SoFi (SOFI) 31 Jul 232023 Q2 Earnings call transcript

Good morning and thank you for attending today's SoFi's Second Quarter 2023 Earnings Conference call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instruction]

At this time, I would now like to turn the conference over to our host, Maura Cyr from SoFi Investor Relations. Maura, please proceed.

morning. good and you, Thank Welcome to conference XXXX second quarter earnings call. SoFi's

our today and recent to me results Chris talk CFO. CEO, Joining Noto, about and Anthony events Lapointe, are

the presentation earnings find our accompanying can section of the release You on Investor Relations website. our

include will that statements expectations today our and uncertainties. are involve forecasts, and remarks risks on current forward-looking Our based and

business future These strategy, macroeconomic and statements competitive products services, our and advantage include, performance. but to are and and future and not outlook, financial limited conditions

differ those from may these by statements. results forward-looking actual Our materially contemplated

that to as Factors well and differ are described Securities XX-K could recent as the XX-Q. on information Any events. SEC, as we obligation most Commission, assumptions Form based on our release to press subsequent materially and cause that statements a these this Exchange with filed new filings results or in as made our of Form the statements today's are result upcoming today. undertake make as forward-looking of update future our We no call including these with

I'd to call the like turn over Anthony. to now, And

and good everyone. morning, you, Thank

our is the Technology and quarter and team. Financial EBITDA. consecutive volatility bolstered industry second businesses Services disruption and by fueled coupled record with unique were which market despite These of marked strong execution member both record and ninth our which quarter by segment, additions, our results segment, reflect SoFi record at achieved monetization trends. revenue results quarter of we adjusted These strong diversification in revenue world-class the by Platform fourth consecutive business The our record of business our

second next quarters record trends about what accomplished. we've margin. XX% us incremental representing as Record what XX% the the nearly of include, even business. across is net achievements and over segments in EBITDA $XXX discuss of indicating our each a excited up consolidated adjusted for underlying to are continued more excited margin, incredibly I'm key key in million, store a quarter adjusted XX% year-over-year. revenue million, several momentum from the the of few financial A $XX I'm

XX%. company of XX% which Bank, an GAAP At level, value margin in GAAP over the $XX ended with At loss net a high-quality SoFi million. From balance we incremental SoFi income billion $XX.X the net saw our we of sheet million perspective, and of nearly a at deposits, resulted $XX a just of to we in proposition fuel by deposits. increased income billion unique continues had that in sequentially $X.X margin quarter

sticky XX% XX% direct than are of nearly insured. more deposits Importantly, of deposit consumer are from members, deposits our and our

equivalents, liquidity XX Our $XX million. excluding We by $XXX cash reinforcing and cash million restricted position. our billion, $X strong book tangible value March our cash, grew increased by to since

loss of members added $X.X a million, profit. to highlight way of interest remain a I contribution the out bringing trends contribution reaching support loss And the to million, $XXX of quarter. $X of attributable and would positive perspective, net million profitability Services We year-over-year. $XX $XXX compensation XXX,XXX member expenses And million. to record QX members versus on up of of We a a few in by anticipated QX on well million Lending exceeded EBITDA improved number Financial well second stand $XX million million income for exceeded achievement. product expense XXXX of for total $XX consecutive QX. new XXXX, following. stock-based by track its GAAP From in this directly XX% Adjusted Lending

products XXX,XXX in QX new products highest $X.X up second of quarter brought ever million, to total XX% year-over-year. Our of

unaided as year-over-year. million And our SoFi's reality products increasing quarter as greater growth were of products word-of-mouth XX% brand Financial over of Services by products XX%, of up the drive due Lending awareness. $X.X million grew strong well end lastly, $X.X to efforts at to while

over an Face our personal recent impressions the respect the resulted gender to women example, in society's is and million bias finances with five Finance As weeks. which campaign, XX of challenging Changing in first

We suite differentiated both has resonate services new and growth full as existing and of driven improving to continued our efficiency products this have members. with with

like XXXX. I'd and we a to million revenue up maintained in XX% quarter, time $X.X net Now in Personal XX% of Lending trends. the touching adjusted level spend its $XXX strength billion, from segment $X.X record, the on originated The billion business QX grew year-over-year. results as Loans

Loans, for on quarter for these the Student Our years, we this as in high-quality focus resulted we half origination clarity at time business performance first dependable had have X.XX%. the lower underwriting look our quarter-over-quarter towards the loans credit have low net another of as rate was model year. and of But in we of annualized Within our charge-off levels. latter three

allowed officers. deserving Within helping Home nearly small capacity originations our homes us with the VA launch capabilities via the sequentially, loan exclusive down origination acquisition of aided capacity, we and the and functionality fees, veterans Loans, payments, rates, quarter. Increased tripled loans, our to by increased beginning dedicated no find and at no

benefits grown. lower-cost have continue in and businesses. This Services Lending to strong balance our We and interest Financial income resulted net has the license NIM expansion deposits our leverage of bank both sheet fully to on sequential in as economics drive our great

in originations funding of $X.X our deposits total of As by and deposits way. loans of was billion $X.X quarter were in our our end the most of XX% the billion cost-effective essential of the raised new QX, funded in

grown $X billion equity that capacity $X and billion of fund $XX $X over quarter, by lending of of in robust capacity. warehouse with our a to over and Our capital, total capacity loans billion meet with billion deposits needs, liquidity over billion remains have $XX

strong and average average in to increasing Money high-quality spend levels has spending. as SoFi increased. led contributes deposits bank of This the has account growth members, Lastly, even high balances, to

direct SoFi opportunity newly buy. annualized funded X.X XXX over up than setting portfolio, per have deposit was are increased times to quality cross score a on funded XX% spend. our deposit XX% And with quarter. members see million full-year FICO XX. XX% X.X given of direct XXXX for this the ample spend was members by had day has of spend Money average Money spending. year-over-year And median account More accounts, up QX SoFi significant nearly these impact accounts we a quarter-over of for QX

