our ability to sustain healthy deposit versus lending betas. This included a 27 basis point decrease in cost of funds which was partially offset by a 13 basis point decrease in average yields. We continue to expect a healthy net interest margin above 5% for the foreseeable future. In terms of our regulatory capital ratios, we remain very well capitalized.

[Chris Lapointe, CFO at SoFi]

Our total capital ratio of 15.5% at quarter end remains comfortably above the regulatory minimum of 10.5%. Tangible book value grew more than $167,000,000 sequentially to $5,100,000,000 and tangible book value per share at quarter end is 4.58 up from $3.9 a year ago. Let me finish by providing our revised outlook for 2025. Given our strong start to the year, we continue to expect to add over 2,800,000 members which represents at least 28 year over year growth. We now expect adjusted net revenue of $3,235,000,000 to $3,310,000,000 above our prior guidance of $3,200,000,000 to $3,275,000,000 This equates to year over year growth of approximately 24% to 27%, an increase from our prior guide of 23% to 26%.

[Chris Lapointe, CFO at SoFi]

We now expect an adjusted EBITDA of $875,000,000 to $895,000,000 above our prior guidance of $845,000,000 to $865,000,000 This represents a 27% margin. We now expect adjusted net income in the range of $320,000,000 to $330,000,000 above our prior guidance of $285,000,000 to $3.00 $5,000,000 and adjusted EPS of $0.27 to $0.28 above our prior guidance of $0.25 to $0.27 We now expect growth intangible book value of $585,000,000 to $600,000,000 for the year above our prior guidance of $550,000,000 to $575,000,000 For the second quarter of twenty twenty five, assuming credit spreads are in line with the range we've observed year to date, we expect to deliver adjusted net revenue of $785,000,000 to $8.00 $5,000,000 adjusted EBITDA of 200,000,000 to $210,000,000 adjusted net income of 60,000,000 to $70,000,000 and adjusted EPS of $05 to $06 Overall, it's been a strong start to 2025 and we're looking forward to a great year overall. I'll hand it back to Anthony to wrap us up and kick off the Q and A.

[Anthony Noto, CEO at SoFi]

Thank you, Chris. As I mentioned, our strategy and execution continue to deliver excellent results. The opportunity in front of us remains massive and we are accelerating our investment in new product launches. We are building from a position of strength as the only digital company to successfully scale members and revenue across five lending businesses, a world class SoFi money offering with $27,000,000,000 in total deposits and invest in credit card offerings with 2,700,000 products and over 300,000 cardholders respectively. At the same time, we're incubating and beginning to scale our SoFi Protect offering across home, auto and life insurance, lending and checking products for small and medium businesses, and of course, our recently launched SoFi Plus product with the best value in a financial services subscription offering.

[Anthony Noto, CEO at SoFi]

Additionally, we've seen tremendous scale and indirect value creation from SoFi Relay with over 5,100,000 products. Despite all of that success, we built an entirely new loan platform business in less than twelve months generating a $380,000,000 annualized high margin fee revenue stream. And of course, our technology platform business serving over 158,000,000 accounts and over 8,000,000,000 annualized transactions while helping power the SoFi products. Make no mistake with each business we have or will have superior speed, capabilities and services when compared side by side to alternative offerings as product quality is critical to being a member centric company. But having great products is not enough.

[Anthony Noto, CEO at SoFi]

We must also have a sustainable competitive advantage. In that regard, we believe our unique strategy, the combination of our businesses and how we've architected our products results in building a sustainable competitive advantage and having the highest lifetime value per member. Our highest lifetime value is built on the back of striving to have superior unit economics and a per product basis combined with significantly lower cost and more products and revenue per member such that we can provide more value in each product and more value when they are used together. And we can do this better than anyone else. Specifically, our competitive advantage allows us to offer superior and even one day unmatchable value to our members in the broadest selection of loans with the best interest rates, superior APY and deposits, the best value in a financial service subscription product in SoFi Plus, the broadest selection in invest products and competitive matches on invest rollovers, a fully comprehensive suite of products all in one device, which is necessary to get your money right, as well as SoFi rewards across all of our products and services, free financial planning with the CFP, discounted travel offerings, and other spend better offers.

