Accelerating Revenue Growth, Expanding Margins
and GAAP Profitability Fourth Quarter $615 Million GAAP Net
Revenue Up 35% Year-over-Year; $594 Million Adjusted Net Revenue Up
34% Year-over-Year Record Fourth Quarter Adjusted EBITDA of $181
Million Up 159% Year-over-Year, 30% Target Margin Reached Fourth
Quarter Positive GAAP Net Income of $48 Million, GAAP EPS of $0.02
Quarterly New Member Adds of Nearly 585,000; Total Members Up 44%
Year-over-Year to Over 7.5 Million Quarterly New Product Adds of
Nearly 695,000; Total Products Up 41% Year-over-Year to Over 11.1
Million Fourth Quarter Total Deposit Growth of $2.9 Billion to
$18.6 Billion Fourth Quarter Growth in Tangible Book Value of $204
Million, up $334 Million for Full Year 2023 Diversification
Milestone with 40% of Fourth Quarter Adjusted Net Revenue from Tech
Platform and Financial Services Segments Management Announces 2024
Guidance & Longer Term Outlook
SoFi Technologies, Inc. (NASDAQ: SOFI), a member-centric,
one-stop shop for digital financial services that helps members
borrow, save, spend, invest and protect their money, reported
financial results today for its fourth quarter and fiscal year
ended December 31, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240129860912/en/
Note: For additional information on our
company metrics, including the definitions of “Members”, “Total
Products” and “Technology Platform Total Accounts”, see Table 6 in
the “Financial Tables” herein. (Graphic: SoFi)
“We delivered another quarter of record financial results and
generated our eleventh consecutive quarter of record adjusted net
revenue of $594 million. We saw new member adds of nearly 585,000
and growth of 44% for total period end members of over 7.5 million,
with new product adds of nearly 695,000 and growth of 41% to over
11 million total products at period end. Record revenue at the
company level was driven by record revenue across all three of our
business segments, with a record contribution of 40% of adjusted
net revenue generated by our non-Lending segments (Technology
Platform and Financial Services segments). On a consolidated level,
we saw sequential and year-over-year expansion of our net interest
margin to 6.02%. We also generated record adjusted EBITDA of $181
million, representing 159% year-over-year growth and a 74%
incremental adjusted EBITDA margin, with all three segments
profitable on a contribution basis. This equates to a 30% adjusted
EBITDA margin, in line with our long-term target. We generated
positive GAAP net income of $48 million in the quarter and EPS of
$0.02. Finally, we generated $204 million in tangible book value
growth in the quarter and $334 million for all of 2023,” said
Anthony Noto, CEO of SoFi Technologies, Inc.
Consolidated Results Summary
Three Months Ended December
31,
% Change
Year Ended December
31,
% Change
($ in thousands, except per share
amounts)
2023
2022
2023
2022
Consolidated – GAAP
Total net revenue
$
615,404
$
456,679
35%
$
2,122,789
$
1,573,535
35
%
Net income (loss)
47,913
(40,006
)
n/m
(300,742
)
(320,407
)
(6
)%
Net income (loss) attributable to common
stockholders – basic(1)
37,724
(50,195
)
n/m
(341,167
)
(360,832
)
(5
)%
Net income (loss) attributable to common
stockholders – diluted(1)(2)
24,615
(50,195
)
n/m
(341,167
)
(360,832
)
(5
)%
Earnings (loss) per share attributable to
common stockholders – basic(1)
0.04
(0.05
)
n/m
(0.36
)
(0.40
)
(10
)%
Earnings (loss) per share attributable to
common stockholders – diluted(1)(2)
0.02
(0.05
)
n/m
(0.36
)
(0.40
)
(10
)%
Consolidated – Non-GAAP
Adjusted net revenue(3)
$
594,245
$
443,418
34%
$
2,073,940
$
1,540,492
35
%
Adjusted EBITDA(3)
181,204
70,060
159%
431,737
143,346
201
%
Net income (loss), excluding impact of
goodwill impairment(4)
47,913
(40,006
)
n/m
(53,568
)
(320,407
)
(83
)%
Net income (loss) attributable to common
stockholders, excluding impact of goodwill impairment –
basic(1)(4)
37,724
(50,195
)
n/m
(93,993
)
(360,832
)
(74
)%
Net income (loss) attributable to common
stockholders, excluding impact of goodwill impairment –
diluted(1)(2)(4)
24,615
(50,195
)
n/m
(93,993
)
(360,832
)
(74
)%
Earnings (loss) per share attributable to
common stockholders, excluding impact of goodwill impairment
– basic(1)(4)
0.04
(0.05
)
n/m
(0.10
)
(0.40
)
(75
)%
Earnings (loss) per share attributable to
common stockholders, excluding impact of goodwill impairment
– diluted(1)(2)(4)
0.02
(0.05
)
n/m
(0.10
)
(0.40
)
(75
)%
Tangible book value (as of period
end)(5)
3,477,059
3,142,956
11%
3,477,059
3,142,956
11
%
(1)
For additional information on the
computation of basic and diluted earnings (loss) per share, see
Table 8 in the “Financial Tables” herein.
(2)
For the three months ended
December 31, 2023, diluted earnings per share of $0.02 and diluted
net income attributable to common stockholders of $24,615 exclude
gain on extinguishment of debt and interest expense incurred, net
of tax, associated with convertible note activity during the
period.
(3)
Adjusted net revenue and adjusted
EBITDA are non-GAAP financial measures. For more information and
reconciliations to the most comparable GAAP measures, see “Non-GAAP
Financial Measures” and Table 2 to the “Financial Tables”
herein.
(4)
Earnings (loss) per share
attributable to common stockholders, excluding impact of goodwill
impairment is defined as net income (loss) attributable to common
stockholders, adjusted to exclude goodwill impairment losses of
$247.2 million for the year ended December 31, 2023, divided by the
weighted average common stock outstanding. The goodwill impairment
adjustment had no impact on weighted average common stock
outstanding, or income tax impacts.
(5)
Defined as permanent equity,
adjusted to exclude goodwill and intangible assets.
Noto continued: “Continued growth of over 40% in both total
members and products, along with improving operating efficiency,
reflects the benefits of our broad product suite and unique
Financial Services Productivity Loop (FSPL) strategy.”
Noto concluded: “Total deposits grew by $2.9 billion, up 19%
during the fourth quarter to $18.6 billion at year-end, and over
90% of SoFi Money deposits (inclusive of Checking and Savings and
cash management accounts) are from direct deposit members. For new
direct deposit accounts opened in the fourth quarter, the median
FICO score was 744. More than half of newly funded SoFi Money
accounts are setting up direct deposit by day 30, which has had a
significant impact on debit spending, which exceeded $1.5 billion
in quarterly debit transaction volume and was up nearly threefold
year-over-year, representing more than $6 billion of annualized
debit transaction volume. Importantly, and as anticipated, we also
benefit from continued strong cross-buy trends from this attractive
member base into Lending and other Financial Services products.
“As a result of this growth in high quality deposits, we have
benefited from a lower cost of funding for our loans. Our deposit
funding also increases our flexibility to capture additional net
interest margin (NIM) and optimize returns, a critical advantage in
light of notable macroeconomic uncertainty. SoFi Bank, N.A.
generated $128.6 million of GAAP net income at a 27% margin in the
quarter, and an annualized return on tangible equity of 16.8%.”
Consolidated Results
Fourth quarter and full-year 2023 total GAAP net revenue of
$615.4 million and $2.1 billion, respectively, each increased 35%
relative to the prior-year period’s $456.7 million and $1.6
billion. Fourth quarter and full-year 2023 adjusted net revenue of
$594.2 million and $2.1 billion grew 34% and 35%, respectively,
from the corresponding prior-year periods of $443.4 million and
$1.5 billion. Fourth quarter record adjusted EBITDA of $181.2
million increased 159% from the same prior year period's $70.1
million, culminating in full-year positive adjusted EBITDA of
$431.7 million, up 201% year-over-year.