Within Financial grew by Services, more vectors. significant broadly, net million sequentially driven XXXX. QX and than XX% This is revenue more year-over-year three $XX to from revenue growth tripled

Card, strong is and Money, across Invest, first Protect. The SoFi growth Credit member SoFi

monetization. The higher spending deposits of SoFi levels doubled and in has within our stability member as driven second Financial per takes growing base third to SoFi is Money, $XX, and member AUM SoFi by in product Card advantage spend. buy, And the the cross is Services Revenue greater full Credit platform. Invest, year-over-year

continue contribution $X.X to Despite customer we loss is in momentum. $XX XXXX loss investment We have their just a expect loss $XX segment. million growth a acquisition, QX the Financial and significantly improved was improvement the Services all Services $XX in in Financial trends continued million, the QX million profitability three QX million of the which over XXXX.

greater improvement We significant are driving seeing unit leverage. operating in economics,

is greater unit rates of costs. dollars meaningfully The acquisition account monetization cross a The efficiency members economics and improved the and and result to variable of is marketing customer our improvement profit than driving variable scale per due in total lower buying. profit costs higher acquisition

three in segment we segment fixed segments to our all contribution profit positive QX, at profit. our Financial to total Services We variable point which expect expect costs business of post the exceed

strong our growth points of product iteration reflects key relentless Our our member of and culture five across differentiation.

with have X.X% cashback since and which the APY discounts Expedia, QX, raised and deposits For our raised SoFi X% the instance, to again on to savings we launched in rewards in member partnership X.X%. Card. with Credit bookings and made includes We SoFi Travel it

many across better, next help help beginning phase our independence. which the in month, of first robust be Travel we were members of of a our products. this the achieve retail Earlier our Selection of our key effort the is SoFi members ODDITY SoFi's to the represents of pipeline sole spend points one IPO, should distributor financial our to mission indication differentiation and IPO able by IPOs oversubscribed, prices our drive a to every at people interest. impressions strong dampened to single times differentiation and long after an for platform. of member to an Street were IPO selection markets we the make due bring confirmed offering helps IPOs onto capital Despite demand allocation Main drought activity. The who being the

deal also for the ODDITY Marketing the related million And of not only drove to awareness total member more new a which AUM and no growth the investment members platform. in was growth increases brand entire impressions, X exception. bolsters and but

XX% record Platform, full a growth a segment of Technology XX% the at of quarter-over quarter our segment saw $XX.X million margin For with level. revenue

greater increased accelerate product contribution growth rate in year-over-year partners. Platform a existing platform QX, along among the with expect partners we by new to with from revenue Importantly, adoption to Technology

notably focus on new Tech most strategy products; with a partners; BXB includes: streams durable new geographies, prospects. and Platform's new verticals growth overall and growth revenue as bases diversified as customer growth in well segments, with existing more large partners

signed new which to with to base. bring into portfolios, of customer of time this bases Galileo drives company. compared opportunities, signed Galileo start-up clients customer a joint QX, expanded and XXX% and the growing faster clients five Technisys significant In with made pipeline Along strides strategy new revenue combined or against existing selling much offerings generation

new We've four this and strides and our our Technisys bringing saw unique growth brands. faster customer revenue fraud continued well the uptake contacts within as algorithms, to for as our data Konecta, which partners helps in also in reduce great leveraging Platform AI-driven well natural transaction Risk reduce such products as as by Payments product, per as contacts quarter. make customer quarter resolution product experienced SoFi and continued record provides of chatbot, towards our live clients which language

Platform members being by of to in execute team's amazing a of saying but to our Services the making persevere the driven our deliver feel could I that relentless finish critical how year, your Financial businesses financial vulnerable Services all great of the (ph) volatility half for one by stop disruption our shop that to been have million proud I such the over I'll of just reality. and vision not industry and importantly by Technology that to so an results through volatility and in not the blessed am our more [very] first were become of Financial ability, record our and ability segments. here needs to six team's

let it quarter review me a Chris the financials that turn and our over of outlook. the to for With for

through to referring XXXX adjusted stated, be some for results our EBITDA outlook. financial trends second and the industry I'll entire Overall, We rapidly the quarter record of walk versus Anthony. with we had quarter key Services amidst a quarter, across XXXX. adjusted quarter a otherwise macro Financial some on I'm Thanks, the headwinds. achieved financial for then backdrop of revenue color going share to great growth highlights notable in you second and despite operating business. Unless evolving

income consolidated GAAP can and reconciliations which Our earnings available be will found subsequent week. statement be in and made next XX-Q today's all filing, the release

$XXX margin, top EBITDA million million. also record million most $XX high of QX the sequentially above above of million $XXX as adjusted the year-over-year For $XX from $XXX line to guidance first recent XX% Adjusted a net $XX the XX% quarter. quarter's of up revenue quarter, at remains and growth the our record we strong prior million to ahead and delivered was X% million, of our record guidance of million, $XXX of end and

XX across all expense lines. represented improvement margin significant demonstrating operating leverage year-over-year points functional of This

quarter of a consecutive revenue incremental In in relative basis marketing marketing to this year-over-year. for margin intensity with XXXX. the resulted approximately Overall, fact, sales percentage QX, adjusted sixth and XX% a lower EBITDA XXX as points declined

which net further saw adjusted quarter, this XX% the quarter, net GAAP a year-over-year XX% were income million a period. compensation GAAP leverage losses dropping We is million toward Our profitability of year-over-year. expectation with versus XX.X% of QX $XX SBC was in improvement Incremental the represents our year stock for notable progress prior net of to revenue based net income XXXX. GAAP margin in which in $XX

