SoFi (SOFI) 29 Jan 242023 Q4 Earnings call transcript

Good morning. My name is Daisy, and I'll be your conference operator today. At this time, I would like to welcome everyone to the SoFi Technologies Q4 2023 and Full Year 2023 Earnings Conference Call. Operator Instructions] Thank you.

With that, you may begin your conference.

morning. good and you, Thank Welcome to Conference Year Earnings and Fourth Quarter Call. Fiscal XXXX SoFi's

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

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

and today statements expectations future include, competitive not to, and remarks but our forward-looking will advantage that and and future performance. services financial our macroeconomic and outlook, include are products are Our involve conditions and on risks based statements and current forecasts These and strategy, uncertainties. limited business

statements Our including by and are release no obligation actual of cause update described Factors a results these may Form make forward-looking could on SEC, new press today's future our Any we differ information based materially are subsequent as upcoming from on to undertake those as that materially in call XX-K. of We or these result assumptions filings contemplated results made forward-looking that differ to these statements the statements. with today. this our events.

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

continuing good events. and for our records despite a of in serve a built remarkable and driving while business standout realized our you, host have change, we We that achieved Thank everyone. environments, multiple XXXX SoFi. and members' to geopolitical seismic aspirations We many morning, demonstrated a macroeconomic was to year swiftly with challenging performance, financial to thrive needs. reacting of our forward business

my become top ability achieve to to XXXX conviction a our our and institution. financial our results in Our have long-term reinforced potential XX aspiration

the XX% income are positive XXXX. the net to full of year a consolidated year. record of quarter the incremental year for of fourth some continue XX% to fourth which by adjusted target in versus quarter in for increased long-term to of for highlight our and achievements to positioned a EBITDA margin the like This XX% the and of We income grew to adjusted billion, revenue XXX% XXXX. million net margin while represents margin reached GAAP in $X.X notable net XX%, profitability We drive $XXX achieved EBITDA XXXX. a we GAAP I'd our compared

XX%, for at members total new grew million of year-end. million over X.X products a both in and we X.X XXXX, X.X million members with XX new of a for Total products million members, and added total products

We the XX% adjusted with to quarter from financial tech and contributing up net quarter. revenue diversify our services year the in platform of XX% revenue, ago continue fourth

in a sector further third Our quarter. in us Financial in focus, the financial looking provide We positioning the in tech in ramped capture consumer product to Tech addition traditional fourth companies banking offering profit the and Services quarter, contribution and to which segment to services. the opportunity positive completed achieved dramatic massive shift Platforms

was net compared Lending, $XX.X billion our $XXX million XX% now interest In Net which $XX.X more are XXXX deposits in interest over by from members. net in deposit 'XX. stream accelerate from Total is noninterest year generated XX% tangible to in revenue of income recurring XXXX. growth, of adjusted grew to deposits income a predictable XX% value direct and billion set book cash compared fiscal and We to revenue income. to in offers consumer

revenue is fiscal and embarked I'll we perspective, comparing joined adjusted net XXx, longer-term EBITDA To its Xx. on when annual by total XXXX, annual have than these products products achievements grown of new context business the Bank income interest to [ of on tangible we SoFi ] by SoFi a services I our which million, reported of nearly of than formation. million, a margin equity net When our year by and a our $XXX year put return $X.X first services grown following. services income of million comprise products full of with some $XXX $XXX rental several since total in million, strategy, nearly the net note financial and more in to Xx XX% XX.X% consolidated adding to in have Financial products. were more Annual members revenue And Xx. XX% Services XXx almost financial by now than products more XXXX, by in total we

record of equal really quarter million long-term XXX% of $XXX net year. our and up XX%. year-over-year million revenue XX XX% year-over-year an percentage growth, margin fourth This The to EBITDA consolidated $XXX adjusted a of grew now is to exceptional is with points while Record XX% adjusted accelerated margin. EBITDA capped EBITDA target

Financial and negative contribution $X.X quarter year to the grew last $XX profit Services an $XX versus million, million quarter. margin segment in ago million XX%

grew deposits of by the nearly Our $X billion a in record quarter.

revenue to XX% way a margin with XX% segment Platform growth Tech year-over-year contribution on accelerated quarter. XX% its year XX% next in the ago to year versus

$XXX was to segment year-over-year We over this interest points basis sequentially is [ because by up revenue revenue than attributable greater million net cash Lending, directly XX% In our of XXX Segment $XXX net million. out improved of income, margin XX% million. in $XXX to Xx expenses point XX%. adjusted ] contribution

a earnings million the year consolidated GAAP quarter. $X.XX, Company income net with totaling was loss share $XX versus ago GAAP $XX per million in

of XX% on net equity and Bank's XX.X%. $XXX million an of a represents margin annualized income return SoFi

