SoFi Technologies, Inc. (SOFI) Earnings

Management highlights

- Core Growth and Strategic Milestones * Achieved 19th consecutive quarter exceeding the Rule of 40 with a 70 score, combining 40% year-over-year revenue growth and a 30% adjusted EBITDA margin * Added a record 1.1 million new members, growing total members 35% year-over-year to 15.8 million; added a record 2.2 million new products, growing total products 42% year-over-year to 24.4 million * Hit a key inflection point: products per member is accelerating, and 51% of new products are now opened by existing members, up 16 percentage points year-over-year, validating the everything app cross-buy strategy - Key Product Launches and Performance * Relaunched SoFi Plus paid premium membership with enhanced benefits, surpassing 200,000 paid subscribers after one quarter for an annualized revenue run rate of over $24 million; 85% of new subscribers are existing members, and 25% add an additional product after joining * Launched SoFi Coach AI personal financial guidance in June, which has already garnered nearly 500,000 conversations with 90% positive member feedback; additional capabilities like automated subscription management will launch later in 2026 * Added multiple new innovative product offerings: Composer AI-powered custom investing tools, access to the SpaceX IPO, the SoFi Social 50 Income ETF, small business loans, new home equity lines of credit, and Big Business Banking for commercial clients * Credit card revenue more than doubled year-over-year, and the back book is now profitable; invest products grew 38% year-over-year, with brokerage revenue increasing nearly 2.5x * Achieved key blockchain milestones: began settling crypto trading in the SoFiUSD stablecoin, and started processing Big Business Banking transactions on the SoFi Exchange network, enabling 24/7 real-time fiat and digital asset transfers for commercial clients - Business Development and Innovation * Grew unaided brand awareness to an all-time high of 10.4%, up 190 basis points year-over-year, supported by high-impact marketing partnerships including the U.S. Open, CMA Fest, FIFA World Cup matches at SoFi Stadium, and a new multi-year deal with Notre Dame Athletics * Progressed migration of SoFi Money to the in-house cloud-native STS banking core, which will soon be offered to external bank and financial institution clients; acquired Peach Finance to expand STS credit product capabilities * Expanded the loan platform business to add new asset classes: small business loans and home equity loans, with new multi-year partner agreements to fund $3 billion in SMB originations and up to $1 billion in additional personal loans

Guidance

- Full year 2026 adjusted net revenue guidance is raised to $4.75 to $4.85 billion, representing 32% to 35% year-over-year growth, up from prior guidance of ~30% growth - Full year 2026 adjusted EBITDA guidance is maintained at approximately $1.6 billion, equating to an adjusted EBITDA margin of 33% to 34% (the decision to maintain rather than raise EBITDA reflects intentional reinvestment in new long-term growth opportunities) - Full year 2026 adjusted net income guidance is approximately $825 million (17% net income margin), and adjusted EPS guidance is 60 cents; the lower-than-implied EPS reflects an updated expected 22% tax rate, 7 percentage points higher than original guidance - Management maintains the long-term target of 20% to 30% return on tangible common equity (ROTCE), with a clear and visible path to achieve this target via expanding net income margins and growing capital-light fee-based revenue - Management expects net interest margin to remain healthy above 5% for the foreseeable future

Segment performance

1. Financial Services: Net revenue of $466 million, up 29% year-over-year. Contribution profit of $213 million, up 13% year-over-year, with a 46% contribution margin. This segment represents 39% of total adjusted net revenue. Net interest income grew 29% year-over-year to $249 million, and non-interest income grew 28% to $217 million. Record interchange revenue was up 67% year-over-year, and record brokerage revenue was up 2.4x year-over-year. The loan platform business generated $143 million in revenue from $3.1 billion in third-party personal loan originations. 2. Technology Platform: Net revenue of $85 million, up 13% quarter-over-quarter. Contribution profit of $12 million, with a 14% contribution margin. This segment represents ~7% of total adjusted net revenue. Revenue growth was driven by further monetization of existing clients and contributions from new clients. 3. Lending: Adjusted net revenue of $712 million, up 59% year-over-year. Contribution profit of $399 million, with a 55% contribution margin. This segment represents 59% of total adjusted net revenue. Net interest income grew 54% year-over-year to $573 million, and loan origination fees grew 64% year-over-year. The segment achieved record originations across all categories: $10.7 billion in personal loans (of which $7.6 billion was held on balance sheet), $2.7 billion in student loans (up 270% year-over-year), and $1.4 billion in home loans (up 74% year-over-year).

Risks & headwinds

- Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including changes in macroeconomic conditions, interest rate movements, and competitive dynamics - High interest rates have muted purchase and refinance activity in the home loan segment, though growth is supported by new home equity product offerings - Lending segment credit performance is currently in line with expectations, but changes in economic conditions could impact charge-off and delinquency rates - Fair value marks for on-balance sheet loans declined in the quarter due to higher benchmark interest rates increasing discount rates

Analyst Q&A

• Q: What is the market opportunity and fee economics for the loan platform business's new SMB and home equity asset classes? /

  A: Expanding the loan platform to multiple asset types creates a full menu of options for investor partners, which is the long-term goal for the business. There is already strong application demand for SMB loans, with fee economics similar to or slightly better than existing personal loan platform activity. Home originations are already running at a meaningful monthly clip, with new partner arrangements for $100-$200 million monthly volume and similar economics to current business. SoFi can offer far more competitive pricing than existing SMB lenders, positioning it to take significant market share and attract high-quality borrowers.

• Q: With cross-buy hitting an inflection point, will SoFi shift focus from member growth to monetization, or can both continue growing? /

  A: Both member growth and monetization via cross-buy will continue growing simultaneously, as the everything app flywheel is now working organically. Tip-of-the-spear products like SoFi Money and Relay drive new member growth at low cost, and existing product density enables free cross-sales to higher-margin products like loans and investing. The recent relaunch of SoFi Plus is accelerating product per member growth: 85% of new SoFi Plus members are existing users, and 25% add an additional product after joining.

• Q: What is the rationale for maintaining full-year EBITDA guidance even after raising revenue guidance? /

  A: SoFi is choosing to reinvest incremental revenue from strong performance into new high-impact long-term growth opportunities that were not included in the original 2026 plan, such as Big Business Banking, SMB lending, SoFiUSD, and expanded investment in the high-performing SoFi Plus product. Management prioritizes capturing future growth over hitting near-term profitability targets, and the profitability opportunity will remain available in future periods. Guidance also includes a buffer for the expected 1-2 interest rate hikes in 2026, with potential upside to the bottom line if rate hikes do not materialize.

• Q: How does the cross-buy flywheel apply to SoFi's new commercial offerings like SMB lending and Big Business Banking? /

  A: The SMB lending business grew organically from existing member demand: a large share of existing SoFi members operate small businesses, so SMB lending is just another product to satisfy existing member needs, and will add to the cross-buy flywheel with additional commercial banking products to follow. Big Business Banking was born from direct industry demand for a regulated bank to provide API-driven fiat and crypto banking services, and it creates synergies that drive adoption of SoFiUSD, which in turn generates net interest income for the business. These new offerings layer on top of existing consumer business synergies, rather than operating independently.