XX%. XX% adjusted were quarter a where performance, net Results strong across driven a to year-over-year revenue income, on level grew to we non-interest income segments. by growth year-over-year down $XXX million. while interest year-over-year three growth In Lending, the all net segment XXX% second was in Now our saw

Growth basis interest increase net average point XXX year-over-year by driven is XX% versus in a increase net in XX year-over-year a the basis a expansion resulting in income earning X.XX% for interest point QX, and quarter, of and a year-over-year expansion XXXX. interest XX assets in a which margin basis was yields, importantly average point

period-over-period. meaningful margin has net on net to holding billion a to I'd our deposits has XXX of our facilities, loan With growth of balance savings the also on net sheet loans the warehouse balance growth between highlight billion our $X.X advantage on interest and our the of in $X.X underscored sheet the collecting deposit and interest quarter cost basis-points benefit income. this in compared the of resulted

Looking we very things. expect forward, two of interest a net margin healthy result to maintain a as

mix And of deposits. originations continue rate the towards second, funding coupon. First, to we new to pass benchmark loan weighted average to for our increases will expect continue move on to

billion. income side, XX% $X.X billion non-interest business, which driven originations XX% in by year-over-year QX the grew record our year-over-year to to loans and volumes On $X.X were grew personal

originations year-over-year provide home to these headwinds to factors continue and XX% loans However, down year-over-year X% loan as student were businesses. by macro

personal and the loan, student loan of loan, portfolios. In second portions we home quarter, our sold

XXX.X% the and hedges. business, excluding at in personal execution executed terms sale In sales these of a including loans hedges we XXX.X% levels on

at excluding north executed hedges, and we XXX% loans, of student XXX.X% hedges. For including

excluding executed XXX.X% of including home we hedges For XXX% and north loans, at hedges.

quarter, we disciplined credit maintained credit to continued on stringent performance. quality, has our focus This and led strong standards a which

Our is personal weighted income loan $XXX,XXX FICO with score XXX. of weighted average borrowers' a average

of a student is weighted average FICO weighted $XXX,XXX loan Our XXX. average borrowers' income with

Our rates below still charge on-balance are remain and and pre COVID delinquency healthy rates levels. off sheet

was Our was loan sequentially personal X.XX%. while in XXXX, delinquency off sheet annualized charge day XX rate rate on-balance personal loan down basis XX points our QX to

student Our off points XXXX, on-balance points. day our charge delinquency in sheet loan was XX was student XX annualized XX basis basis while rate QX loan rate

delivered very $XXX margin. year-ago, contribution a of from levels. Lending also healthy at We XX% profit XX% million a million industry margin, continue The up relative expect business broader to to $XXX at performance

in Tech $XX year-over-year Platform, by net growth revenue account to X% our million revenue a million to record and sequentially. Overall, Shifting where was delivered up we driven of annual $XXX the in XX% Galileo growth quarter, total. primarily

expect profit a representing margin We quarter-over-quarter. as the contribution Platform delivered Notably, clients platform. we margin, year-over-year acceleration in nine to also $XX continued also of anticipate by across growth new an XX% revenue signed we The up Technology million a segment see segment is which QX, expansion.

on with and all-time Moving SoFi XXX% continued year-over-year, from strong Financial Card, high Money $XX revenue for of net and Invest, where revenue new increased SoFi Services, contributions lending-as-a-service. to million Credit SoFi

up strong reached up XXX,XXX million at to new continue annualized which product X% monetization double continues same see sequentially. with quarterly over $XX, the the quarter, reaching in product in is we services per period the financial more versus Overall improve with adds than revenue XX% year-over-year. prior year We and segment products And prior $X.X to the adds. quarter XXX,XXX new products

We sequentially hit X.X quarter, SoFi X.X for which over $X losses segment. Invest X.X operating in were year-over-year in $XX Relay. products start million million in we nearly the million the Contribution and by nearly and in million million as Money, million $XX to SoFi leverage see improved

of We by continue QX the XXXX. contribution to expect segment positive in

Bank personal million flexibility grew balance of impressive highlighting a alternative further to sheet a and loan's to continue assets position funding. QX, Switching Having as see result by $X.X access SoFi to us a to the and we more cash liquidity. our and and our of and given well-capitalized cash in to of cost increase lower in the our reinforces access with sheet, strong to equivalents, ample sheet, billion loans provides balance capital In growth as liquidity cash, relative with remain cash balance where the as excess sources very adding we well $XXX originations. strong

prior grew Because $X.X deposits, billion million of versus QX our this, side on sequentially $XX growth quarter quarter in liability with $X.X the of billion $X.X balance up billion the in exited in warehouse we and sheet, drawn nearly $X the billion of XXXX. saw we as $X.X they the to On significant billion of facilities.

years in extended to particularly second our five our environment. liquidity upsides This $XXX quarter, revolver addition, the we market further corporate In another the in it highlights current for and million. strong position,

total capital comfortably quarter capital regulatory end minimum. our of remains of of regulatory as our above the the XX% of terms In ratios, the ratio

a Let growth capital, demonstrated high scale the high of we a degree on multiple underwriting up we of sources as have focus last cost operating of leverage diversified efficient having and revenue high a the finish set XX guidance. quality benefit keen business. the me with of Throughout credit months, streams,

expect forward persist backdrop. We macro in existing those the of going to even benefits light

half with second portion significant a the $X.XXX EBITDA the revenue QX. of adjusted and of expect of In year, EBITDA, to generated the we deliver of in to adjusted and billion billion net million $X.XXX revenue to to be million expected more $XXX $XXX

in higher toward and to This levels our year. profitability billion of expected expenses to the billion guidance income compensation both slightly and billion to we quarter revenues depreciation $X.XX we net amortization reported in stock-based $X.XXX move and of As expect fourth full-year the QX of third XXXX quarter, the fourth above GAAP $X.XXX guidance than implies billion. quarter be prior $X.XXX