In grew million billion $X.X value we $XXX total. in our balance the level, consecutive at the book for reaching tangible sixth terms by sheet, consolidated of quarter

debt an XX.X% by ratio improved $X $XX capital opportunistic of helped last growth, book to XX.X% Our over billion total capital convertible moves sales, quarter, tangible of loan repurchase organic from million. optimization and

perspective, we a a products. members, for new XXX,XXX over of the and added and total fourth total From products a X.X members quarter, XX over for new million million in XXX,XXX member of product

and time on year-over-year Lending Now a adjusted comparison $XXX I'd difficult XX% XX% to level grew like million loan ] [indiscernible] $XXX home year-over-year growth million. originations grew to results. to year revenue billion. $X.X loan of [ year-over-year ago increased spend XX% some quarterly XXX% net million touching the quarter. year-over-year Personal of segment originations loan originations against $XXX to in XX% grew year-over-year

to revenue XXX% strong and despite money, year-over-year driven $XXX the net We investment sequentially XX% continued the Financial achieved our credit segment. profit card and by contribution grew invest. significant Services, in monetization within across Within million $XX million,

quarter, last card the deliver eventually to positive noted in Through profit, economic greater businesses how a over we and businesses and $XXX on contribution these run annually optimization, investment with As will of see scale, similar Money. with credit mode unit losses are investment SoFi rate we basis. still million heavy

led engagement. growth spend and even We products, higher SoFi continue in great This deposits account high-quality average balances to increased. average Money has importantly, see has and as strong levels to of

have X.X SoFi Money nearly increased products by X.X XX% million accounts. year-over-year to or million

a median of direct the important and our we As XXX for for members these quality is hence, deposit FICO with ample see portfolio, of cross-buy. opportunity

to newly annualized account of XX% represents up spending, nearly $X SoFi our quarter, in are debit the This up direct $X.X is XX. In terms This over transaction accounts debit of Money by primacy volume. drives transactions than fourth billion of more funded engagement, setting and deposit day of volume. Xx which exceeded billion year-over-year

year-over-year. excluding of $X.X grew products, from total XX% with XX% to a Our increasing million AUM periods, invest year-over-year all crypto

to Services and further launch needs continued in member to growth new that accelerate our Financial exciting We've meet new cross-buy. members' products

everyday Just funds, traditionally is SoFi mutual and [ to for of we with Alt granting the alternative instance, another ] launch access wealthy. the institutional the for today, and for opportunity investment announced yet investors ultra reserved of investors investments launch opportunities,

For in our Tech Platform, QX. XX% accelerated revenue up from to million X% $XX of growth year-over-year,

revenue of organic driven as notable existing this them, our leveraging and in last continue see adoption strategy make months. growth contributions We diversified but also was increasingly the opportunities. to quarter clients, pursue have by growth of partners our launched product more by significant in continued to durable strides new X larger, growth strategy We to not product suite from the evidence diversified of fourth started within unique just which strong by and

As last strong. and institutions from financial demand mentioned quarter, categories nonfinancial traditional remain

times processing real is not the in for in playing quarters ensuing the and many [ to modern ] winning measured are envisioned RFPs time it. While we modern out and integrations quarters, way months, transition lead

a an with notably, sectors. product account the Mastercard for the build existing seeing in rapid access partnership in funds launched with diverse faster we of to tied ], to we for allows which And We Risk holders which On card corporate launched clients. and a solution clients helps insights and mitigate Most into data platform, BXB risk sector ship same-day management to multiple provides risk range data side, from launched [ expense we that is continue our Payments adoption ACH and products transactional delays. mart spend. pipeline

review to for his financials let me our review and Chris turn our after XXXX over a outlook the that, I'll for thoughts. to outlook. return With Chris the quarter multiyear shares it of

and drives really and growth Thanks, full once durability our highlights our and proved referring year and again XXXX. XXXX business to results of Anthony. that versus The I'll full the otherwise results year adjusted model to quarter outlook. stated, going and diversified potential. fourth full SoFi's key financial I'm walk through financial of be Unless fourth quarter QX long-term for XXXX year and differentiated

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

sequential million quarter's $XXX Adjusted million long-term represented leverage from functional net accelerating year-over-year points quarter, million. growth operating of target and of our percentage a prior XX% at up the margin, $XX sequentially quarter improvement, $XXX XX expense points million. to EBITDA XX% record all adjusted of XX% lines. over over This For margin delivered revenue improvement with the margin, $XXX XX from demonstrating and of record is of third which percentage across was we significant XX% margin year-over-year the record

of marketing adjusted quarter. a revenue declined In the as sales consecutive fact, fifth percentage for and net

improvement versus our declined million for margins. adjusted year-over-year period We XX year-over-year. adjusted of in resulted incremental longer-term as a on this time with of an Total first XX% to reaching year margin GAAP XX%. net compensation an margin million, income roughly in We stock-based goal Overall, of profitability GAAP compensation EBITDA the operating single-digit XX% the in a achieved revenue continued adjusted revenue and path dropping points percentage net XX% $XX $XX prior stock-based year-over-year saw to our quarter leverage of this expenses incremental year-over-year. net

in to XXXX. from revenue, XXX% billion EBITDA we the For adjusted million Adjusted margin. rose XX% full adjusted XX% year-over-year EBITDA delivered $X.X year-over-year at $XXX billion year, a net $X.X of up