SoFi reported a number of key financial achievements in the
quarter, including positive GAAP net income of $47.9 million or
$0.02 per share. This compares to a loss of $40.0 million in the
fourth quarter of 2022. Full-year 2023 GAAP net loss, excluding the
impact of impairment of goodwill assets, was $53.6 million, versus
a loss of $320.4 million for full-year 2022.
Additionally, contribution profit in the Financial Services
segment of $25.1 million increased nearly eightfold from the first
quarter of positive contribution profit in the third quarter of
2023, while contribution margin grew 15 percentage points
sequentially to 18%. The Financial Services segment also reached
contribution profit break even for the full year 2023, relative to
a loss of $199 million in 2022. This is a strong testament of our
ability to scale new businesses from a significant investment phase
to profitability via a continuous process of optimizing unit
economics and efficiently acquiring members and achieving cross
buy.
Net interest income of $389.6 million and $1.3 billion for the
fourth quarter and full-year 2023, respectively, was up 87% and
116% from the corresponding prior-year periods and up 13%
sequentially. Net interest margin of 6.02% was a record for the
company, up from 5.99% last quarter and 5.94% in the prior-year
quarter.
The average rate on interest-earning assets increased by 17
basis points sequentially and 122 basis points versus the
prior-year period, while the average rate on interest-bearing
liabilities increased just 9 basis points sequentially and 91 basis
points year-over-year. The funding of loans continued to shift
toward deposits. In the fourth quarter, the average rate on
deposits was 218 basis points lower than that of warehouse
facilities.
Technology Platform revenue of $96.9 million accelerated to 13%
growth year-over-year, up from 6% year-over-year growth last
quarter, with margins of 32% up 12 percentage points versus the
prior year quarter.
Member and Product Growth
SoFi achieved strong year-over-year growth in both members and
products in the fourth quarter and full-year 2023. New member
additions of nearly 585,000 in the quarter brought total members to
over 7.5 million by year end, up over 2.3 million, or 44%, from the
prior year end.
Product additions of nearly 695,000 in the fourth quarter
brought total products to over 11.1 million at year end, up 41%
from 7.9 million at the prior year end.
In the Financial Services segment, total products increased by
45% year-over-year, to 9.5 million from 6.6 million at the prior
year end. SoFi Money (inclusive of Checking and Savings and cash
management accounts) grew 54% year-over-year to 3.4 million
products, SoFi Relay grew 74% year-over-year to 3.3 million
products and SoFi Invest grew 10% year-over-year to 2.4 million
products.
Lending products increased 24% year-over-year to 1.7 million
products, driven primarily by continued growth in personal loan
products as well as a notable increase in student loan
products.
Technology Platform enabled accounts increased by 11%
year-over-year to 145 million.
Lending Segment Results
Lending segment GAAP and adjusted net revenues were $353.1
million and $346.5 million, respectively, for the fourth quarter of
2023, up 8% and 10%, respectively, and were $1.4 billion and $1.3
billion, respectively, for the full-year 2023, up 20% and 21%,
respectively. Higher loan balances and net interest margin
expansion drove strong growth in net interest income of $79.0
million, or 43%, and $429.3 million, or 81%, for the quarter and
full-year 2023, respectively. Resulting net interest income of
$262.6 million and $960.8 million significantly exceeded directly
attributable segment expenses of $120.4 million and $513.1 million
for the fourth quarter and full-year 2023, respectively.
Lending segment fourth quarter and full-year 2023 contribution
profit of $226.1 million and $823.3 million increased 8% and 24%,
respectively, from $208.8 million and $664.0 million in the
corresponding prior-year periods. Contribution margin using Lending
adjusted net revenue for the fourth quarter and full-year 2023
decreased to 65% from 66%, and increased to 62% from 60%,
respectively, compared to the corresponding prior-year periods.
These strong margins reflect SoFi’s ability to capitalize on
continued strong demand for its lending products.
Lending – Segment Results of
Operations
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
% Change
2023
2022
% Change
Net interest income
$
262,626
$
183,607
43
%
$
960,773
$
531,480
81
%
Noninterest income
90,500
144,584
(37
)%
409,848
608,511
(33
)%
Total net revenue – Lending
353,126
328,191
8
%
1,370,621
1,139,991
20
%
Servicing rights – change in valuation
inputs or assumptions
(6,595
)
(12,791
)
(48
)%
(34,700
)
(39,651
)
(12
)%
Residual interests classified as
debt – change in valuation inputs or assumptions
10
(470
)
n/m
425
6,608
(94
)%
Directly attributable expenses
(120,431
)
(106,131
)
13
%
(513,073
)
(442,945
)
16
%
Contribution profit
$
226,110
$
208,799
8
%
$
823,273
$
664,003
24
%
Adjusted net revenue –
Lending(1)
$
346,541
$
314,930
10
%
$
1,336,346
$
1,106,948
21
%
(1)
Adjusted net revenue – Lending represents a non-GAAP financial
measure. For more information and a reconciliation to the most
comparable GAAP measure, see “Non-GAAP Financial Measures” and
Table 2 to the “Financial Tables” herein.
Lending – Loans At Fair Value
($ in thousands)
Personal Loans
Student Loans
Home Loans
Total
December 31,
2023
Unpaid principal
$
14,498,629
$
6,445,586
$
67,406
$
21,011,621
Accumulated interest
114,541
34,357
92
148,990
Cumulative fair value adjustments(1)
717,403
245,541
(1,300
)
961,644
Total fair value of loans(2)(3)
$
15,330,573
$
6,725,484
$
66,198
$
22,122,255
September 30,
2023
Unpaid principal
$
14,177,004
$
5,929,047
$
110,320
$
20,216,371
Accumulated interest
105,156
26,497
163
131,816
Cumulative fair value adjustments(1)
568,836
86,000
(9,187
)
645,649
Total fair value of loans(2)(3)
$
14,850,996
$
6,041,544
$
101,296
$
20,993,836
(1)
During the three months ended December 31, 2023, the cumulative
fair value adjustments for personal loans were primarily impacted
by a lower discount rate, which resulted in higher fair value
marks, partially offset by lower origination volume and higher
prepayment rate and default rate assumptions. The cumulative fair
value adjustments for student loans were primarily impacted by a
lower discount rate and increases in coupon rates, which resulted
in higher fair value marks, partially offset by lower origination
volume and higher default rate assumption.
(2)
Each component of the fair value of loans is impacted by
charge-offs during the period. Our fair value assumption for annual
default rate incorporates fair value markdowns on loans beginning
when they are 10 days or more delinquent, with additional markdowns
at 30, 60 and 90 days past due.
(3)
As of December 31, 2023, student loans are classified as loans
held for investment, and personal loans and home loans are
classified as loans held for sale. As of September 30, 2023, all
loans were classified as loans held for sale.
The following table summarizes the significant inputs to the
fair value model for personal and student loans:
Personal Loans
Student Loans
December 31,
2023
September 30,
2023
December 31,
2023
September 30,
2023
Weighted average coupon rate(1)
13.8 %
13.8 %
5.6 %
5.3 %
Weighted average annual default rate
4.8 %
4.6 %
0.6 %
0.5 %
Weighted average conditional prepayment
rate
23.2 %
20.3 %
10.5 %
10.5 %
Weighted average discount rate
5.5 %
6.6 %
4.3 %
4.8 %
Benchmark rate(2)
4.1 %
5.0 %
3.6 %
4.5 %
(1)
Represents the average coupon rate on loans held on balance
sheet, weighted by unpaid principal balance outstanding at the
balance sheet date.
(2)
As of December 31, 2023 and September 30, 2023, corresponds with
two-year SOFR for personal loans, and four-year SOFR for student
loans.
Fourth quarter Lending segment total origination volume
increased 45% year-over-year, as a result of continued strong
demand for personal loans and notable growth in both student loan
and home loan originations.
Personal loan originations of $3.2 billion in the fourth quarter
of 2023 were up 31% year-over-year, and declined 17% sequentially.
Full year personal loan originations of $13.8 billion increased 41%
from 2022. Fourth quarter student loan volume of nearly $790
million was up 95% year-over-year, and declined 14% sequentially.
Fourth quarter home loan volume of $309 million was up 193%
year-over-year, and declined 13% sequentially.
