SoFi Technologies, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Durable Growth: Added a record 850,000 new members in Q2 2025, increasing total members to 11.7 million, and 1.3 million new products, with 35% of new products opened by existing members. Adjusted net revenue was a record $858 million, up 44% year-over-year.
• Returns and Profitability: Adjusted EBITDA was a record $249 million, up 81% year-over-year, with an adjusted EBITDA margin of 29%. Net income was $97 million at a 11% margin, and earnings per share were $0.08. Tangible book value ended the quarter at $5.3 billion.
• Crypto and Blockchain Initiatives: Announced self-serve international money transfers and return to crypto investing. Self-serve international money transfers will allow seamless cross-border money transfers, and crypto investing will let members buy, sell, and hold select cryptocurrencies. Both are expected to launch later this year.
• AI Applications: Implementing AI across the business, including enhancing back-office processes and improving member interactions. Cash Coach, part of the Relay product, will help members optimize their cash.
• Brand Building: Unveiled a music partnership as the presenting partner of the CMA Fest and partnered with Kelsea Ballerini. Unaided brand awareness reached an all-time high of 8.5%.
• Product Innovation: Loan Platform Business increased the proportion of near-prime loans, driving record origination volume. Tech Platform's Cyberbank Konecta improved response times and reduced chat abandonment. Home lending saw strong growth in home equity originations.

Segment Performance

• Financial Services Segment: Net revenue was $363 million in Q2 2025, more than double that of Q2 2024. Contribution profit was $188 million, up nearly 3.4x from last year, with a contribution margin of 52%. Net interest income was $193 million, up 39% year-over-year, and noninterest income grew nearly 4.6x to $169 million. Financial Services revenue per product increased from $64 in Q2 2024 to $98 in Q2 2025. The Loan Platform Business (LPB) generated $131 million in adjusted net revenue in Q2 2025, up 36% from last quarter, with $127 million driven by $2.4 billion of personal loans originated on behalf of third parties. Interchange revenue was up 83% year-over-year.
• Tech Platform Segment: Delivered net revenue of $110 million in Q2 2025, up 15% year-over-year. Contribution profit was $33 million at a 30% contribution margin. Revenue growth was driven by continued monetization of existing clients and new deals in new client segments.
• Lending Segment: Adjusted net revenue was $447 million in Q2 2025, up 32% from the same period last year. Contribution profit was $245 million with a 55% contribution margin. Record total loan originations of $8.8 billion were achieved, with personal loan originations at a record $7 billion, student loan originations $993 million, and home loan originations $799 million. Capital markets activity was strong, with over $3.4 billion of loans sold and transferred through LPB.

Guidance

• 2025 Outlook: Now expects to add over 3 million members (30% year-over-year growth). Adjusted net revenue is expected to be approximately $3.375 billion (above prior guidance of $3.235 billion to $3.310 billion), with year-over-year growth of ~30%. Adjusted EBITDA is expected to be approximately $960 million (above prior guidance of $875 million to $895 million) with a 28% margin. Adjusted net income is expected to be approximately $370 million (above prior guidance of $320 million to $330 million) and adjusted EPS is expected to be approximately $0.31 (above prior guidance of $0.27 to $0.28). Tangible book value is expected to grow ~$640 million for the year.
• Medium-Term: Continues to expect to exceed 25% compounded annual revenue growth from 2023 to 2026 and EPS in the range of $0.55 to $0.80 in 2026. Allocate resources to segments and businesses driving best compounded growth over decades with an ROE of 20% to 30%.

Risks

• Regulatory Uncertainties: Changes in regulatory requirements could impact operations, product launches, and growth. For example, regulatory approval and compliance for crypto and stablecoin initiatives may face uncertainties.
• Market Fluctuations: Macroeconomic conditions and market fluctuations can affect lending volumes, interest rates, and member behavior, impacting revenue and profitability. For instance, changes in interest rates can influence home loan and refinancing demand.
• Competition: Intense competition in the financial services industry could affect market share, member acquisition, and revenue growth. New entrants or existing competitors may offer similar or better products and services.

Question and Answer

Q: John Hecht from Jefferies asked about the cadence of growth from the third and fourth quarters and medium-term guidance.

A: Christopher Lapointe said they're pacing well above prior guidance for Financial Services, with Tech Platform and Lending expecting low double-digit to teens growth. Q4 is expected to be higher than Q3. Anthony Noto added they'll allocate resources to segments driving best compounded growth over decades with an ROE of 20% to 30%.

Q: Dan Dolev from Mizuho asked about the Tech Platform and Chime migration.

A: Christopher Lapointe said they don't give guidance on Tech Platform accounts but have made good progress on new partners contributing in 2026, with ~10 new clients expected in Q1 2026 that didn't contribute in Q1 2025.

Q: Andrew Jeffrey from William Blair asked about anticipated funding mix.

A: Anthony Noto and Christopher Lapointe said they balance business lines for optimized ROE, with deposits growing roughly in line with loan growth. They have ample warehouse capacity and are expanding into new asset types.

Q: Kyle Peterson from Needham & Co. asked about the Loan Platform Business near prime ramp.

A: Christopher Lapointe said momentum is strong with continued growth expected in Q3 and Q4, though not guiding specifically to LPB originations.

Q: Moshe Orenbuch from TD Securities asked about the scope of Loan Platform Business partner agreements and loan tokenization.

A: Anthony Noto said they have broad-based demand for LPB, partnering with long-term focused players. Christopher Lapointe mentioned existing agreements with Fortress, Blue Owl, and others, and loan tokenization potential for wider availability in liquid markets.

Q: Peter Christiansen from Citigroup asked about discretionary spend and margins in the Lending segment.

A: Christopher Lapointe said they invest for future growth, with engineering, product, and design being key areas. Margins in the Lending segment are expected to stay consistent, with the home loan business poised to grow when rates come down.

Q: Kyle Joseph from Stephens asked about growth opportunities and profit margins in the Lending segment.

A: Anthony Noto said margins in the Lending segment will stay consistent. The home equity business is benefiting from high rates, and the student loan business is seeing a pickup in refinancing.

Q: Reggie Smith from JPMorgan asked about the Invest segment monetization and KPIs.

A: Anthony Noto said monetization is slowly improving with more assets and back-end revenue streams. Metrics include total products in Invest, AUM, net flows, and mix of first-to-SoFi vs cross-bought members.