$XX exceeded per excluding the year impairment our taken net and unit as and was loss risk management. and million a by and leveraging full relentless and asset economics share, We products of recent guidance respectively, Our charge suite as revenue on in $XX nimble $X $X.XX allocation, by resource our services, million, EBITDA end QX. the of million and high goodwill most well unique focus

between yields. points $X.X year-over-year net point In basis performance. X XX% revenue Growth year-over-year up in results grew $XXX billion facilities resulted highlight benefit a from interest-earning were driven million quarter the fourth points XX%, growth XXX growth million level year-over-year, $X.X in net income average sequentially segment by in driven deposits These an by to interest meaningful our growth margin, up noninterest basis X with interest primarily of deposit down Lending, average the loan a assets our This resulted net and XX% basis ago. at by year our on interest net for Now X.XX% adjusted of contribution the to our also in compared savings to on $XXX $XXX the warehouse basis year-over-year margin to an of income interest margin. and points increased has The quarter, in million balance the of in while in our of income XX% XX% was cost by net profit and year-over-year net billion quarter increase losses XXX and and prepayments. sheet. driven average was increase a

It also on option net income. having of of benefits collecting holding advantageous the balance the loans interest when in sheet underscores

with toward continued WACC expect high to funding, maintain our along loan We mix a from the benefit margin deposit healthy betas. demonstrated and interest net

up driven planned even of to continue year-over-year sequentially. intentionally $X.X products, year-over-year originations credit as income three XX% by the and our standards. billion, saw originations We against our all stringent Personal we were and business and side, $X.X noninterest in and down originations with billion underwriting QX XX% growth lower for On tightening Loans XX% typical across grew seasonality

Loans Student nearly $XXX sequentially doubled volume saw year-over-year Our declined to XX% and business million. origination

year-over-year and XXX% million. Home Loans $XXX by grew to XX% sequentially declined

Our is weighted average Personal with a $XXX,XXX Loan of income borrowers FICO average weighted XXX. score

XXX. borrowers average Loan a Student weighted is Our $XXX,XXX average income with FICO weighted of

levels. pre-COVID continue rates back Our charge-off and anticipated toward QX on-balance to normalize rates sheet as delinquency

Our was XX-day XX Personal our basis rate delinquency annualized on-balance Loan X.X%. sheet points Loan while Personal rate was charge-off

rate rate Student was Loan basis sheet Loan XX-day annualized points, points. while our XX Student on-balance charge-off XX basis Our delinquency was

the our relative We Loan Loan and performance and quarter, totaling broader approximately Home continue fourth expect million Personal sold to in healthy In Home Loans Loan principal $X.X we $XXX Personal levels. to $XXX industry portfolios principal. billion, portions of in million

In structures that comprised the proceeds capitalized. cash $XXX execution in [ loss the share and BlackRock, above Personal at fees immaterial the closed held and These multiple similar loans. at or Loan bonds assumption XXX.X% resid to to losses terms the relative Personal to a at we ] parties of have level deals where both other provision of a had of at disclosed we of of small servicing These execution par additional that an closed our if base the had a sales, recent included premium sales with of million and form million Loan XXX.X%. a an we are blended securitization contractual previously and loans premium par $XXX exposure would whole majority to we the of loan otherwise sold is with the

you quarter, up costs. held the loans and loans pool In securitization financing, a are sheet million we secured investment amortized secured These executed our assets, equivalent a secured collateral. and bonds, for at same balance therefore, of show $XXX detailed will do underlying of the to investment-grade senior fixed the to which have structure against term senior for were if on

In yield unsecured. the provides net addition, market a but our are to only diversify also at margin our are above not loans, balance similar return helps interest loans priced which our cost these additional sheet, which funding rates, of an to and of

marks assumptions. to Now our fair and turning value key

change by end marked QX. was rate benchmark Notably, not inputs, spreads points basis underlying by as points. observed actual at year-end, basis was Loans of This from assumptions. of function discount basis declining the decreasing XXX.X% XXX change Personal market and up the spread of points, and by are rate the by which as benchmark XX a Our the XXX.X% the XX empirical tightening at rate are their driven the

increase speed impact has which decrease in the to default was the in to the from overall as annual rate mark. an XX% annual offsetting in the Partially discount X.X% X.X% in assumption increase prepayment rate from the as assumptions well immaterial on XX%, change an an

a of are a the When to prepays, the relative very the time, borrower only principal assets capturing is the small par in above still given premium we is on and principal impact the value outstanding. at point the of which based

continue to default X% X%. expect loan loss pre-COVID to levels rates of We normalize to of approximately life to

underlying XX by our at to decreasing function of For decrease discount benchmark value rate spreads discount Loan the WACC basis mark portfolio, to increased increase X.X% XX declining QX. in was in Student annual points. at XXX.X% a assumption the the widening by increasing rate was points Partially driven the the portfolio and rate basis year-end an basis by offsetting the This versus the from by default points, points XXX.X% XX rate and by XX fair end basis of X.X%.

widening the fair resulting interest by ] Importantly, losses in X was [ as business. and offset for spread benefits SLR Personal decreases Loan hedge value spread as well nearly X tightening rate from our

quarter to there no benefit revenue So the input changes. was due net in rate discount

to For at margin. contribution billion net grew profit Lending and $XXX a revenue XX% the the segment delivered million year, full adjusted XX% $X.X of

robust This $XX, year-over-year for Credit Invest as of AUM XXX% as where $XX well deposits high SoFi growth on XXXX as continues new and in increased net SoFi SoFi with sequentially. Money, product is versus continued and to from with revenue up and QX improve and higher spending in members monetization driven of revenue nearly year-over-year credit Overall monetizable Invest. within and in service lending $XXX XX% Money, levels features annualized SoFi up Card Services, a card by contributions XX% all-time spend. to revenue Moving SoFi Financial million per greater