Lending – Originations and Average
Balances
Three Months Ended December
31,
% Change
Year Ended December
31,
% Change
2023
2022
2023
2022
Origination volume
($ in thousands, during period)
Personal loans
$
3,222,759
$
2,466,093
31
%
$
13,801,065
$
9,773,705
41
%
Student loans
789,970
405,789
95
%
2,630,040
2,245,499
17
%
Home loans
308,884
105,501
193
%
997,492
966,177
3
%
Total
$
4,321,613
$
2,977,383
45
%
$
17,428,597
$
12,985,381
34
%
Average loan balance
($, as of period end)(1)
Personal loans
$
24,223
$
24,917
(3
)%
Student loans
44,683
46,585
(4
)%
Home loans
284,289
285,152
—
%
(1)
Within each loan product category, average loan balance is
defined as the total unpaid principal balance of the loans divided
by the number of loans that have a balance greater than zero
dollars as of the reporting date. Average loan balance includes
loans on the balance sheet and transferred loans with which SoFi
has a continuing involvement through its servicing agreements.
Lending – Products
December 31,
2023
2022
% Change
Personal loans
1,113,864
837,462
33 %
Student loans
519,489
477,132
9 %
Home loans
29,653
26,003
14 %
Total lending products
1,663,006
1,340,597
24 %
Technology Platform Segment Results
Technology Platform segment record net revenue of $96.9 million
for the fourth quarter of 2023 and $352.3 million for the full year
increased 13% and 12% from the comparable prior year periods and 8%
sequentially. Contribution profit of $30.6 million for the fourth
quarter of 2023 and $94.8 million for the full year increased 81%
and 24% from the comparable prior year periods, for a margin of 32%
and 27%, respectively.
In the fourth quarter, growth was driven by continued strong
organic growth of existing partners, new product adoption and
notable contributions from increasingly diversified clients which
have launched within the last 6 months. As noted previously, we
continue to make significant strides in our strategy of leveraging
our unique product suite to pursue diversified growth and larger,
more durable revenue opportunities.
Technology Platform – Segment Results
of Operations
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
% Change
2023
2022
% Change
Net interest income
$
941
$
—
n/m
$
1,514
$
—
n/m
Noninterest income
95,966
85,652
12 %
350,826
315,133
11 %
Total net revenue – Technology
Platform
96,907
85,652
13 %
352,340
315,133
12 %
Directly attributable expenses
(66,323
)
(68,771
)
(4)%
(257,554
)
(238,620
)
8 %
Contribution profit
$
30,584
$
16,881
81 %
$
94,786
$
76,513
24 %
Technology Platform total enabled client accounts increased 11%
year-over-year, to 145.4 million at December 31, 2023 from 130.7
million at December 31, 2022.
There is a robust pipeline of ongoing discussions with potential
partners with large existing customer bases across both the U.S.
and Latin America spanning both the financial services and
non-financial services segments.
Technology Platform
December 31,
2023
2022
% Change
Total accounts
145,425,391
130,704,351
11 %
Financial Services Segment Results
Financial Services segment record net revenue increased 115% in
the fourth quarter of 2023 to $139.1 million from the prior year
period's total of $64.8 million, and by 160% for the full year to
$436.5 million in 2023, helped by 126% and 103% growth in segment
interchange revenue and 139% and 262% growth in net interest
income. Notably, the company exceeded $1.5 billion in point of sale
debit transaction volume in the quarter, representing an annualized
$6 billion run-rate. Strength in the segment results was driven by
new all-time high revenue for SoFi Money, Credit Card and lending
as a service, as well as continued contributions from SoFi
Invest.
The Financial Services segment posted a positive contribution
profit of $25.1 million for the fourth quarter and nearly broke
even with a loss of $0.3 million for the full year of 2023,
reflecting a $68.6 million and $199.2 million improvement over the
comparable prior year periods of $43.6 million and $199.4 million
losses. This came as a result of continued improvement in
monetization for the segment, along with increasing operating
leverage as we efficiently scale the business. Monetization
progress is underscored by annualized revenue per product of $59
for the fourth quarter of 2023 and $46 for the full year, which
grew 48% and 80% year-over-year and 10% sequentially. At the same
time, operating leverage is evident, as the segment generated $74.3
million in incremental revenue, with only $5.7 million in
incremental directly attributable expenses year-over-year, driving
a 92.4% incremental contribution profit margin.
Financial Services – Segment Results of
Operations
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
% Change
2023
2022
% Change
Net interest income
$
109,072
$
45,609
139 %
$
334,847
$
92,574
262 %
Noninterest income
30,043
19,208
56 %
101,668
75,102
35 %
Total net revenue – Financial
Services
139,115
64,817
115 %
436,515
167,676
160 %
Directly attributable expenses
(114,055
)
(108,405
)
5 %
(436,777
)
(367,102
)
19 %
Contribution profit (loss)
$
25,060
$
(43,588
)
n/m
$
(262
)
$
(199,426
)
(100)%
By continuously innovating with new and relevant offerings,
features and rewards for members, SoFi grew total Financial
Services products by over 2.9 million, or 45%, year-over-year,
bringing the total to 9.5 million at year end. In the fourth
quarter of 2023, SoFi Money products increased by nearly 311,000,
and Relay products increased by over 378,000. SoFi Invest products
decreased by 84,000, but when adjusted to exclude the accounts of
our now closed digital assets business, products increased by over
113,000 in the quarter.
Most notably, our SoFi Money offering has an APY of up to 4.60%
as of January 29, 2024, no minimum balance requirement nor balance
limits, FDIC insurance through a network of participating banks of
up to $2 million, a host of free features and a unique rewards
program. Total deposits grew 19% during the fourth quarter to $18.6
billion at year end, and over 90% of SoFi Money deposits (inclusive
of Checking and Savings and cash management accounts) are from
direct deposit members. More than half of newly funded SoFi Money
accounts were setting up direct deposit by day 30 in the fourth
quarter of 2023.
Financial Services – Products
December 31,
2023
2022
% Change
Money(1)
3,374,310
2,195,402
54 %
Invest
2,380,641
2,158,864
10 %
Credit Card
245,385
171,425
43 %
Referred loans(2)
55,231
40,980
35 %
Relay
3,336,868
1,921,986
74 %
At Work
87,035
65,382
33 %
Total financial services products
9,479,470
6,554,039
45 %
(1)
Includes SoFi Checking and Savings accounts held at SoFi Bank,
and cash management accounts.
(2)
Limited to loans wherein we provide third party fulfillment
services.
Guidance and Outlook
Management expects to generate $550 to $560 million of adjusted
net revenue in the first quarter of 2024, $110 to $120 million of
adjusted EBITDA and GAAP net income of $10 to $20 million. This
guide anticipates a 20% adjusted EBITDA margin.
For the full year 2024, management expects Tech Platform and
Financial Services segments combined to grow at least 50% and
lending revenue to be 92% to 95% of 2023 levels, and expenses under
the EBITDA line to be flat when compared to 2023 results, excluding
the reported goodwill impairment expense. This guidance anticipates
an adjusted EBITDA margin of approximately 30% by year-end, which
equates to a range of $580 to $590 million for the year. We
anticipate that revenue from our Tech Platform and Financial
Services segments, combined, will be approximately equal to revenue
from our Lending segment for the year. That equates to full-year
GAAP net income in the range of $95 to $105 million, or GAAP EPS of
$0.07 to $0.08. We expect growth in tangible book value of $300 to
$500 million for the year. In terms of Member growth, we expect at
least 2.3 million new members during the full year 2024, which
represents 30% growth.
Looking beyond 2024 management expects 20% to 25% compound
revenue growth for the time periods of 2023 through 2026, assuming
no meaningful changes in the macroeconomic environment and no
significant new business launches or acquisitions. This implies 50%
compound growth for Financial Services revenue, mid-20% compound
growth for Technology Platform revenue, and mid teens compound
growth for Lending segment revenue. This is expected to drive
between $0.55 and $0.80 in GAAP earnings per share in 2026.
Moreover, we see 20% to 25% EPS growth beyond 2026 reflecting
both the continued growth of the core business growth plus the
added benefit from new business lines launched in the 2024 to 2026
time period.