[Anthony Noto, CEO at SoFi]

Additionally, we provide free services like Relay, Autopilot, Vault, Zelle, and p two p. And finally, several new AI driven products in development that will specifically show our members how to get their money right by spending less than they make and investing the rest, like the SoFi expense are and SoFi cash coach, just to name a few. In total, SoFi's unmatched value across its products and services make it the best place to help members achieve the most critical factors in their financial life, which is how to spend less than they make and invest the rest in order to get their money right and realize their ambitions. All that we do must serve this simple but hard to achieve equation better than anyone else. Hopefully, our leadership position as a one stop shop in our competitive advantage with the highest lifetime value is clear as well as why we want to accelerate our rate of investment and innovation to take advantage of the incredible competitive position we have built.

[Anthony Noto, CEO at SoFi]

In my mind, our path to our ambition is simple. Given the superior competitive position we occupy, the only thing that stands in the way of us and our aspirations is well, us, and our ability to maintain a founder's mentality culture to further strengthen our competitive sustainable advantage. With that, let's begin the Q and A.

[Operator]

Thank you. Session. And our first question today comes from Andrew Jeffrey of William Blair. Andrew, your line is open. Please go ahead.

[Andrew Jeffrey, Research Analyst at William Blair]

Hi. Thank you very much. I appreciate taking the question. Terrific results here. Anthony, I

[Andrew Jeffrey, Research Analyst at William Blair]

know it might be a little bit of

[Andrew Jeffrey, Research Analyst at William Blair]

a difficult question to answer, but as I look at the very impressive performance of the loan platform business, can you envision a time where SoFi is just materially a fee based business? And what are the implications for that for deposits, which also different interest rate environments? I just wonder, do you wind up with excess funding? And and do you you grow loan faster? Primarily on that?

[Anthony Noto, CEO at SoFi]

Yes. And you're a little broken up there. I think I got the bulk of your questions. I think the question was, do you see a time where you we transitioned to a largely fee based business? I think you'll see us increasingly change the mix to greater fee based than we are today.

[Anthony Noto, CEO at SoFi]

41% on an annualized basis is the percent of our revenue from fee based revenue today. It's broad based, so it's not just the loan platform business. Interchange is becoming a bigger part in addition to referral revenue, in addition to, our ability to drive fees in other smaller businesses that aren't as visible like our insurance business and our small medium business, which is both loan referral fees as well as checking and savings fees. So I do think it will continue to increase quite meaningfully, but not just because of the loan platform business. I think the thing that would drive it even higher than we anticipate, which we do imagine it's going above 50%, is if we can do the loan platform business meaningfully outside of our credit box.

[Anthony Noto, CEO at SoFi]

Today, the bulk of our loan platform business is in and about our credit box, just volume that we wouldn't otherwise want to originate on our own balance sheet, both from a credit and risk standpoint. If we can actually deliver loans in the loan platform business that are meaningfully outside the credit box, say 600 to six eighty, then the revenue stream there is going to be even much, much larger than it is today. We are working on that. I'm optimistic we can get some of those deals done. We we announced a piece of that today with Edge Focus, but there's a couple of other deals that are quite large that could be pretty meaningful that would drive that higher.

[Anthony Noto, CEO at SoFi]

The other thing I'd say about the invest business is that, you know, our outlook and what we're contributing today does not include crypto, which will also be a fee based business, in the invest product itself, but also that we could have a stable coin pay product with high yield that could drive fees as well in addition to doing things that I mentioned earlier in the call outside of invest or stable coins. The thing I'd say more broadly about this business and our desire to own loans, we do want to put loans in the balance sheet and sell those loans and hold them for sale. Our student loan financing business is an important product for us to have. We have that held for investment on a big piece of it, but we'll manage to the best ROE. And that's what will be our guiding light.

[Anthony Noto, CEO at SoFi]

We want to have a ROE that's in the 20 to 30% range. And so we have to have the right mix of products. So it can't all be fee based, but we'd like it to be more than 50% for sure.

[Operator]

The next question comes from Kyle Peterson at Needham and Co. Kyle, your line is open. Please go ahead.

[Kyle Peterson, Managing Director, Equity Research at Needham & Company]

Good morning, guys. Nice results and thanks for taking the questions.