XXXX, continue aggressively the we in rapidly we delivered XX% quarter, as X.X for invest full quarter. for million [ $XXX is Relay to the revenue with in in products Contribution Full SoFi in broke Services year. and even quarter, contribution nearly $XXX is year opportunities the Financial new million million in we Invest the and basis X.X against million reached segment reached the million in with to products X.X X.X reached ample XXX,XXX this Money, X.Xx even operating profit the $XX million on a which attractive grow ]. returns. segment We We products up of year-over-year SoFi million

Tech accounts along contribution continued million. of Shifting with we and in where million, deals to quarter, $XX million client new by year-over-year new our margin. existing representing $XXX clients, revenue delivered was profit sequentially. revenue grew growth Platform, $XX up a signed driven net delivered of Annual Galileo of the monetization XX% segments. XX% The to year-over-year record segment a X% in XX%

continue We segment diversified and going Galileo position to to investments higher the integrate rates Technisys of leverage and for durable forward. made growth

We with continue expect in Tech strong revenue Platform XXXX accelerating to margins.

grew million year, Platform For XX% XX% to at the a $XXX and delivered million full margin. of segment the profit contribution Tech $XX revenue

liquidity. Switching growth In and loans growth in we result to balance QX, equivalents investment remain of securities. by $X.X of well as cash and where sheet, cash, with capitalized in $XXX cash billion our assets very ample approximately and $X.X a billion million grew

billion. to deposits the grew by liability side, On sequentially billion $X.X $XX.X

fourth outpaced quarter. for growth the loan Importantly, net deposit growth consecutive

the costs -- as As deposits. resulting were utilized that by are we more to over continue by warehouse we loans of able facilities reduce a ramp to efficient portion funded in result, million, $XXX

small warehouse the billion grew the drawn consecutive million We the for tangible billion. fourth with sixth quarter we $X.X In opportunistically by our book on nearly $XXX of exited billion value record a quarter outstanding $X facilities. income by $X.X bonds, to We executed quarter, our to which GAAP more by convertible GAAP EPS basis of our of capital risk-based was buyback a and our the than portion ratio additive to total net points. $XX.X million additive to accretive XX

given loans entered attractive versus returns sale the Additionally, trends expect as loans. we for student billion to for do see ratios credit of we value accounting the refinanced swap with than the pricing to for lowers reclassification reclassified the changing. ratios revenue default impact these overall on in and today. We fact and dynamic is that swap, that we fair capital these our assets These as investment based significantly it not intend loans until on held arrangement market our no maturity, weighting greater the held more in X% a see by price and risk-based into $X.X capital to relative however, hold improve does were increased The risk has consistent quarter. credit profitability. default The total practices for

ratio our our of capital ratios, remains XX.X% from and terms XX.X% at comfortably regulatory In quarter above regulatory last of XX.X%. year-end minimum total improved the of capital

our finish me with outlook. up Let

want than uncertain going and a review some in specific XXXX normalization of higher a markets the GDP of in capital contraction underpin numbers, to X% assume guide. and unemployment through continued and of broadly to Before activity an continuation credit. our consumer I We increase assumptions financial larger macro that in

reaching Fed four funds rate deterioration by a and normalization credit economy, cuts QX X.X% XXXX. higher performance we contracting rate approximately with to assuming interest an rate unemployment and From response in perspective, are and

Before and guidance, to segments drive XX% to Tech the approximately adjusted XXXX. and give I total growth from year for all Services high-level I of some SoFi of together in Platform by XX% Financial for increase as net transitional revenue XXXX will a annual be XXXX segment. thoughts our summarize will want XXXX

and Services Financial Specifically, the segments to growing we growing XX% grow taken Services Tech Platform Platform expect segment year-over-year. XX% or together approximately and our Financial Tech XX% when approximately with more year-over-year

revenue capacity Therefore, a be XX% below segment to as in choice it economy our conservative both given we have will industry pragmatic and to of limit maintain to toward environment very uncertainty revenue, liquidity. level XX% on demand to XXXX expecting This see view Lending segment Lending We we revenue. XXXX our largely are macro of had and it, to rates, the manage and relates Lending and higher lending XXXX reflects expect taking approach that we lending growth the concerns our to the of the about to have. conservative the much continue

to and businesses profit, scale we Lending significant Fortunately, cash of Services in and and profitability in book the periods intentionally overall and we an conservative our growth. million XXXX, generation us Platform Services Platform combined revenue Tech at expect for of have least our with XX% Tech growth. growth us, view in X.X growth growth of uncertainty Lending attractive Financial Financial and value achieved represents maintaining Even segments new XX% the rate, still while in of limit add allows which business, members our to