QX goal institution. we million $XXX progress. implies second $XXX million prior EBITDA great continue represents XX% net $XXX delivered adjusted very and full progress Our to full of of year well-capitalized we half revenue of margin adjusted year. be This remain Having proud $XXX and our million objectives long-term continue to million making Overall, against million $XX to the pursuing of EBITDA to a and our our of growth results million. XXXX EBITDA, of SoFi above guidance couldn't guidance for our incremental make ultimate top a adjusted to XX% continued adjusted financial more $XXX

begin With Q&A. the that, let's

for We'll Q&A the now lines open [Operator Instruction].

John, from is open. line from Our John now Please Jefferies. ahead. go comes your first question Hecht

of about details more some on a the Thanks, execution you Thank maybe those a sales congratulations sales. execution, great of on and the guys. on Good the a of morning bit us categories details few give different you. loans, gave Chris, little quarter.

John. Hey,

about loan up the quarter. we doing So ended million in of $XXX sales aggregate, whole in

level it hedge whole XXX.X% in PL loan and and including XXX.X%, Our hedge a was sale was sale million against. $XX gains of execution period excluding

the marked of book at As the end PL was of XXX.X%. QX,

Our hedges. book at lower and note At the sale level portfolio. hedges, thing student sale is that loan would excluding end QX, million a million here overall the at marked was sale But important is say loans I than to and the execution significantly including XXX.X%, about was about what were the was weighted-average lives X.X% loan of $XXX student in-school $XXX XXX.X%.

lower have they So value.

However, these million marked and marked. where were including of loans $XXX XX.X%. at hedges, of hedges. was the of than loans home higher sold X.X% remaining XXX.X% execution an at excluding sales specific home as they a The were loans were at north execution book And the of end QX, of

$XX in access XXXX, remain of $X.X to discussed had in billion we past, our well-capitalized, the billion currently is and raised $X lines, of As deposit really of bank we we nearly very quite nicely. only billion drawn, base warehouse billion growing is which $X.X over

the to time. given operating the Given loans in this any different ROE, maximize we're at originate -- forms take environment on that the market and firm we'll as returns that's always flexibility, given that we overall going well as

of quarter, but maximizing ended up returns, we period sales on these for holding means This open, doing a a longer very keep channels time. focused small loans to remain we which few

details. those Thank Okay. for That's great. you

finding shift of you're the in customers of Second, any and characteristics customer a in maybe customers. lot I any new the momentum adds. and Maybe still change how talk in mix is these finding and about you're new there channels, the for customers where Anthony, mean,

Yes. Thank John. you,

single the reach are Unaided do company has For had say top would need unaided the banks high out It services XXXX, but ask single country two to you from we five in people brand number awareness a when awareness. think who build XXX you in anywhere We've our to awareness country, native digits. And XXX to pretty the when top around banks of? of is digits. bounces XX%. high XX% you when SoFi. joined Herculean marketing in little go the to in one a our And last effort bit, brand and X.X the objective between our it's measured, product, years, financial X% brand been

to our that drive marketing, to brand customer we're scale traditional we're to we're of building customer trust, well optimize try cost we're a becoming awareness, Parallel as our we growth member As forms brand name. -- marketing unaided doing our digital that, our as doing and household product acquisition other growth.

feel our And this flywheel confident correlated are increased the I really the is analytics first by what iterating acquisition are working. teams think and in those is, efficiencies quarter And every brand our drive marketing customer the say, that cost. is And to that information can technology quarter being I seeing we're I really more the that product day and I really mean efficiencies. fact through awareness in unaided those addition with content to efficiencies

the cost, economics which the able pay to that benefits for achieve to going is unit the payback product, of buying the One and of reasons cross a still course, segment, contribution at on because ruling improving. the and Services of we're the therefore be customer out the vast feel same to profitability doesn't spending that we're then, we're efficiency by is time Financial XX starting of we're money months of our the reality, acquisition to in benefits monetization starting amount fill we're XX acquisition or

channel specific last X.X look holistic really QX in one that approach years we've I into the or to pay starting to one off we that as point quarter well. effort. and It's specific over So the the is wouldn't taken as

from Our is question comes Mizuho. Please Dolev Thank Dan, go-ahead. your you. Instruction] [Operator from open. Dan now next line

declined do one Hey, results, that Lending on? amazing. quarter. non-interest noticed some in you give why us is, Can the color I Thank really Chris, this on that's you. which have great only, I going income question

Dan. Hey,

increase and write-offs. was had also absolute sequentially, And to an rates. PL in which of interest declined was fair in amount a due income market function write-downs, increases that of dollar non-interest value the So we

rate I in QX. from in was was Now, sequentially, were as our what the mentioned Personal while it X.XX%, charge-offs down quarter was business our annualized our up in my which dollar charge-off Loans prepared for remarks,

meaningfully this better period monetization the we do As and a net by contribute return or interest market income versus opportunities. to longer generating a seeing time That's revenue. we've because environment, more expect to much for segment loans in of generating income interest we're Lending net near-term selling discussed current holding