Management will further address full-year guidance on the
quarterly earnings conference call. Management has not reconciled
forward-looking non-GAAP measures to their most directly comparable
GAAP measures of total net revenue, net income and gross margin.
This is because the company cannot predict with reasonable
certainty and without unreasonable efforts the ultimate outcome of
certain GAAP components of such reconciliations due to
market-related assumptions that are not within our control as well
as certain legal or advisory costs, tax costs or other costs that
may arise. For these reasons, management is unable to assess the
probable significance of the unavailable information, which could
materially impact the amount of the future directly comparable GAAP
measures.
Earnings Webcast
SoFi’s executive management team will host a live audio webcast
beginning at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time) today
to discuss the quarter’s financial results and business highlights.
All interested parties are invited to listen to the live webcast at
https://investors.sofi.com. A replay of the webcast will be
available on the SoFi Investor Relations website for 30 days.
Investor information, including supplemental financial information,
is available on SoFi’s Investor Relations website at
https://investors.sofi.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain of the statements above are forward-looking and as such
are not historical facts. This includes, without limitation,
statements regarding our expectations for the first quarter of 2024
adjusted net revenue, adjusted EBITDA, adjusted EBITDA margin and
GAAP net income, our expectations regarding full year 2024 lending
revenue, revenue and growth in our Technology Platform and
Financial Services segments, expenses, adjusted EBITDA margin, GAAP
net income, and tangible book value, quarterly and full year member
growth, our expectations regarding compound revenue growth through
2026, growth in our segment revenue and EPS expectations beyond
2026, our expectations regarding our ability to continue to grow
our business and launch new business lines and products, improve
our financials and increase our member, product and total accounts
count, our ability to achieve diversified growth and larger, more
durable revenue, our ability to navigate the macroeconomic
environment and the financial position, business strategy and plans
and objectives of management for our future operations. These
forward-looking statements are not guarantees of performance. Such
statements can be identified by the fact that they do not relate
strictly to historical or current facts. Words such as “achieve”,
“continue”, “expect”, “growth”, “may”, “plan”, “strategy”, “will
be”, “will continue”, and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Factors that could
cause actual results to differ materially from those contemplated
by these forward-looking statements include: (i) the effect of and
our ability to respond and adapt to changing market and economic
conditions, including recessionary pressures, fluctuating inflation
and interest rates, and volatility from global events; (ii) our
ability to achieve profitability, operating efficiencies and
continued growth across our three businesses in the future, as well
as our ability to continue to achieve GAAP net income profitability
and expected GAAP net income margins; (iii) the impact on our
business of the regulatory environment and complexities with
compliance related to such environment; (iv) our ability to realize
the benefits of being a bank holding company and operating SoFi
Bank, including continuing to grow high quality deposits and our
rewards program for members; (v) our ability to continue to drive
brand awareness and realize the benefits or our integrated
multi-media marketing and advertising campaigns; (vi) our ability
to vertically integrate our businesses and accelerate the pace of
innovation of our financial products; (vii) our ability to manage
our growth effectively and our expectations regarding the
development and expansion of our business; (viii) our ability to
access sources of capital on acceptable terms or at all, including
debt financing and other sources of capital to finance operations
and growth; (ix) the success of our continued investments in our
Financial Services segment and in our business generally; (x) the
success of our marketing efforts and our ability to expand our
member base and increase our product adds; (xi) our ability to
maintain our leadership position in certain categories of our
business and to grow market share in existing markets or any new
markets we may enter; (xii) our ability to develop new products,
features and functionality that are competitive and meet market
needs; (xiii) our ability to realize the benefits of our strategy,
including what we refer to as our FSPL; (xiv) our ability to make
accurate credit and pricing decisions or effectively forecast our
loss rates; (xv) our ability to establish and maintain an effective
system of internal controls over financial reporting; (xvi) our
ability to maintain the security and reliability of our products;
and (xvii) the outcome of any legal or governmental proceedings
that may be instituted against us. The foregoing list of factors is
not exhaustive. You should carefully consider the foregoing factors
and the other risks and uncertainties set forth in the section
titled “Risk Factors” in our last quarterly report on Form 10-Q, as
filed with the Securities and Exchange Commission, and those that
are included in any of our future filings with the Securities and
Exchange Commission, including our annual report on Form 10-K,
under the Exchange Act. These forward-looking statements are based
on information available as of the date hereof and current
expectations, forecasts and assumptions, and involve a number of
judgments, risks and uncertainties. Accordingly, forward-looking
statements should not be relied upon as representing our views as
of any subsequent date, and we do not undertake any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws.
As a result of a number of known and unknown risks and
uncertainties, our actual results or performance may be materially
different from those expressed or implied by these forward-looking
statements. You should not place undue reliance on these
forward-looking statements.
Non-GAAP Financial Measures
This press release presents information about our adjusted net
revenue and adjusted EBITDA, which are non-GAAP financial measures
provided as supplements to the results provided in accordance with
accounting principles generally accepted in the United States
(GAAP). We use adjusted net revenue and adjusted EBITDA to evaluate
our operating performance, formulate business plans, help better
assess our overall liquidity position, and make strategic
decisions, including those relating to operating expenses and the
allocation of internal resources. Accordingly, we believe that
adjusted net revenue and adjusted EBITDA provide useful information
to investors and others in understanding and evaluating our
operating results in the same manner as our management. These
non-GAAP measures are presented for supplemental informational
purposes only, have limitations as analytical tools, and should not
be considered in isolation from, or as a substitute for, the
analysis of other GAAP financial measures, such as total net
revenue and net income (loss). Other companies may not use these
non-GAAP measures or may use similar measures that are defined in a
different manner. Therefore, SoFi's non-GAAP measures may not be
directly comparable to similarly titled measures of other
companies. Reconciliations of these non-GAAP measures to the most
directly comparable GAAP financial measures are provided in Table 2
to the “Financial Tables” herein.
Forward-looking non-GAAP financial measures are presented
without reconciliations of such forward-looking non-GAAP measures
because the GAAP financial measures are not accessible on a
forward-looking basis and reconciling information is not available
without unreasonable effort due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations, including adjustments reflected in our
reconciliation of historic non-GAAP financial measures, the amounts
of which, based on historical experience, could be material.
About SoFi
SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for
digital financial services on a mission to help people achieve
financial independence to realize their ambitions. The company’s
full suite of financial products and services helps its more than
7.5 million SoFi members borrow, save, spend, invest, and protect
their money better by giving them fast access to the tools they
need to get their money right, all in one app. SoFi also equips
members with the resources they need to get ahead – like career
advisors, Credentialed Financial Planners (CFP®), exclusive
experiences and events, and a thriving community – on their path to
financial independence.
SoFi innovates across three business segments: Lending,
Financial Services – which includes SoFi Checking and Savings, SoFi
Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and
Technology Platform, which offers the only end-to-end vertically
integrated financial technology stack. SoFi Bank, N.A., an
affiliate of SoFi, is a nationally chartered bank, regulated by the
OCC and FDIC and SoFi is a bank holding company regulated by the
Federal Reserve. The company is also the naming rights partner of
SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles
Rams. For more information, visit https://www.sofi.com or download
our iOS and Android apps.
Availability of Other Information About SoFi
Investors and others should note that we communicate with our
investors and the public using our website (https://www.sofi.com),
the investor relations website (https://investors.sofi.com), and on
social media (Twitter and LinkedIn), including but not limited to
investor presentations and investor fact sheets, Securities and
Exchange Commission filings, press releases, public conference
calls and webcasts. The information that SoFi posts on these
channels and websites could be deemed to be material information.
As a result, SoFi encourages investors, the media, and others
interested in SoFi to review the information that is posted on
these channels, including the investor relations website, on a
regular basis. This list of channels may be updated from time to
time on SoFi’s investor relations website and may include
additional social media channels. The contents of SoFi’s website or
these channels, or any other website that may be accessed from its
website or these channels, shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933, as
amended.