Personal modestly Loan Student our down Loans just decreases. originations rate could grow Lending, Within while could originations could flat be versus be with or correlated relatively growth and Loan XXXX, Home

and capital through up from GAAP net improved our sales. of and total XX.X%, effectively capital transactions sheet QX, our ratio risk-based demonstrating to in capital loan manage ability XX.X% and efficiency income, ratios balance our terms to in opportunistic growth In capital liquidity,

and originate billion based in to in expect approximately loans north loans $XXX to $X loan $XX translates lending XXXX, ratios book terms existing million have on and billion sales. announced in minimums, $XX to in of ability value, capital $X.X to capacity, well previously of of the XXXX billion specific, of tangible In regulatory to generate capacity. million amortization we our book value growth of be to $XXX keeping that's we incremental tangible To which billion while

rate of billion. annual amortizing down Second, $X.X paying loans are or an

Third, $XX a Having I billion is achieved similar the headroom said And have previously ratio. of addition to outlined less capacity, sale to we number previously. in based capital than factors this sales $XX in agreement forward in intend billion our the we expect on to that, QX. to on-the-run the and loan to $X billion originate in announced flow lastly, execute we we have our transactions

specific to With that, turn me let guidance.

with even Tech conservative we represents which XXXX XXXX, For year-over-year revenue, XX% in XX% add X.X of expect and million and combined of of growth members, Financial XX% to to business view at growth. the our least Platform revenue Lending new at Services XX%

ramping We our XX% margin adjusted million for $XXX year-end, EBITDA of a in target anticipate million. long-term XX% to of equates by XXXX quarter, margins $XXX first which approximately to of the to range EBITDA

For dollar the in we $XXX $XX impairment XXXX, range $X.XX net full income to the terms equivalent in excluding and range year to in under equates of of line roughly aggregate expenses to to in XXXX, GAAP expect compared EBITDA goodwill full expense. be GAAP million year That the $X.XX. to XXXX the the million EPS reported

of tangible in growth $XXX the capital year, and total to for million with million year expect north ratio a to We the end XX%. book of value $XXX

in we and expect million XXXX, $XX income to $XXX range revenue million deliver million of the adjusted adjusted QX million net to to For of GAAP million, net $XX of to $XXX $XXX $XXX million. EBITDA

thoughts Anthony our to Now medium-term outlook. let back me it turn for on

Given the X be we we helpful as beyond since it that will as be thought number strategy of achieved to of milestones the when perspective the well a a transitioned provide I XXXX years joined longer-term ago transitional the year, company would fact we XXXX. have

acquisitions annual revenue as card a such of Platform we and in growth environment new to macro credit with The investments significant brand trust XXXX members. build through period, management the of assuming and and the we've businesses the benefits XX% XX% assumes meaningful the change asset Services launches made paired new For small from broader see for percent put, segment adoption technology medium portfolio, a in XX% compound by mid-teens compound through and XX% revenue annual geographies. new growth, or cross-buy medium reflects business a our and broader to business, business existing insurance, or savings the revenue XX% Tech no revenue, this annual time XXXX checking from Technology business verticals mid-XXs XXXX revenue. and or Financial small continuing business for Platform to lending, compound new members growth XXXX for for the awareness, rate growth Simply driving existing only Lending no

added drive growth The earnings and GAAP to in share notable power XXXX. could XX% beyond EPS that in of see and associated continued and the with XXXX. businesses $X.XX EPS growth between period described, from beyond XXXX, Moreover, the begins is we we've growth to business in the XXXX launched core reflecting to $X.XX time scale XXXX impact both new XX% benefit this just the plus lines per

which Make for investment opportunity unchanged continue opportunities and within in the the are long-term believe the stage remains are no we on mistake, and of started. There company just to endless growth, we for for durable focused we getting the of SoFi types environment operate. growth and we our remain and right

more In be summary, ahead we could the even We're XXXX. the not us. more of prospects proud of encouraged by results of SoFi in

a high of get business takes degree most underwriting money members winner focused benefit shop scale the services being member-centric resulting high-growth in right, the approach we team and cost-efficient financial on having diversified, help as a be that the digital of sector. a demonstrated capital, high-quality multiple one-stop operating streams, to have of revenue leverage set a their a sources of our We the to credit in and having

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

[Operator Instructions] Our first question today John from Hecht Jefferies. is from

much details taking intermediate-term about I Thank questions. goals, you all my you the so appreciate and for the

fairly conservative economy. taking at are a -- You the guys

year. you this guiding think segment and I Lending the that's Non-lending how between want dictating of balance kind the to segments growth the or

versus a of if we pan Lending than trajectory? how would out as expected, get change the of little kind segments that Nonlending into just better I'm things And Anthony, do then kind wondering, we year? next segment about think

Yes.

different, vastly the be think it up both I would is both It it ways. if could could and backdrop trajectory, think change that down. economic be worse, I will in about better. the

it some different that are do we [ rate benefit the stifled greater see benefit things ] businesses, purchases. business business but could and and Loan our declines, I We that about in would If Home the benefit. tailwind. a us would now quite from As market, would the think in that be rates refinancing give high growth Mortgage really from

a is Loan And emotional We to it's and that their largest our the that it's lives. we the their to for much in a It to be could one, -- it with risky. decision. house if a one making really of Home catch reasons. most you really takes we're ability in for members, someone are couple up too hard the decision later. people to love relationship overpays discretionary financial Number If or if do business eliminate of your have have be mortgage, there in for to on income XXs, invest also and there their for most probably going XXs debt

really a delivering our it's us product So mission. on for critical

We ] It's agency also balance means it, [ a we mortgages, but underwrite can largely the great we windows, use sheet quite government economic it to meaningfully. sell product. then our which the just agency capital which do benefits

that's mortgages would from one agency that capital business lower would So that do generally, light, if we be benefit rates.