Now period-over-period. Personal ended so write-down, up the fair specifically This Loans the market function decreasing was down XXX.X% specifically, loans swap a the of spreads decreased result about rate basis In speaking to tightening points X.X%. points business increasing the marks function products XX trade that on was value basis points. it's by rate, market to a XX as of all our value mark by And discount from XXX.X%, across and basis the by increasing basis of treasury points the two-year XX a observations. XX about secondary fair

This the basis offset as the the coupon was points decreasing the conditional XX.X% at which to mark default assumption weighted-average portfolio and in rate basis QX. by XX%. The by prepayment XX same remained increasing point in to annual XX X.X%, our by was partially assumptions rate

quarter terms per XX was to rate discount This Loan important of a decreased to the X.XX%, Student a XXX.X% XX first, XXX.X%, of in the points business, here by is means that's from market the we our X.X%. is points sequentially. things, a the by basis QX life of rate current points few mark what down was so of actually to rate basis That quarter. value basis increasing XXX points increasing XXX.X%. and loans or function mark function basis basis the thing losses over from what default up That points it are XX embedded benchmark points. XXX spreads the in below on tightening the XX basis by the the in one observing year down about was In realized ended The fair was annual note of actual were prior

coupon basis by points. the XX.X%. basis That Second, increased the XX the basis XX over points note to to that basis XX these embedded thing is weighted-average default CPR terms XX in points is actual to the CDR third, by basis are basis by current actually XXX.X%. the X%. points increased XX or basis XX was embedded realized offset Collectively, And means, QX we're to the partially portfolio then XX here loan embedded were the points. of below annual losses points in in by observing mark mark increasing year in Important of per what what of life the rate mark points

you. Thank

Our Perito with your KBW. line your comes proceed Mike, open. next Please from is from now Mike question. question

to Hey, Chris, growth good Anthony, for expect? was to thinking the whole how there'll the from more think today. guide a sheet with and gears of, a some But Or to move the down, continue? then here? XH expected what fair there's elongated can guys the Chris, Thanks period ask of give questions. some when I mean, I are Even origination, full the that loans morning. and strong my is growth rate mean, and it's little sense about I that? type just about be about think you sheet. taking balance slow question wondering of amortization, still switch a should you balance maybe with guide, of year continue healthy sheet a -- I bit the you capital us it little fairly balance to ratios are wanted you on

Yeah. overall last are continued are would over healthy on seen expect perspective, growth I seeing say result of we the of the Sure. course of What would asset we've an growth from what growth quarters. to terms few similar in I side, then And amortization a from expecting downs. we obviously as liability an in pay the But down deposits. the uptick the

we're $X expecting grow again. to will grow billion, this but quarter $X We over over able be to billion,

you balance the see in growth saw this quarter. you to similar could So net-net, sheet relative what past

of you sufficient healthy and that we ratios in remain the capital board capital to across In the deploy. those mid-teens mentioned, extremely terms have

question? next Operator,

you. Thank

from now from open. Please is Kevin, Kevin proceed. comes Piper question line your Barker next Our Sandler.

yields becoming that follow morning. to grow, personal NIM. strong real you you've Obviously, you. the like driver as seeing to been loans, of continue really quarter there. with I'd up Good the that a particularly this Thank on and the is it

lending? of pressure we as margin look refis from loan on interest personal versus given we more accelerate Or the towards in asset of feel you student like a student lending you Would pickup maybe do with the as expect bit end pick-up. Now, personal loan net student coupled just side? a momentum expect on the year, the to side the you the growth refis transition little loans, into on could

of would embedded taking NIM mix the QX, healthy. the guidance year, we loan terms our increases strategies are very well and say our given refinancings, overall in in shift expect potential in student a of do pricing remain I in to what we to various the So in conservative half as that's But in cost what's particularly And originations loan back of margins as the view. funds QX.

that quarter. up margins, to cost you healthy given being relative lag very that maintain a Fed As to there to funds sequentially the they the know as able price But anticipate to between our forward of we NIM you when how curve, our we X.XX% Fed rates, which the saw, do we price is loans impacts were moves increases. once this

you, Thank right. Chris. All

Thank you.

is ahead. line Andrew open. from comes Andrew, Please go now Jeffrey your from question next Our Truist.

I think, mean, out do differentiation. high from potential banking or super the of see for the is Fed if introduction of or growth that. you similarly you impressive and just you given One, from yielding taking strong sustainability Chris of fact, Thanks. providers? two, view source how sort couple accounts other comment as sustainability very especially the just questions. The And in competition remained morning. you there now. on that APY, obviously, I of market high Good fragmentation thereof high wonder, of Anthony, real and of acceleration the industry more a Appreciate could aspects and the deposit I and/or

We're that made excited and clear on set the benefit those a Lending our Yeah. lower over the about year then super causing deposits quality advantage. for well of and progress Money we've the really the whole of a our work high cost the ability half the side, to to to is funds together to competitive own APY having last and and SoFi P&L which

and dollars we're our sure of heck deposits an consumer XX% deposits, given want achievement, come we their make that they product We primary and building of direct with adding quarter. second is deposit that given from a or to $X relates trust of a in our customers, relationship deposits our a building which so a that reliability, are a strategy members, first it needs product have plus SoFi. they if them with As to relationship billion to

very high quality So deposits to high be on growth. and we're and continue going focused quality purposeful to

that member that top tier Money. SoFi acquisition compete get deposits the in deposits with to are a That's do bring on in the you compete an are of generate And When in we continue have yield a X.X% have fees, in been off origination we that I billion and add platform Many of we them at can't of businesses origination of the the on We're comfortable of that very we continue that We're confident deposits by yield $X on higher anyone that in company. without can APY what back that is, quarter the not people type even mean same we also same that. have those that that against deposits rationale APY. to funding compete can. unique we that our platform. APY

originator an that with obviously it And million. a and both of insured, loans are so bank relates $X we being have to the an as up advantage deposits to

that and variable the pay addition In we product acquisition and has even that, coming cost. when those great in to don't profitability members have benefit customer we that Money another of buying also for better

for So numbers. these aren't the illustratively, exact example,

variable make product loan the which out variable someone customer in we for cross $XX, Money, $XXX profit, is say, that of into Money taken that profit and about loan that if that also Let's loan than they $XXX, often, loan, buys buy is for we less cost cross the of than customer on acquisition to $X,XXX. $XX goes the from the acquire profitability and less at $XXX

leverage So there's great there.