SOFI-F
FINANCIAL TABLES (Unaudited)
1. Consolidated Statements of Operations
2. Reconciliation of GAAP to Non-GAAP Financial Measures
3. Consolidated Balance Sheets
4. Average Balances and Net Interest Earnings Analysis
5. Consolidated Cash Flow Data
6. Company Metrics
7. Segment Financials
8. Earnings (Loss) Per Share
Table 1
SoFi Technologies,
Inc.
Consolidated Statements of
Operations
(Unaudited)
(In Thousands, Except for
Share and Per Share Data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Interest income
Loans and securitizations
$
598,959
$
300,299
$
1,944,128
$
759,504
Other
46,278
7,109
106,939
13,867
Total interest income
645,237
307,408
2,051,067
773,371
Interest expense
Securitizations and warehouses
62,989
50,969
244,220
110,127
Deposits
182,612
40,670
507,820
59,793
Corporate borrowings
9,882
7,069
36,833
18,438
Other
113
116
454
917
Total interest expense
255,596
98,824
789,327
189,275
Net interest income
389,641
208,584
1,261,740
584,096
Noninterest income
Loan origination, sales, and
securitizations
82,929
131,347
371,812
565,372
Servicing
7,525
13,544
37,328
43,547
Technology products and solutions
87,026
81,339
323,972
304,901
Other
48,283
21,865
127,937
75,619
Total noninterest income
225,763
248,095
861,049
989,439
Total net revenue
615,404
456,679
2,122,789
1,573,535
Noninterest expense
Technology and product development
141,817
113,281
511,419
405,257
Sales and marketing
174,705
173,702
719,400
617,823
Cost of operations
103,947
80,615
379,998
313,226
General and administrative
131,685
113,085
511,011
501,618
Goodwill impairment
—
—
247,174
—
Provision for credit losses
12,092
14,945
54,945
54,332
Total noninterest expense
564,246
495,628
2,423,947
1,892,256
Income (loss) before income taxes
51,158
(38,949
)
(301,158
)
(318,721
)
Income tax (expense) benefit
(3,245
)
(1,057
)
416
(1,686
)
Net income (loss)
$
47,913
$
(40,006
)
$
(300,742
)
$
(320,407
)
Earnings (loss) per share
Earnings (loss) per share – basic
$
0.04
$
(0.05
)
$
(0.36
)
$
(0.40
)
Earnings (loss) per share – diluted
$
0.02
$
(0.05
)
$
(0.36
)
$
(0.40
)
Weighted average common stock
outstanding – basic
962,691,936
922,936,519
945,024,160
900,886,113
Weighted average common stock
outstanding – diluted
1,029,303,297
922,936,519
945,024,160
900,886,113
Table 2
Non-GAAP Financial Measures
(Unaudited)
Reconciliation of Adjusted Net
Revenue
Adjusted net revenue is defined as total
net revenue, adjusted to exclude the fair value changes in
servicing rights and residual interests classified as debt due to
valuation inputs and assumptions changes, which relate only to our
Lending segment, as well as gains and losses on extinguishment of
debt. For our consolidated results and for the Lending segment, we
reconcile adjusted net revenue to total net revenue, the most
directly comparable GAAP measure, as presented for the periods
indicated below:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
Total net revenue
$
615,404
$
456,679
$
2,122,789
$
1,573,535
Servicing rights – change in valuation
inputs or assumptions(1)
(6,595
)
(12,791
)
(34,700
)
(39,651
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
10
(470
)
425
6,608
Gain on extinguishment of debt(3)
(14,574
)
—
(14,574
)
—
Adjusted net revenue
$
594,245
$
443,418
$
2,073,940
$
1,540,492
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
Total net revenue – Lending
$
353,126
$
328,191
$
1,370,621
$
1,139,991
Servicing rights – change in valuation
inputs or assumptions(1)
(6,595
)
(12,791
)
(34,700
)
(39,651
)
Residual interests classified as
debt – change in valuation inputs or assumptions(2)
10
(470
)
425
6,608
Adjusted net revenue – Lending
$
346,541
$
314,930
$
1,336,346
$
1,106,948
(1)
Reflects changes in fair value inputs and assumptions on
servicing rights, including conditional prepayment, default rates
and discount rates. These assumptions are highly sensitive to
market interest rate changes and are not indicative of our
performance or results of operations. Moreover, these non-cash
charges are unrealized during the period and, therefore, have no
impact on our cash flows from operations. As such, these positive
and negative changes are adjusted out of total net revenue to
provide management and financial users with better visibility into
the net revenue available to finance our operations and our overall
performance.
(2)
Reflects changes in fair value inputs and assumptions on
residual interests classified as debt, including conditional
prepayment, default rates and discount rates. When third parties
finance our consolidated securitization VIEs by purchasing residual
interests, we receive proceeds at the time of the closing of the
securitization and, thereafter, pass along contractual cash flows
to the residual interest owner. These residual debt obligations are
measured at fair value on a recurring basis, but they have no
impact on our initial financing proceeds, our future obligations to
the residual interest owner (because future residual interest
claims are limited to contractual securitization collateral cash
flows), or the general operations of our business. As such, these
positive and negative non-cash changes in fair value attributable
to assumption changes are adjusted out of total net revenue to
provide management and financial users with better visibility into
the net revenue available to finance our operations.
(3)
Reflects gain on extinguishment
of debt. Gains and losses are recognized during the period of
extinguishment for the difference between the net carrying amount
of debt extinguished and the fair value of equity securities
issued. These non-cash charges are not indicative of our core
operating performance, and as such are adjusted out of total net
revenue to provide management and financial users with better
visibility into the net revenue available to finance our operations
and our overall performance.
Reconciliation of Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss), adjusted to
exclude, as applicable: (i) corporate borrowing-based interest
expense (our adjusted EBITDA measure is not adjusted for warehouse
or securitization-based interest expense, nor deposit interest
expense and finance lease liability interest expense, as these are
not direct operating expenses), (ii) income tax expense (benefit),
(iii) depreciation and amortization, (iv) share-based expense
(inclusive of equity-based payments to non-employees), (v)
impairment expense (inclusive of goodwill impairment and property,
equipment and software abandonments), (vi) transaction-related
expenses, (vii) foreign currency impacts related to operations in
highly inflationary countries, (viii) fair value changes in warrant
liabilities, (ix) fair value changes in each of servicing rights
and residual interests classified as debt due to valuation
assumptions, and (x) other charges, as appropriate, that are not
expected to recur and are not indicative of our core operating
performance. We reconcile adjusted EBITDA to net loss, the most
directly comparable GAAP measure, for the periods indicated
below:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
Net income (loss)
$
47,913
$
(40,006
)
$
(300,742
)
$
(320,407
)
Non-GAAP adjustments:
Interest expense – corporate
borrowings(1)
9,882
7,069
36,833
18,438
Income tax expense (benefit)(2)
3,245
1,057
(416
)
1,686
Depreciation and amortization(3)
53,449
42,353
201,416
151,360
Share-based expense
69,107
70,976
271,216
305,994
Restructuring charges(4)
7,796
—
12,749
—
Impairment expense(5)
—
—
248,417
—
Foreign currency impact of highly
inflationary subsidiaries(6)
10,971
—
10,971
—
Transaction-related expense(7)
—
1,872
142
19,318
Servicing rights – change in valuation
inputs or assumptions(8)
(6,595
)
(12,791
)
(34,700
)
(39,651
)
Residual interests classified as
debt – change in valuation inputs or assumptions(9)
10
(470
)
425
6,608
Gain on extinguishment of debt(10)
(14,574
)
—
(14,574
)
—
Total adjustments
133,291
110,066
732,479
463,753
Adjusted EBITDA
$
181,204
$
70,060
$
431,737
$
143,346
(1)
Our adjusted EBITDA measure
adjusts for corporate borrowing-based interest expense, as these
expenses are a function of our capital structure. Corporate
borrowing-based interest expense includes interest on our revolving
credit facility and the amortization of debt discount and debt
issuance costs on our convertible notes. Revolving credit facility
interest expense in the 2023 periods increased due to higher
interest rates relative to the prior year periods on identical
outstanding debt.