[Kyle Peterson, Managing Director, Equity Research at Needham & Company]

I wanted to touch a

[Kyle Peterson, Managing Director, Equity Research at Needham & Company]

little bit on, specifically the tech platform and pipeline. I know you guys have a lot of wins that are kind of coming live later this year, but just wanted to see if given some of the recent market volatility and kind of macro uncertainty, has there been any change, whether it's in client appetite or decision making or any slowing or change in activity that we should be mindful of, given the volatility over the last few weeks?

[Anthony Noto, CEO at SoFi]

No change in our outlook for the tech platform business long term. We still have a very strong conviction that is important for the SoFi businesses and helping us deliver our sustainable competitive advantage in the highest lifetime value. Owning that tech allows us to not just have lower cost, but allows us to have superior unit economics and allows us to, innovate at a much faster rate. And so it is part of owning it is for the SoFi business. But the other piece is providing the rest of the world technology services.

[Anthony Noto, CEO at SoFi]

And our outlook for that is unchanged even with the more recent volatility around tariffs and the economy and other concerns. We've signed a number of partners that will be integrated this year and they'll contribute to revenue in 2026. Our outlook for this year is unchanged in terms of revenue guidance as well as longer term. I do think there could be an acceleration in 2026 relative to 2025 in terms of the number of new deals, one, and the impact they could have because of the fact that people are starting to move more aggressively into innovative areas, and they can no longer compete from an innovative standpoint. If you're a traditional financial institution or you're a big consumer brand that has financial services products, you really have gotten away the last three years without innovating.

[Anthony Noto, CEO at SoFi]

And the reason we've gotten away from away with it is because of the regulatory environment, because the backdrop of the economy and interest rates going higher. But in an environment where interest rates stay stable where we're at and we have a stable economy, you know, these financial institutions need to start to compete or they're gonna keep losing share. You can see the rate of innovation happening in the private markets. We have more inbound calls than we've ever had for acquisitions and more inbound calls for partnerships than we've had in three years. And it's because of the fact that capital is coming back to the fintech sector.

[Anthony Noto, CEO at SoFi]

It's because the interest rates are now stabilizing and people can start to start to reinvest. So that's the opportunity set for us. It's up to us to deliver and we feel confident we'll be able to deliver our share against the tech platform business and for SoFi more broadly for that matter.

[Operator]

The next question comes from Dan Dola from Mizuho. Dan, your line is open. Please go ahead.

[Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group]

Hey, team. Chris, Anthony, really, really nice results. Great to see that. Can I ask you guys about the strength of the capital markets in this market given the high volatility looks really strong? Would like to get some perspectives on that.

[Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group]

Thank you.

[Anthony Noto, CEO at SoFi]

I'll let Chris add in more holistically, but I'll tell you when the tariff and volatility stuff happened. I thought some of our deals will get delayed in investment committee or other factors. And we've seen that happen in the past you had shelter in place for COVID, things came to a screeching halt and other things have happened in the last seven years related to dislocations and liquidity, etcetera. We didn't see any slowdown. When the tariff and volatility stuff happened, there was no slowdown.

[Anthony Noto, CEO at SoFi]

In fact, people are moving just as fast and it was a pleasant surprise. So, that's on the near term. I'll let Chris talk about more holistically the appetite for our assets and general sector trend that we're seeing.

[Chris Lapointe, CFO at SoFi]

Yes. So overall, the strength of the capital markets remains extremely strong, including the loan platform business. This quarter, we ended up selling or transferring over $3,000,000,000 of personal and home loans at really strong execution levels. That's over $12,000,000,000 of annualized demand in Q1 alone. And then as we mentioned in our prepared remarks, we also signed over $8,000,000,000 of LPD partnerships between Blue Owl, Fortress and Edge Focus.

[Chris Lapointe, CFO at SoFi]

These recently announced partnerships and other deals are going to drive an acceleration in LPB volume in Q2. So overall, really pleased with how the LPB business has developed and we're feeling good about the demand both from capital markets investors as well as from our members.

[Anthony Noto, CEO at SoFi]

And I don't think people truly appreciate this stat. We underwrite around $20,000,000,000 of loan originations, give or take. And that's not meant to be guidance, just a round number. We decline a hundred billion dollars of loan applicants. A hundred billion dollars.

[Anthony Noto, CEO at SoFi]

That means we've done all the work of building our brand, of driving the demand, of going through an application process to tell a hundred billion more than a hundred billion dollars no. That is a huge opportunity for us, and it's gonna be high margin, no capital required, low credit risk. Obviously, those loans are being taken away a couple of days after they're underwritten. So it is a big, big opportunity. So don't sleep on the loan platform business holistically.