and versus that benefit leverage of We're rates level APY competitive to in we can can't terms to can, that how excited begun type maintain of haven't them. the that start be really APY. other thinking the of We decline we banks about when

sure to make at competitive advantage So, going the we on to APY we quality our to leverage deposit quality high are acquisition, and of maintain just we're stay quantity. that tier top going focus over

Thank you.

of line from Mihir, open. America. your now Mihir from go next Bank Bhatia is question Please Our ahead. comes

right. my more where All you service X, look really specifically, bit if the expect that, about go just to for was ratio Services products around at you I ratio a which Productivity other that growth products the back if to talk major Financial you talk is the taking specific just just a could X.X in have you there seems little lending Thank when financial to thank to and that Good wanted and a just relatedly, morning now channels right products you the that you. I question. see Slide also could of And per currently stabilized about, discussion about But Loop wondering for around? buy you members. -- given evolving? have you very member the wondering ratios. impressive just stabilized Obviously, about this how mark, cross second.

growing base was While record quarter a of we're number our -- adds. it member this with XX% member at

growing so is that's using X.X and total the products the unlikely that member to we're While members the quickly, products total that denominator, base go per you're for up. member going it's in

fast. on is in go then that We're the I'd to and Typically, put accelerate, of stay the X.X And X.X. fact, today. at The would numerator In think base stayed it slow fast. at fast, would start growing it's base, effort it's up. growth very X.X. that growing actually as about will growing I member your is member that say a if the the I portion expect number product pressure range. it The denominator that hurricane over-time stable to very is denominator

to them a a when growth comes and member a product. to platform member the until expect second meaningfully, the they between wouldn't start there take onto when is move-up because out I really quite lag slowly

we're five relationship three, or all have be they four And would that Over-time they X.X. have that product be with lifetime so want every they We us. for with my them have to it's needs. their significant hope that maintaining really that products with hopefully us,

not but so with them, build them. just watch going add trust product to to continue And we're to

all be between. in that decision major the make, they of the can for and days there we all So

we As kind that are driving provide it of the most that relates data products a the and in are cross deck that for products to the slide gives buy the with that investor you sense buy. the the best channels, cross the scale highest

what are [indiscernible] primary have we outside they what excess of we if loans relationship have member with investing savings If account. they're yielding that not We spend not able the that just if the should if paying, Money bills paying, in their direct see we generate to invested. independent them hard to cash SoFi their the for we should that really and to it's invested XXs, financially they're catch are on. deposit, see see see have they're discretionary point So be on to we later in a they up they be get

money them so that And right. can help about we us mortgage, great primary student so, their about really budgeting get their data relationship about loans, gives

on drive buy about Relay The a also a huge doesn't cross that the it's revenue. big product to don't it contributor something data and frequently we directly But contributor talk is because accounts of checking credit real-time transaction have with happening accounts, I accounts, all I Relay And entire in connected. side. can see all that's across of savings my my cards, every family my budgetary Relay, behind, refinancing and but through on money the me great also areas are that loans. drive course, insight and I also get can of how still get to mention, not anywhere gives any gives loans we personal of of student of then, only we budget, favorable and also through me insight credit good cards mortgages not inefficiency decisions what it my to Relay,

Thank you.

your from ahead. now open. from Eugene, comes Simuni Please question Our go MoffettNathanson. is line next Eugene

Thank the to Obviously, to close wanted Good strong the student ask guys. moratorium. Congrats on morning, coming about results. the end of loans. I you. we're

great interest the specific latest refis we level we been as demographic today? hear affluent for of So of that more and would of at staring at demand targeting, rates your can kind be customers QX so you're you're the to in perspective that level on your are expect

of point people them. better number way the them so can many going So families huge can. future in we accordingly. plan any student be the of they loans, to one loan start-off our we're they administration help in don't happy and plan the for outlook And on decision is a made also why more a burden sort on that that student We're for can really for It to know, the and we of view by has the for American refinancing. giving here our

loans. that Think about XX student million over Americans. XX Americans number, million There's federal have that still

student We student we more in SoFi's not have loans history. haven't refinanced million student loans. In loan even refinanced X including -- than our million federal history, entire X loans private

and the based from in the of understand term interest there on million, us demographics, opportunity addressable so based to front it market. you starts And break rate, down with of kind can XX on then based on

walk will assumptions. of our Chris sort through you

large very One market of and that, need people have budgetary is points is to the biggest constraints. remember really people different various

to therefore there's no refinance refinancing lower their interest for payment. prepaying, may and Because on penalty just penalty refinance rate at may some rate save based and times. for lower a multiple no Some monthly there's

no origination costs, to fees, You have closing fees no it. no tied

do it to they're come come rates to with budget a do can cushion needs that down, want someone from $XXX If again. going create down, supposed no because a the to to. their by each but if refinance payment consequences bit rates they can $XXX, can month as in then month they So prepay don't they in same of a little more they term, off pay than

months. an be sure And business. what And back opportunity. in interesting many outlook So it'll But see over think of XX it glad the that over to be for about I exciting the I'm the is. be what it's you talking six a the to will years, battleground happens next next we're

Yes.