(2)
Income taxes were primarily
attributable to tax expense associated with the profitability of
SoFi Bank in state jurisdictions where separate filings are
required. For the full year 2023 period, this expense was more than
offset by income tax benefits from foreign losses in jurisdictions
with net deferred tax liabilities related to Technisys.
(3)
Depreciation and amortization
expense for the 2023 periods increased compared to the 2022 periods
primarily in connection with acquisitions and growth in our
internally-developed software balance.
(4)
Restructuring charges in 2023
primarily included employee-related wages, benefits and severance
associated with a small reduction in headcount in our Technology
Platform segment in the first quarter of 2023 and expenses in the
fourth quarter of 2023 related to a reduction in headcount across
the Company, which do not reflect expected future operating
expenses and are not indicative of our core operating
performance.
(5)
Impairment expense for the full
year 2023 period includes $247,174 related to goodwill impairment,
and $1,243 related to a sublease arrangement, which are not
indicative of our core operating performance.
(6)
Foreign currency charges reflect
the impacts of highly inflationary accounting for our operations in
Argentina, which are related to our Technology Platform segment and
commenced in the first quarter of 2022 with the Technisys Merger.
For the year ended December 31, 2023, all amounts were reflected in
the fourth quarter, as inter-quarter amounts were determined to be
immaterial. Amounts in 2022 were determined to be immaterial.
(7)
Transaction-related expenses in
the 2023 and 2022 periods primarily included financial advisory and
professional services costs associated with our acquisitions of
Wyndham and Technisys, respectively.
(8)
Reflects changes in fair value
inputs and assumptions, including market servicing costs,
conditional prepayment, default rates and discount rates. This
non-cash change is unrealized during the period and, therefore, has
no impact on our cash flows from operations. As such, these
positive and negative changes in fair value attributable to
assumption changes are adjusted out of net loss to provide
management and financial users with better visibility into the
earnings available to finance our operations.
(9)
Reflects changes in fair value
inputs and assumptions, including conditional prepayment, default
rates and discount rates. When third parties finance our
consolidated VIEs through purchasing residual interests, we receive
proceeds at the time of the securitization close and, thereafter,
pass along contractual cash flows to the residual interest owner.
These obligations are measured at fair value on a recurring basis,
which has no impact on our initial financing proceeds, our future
obligations to the residual interest owner (because future residual
interest claims are limited to contractual securitization
collateral cash flows), or the general operations of our business.
As such, these positive and negative non-cash changes in fair value
attributable to assumption changes are adjusted out of net loss to
provide management and financial users with better visibility into
the earnings available to finance our operations.
(10)
Reflects gain on extinguishment
of debt. Gains and losses are recognized during the period of
extinguishment for the difference between the net carrying amount
of debt extinguished and the fair value of equity securities
issued. These non-cash charges are not indicative of our core
operating performance, and as such are adjusted out of total net
revenue to provide management and financial users with better
visibility into the net revenue available to finance our operations
and our overall performance.
Table 3
SoFi Technologies,
Inc.
Consolidated Balance
Sheets
(Unaudited)
(In Thousands, Except for
Share Data)
December 31,
2023
December 31, 2022
Assets
Cash and cash equivalents
$
3,085,020
$
1,421,907
Restricted cash and restricted cash
equivalents
530,558
424,395
Investment securities (includes
available-for-sale securities of $595,187 and $195,438 at fair
value with associated amortized cost of $596,757 and $203,418, as
of December 31, 2023 and December 31, 2022, respectively)
701,935
396,769
Loans held for sale, at fair value
15,396,771
13,557,074
Loans held for investment, at fair
value
6,725,484
—
Loans held for investment (less allowance
for credit losses on loans at amortized cost of $54,695 and
$40,788, as of December 31, 2023 and December 31, 2022,
respectively)
836,159
307,957
Servicing rights
180,469
149,854
Property, equipment and software
216,908
170,104
Goodwill
1,393,505
1,622,991
Intangible assets
364,048
442,155
Operating lease right-of-use assets
89,635
97,135
Other assets (less allowance for credit
losses of $1,837 and $2,785, as of December 31, 2023 and December
31, 2022, respectively)
554,366
417,334
Total assets
$
30,074,858
$
19,007,675
Liabilities, temporary equity and
permanent equity
Liabilities:
Deposits:
Interest-bearing deposits
$
18,568,993
$
7,265,792
Noninterest-bearing deposits
51,670
76,504
Total deposits
18,620,663
7,342,296
Accounts payable, accruals and other
liabilities
549,748
516,215
Operating lease liabilities
108,649
117,758
Debt
5,233,416
5,485,882
Residual interests classified as debt
7,396
17,048
Total liabilities
24,519,872
13,479,199
Commitments, guarantees, concentrations
and contingencies
Temporary equity:
Redeemable preferred stock, $0.00 par
value: 100,000,000 and 100,000,000 shares authorized; 3,234,000 and
3,234,000 shares issued and outstanding as of December 31, 2023 and
December 31, 2022, respectively
320,374
320,374
Permanent equity:
Common stock, $0.00 par value:
3,100,000,000 and 3,100,000,000 shares authorized; 975,861,793 and
933,896,120 shares issued and outstanding as of December 31, 2023
and December 31, 2022, respectively
97
93
Additional paid-in capital
7,039,987
6,719,826
Accumulated other comprehensive loss
(1,209
)
(8,296
)
Accumulated deficit
(1,804,263
)
(1,503,521
)
Total permanent equity
5,234,612
5,208,102
Total liabilities, temporary equity and
permanent equity
$
30,074,858
$
19,007,675
Table 4
SoFi Technologies,
Inc.
Average Balances and Net
Interest Earnings Analysis
(Unaudited)
Three Months Ended December
31, 2023
Three Months Ended December
31, 2022
($ in thousands)
Average Balances
Interest
Income/Expense
Average Yield/Rate
Average Balances
Interest
Income/Expense
Average Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits with banks
$
2,675,248
$
34,217
5.07
%
$
1,286,970
$
6,911
2.15
%
Investment securities
697,032
13,837
7.88
417,150
3,435
3.29
Loans
22,326,117
597,183
10.61
12,399,647
297,824
9.61
Total interest-earning assets
25,698,397
645,237
9.96
14,103,767
308,170
8.74
Total noninterest-earning assets
2,879,773
3,084,282
Total assets
$
28,578,170
$
17,188,049
Liabilities, Temporary Equity and
Permanent Equity
Interest-bearing liabilities:
Demand deposits
$
2,553,537
$
13,062
2.03
%
$
2,103,395
$
11,118
2.11
%
Savings deposits
11,664,436
133,795
4.55
3,135,963
22,915
2.92
Time deposits
2,719,390
35,755
5.22
672,690
6,637
3.95
Total interest-bearing deposits
16,937,363
182,612
4.28
5,912,048
40,670
2.75
Warehouse facilities
3,285,127
53,473
6.46
2,645,291
39,558
5.98
Securitization debt
543,152
6,283
4.59
659,962
7,278
4.41
Other debt
1,626,551
13,228
3.23
1,648,150
10,948
2.66
Total debt
5,454,830
72,984
5.31
4,953,403
57,784
4.67
Residual interests classified as debt
9,192
—
—
36,638
254
2.77
Total interest-bearing liabilities
22,401,385
255,596
4.53
10,902,089
98,708
3.62
Total noninterest-bearing liabilities
761,532
733,524
Total liabilities
23,162,917
11,635,613
Total temporary equity
320,374
320,374
Total permanent equity
5,094,879
5,232,062
Total liabilities, temporary equity and
permanent equity
$
28,578,170
$
17,188,049
Net interest income
$
389,641
$
209,462
Net interest margin
6.02
%
5.94
%
SoFi Technologies,
Inc.