may and no business say rate committed ability and earn yield interest API product. an to to that addition providing our X-day products bill second [ would to not product points people is benefit of pay a paycheck the benefits person-to-person coming down, that to standpoint, reward in offset [ ] grow get you'll ] we may rates and fast. down, early believe and like What looking all that to the I'd payments that The in with rates Invest. all is that do as from more see the other top-tier we are other and functionality come fees as SoFi from Money An provide some

you tells matter see we're this have I an XX deposits, The things rate about a as days, the switch cuts for be I X.X% higher on against we going worry in so at what the we have we a to a bifurcated are economy. strong from say forecasting originator to know, world which of of I because late how longer, Xx, rate X SoFi instead X we from in cuts don't give if the is in going you quickly. able backdrop. so October, quickly concerning and do in market generate market cuts advantage rate in can yield Xx and we're that maintain fact competitive what quarter, rate But how economic those would we do a Money. and switched are

risk. our it conservative in relates want outlook to we to as So be

have we've being outlook the of of the growing the to Platform our segment Services segment. be We able what because and in conservative benefit Technology in done Fungal

the invest And card mode on credit it fast on overall, a still grow it's revenue, profitable, cost Services on it can margin that investment But grow segment of the we the we on losses and that our Money. very significant We're basis, drive profit and Financial even benefit faster, is acquisition because increasing. in SoFi and high-margin a can from and contribution is profitable there up. doesn't now

the and Platform. Tech of expansion We're And invested [indiscernible] mode. mode the acceleration meaningfully last in We the over three Platform. Tech revenue now margin years in

their what money having need strategy they all more a to of streams. giving also revenue get in direct results So and three our durable but diverse right, of businesses, consumers broad-based result

In bank where charge-off industry. will trends up. and our situation spectrum, the across as that the reserves ] happen the we telling economy prudent profile. to is go indicate normalization make across well all losses be delinquencies data and sure factor We've that to for than The is that risk want weaker seen and we as very expected, losses rates the [ into

question today from next Our Andrew Jeffrey from is Truist.

the profitability. if wonder Financial in Products growth, about you talk the anticipated specifically segment I balance I'm bit company's a Anthony, and between could little thinking

achieved to good long-term ostensibly, targets really at generate CAC. quarter, continue You've least LTV and margin your this to you

factors there are actually business away that see little from becomes as a that balanced limit accelerate Products we Or Lending? terms could Financial in more segment? of the the growth So any

and contribution marketing. margin for I to your spend and major The awareness you how quarter. Thank that much fourth Financial the year in the our want for Services growth say breakeven in limit question. on meaningfully the in improved would business full is was on segment building the we

good Money, cost profiles the customer acquisition businesses, best in have We payback the got especially period. it's SoFi really

Invest. to sleep in Investors doing really on Invest we're shouldn't But our well go business.

in the more mentioned alternative We we classes XX%. than the asset today. As call, increased AUM launched

now for out Main alternate we're bringing wealthy. consumers investments and with Street. that give which available to also. the build we'll are IPOs that them to access continue typically And with did We today, only products to We continue to

feel hunkered Card right. great story. we made the the really sure economics most unit credit market business, have progress did the have segmentation profile pulled I there. make in to And Credit down in we've and we there our back we like we ] right, [ And like importantly, make And Money, sure

to months. comes The we driving segment, spend to marketing. anywhere how months that within have much in from it So down to want XX payback periods XX products really

margin, So the how XX% EBITDA to overall business and up the manage that incremental a to ultimately, about think point. And we we'll to that's so limits growth. invest to want to

the of terms or -- that to is more in between to a and if a question up we EBITDA and market it the hold it It's down. ourselves product much dial opportunity, The margin, not fit want you [indiscernible] growth grow just market wanted spend faster. incremental XX% so But great. how to balance of

is question next Reggie Our from from JPMorgan. Smith

be quarters would that totally could off a you it like Chris, and I in Loan three that -- and was -- guys quarter. the full wondering were the through was think, math the fourth tell us I said fourth I charge-offs of I guess you could I for quarter. X.X% for was rate that the what imply, year. loss my X%, like you first X% think I believe, if the Personal year,

would helpful. wrong I'm I if don't color be So there, any like know there

no Reggie. worries, Yes,

the the fourth of fourth accurate remarks, terms was what In you quarter. for quarter, my in heard prepared

was from rate business XXXX. QX the for X.X%. Loans was That X.XX% NCO of Personal up So our in

continued normalization had loan in and a to As expect Anthony range. X% towards life to, pre-COVID the we X% of levels alluded losses do

Dolev from Mizuho. next question Dan from is Our

Thank you. Hey, guys. Excellent question quarter. Nice you. for maybe work. Anthony, a

into of a maybe on us level your Can earnings the provided give earnings long-term You comfort -- XXXX. you business? the nice power on outlook the profitability

Yes.

power we the have is which of what to there's way for about business, earnings indicators sort incremental that the then the what's two long-term of think important think I profitability. done to and date,

the fourth were naysayers margin that mentioned EBITDA for XX% to there. you is cannot quarter tell people So huge number XX% a I that margin us. our long-term of I the milestone at in

revenue, really in profitability but margin GAAP margin our achieved that have as sticking done the from to today. a with proud XX%, what I'm this of business. than $X To we've EBITDA XX% a standpoint. of long-term So [ potential but actual shows XX% equally ] profitability accelerated the of higher margin we've billion could that and revenue proud scale of The over growth, we're be much you earnings which

about margin it in get in and help there would As I profile is think XXs make XXXX period, would that us the time what achievable.