[Operator]

The next question comes from Jeff Adelson from Morgan Stanley. Jeff, please go ahead. Your line is open.

[Jeffrey Adelson, Executive Director at Morgan Stanley]

Hey, good morning. Thanks for taking my

[Jeffrey Adelson, Executive Director at Morgan Stanley]

questions. Just a couple

[Jeffrey Adelson, Executive Director at Morgan Stanley]

of questions for me. Can you talk a little bit more about how you might position the student loan business if Congress ultimately decides to cap some of the programs out there in Grab plus Parent plus I know historically that's been more of a source for your refi business over time. Would you be looking to do a little bit more of the in school graduate side if that happened? And Chris, if you could also just maybe touch on the take rate on the loan platform business. It looked like it increased on the non referral side this quarter up to about 4.7% as a percent of those originations.

[Jeffrey Adelson, Executive Director at Morgan Stanley]

So should we be thinking about that as kind of like the sustainable run rate from here? Should was there anything sort of one off in that number? Thanks.

[Anthony Noto, CEO at SoFi]

So Jeff, on your first question as it relates to student loans, you're really referring to the in school student loan market. That's a product that we launched seven or sorry, six years ago. It's an important product in terms of our mission, being there for all the major financial decisions in our members' lives and the days in between. So if the government backs away from providing in school loans, Grad PLUS, etcetera, etcetera, we'll we'll absolutely capture that opportunity. By the way, those loans are a lot more attractive than our refinance student loans.

[Anthony Noto, CEO at SoFi]

They come at a higher whack, and they're also, typically backed by, a co a co borrower and a parent. And so they are great ROE products, and we would love to do as much as we can in that market. And we'd be very happy to step in for the government. In addition to the fact that we would not only underwrite the in school loans, when those students graduate and go get jobs and drive great credit scores, we'll refinance those loans. So it will be a double bottom line from the standpoint that it's a revenue stream sort of day one, but it's also a member that becomes part of the ecosystem of SoFi, And there's going to be a high lifetime value to someone that takes out an in school loan from us relative to someone that refinances from us.

[Chris Lapointe, CFO at SoFi]

Yes. And then on your second question as it relates to the loan platform business take rate, we are really excited about the momentum that we have there and our improved monetization. You saw that quarter over quarter. I think part of it is as a result of the excess demand that we're seeing from loan investors which is enabling us to create some pricing tension in some of these partnerships. In terms of the long term guide on the take rate, what I would think about is each deal is structured a little bit differently.

[Chris Lapointe, CFO at SoFi]

And the majority of the deals that we've done have been within our credit box or stuff that we would otherwise hold on the balance sheet, but we haven't because we're happy with the size of our balance sheet. As we start addressing the large TAM that Anthony mentioned of the $100,000,000,000 that we're currently declining right now on an annual basis, you'll see that take rate fluctuate.

[Operator]

The next question comes

[Chris Lapointe, CFO at SoFi]

from line Brian Ross.

[Operator]

Sorry, go ahead.

[Chris Lapointe, CFO at SoFi]

Yes, sorry. Before you go Devin, the only other thing I say is that overall the economics remain extremely healthy. These are high, high margin unit economics for the LTV business.

[Operator]

Go ahead, Devin. Your line is open.

[Ryan Devin, Director of Financial Technology Research at Citizens JMP]

Okay. Great. Good morning, Anthony and Chris. How are you guys?

[Ryan Devin, Director of Financial Technology Research at Citizens JMP]

Great.

[Ryan Devin, Director of Financial Technology Research at Citizens JMP]

Just a question on yes, good. So question on just kind of volatility in the market kind of post quarter end, obviously, a lot of moving parts here. But one piece of forward Fed fund expectations have come down quite a bit over the past month. And just curious kind of how we should think about implications on deposit costs, what type of betas you guys are estimating? And then also what are the implications on deposit growth if short term rates follow market expectations?

[Ryan Devin, Director of Financial Technology Research at Citizens JMP]

Thanks.

[Anthony Noto, CEO at SoFi]

Yes. I'll let Chris and I will tag team this. In the quarter, you saw that our members within SoFi and Money grew 41%, our deposits grew 52%. So we're seeing positive deposit trends not just from new SoFi Money members but from existing deposit members. What I'd say is this, we have a competitive advantage.