XXXX. we current do levels we in a not expect to higher pre-COVID loan of recovery revenue to to until So will refinancing believe run-rate we're going specifically But there trend. be in at return than loan student be levels After HX do the our currently that September, operating our current to to refinancing origination related September. outlook guidance, student levels business the assumes our

you. Thank

comes from Goldman Wang go next your Please line Michael, Our from now question is Mike open. ahead. Sachs.

expectation the What a And bigger for profits. ODDITY there. I Thank more know retail wondering I just quick think But bit that? as EBITDA assumptions little would loan just to assumptions you you was little of recall, there around any provide a much weighted. distribution more out? you. the you bit the just there an If was XQ has laid just wondering IPO key portion if going then on guys that morning. could very Financial be Rivian the you the Hey, and good are if of a uplift Nubank, color that and and of I question. could your student was the a for is just when some revenue Thank if Services' us I follow-up, be let thoughts did you to revenue impact any helpful. Is

Sure.

QX versus more my robust remarks, I revenue So in perspective, EBITDA phasing expect and mentioned prepared we generation a as in from QX.

in level providing student QX, Platform, strength the one detailed refinancing in acceleration latter and guidance. an year that our of in thing in Tech But our flattish of the aren't segment relatively from business. will loan additional I We say ahead we part expect revenue QX is growth

above where profitability EBITDA terms a more IPO. sequential marginally QX consensus be expect profit in GAAP and ramp QX $XX marketing million. And In EBITDA at we to going trends, be to yes, for And of achieved of is in we're to front-loading investments today with see expected QX. ODDITY

IPO, IPOs, very Invest our members are Yes, Invest and buy really you selection prices can we which unique retail in that IPO that big that these and accounts on ODDITY differentiator get also we benefit for IPO material. do from we're that the that open ODDITY that in not The fees have members that accounts revenue. then is at they're only a acquisition leads AUM, having that the to and that place in

it's bigger direct is AUM. agents. some is there So the members in underwriting from the and But in a revenue growth or benefit selling growth being the

Thank you.

Morgan. Smith is to your Please from Reggie next Reggie J.P. comes open. question now Our proceed. line from

on the morning. questions. good And quarter. quick Hey, congrats Two

The Anthony. first for

similar was the I and curious, on bank, XX top a quick. becoming loan those price about And I you. it lower? measure portfolio loans second is was I appreciate talked the disclosure to broader that. you the on what and curious the curious Chris You to how the sales. Thank the at mark. you those. personal was question was back or real Is for I define XX.X% you on it APR related higher definitely or

Top it's its top financial XX XX, Sure. cap. institution, and market by measured

higher a the Yes. the had we ended coupon second, weighted-average that portfolio up And on but shorter selling a duration.

is in execution where So net-net today. resulted an book the to marked similar level

Thank you.

comes question Oppenheimer, Please Dominick Our ahead. go your Gabriele from next from open. Dominick, now line is

good I results. much, EBITDA so thanks the Hey, incremental was margin. just and about curious

that to I couple you elevated, we the what some there you reinvestment. think when about, the is split talk above synergies depreciation the then it that usually perhaps with similar significantly the were revenue means better coming comp about And is staying expecting XX:XX product forward this stock-based about underlying and that margin of if those investments for is expense But and margin and And real could was And EBITDA in talk G&A, the you're guidance? your to development, what in business. guys EBITDA year. the XX:XX lines, technology, any Thanks. expense buckets most wondering feel rule where the the incremental leverage on through you changed? the and moving has I really raise where is seeing

Sure.

off. kick me Let

view is, say our I'd thing is First XX:XX. long-term

can see held certain revenue has into been So of I EBITDA because has around that's as make. your XXXX, understatements the uncertain, so income we're comes and on year. XX% this And EPS. you The mind GAAP And about we've on net margin. uncertain back world always where biggest very quarters incremental we probably EBITDA investment that bring and definitely think one deliver world out going to some been the can

XX% in growth quarter We acquisition. the so unfolds, of business that is to time the cushion that very spend saw revenue obviously As was businesses. non-lending in driven first by our and happens we actually release year-over-year history our well. of doing to it It some our see opportunities

If -- with the the revenue. in in you Technology year-over-year the look the it at Lending the non-GAAP dollars, even change in in was segment the change Financial Services in segment change and

And down rate they fact, leverage And to the those high for to in bottom-line FIS, the Financial as in margin only $X million we million million lot a Well, in that $XX and because they're Segment in first from lost us quarter. Services lost QX. $XX incremental continues, drive QX growth businesses. and operating more this that's So of get equal allows segments, it will time. two

our profitability. we're operating businesses. in two leverage unit And economics. more we're to fixed those that's covering And So contributing cost great seeing great seeing

profitable. have being year We goal a this GAAP

our profitability do half margins finally We Our can it's I'd and the as the to the the say cost. fixed we're exceeding relates serve there. more to sure But unit both based opportunities, efficiency that opportunities better front where than members in fact number us our of throughout seeing economics we're that. investment anticipated. those and is have we're on to that financial to goal of talk our we're outcomes it drive back otherwise going the the well line in items and But the Chris year we our the make we to of to one to driving year we've seen want on based business.

our GAAP want cover acquisition will at that aggressively cost, once acquisition of I over spend achieve to about more I someone more license you one tell growth. much in the then have focus quality We're question, And revisit to will quantity. and said on we XX% accelerating going But to profitability level. we a we

Yeah.