businesses margin a you the think cost per about individually then we're economic exceeds as account, XX that to after variable of acquisition to the architecting collectively, our per back and cost series then and customer by businesses margin If revenue obviously variable account XX pays where meaningful unit a profit months.

for line. has incremental fixed variable that dropped scale to margin. we're still right quite base, the means which going cost greater But with cost Once going profit that fixed we're our to bottom a get you XX%, could early, economics you're margins while And be our long-term you the the than As unit surprisingly at per long-term now unit base. [indiscernible] account, economics above than that our in so greater stick It's are growing. XX%.

than hold to But invest because to a book growth. future tangible balancing could versus we're greater push we in, going while constraints So ourselves to profitability the ROE higher great that accountable and of we what towards we marching on want what and growth some bring. value should indication be make it that not higher sure

is Our Adelson next from from question Jeff Stanley. Morgan

digging we the increase question book. when data credit data, on to on losses worse we that some ABS guess know lenders to to the continues this Loan ] Reggie's quarter. does should you also I on a follow-up there in loss it consumer that the on at have I modestly this wanted have of of the just get Personal the I dig there life the did And -- expectation in other flagged little out look world year. bit like get [ X.X% look worse. and

you your going I'm ] revenues us help world financing you frame loan new secured Is dollar it quarter . you if wondering could [ there. this XXXX overshooting this wondering year? or where kind have could follow-up, hold should expectations a you that a of I'm got of the quarter do you provide think if from Or and kind for the expectation you the see life there. you that X.X% as And there So of NII also to this loss announced then where the benefit credit

sure. Yes,

X.X% loss normalize XXXX. which life to X-ish occur loan, be to a to ], on which mentioned to rate, rate, loss X% annualized to annual So of expect clear, is the X.X% translates percent the of in rate just that half actual I X% I the want where PO losses [ closer first to NCO an to we was it when we expect

levels those of related charge-offs get the the end XX% The comprises by those balance out NCOs reason is credits the to system confident are sheet. are on less about if at at that of QX X% of net for to to going that peak that XXXX, we our that we down to from and about get that the we look That's have the expected than year. X% removed of UPB overall you

the of revenue your second sales. period given my of $XXX to associated in prepared announced, from secured we time alluded the as In question about that did from actual we I The quarter, around remarks. with in immaterial that terms revenue million benefit financing was generation in

is outlook. differently. to is those for backdrop hold obviously more only would economic thing normalization manage challenging that to business our outlook, we economic the and and credit not a assumptions performance add the I'd be credit other Obviously, tied in our And true, likely and

years that's the adjust I've and performances is here thing one our isn't actually the to economy happen and be last with say thought would that data points X we the I accordingly. and and true over the economy, been nimble macroeconomic with been we smart to happened read all whatever what's have the business own would

economic all the is that the in that backdrops, not anyone specific that have don't to it's we it's I we one very outlook think outlined. So for want

next is Our from Michael Goldman question Sachs. Ng from

bit I XXXX all any could about the you if each would I just question. And key very by you the be appreciate things contribution little for segment consider segment? the Thank profit helpful. XXXX. around by revenue much specifics a guidance for to outlook, was segment talk wondering for

it The is the there. think profitable, margins meaningfully profit about very contribution way I business [indiscernible] high is

you'll focused a long we time, who ensuring that loans margin that those the For loans about to will loan that cycle, for XX% have so a remember on be those us been that. achieving remain and XX% was the have our through durable following profit made comments variable per

the with see there, invested a meaningful. coming saw you invested thing of quite to you second investments the the those products this Platform, there meaningfully more leverage, profitability It's and higher expansion the quite fixed your moving business you cost, and which contract contribution the in revenue. seeing can revenue is from and and that profit margin benefit continue once is incremental I'd operating nice exceed Technology now and to in new services, more in prior and The on-prem we're we architecture the year margins to say as new we cloud

million Financial in over a a homogeneously across $XXX there's variable we talk different million businesses because it's in so but in different acquisition are by despite fixed the contribution profit, we're yet. costs and still harder the said Chris the from meaningfully Services segment, $XX on the contribution profit also lot a cost there. that the of standpoint the losing profit Invest fact there, because businesses many quarter achieved losing covered the of call to businesses Card not that because Credit like SoFi investing And year the we're

in business contribution upside lot profit. And of that has a so

where business have you and cycle. in those are businesses development it But think by their to about

lot and so Invest in Credit losing And money. cycle investment of very Card early and a are their therefore,

of positive weight variable the business. profit carrying Money overall and now the is of SoFi profitability their

that We biggest there contributor they're dollars not high nicely, small the also but area. insight business that in have contribute to are that are some that margin

Our question next Vincent from from Stephens. Caintic is

the all appreciate I details.

rate your we sales pipeline for XXXX, an of expectations, value to go forward Or on sales time back rate on down? your sort already? what focus for actually continue increase in cut does decline therefore Going I goes and acceleration current ] cuts expect on? fair to the cap expect rates to loan should the fair the this then fair reflect how if the as the like on looks [ Should marks expectations we and to loan wanted value mark, And sales? value rate loan market affects that

