SoFi beats Q2 earnings and raises 2023 Guidance

EPS of $-0.06 (Estimated $-0.07)

• “Record GAAP and Adjusted Net Revenue for Second Quarter 2023

• GAAP Net Revenue of $498 Million Up 37%; $489 Million Adjusted Net Revenue Up 37% Year-over-Year

• Record Adjusted EBITDA of $77 Million Up 278% Year-over-Year

• New Member Adds of Over 584,000; Quarter-End Total Members Up 44% Year-over-Year to Over 6.2 Million

• New Product Adds of Nearly 847,000; Quarter-End Total Products Up 43% Year-over-Year to Over 9.4 Million

• Total Deposit Growth of $2.7 Billion, Up 26% During the Second Quarter to $12.7 Billion

Management Raises Full-Year 2023 Guidance”

“Management expects to generate $1.025 to $1.085 billion of adjusted net revenue in the second half of 2023, up 19% to 26% year-over-year, and $180 to $190 million of adjusted EBITDA. For the full year 2023, management expects adjusted net revenue of $1.974 to $2.034 billion, up from its prior guidance of $1.955 to $2.02 billion, and full-year adjusted EBITDA of $333 to $343 million, up from its prior guidance of $268 to $288 million, representing a 40-44% incremental adjusted EBITDA margin. Management projects that a more significant portion of the second half adjusted net revenue and adjusted EBITDA results will be generated during the fourth quarter. As the company moves toward expected GAAP net income profitability in the fourth quarter, management expects share-based compensation and depreciation and amortization expenses to be slightly higher than reported second quarter 2023 levels in both the third and fourth quarters of the year.”

Noto concluded: “Total deposits grew by $2.7 billion, up 26% during the second quarter to $12.7 billion at quarterend, 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 second quarter, the median FICO score was 747. More than half of newly funded SoFi Money accounts are setting up direct deposit by day 30, and this has had a significant impact on debit spending, with continued strong cross-buy trends from this attractive member base into Lending and other Financial Services products. With our launch of offering FDIC insurance of up to $2 million, nearly 98% of our deposits were insured at quarter end. 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 macro uncertainty. SoFi Bank, N.A. generated $63.1 million of GAAP net income at a 17% margin.”

SoFi continues to thrive in this macro environment:

• Galileo, Technisys, and bank charter form the pillars for SoFi to become “The AWS of Fintech”
• The acquisition of Wyndham Capital on April 3rd completes the three arms of lending under one umbrella. This cut off the middleman fee and maximizes profitability for the most lucrative segment of SoFi's businesses.
• The wide diversity of SoFi business allows it to thrive in any macro environment.
• SoFi's Savings with direct deposit APY of 4.4% gives an extra push for deposit growth in subsequent quarters.
• SoFi Checking and Savings Offers Access to Up to $2 Million in FDIC Insurance ensuring depositors that their money above $250K won't go up in smoke.