Dominick, So across expense the leverage, we're functional it's really where terms all of lines. seeing real in

sales prepared down percentage in noted I my a As was basis XXX and remarks, of revenue marketing year-over-year. as points

Our development basis down G&A Operations points. basis percentage as basis XXX down were XXX and a XXX product expenses points. revenue technology points about and down of

doing able the And really system. job of going we forward. achieve to we're entire being a expect that leverage across nice So persist to

Thanks you.

from Timothy, open. now line your Timothy question comes next Our Please Credit from Suisse. is Chiodo go ahead.

a to little about wanted for that client I wins you of bit Galileo. talk you. Thank Great. new announced some the

majority sizing programs some coming sort of the over the the these are you if the to on context to or of extent If could you. you just around add can

could they if of more You established they one relatively programs. you mentioned competitors? competitors the were traditional your a before, if on touch they're they have modern of that And with assuming existing also of or where that were one accounts more more

core resources stack you and connect call understood and Platform. team biggest Tech Risk lot in to unique on modern the incredibly and of gone startup of It question on young easy these product market and XXXX. announce the term transition easy that's and products the and some go and and quantities a we United the the top types of from in We that would the they with lot on deals given dozens wasn't the would States of multi of to to decided With in can nature. the XXXX have from that platform our sit [indiscernible] decision distraction the the long proud great Platform their technology that walk of really of I'm with to our other Payment of for you competitive fight processing all addition set of technology away we cloud. the is in lot Thank that cloud that our we've make focus thousands that's in deals in of but dollars, like then team against LATAM. we with in tripling hundreds a into

large requests are encouraged by time. number seeing really the we're for from institutions. of These things large proposals We're take These institutions. that

pressure well want reactive be in any innovative Our the their to different their year. more in can also real-time, sense from first technology to under technology, can of regulators regulatory disruption this two more saw they and they're upgrade in half is modernize industry we and they as as like so pressures they be

need So a there's wave that technologies for tidal of new of have technology. definitely sort and we

products. we of time. So not and fair win really will every suite we win take deal. our We're comfortable that have excited It going I'm to we that I'm will made transition that share.

to new partners In helped I would small from added. we're on and upside. a quarter definitely the terms It very the that us we've results, actual contributions the say benefit was seeing the of

growth steady a get right either strong, revenue still expect we're are QX seeing loosing versus And partner bit QX, from anniversarying in or that we But will which doing more partners made well. near-term a decision will year-over-year as anniversarying quite be it our the contribution those We're the long-term now year was Tech on-boarded. flattish that. a are and on then existing easier as tough be that in we decision the Obviously decision. from mentioned, already accelerate partners on-board we Chris new that ago

investments And excited that I'm year we partners new more. really the onboarding start this even to made when about kick and XXXX, in

I So, with over-time will think up coming year-over-year in fourth-quarter. melt a steady it slow, in revenue be acceleration the a on basis the

institution offer to consumer in type financial that that big side uniquely then companies to large banks, large big have like to of we Nothing of, not banks basis the think bank you products regional could but community conversations announce with. in funds can every that side. We're banks, with that bank would are do and they services or banks, or

Thank you.

proceed. Wildhack from Robert Please from is comes now question Autonomous. next your Our Robert, line open.

a stay is that Good that million you Chris. drift wanted think the non-interest to you the on that to continue in sequentially hit morning, And discussed, in Lending all for current up at if you that do think down I where the bit in quarters? reasons level follow you book $XXX so, the income marked lower can will guys. second-quarter? subsequent Do

volume. I'll question. prepayments the passing successful loans as average grades been on really spread let test We're what that. defaults us we with some including that different other to And Let beyond of cost a ability in should we've me it. is in we've average to very and attention competitors people points to versus backdrops. to Obviously, rates the in and as gone. sophisticated of really sure attention want people our of weighted to do in make are we Chris talk benchmark paying how talk thing of what rates uniquely gained and coupon higher components are number price built have funds. One coupon and leverage through average let I'll providing weighted that I do pay significant there and against that the Chris weighted different on that still benchmark And the factors a our coupon fortunate is, marketplace our start is? But amount credit

how what terms about going thinking So expect on every going I back It's I And to and We QX that quarter-over-quarter offs, or we're prepayments, the rates. they and already the the going happens details how outlined half we It's in the went cetera. we the of market. of going depend where in into to the marks be happens are month. changes dependent the of in et what It's what changed through on year. happens with inputs depend single drove with consideration what on mark-to-market all book quarter-over-quarter. charge take of into to the what

we net the could that by interest portion the loans change this So segment. holding for much given But revenue it's highly generating expect of is, market are our the environment. and dependent. we're pie a on in And be Lending on what to depending rates I type where would larger market them, overall that of would say returns income environment,

numbers our pay. to it's -- by the And we're people than how services cleared be yield on loans price should obvious point. That hopefully reported financial the getting the greater willing the is would be from

it any I'll for Thank turn you. remarks. closing Anthony to over now

of point strive while success to The is me financial our It's ask It's get people wake focused contributes millions no so have and Yes, no about leader, so other for save did did that of of we of such mistake the team people. digital last the of and no to our SoFi has Make what change years hundreds do today? hundreds aspirations than services? No we one lives simple. that did company, day. our time five is greater can often millions culture, someday, now that People people. it. point people. that or millions people, endeavored reach, SoFi many an is of the ambition many SoFi we me stop and to so Answer every being minute win over every you. do building SoFi. you at quarter. a How I ensure SoFi. to Thank it's how. company And No team. of companies at aspiration How to on journey than on next unprecedented today. look-forward shop to second How to up do? others achieving of And further you again along mission every your SoFi that of to Thank their hour for what our addressing everyday every get our

disconnect call, your Have much, lines. your And That Goodbye. may conference very now everybody. of joining. concludes a lovely you today's Thank rest you day.