Yes, sure.

for demand our loans, In remains the terms overall of robust. the demand extremely

You of demand from billion to saw personal format. We unsecured sales million which million in and that in QX. over in remain came of we loan million did sales $XXX QX, $XXX loan $X seeing $XXX sales securitization of with do already robust. expect whole a that We're

billion that on of arrangement will over did on party do loans last the quarters we intact to expect us course we've in the that -- -- year. QX. And has flow we demand run what a a XXXX in other throughout we a As with have bought transactions robust from the $X do reminder, done that then akin stay forward few loan the

in as levels So remarks. execution overall, strong demonstrated demand my really prepared good at

four the terms the market In value do these include fair already. of cuts marks rate

Our marks are time. reflective of a in point

as as So the the what underlying of the benchmark rate XX. of QX, December marks of end reflect

So forward. they don't reflect the full rate that's going

what we durability our our reduced is is by I'd December, thing end have In underwriting the X to think of other about eliminating late say and credit band. call The as our we box. of Tier continued FICO loans, we reduce X, we higher which our

or that our December, we the we're the is on on whether to continue do ] big durable sheet [ them. who higher the we than making we in much about our we through earlier. them through But and we company, we as in loans underwrite balance ] change box, average year, ], [ are reduced so. sell talked X hold XXX XXX progress the X And and relatively as those cycle, higher credit our we have going and so a [ know As mid-Xs,

point around the do cuts. thing rate four just only my the marks include then follow to would other add, on to And I the

hedge know, all on our rate you exposure interest As we loans.

the rate losses. reductions, to had of So increases, meaningful offset that's Similar meaningful the we when loan hedge drops, hedge rate losses by a but interest saw in also offset value interest but happened we that that. QX, what

time Our last have today Gabriele question from is Dominick we for from Oppenheimer.

for so color question the the the call. Thanks across much and

growth mid-XX% lead maybe, by or us So including, feel revenue Anthony, Anything moving to down is within through talk the assumptions breaking Tech provide? really client significant to can target helpful, new this that that likely the if can you pipeline adds. would be Platform, maybe going wins, forward. the like deals, Chris, be you to importance for it customer possible, I your

in We're potential Yes. the into of dozens We're get of to the diversified partners not that across conversations base. spectrum market of going customer in with detail. level

We from dialogue everything with big offerings from benefits government-related have ongoing with to in the large government, all consumer way deals support all from traditional services banks brands, nonfinancial established to and large our for federal services -- country. the the way new financial

The drivers of the business simple. are quite

of platform APIs getting on processing that platform, an factors: to those that provide. transactions transactions payment generating on should the price the for one, the about that addition two paid volume the have based We the underlying that transactions based think and we occur revenue in you in

paycheck for provide platform early for payments risk for Within account opening capabilities. we pay Processing [indiscernible] person-to-person platform, X-day APIs payment the Technology for for bill

more we and And get but they partners it paid, the use also so use, more transactions. different the different more drives APIs the

[indiscernible] other language, to machine is In Konecta, uses learning. have addition that a we products natural which like that,

called those where it We platform, get should not. the ] of be of whether [ and for risk authorizations. or not also a on instantaneously each helping Risk paid one we're have a Payer or product transaction we people And decide authorized

In Technisys' a but institution is Banking Core, system. think which operating for larger addition as we an much have used, core of a decision to that, any

we capability for one bought Technisys Our big reason.

want product so exists extensible -- products system far. products system of today. that new to one run want systems. lot We them one that have operating to Those on at a have We operating be to platform, all and we different

banks, [ cores Financial have industry, the financial In ]. many many Services companies many

savings, products to have checking credit savings card fact, cores other them more many loans. like than courses they probably aggregated versus different In checking because for and were roll-ups mention quarters for for or even that of that a product different and banks of not had

And so into running one different have areas. company for a different products, platform extensible Technisys enables to it's and cores different

is SoFi. launched One Buy SoFi's and that with we Galileo Technisys It did and easy itself. was product in Now is to technologies authorized example a all of use the Later. time, -- application first Pay Later can Pay short Now, We it great and consumer in that Buy three and of the and a for very be product the it's period on

so that is revenue And streams. the overall another driver of

solutions. addition do services other We digital development. apps build relates services to in and also We front-end to of types do it product for as app for digital the

from which drives the revenue per one just no partners, question your out. and So accounts than factors account, other that more there's answer to more products those more laid I

That today to thoughts. prepared you and ends finalize sharing comments just by our with wanted our remarks I questions. final some just

shop couldn't needs feel been one-stop being X.X a throughout persevere results. finish million our through your I'll an all for volatility the team's financial just how of here ability have year, industry proud deliver making am by the by but reality. to the disruption of more in our and I such blessed not so amazing record that more become members than saying vision relentless critical I of to

is also to by the even only and competitive transition capability a excited not excited we The diversified but where where and benefits resulting can of unmatched positions of digital-only in provide strategy provider that scale, any today our the cycle. market we are uniquely be in most services through to that I'm here. sector of about advantages, about greater business winner takes SoFi a in financial our digital, more from durability go

Thank quarter. you next our talking look and to to dialing for in to call, you forward we

for Thank today's joining you, call. everyone,

disconnect have lovely your lines, a and day. may now You