[Anthony Noto, CEO at SoFi]

And that competitive advantage is that we have an insured depository entity in a SoFi bank, and we have four loan products. Most companies that are not banks that are providing an interest rate on deposits are doing it on the back of a sponsor bank. And those deals are limited in terms of what the APY they can offer. They're typically fed funds plus 20 basis points. It can't be more than that.

[Anthony Noto, CEO at SoFi]

And if it is, it's marginally more. Maybe fed funds plus 30 basis points. It is limited. And so it's a really tough strategy to try to live in a world that you wanna be a holistic one stop shop and have a limit on what you could do in any product, whether it's interest rate on loans or interest rates on deposits. We have an unencumbered capability to compete on APOI if we need to, and we will because we have such a strong ROE business from our lending business that can fund those deposits.

[Anthony Noto, CEO at SoFi]

And so on the margin, I don't know anyone that can outcompete us on the APY. Now you may say, geez, Anthony, there's banks with trillion dollars of assets that can do it. They are not going to do it. They could if they chose to, but they're not going to do it. They have a deposit base that is a super low cost of funds, and they have no interest in raising the APY to have more deposits because they just don't need it to lend.

[Anthony Noto, CEO at SoFi]

But the people that want to get into the business and compete with primary accounts, they're not going to be able to compete with us unless they become a bank and they have the lending business to fund that APY. So I couldn't feel better about our position there and how competitive we can be. And again, it will just drive that viral capabilities of all of our products and cross sell and cross buy. But I do think APYs are largely going to come down in the industry, but ours is going to be in that top tier and maintain that top tier. We've never gone to the state of where we needed to be at the very top and to maybe even use it as a loss leader.

[Anthony Noto, CEO at SoFi]

I don't think we have to get there, but we actually have the capability to do it and make it up on the lending side. So I couldn't be more, enthusiastic about our competitive positioning. There's a lot of noise people are making out there that they want to compete with us in that area, I welcome it.

[Chris Lapointe, CFO at SoFi]

The only other thing I would add because Anthony kind of hit on the betas, but to put some more specifics, historically, we've been operating in the 65% to 70% deposit beta range. In terms of overall outlook and what's baked into our guidance, we're at the point where at our long term funding target of about 85 percent to 90% of being member deposit funded. So all else being equal, we'd like to grow total deposits at a similar pace to overall loans, which we've said in the last earnings call of single digit billions. However, if we're continuing to see exceptionally strong member demand, we can grow a bit faster and deploy that funding incremental into funding incremental loans or other assets. And then we also have other ways that we can manage deposits on the balance sheet.

[Chris Lapointe, CFO at SoFi]

So we're not going to stymie member growth at all costs.

[Operator]

The next question comes from Richie Smith from JPMorgan. Richie, please go ahead. Your line is open. Sorry

[Reggie Smith, Executive Director - Equity Research at JP Morgan]

about that. Congrats on the quarter. Lot of questions about kind of macro uncertainty. And and this is these times are very unique in the sense that, you know, I can't think of another period where we had a a presignaled, you know, potential shock. Usually, things happen and we don't know that they're gonna happen.

[Reggie Smith, Executive Director - Equity Research at JP Morgan]

I guess my question, Anthony, is is how and it sounds like your your funding partners have not linked at all, but I'm curious how you guys underwrite or approach underwriting in this type of environment where you've got, know, potentially like a binary outcome. Have you made any changes or like how are you guys approaching that specific to your personal loan business? Thank you.

[Anthony Noto, CEO at SoFi]

Yes. So from a credit policy standpoint, we have early warning dashboard across a number of external, internal, macro and microeconomic factors that kind of dictate how we approach credit. In the past, when those indicators have become red, we cut back on credit and we tighten our credit box. We can underwrite across eight different tiers. There is a period in the last three years where we cut back Tier eight, Tier seven and Tier six and just underwrote through Tier five.

[Anthony Noto, CEO at SoFi]

We're as Chris has talked about multiple times, we're managing to a life alone lifetime loss of 8%. While in a recession life alone losses go up the way you maintain an 8% life alone loss when losses go up because of a recession or dislocation is you stop underwriting those higher tiers that have higher losses. So that's philosophically how we approach it and from a credit policy standpoint. The economic indicators, they're definitely volatile right now, but not to the point that we need to change our underwriting standards. And our credit performance has remained really strong.