Average Balances and Net
Interest Earnings Analysis (Continued)
(Unaudited)
Year Ended December 31,
2023
Year Ended December 31,
2022
($ in thousands)
Average Balances
Interest
Income/Expense
Average Yield/Rate
Average Balances
Interest
Income/Expense
Average Yield/Rate
Assets
Interest-earning assets:
Interest-bearing deposits with banks
$
2,172,013
$
91,312
4.20
%
$
1,122,364
$
10,841
0.97
%
Investment securities
541,590
25,096
4.63
494,005
12,542
2.54
Loans
18,733,812
1,934,659
10.33
9,200,023
749,071
8.14
Total interest-earning assets
21,447,415
2,051,067
9.56
10,816,392
772,454
7.14
Total noninterest-earning assets
3,055,580
2,812,054
Total assets
$
24,502,995
$
13,628,446
Liabilities, Temporary Equity and
Permanent Equity
Interest-bearing liabilities:
Demand deposits
$
2,214,794
$
51,673
2.33
%
$
1,336,006
$
21,814
1.63
%
Savings deposits
8,481,895
359,444
4.24
1,403,750
31,045
2.21
Time deposits
1,958,002
96,703
4.94
281,633
6,934
2.46
Total interest-bearing deposits
12,654,691
507,820
4.01
3,021,389
59,793
1.98
Warehouse facilities
3,142,096
192,987
6.14
2,378,935
71,717
3.01
Securitization debt
751,869
36,853
4.90
593,824
22,507
3.79
Other debt
1,638,748
51,526
3.14
1,575,027
30,618
1.94
Total debt
5,532,713
281,366
5.09
4,547,786
124,842
2.75
Residual interests classified as debt
12,301
141
1.15
57,510
3,723
6.47
Total interest-bearing liabilities
18,199,705
789,327
4.34
7,626,685
188,358
2.47
Total noninterest-bearing liabilities
757,070
657,314
Total liabilities
18,956,775
8,283,999
Total temporary equity
320,374
320,374
Total permanent equity
5,225,846
5,024,073
Total liabilities, temporary equity and
permanent equity
$
24,502,995
$
13,628,446
Net interest income
$
1,261,740
$
584,096
Net interest margin
5.88
%
5.40
%
Table 5
SoFi Technologies,
Inc.
Consolidated Cash Flow
Data
(Unaudited)
(In Thousands)
Year Ended December
31,
2023
2022
Net cash used in operating activities
$
(7,227,139
)
$
(7,255,858
)
Net cash used in investing activities
(1,889,864
)
(106,333
)
Net cash provided by financing
activities
10,885,602
8,439,485
Effect of exchange rates on cash and cash
equivalents
677
571
Net increase in cash, cash equivalents,
restricted cash and restricted cash equivalents
$
1,769,276
$
1,077,865
Cash, cash equivalents, restricted cash
and restricted cash equivalents at beginning of period
1,846,302
768,437
Cash, cash equivalents, restricted cash
and restricted cash equivalents at end of period
$
3,615,578
$
1,846,302
Table 6
Company Metrics
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
March 31, 2022
December 31,
2021
Members
7,541,860
6,957,187
6,240,091
5,655,711
5,222,533
4,742,673
4,318,705
3,868,334
3,460,298
Total Products
11,142,476
10,447,806
9,401,025
8,554,363
7,894,636
7,199,298
6,564,174
5,862,137
5,173,197
Total Products — Lending segment
1,663,006
1,593,906
1,503,892
1,416,122
1,340,597
1,280,493
1,202,027
1,138,566
1,078,952
Total Products — Financial Services
segment
9,479,470
8,853,900
7,897,133
7,138,241
6,554,039
5,918,805
5,362,147
4,723,571
4,094,245
Total Accounts — Technology Platform
segment(1)
145,425,391
136,739,131
129,356,203
126,326,916
130,704,351
124,332,810
116,570,038
109,687,014
99,660,657
(1)
Beginning in the fourth quarter of 2021, the company included
SoFi accounts on the Galileo platform-as-a-service in its total
Technology Platform accounts metric to better align with the
presentation of Technology Platform segment revenue. Quarterly
amounts for the earlier quarters in 2021 were determined to be
immaterial, and as such were not recast.
Members
We refer to our customers as “members”. We define a member as
someone who has a lending relationship with us through origination
and/or ongoing servicing, opened a financial services account,
linked an external account to our platform or signed up for our
credit score monitoring service. Our members have continuous access
to our CFPs, our career advice services, our member events, our
content, educational material, news, and our tools and calculators,
which are provided at no cost to the member. We view members as an
indication not only of the size and a measurement of growth of our
business, but also as a measure of the significant value of the
data we have collected over time.
Once someone becomes a member, they are always considered a
member unless they violate our terms of service. We adjust our
total number of members in the event a member is removed in
accordance with our terms of service. This could occur for a
variety of reasons—including fraud or pursuant to certain legal
processes—and, as our terms of service evolve together with our
business practices, product offerings and applicable regulations,
our grounds for removing members from our total member count could
change. The determination that a member should be removed in
accordance with our terms of service is subject to an evaluation
process, following the completion, and based on the results, of
which, relevant members and their associated products are removed
from our total member count in the period in which such evaluation
process concludes. However, depending on the length of the
evaluation process, that removal may not take place in the same
period in which the member was added to our member count or the
same period in which the circumstances leading to their removal
occurred. For this reason, our total member count may not yet
reflect adjustments that may be made once ongoing evaluation
processes, if any, conclude.
Total Products
Total products refers to the aggregate number of lending and
financial services products that our members have selected on our
platform since our inception through the reporting date, whether or
not the members are still registered for such products. Total
products is a primary indicator of the size and reach of our
Lending and Financial Services segments. Management relies on total
products metrics to understand the effectiveness of our member
acquisition efforts and to gauge the propensity for members to use
more than one product.
In our Lending segment, total products refers to the number of
personal loans, student loans and home loans that have been
originated through our platform through the reporting date, whether
or not such loans have been paid off. If a member has multiple loan
products of the same loan product type, such as two personal loans,
that is counted as a single product. However, if a member has
multiple loan products across loan product types, such as one
personal loan and one home loan, that is counted as two
products.
In our Financial Services segment, total products refers to the
number of SoFi Money accounts (inclusive of checking and savings
accounts held at SoFi Bank and cash management accounts), SoFi
Invest accounts, SoFi Credit Card accounts (including accounts with
a zero dollar balance at the reporting date), referred loans (which
are originated by a third-party partner to which we provide
pre-qualified borrower referrals), SoFi At Work accounts and SoFi
Relay accounts (with either credit score monitoring enabled or
external linked accounts) that have been opened through our
platform through the reporting date. Checking and savings accounts
are considered one account within our total products metric. Our
SoFi Invest service is composed of three products: active investing
accounts, robo-advisory accounts and digital assets accounts. Our
members can select any one or combination of the types of SoFi
Invest products. We began to wind-down our crypto-related
activities in November 2023, whereby members could no longer create
new digital assets accounts and we began closing existing digital
assets accounts. This process is expected to be completed in the
first quarter of 2024. If a member has multiple SoFi Invest
products of the same account type, such as two active investing
accounts, that is counted as a single product. However, if a member
has multiple SoFi Invest products across account types, such as one
active investing account and one robo-advisory account, those
separate account types are considered separate products. In the
event a member is removed in accordance with our terms of service,
as discussed under “Members” above, the member’s associated
products are also removed.
Technology Platform Total Accounts
In our Technology Platform segment, total accounts refers to the
number of open accounts at Galileo as of the reporting date.
Beginning in the fourth quarter of 2021, we included intercompany
accounts on the Galileo platform-as-a-service in our total accounts
metric to better align with the Technology Platform segment
revenue, which includes intercompany revenue. We recast the
accounts in the fourth quarter of 2021, but did not recast the
accounts for the earlier quarters in 2021, as the impact was
determined to be immaterial. Total accounts is a primary indicator
of the accounts dependent upon our technology platform to use
virtual card products, virtual wallets, make peer-to-peer and
bank-to-bank transfers, receive early paychecks, separate savings
from spending balances, make debit transactions and rely upon
real-time authorizations, all of which result in revenues for the
Technology Platform segment. We do not measure total accounts for
the Technisys products and solutions, as the revenue model is not
primarily dependent upon being a fully integrated, stand-ready
service.