[Anthony Noto, CEO at SoFi]

We look at entry rates, we look at ninety day delinquencies and obviously we look at NCLs, all of which have continued to improve and remain very steady. I'd say the American consumer is actually doing quite well and we haven't seen signs that cause us to get concerned. We're 100% willing and able to change on a dime if we need to, but so far no issues.

[Operator]

Final question today comes from Terry Maurer at Barclays. Terry, please go ahead.

[Terry Ma, Senior Equity Research Analyst at Barclays]

Hey, thank you. Good morning. I just wanted to follow-up on the Parent PLUS and the Grad PLUS opportunity. I guess the question is, can you have that kind of in school Grad product coexist with your current refinance business? Because on one hand, I get that it's higher WACC, higher ROE, but then you're also a big consolidator of those loans.

[Terry Ma, Senior Equity Research Analyst at Barclays]

Thank you.

[Anthony Noto, CEO at SoFi]

Yes. It absolutely can coexist. There's nothing wrong with prepayments. You just have to factor that into how you value the loans. So if someone's in school and they've taken out four years of loans from us, they have a great relationship with us.

[Anthony Noto, CEO at SoFi]

Hopefully, have a SoFi money account and maybe even a SoFi credit card and maybe a small invest account as well. As they get out of school and their credit improves and they can refinance at a lower rate because they have a credit rating that warrants it, we'd love to do that loan. We just have to make sure that as we think about the in school loans and as we value them, we have the right type of prepayment levels. We have a great history in in school loans and a great history in refinance loans to know what those prepayment rates are and how to have them coexist. But our goal is to get people out of debt.

[Anthony Noto, CEO at SoFi]

Our goal is to help them reduce their debt so they spend less than they make. Spending less than they make is involve involves debt. It's not just their entertainment spending and their household expenses and their transportation expenses and everything else they spend money on, it's also debt. So our objective is to help people spend less than they make and invest the rest. So we can lower their cost of debt.

[Anthony Noto, CEO at SoFi]

We would love to do that. That's our mission. Refinancing our own loans, I have no issue with that. Even on the personal loan business, if we underwrite somebody at a 14% WACC and we help them improve their credit score from 680 to eight ten, we should absolutely help them refinance that loan. And by the way, we'll make more money when refinancing that loan than we would have if they just kept their current loan.

[Anthony Noto, CEO at SoFi]

It's just we can't overvalue the current loan and that's why we look at prepayment speeds all the time just like we do on servicing assets and how we approach things holistically. The member is at the center of what we're doing, not our financial model.

[Operator]

At this time, I would like to turn the call back over to Anthony Noto for closing remarks.

[Anthony Noto, CEO at SoFi]

Thank you all for dialing in. We have clearly demonstrated an ability to identify opportunities, lean into those areas that will have the greatest impact and execute and execute with excellence. And that's because we have a company of great people, a company of people that are focused on building the best culture in the world. And that is the asset that we will ultimately continue to leverage on top of the opportunity that sits in front of us. Our results, in my mind, continue to show that we have a diversified resilient business that has delivered and will continue to deliver strong growth through a variety of environments, including dynamic environments like we see today.

[Anthony Noto, CEO at SoFi]

We remain focused on the path to our aspirational long term goals by executing day to day and fighting the battle right in front of us. As we look ahead, we're confident that the investments we are making today will generate the results that we need to achieve our ambitions. With that, thank you for your interest, we look forward to talking to you next quarter.

[Operator]

Goodbye. This concludes today's conference call. You may now disconnect.

Participants

Executives

• Anthony Noto, CEO

Analysts

• Executive
• Chris Lapointe, CFO at SoFi
• Andrew Jeffrey, Research Analyst at William Blair
• Kyle Peterson, Managing Director, Equity Research at Needham & Company
• Dan Dolev, Managing Director - Senior Analyst at Mizuho Financial Group
• Jeffrey Adelson, Executive Director at Morgan Stanley
• Ryan Devin, Director of Financial Technology Research at Citizens JMP
• Reggie Smith, Executive Director - Equity Research at JP Morgan
• Terry Ma, Senior Equity Research Analyst at Barclays