Table 7
Segment Financials
(Unaudited)
Quarter Ended
($ in thousands)
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
March 31, 2022
December 31,
2021
Lending
Net interest income
$
262,626
$
265,215
$
231,885
$
201,047
$
183,607
$
139,516
$
114,003
$
94,354
$
77,246
Total noninterest income
90,500
83,758
99,556
136,034
144,584
162,178
143,114
158,635
136,518
Total net revenue
353,126
348,973
331,441
337,081
328,191
301,694
257,117
252,989
213,764
Adjusted net revenue(1)
346,541
342,481
322,238
325,086
314,930
296,965
250,681
244,372
208,032
Contribution profit
226,110
203,956
183,309
209,898
208,799
180,562
141,991
132,651
105,065
Technology Platform
Net interest income
$
941
$
573
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Total noninterest income
95,966
89,350
87,623
77,887
85,652
84,777
83,899
60,805
53,299
Total net revenue(2)
96,907
89,923
87,623
77,887
85,652
84,777
83,899
60,805
53,299
Contribution profit
30,584
32,191
17,154
14,857
16,881
19,536
21,841
18,255
20,008
Financial Services
Net interest income
$
109,072
$
93,101
$
74,637
$
58,037
$
45,609
$
28,158
$
12,925
$
5,882
$
1,785
Total noninterest income
30,043
25,146
23,415
23,064
19,208
20,795
17,438
17,661
20,171
Total net revenue
139,115
118,247
98,052
81,101
64,817
48,953
30,363
23,543
21,956
Contribution profit (loss)(2)
25,060
3,260
(4,347
)
(24,235
)
(43,588
)
(52,623
)
(53,700
)
(49,515
)
(35,189
)
Corporate/Other
Net interest income (expense)
$
17,002
$
(13,926
)
$
(15,396
)
$
(23,074
)
$
(20,632
)
$
(9,824
)
$
(4,199
)
$
(5,303
)
$
(2,454
)
Total noninterest income (loss)
9,254
(6,008
)
(3,702
)
(837
)
(1,349
)
(1,615
)
(4,653
)
(1,690
)
(957
)
Total net revenue (loss)(2)
26,256
(19,934
)
(19,098
)
(23,911
)
(21,981
)
(11,439
)
(8,852
)
(6,993
)
(3,411
)
Consolidated
Net interest income
$
389,641
$
344,963
$
291,126
$
236,010
$
208,584
$
157,850
$
122,729
$
94,933
$
76,577
Total noninterest income
225,763
192,246
206,892
236,148
248,095
266,135
239,798
235,411
209,031
Total net revenue
615,404
537,209
498,018
472,158
456,679
423,985
362,527
330,344
285,608
Adjusted net revenue(1)
594,245
530,717
488,815
460,163
443,418
419,256
356,091
321,727
279,876
Net income (loss)
47,913
(266,684
)
(47,549
)
(34,422
)
(40,006
)
(74,209
)
(95,835
)
(110,357
)
(111,012
)
Adjusted EBITDA(1)
181,204
98,025
76,819
75,689
70,060
44,298
20,304
8,684
4,593
Total permanent equity
5,234,612
5,053,388
5,257,661
5,234,072
5,208,102
5,181,003
5,186,180
5,210,299
4,377,329
Tangible book value (as of period
end)(3)
3,477,059
3,272,576
3,204,883
3,191,201
3,142,956
3,101,281
3,079,681
3,089,079
3,194,223
(1)
Adjusted net revenue and adjusted EBITDA are non-GAAP financial
measures. For additional information on these measures and
reconciliations to the most directly comparable GAAP measures, see
“Non-GAAP Financial Measures” and Table 2 to the “Financial Tables”
herein.
(2)
Technology Platform segment total net revenue includes
intercompany fees. The equal and offsetting intercompany expenses
are reflected within all three segments’ directly attributable
expenses, as well as within expenses not allocated to segments. The
intercompany revenues and expenses are eliminated in consolidation.
The revenues are eliminated within Corporate/Other and the expenses
represent a reconciling item of segment contribution profit (loss)
to consolidated income (loss) before income taxes. For the year
ended December 31, 2021, all intercompany amounts were reflected in
the fourth quarter, as inter-quarter amounts were determined to be
immaterial.
(3)
Defined as permanent equity, adjusted to exclude goodwill and
intangible assets.
Table 8
Earning (Loss) Per Share
(Unaudited)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Numerator:
Net income (loss)
$
47,913
$
(40,006
)
$
(300,742
)
$
(320,407
)
Less: Redeemable preferred stock
dividends
(10,189
)
(10,189
)
(40,425
)
(40,425
)
Net income (loss) attributable to common
stockholders – basic(1)
$
37,724
$
(50,195
)
$
(341,167
)
$
(360,832
)
Plus: dilutive effect of convertible
notes, net(2)
(13,109
)
—
—
—
Net income (loss) attributable to common
stockholders – diluted(1)(2)(3)
$
24,615
$
(50,195
)
$
(341,167
)
$
(360,832
)
Denominator:
Weighted average common stock
outstanding – basic
962,691,936
922,936,519
945,024,160
900,886,113
Effect of dilutive securities(3)
Convertible notes
52,428,091
—
—
—
Unvested RSUs
11,802,827
—
—
—
Common stock options
2,380,443
—
—
—
Weighted average common stock
outstanding – diluted(3)
1,029,303,297
922,936,519
945,024,160
900,886,113
Earnings (loss) per share – basic
$
0.04
$
(0.05
)
$
(0.36
)
$
(0.40
)
Earnings (loss) per
share – diluted(2)(3)
$
0.02
$
(0.05
)
$
(0.36
)
$
(0.40
)
Consolidated – Non-GAAP
Net income (loss), excluding impact of
goodwill impairment(4)
$
47,913
$
(40,006
)
$
(53,568
)
$
(320,407
)
Net income (loss) attributable to common
stockholders, excluding impact of goodwill impairment –
basic(1)(4)
37,724
(50,195
)
(93,993
)
(360,832
)
Net income (loss) attributable to common
stockholders, excluding impact of goodwill impairment –
diluted(1)(2)(3)(4)
24,615
(50,195
)
(93,993
)
(360,832
)
Earnings (loss) per share attributable to
common stockholders, excluding impact of goodwill impairment
– basic(1)(4)
$
0.04
$
(0.05
)
$
(0.10
)
$
(0.40
)
Earnings (loss) per share attributable to
common stockholders, excluding impact of goodwill impairment
– diluted(1)(2)(3)(4)
$
0.02
$
(0.05
)
$
(0.10
)
$
(0.40
)
(1)
Adjusted for the contractual amount of dividends payable to
holders of Series 1 redeemable preferred stock, which are
participating interests.
(2)
For the three months ended December 31, 2023, diluted earnings
per share of $0.02 and diluted net income attributable to common
stockholders of $24,615 exclude gain on extinguishment of debt and
interest expense incurred, net of tax, associated with convertible
note activity during the period.
(3)
Diluted earnings (loss) per share
of common stock is computed by dividing net income, adjusted for
the impact of Series 1 Redeemable Preferred Stock dividends,
by the weighted average number of shares of common stock
outstanding during the period plus amounts representing the
dilutive effect of contingently issuable shares including PSU
awards which require future service as a condition of delivery of
the underlying common stock, RSUs, outstanding options, outstanding
warrants and dilution resulting from the conversion of convertible
notes, if applicable. The adjustment for convertible notes reflects
the conversion price at the end of the reporting period. We
excluded the effect of all potentially dilutive common stock
elements from the denominator in the computation of diluted
earnings (loss) per share in the periods where their inclusion
would have been anti-dilutive. During the three months ended
December 31, 2023, 94,232,528 shares were excluded from the
computation of diluted earnings per share, as the effect would have
been anti-dilutive.
(4)
Earnings (loss) per share
attributable to common stockholders, excluding impact of goodwill
impairment is defined as net income (loss) attributable to common
stockholders, adjusted to exclude goodwill impairment losses of
$247.2 million for the year ended December 31, 2023, divided by the
weighted average common stock outstanding for the respective
periods. The goodwill impairment adjustment had no impact on
weighted average common stock outstanding, or income tax
impacts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240129860912/en/
Investors: SoFi Investor Relations IR@sofi.com
Media: SoFi Media Relations PR@sofi.com
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