Speaker 1: Bloomberg Audio Studios, podcasts, radio news. SOFI shares, like the
Speaker 1: rest of the market, slumping today, in fact, having its
Speaker 1: worst day since March of last year. The fintech lender
Speaker 1: publishing perhaps a forecast that seems to be below where
Speaker 1: the marketer wanted to see. We've got a broad tech route,
Speaker 1: of course, linked to deep Seat more broadly in general,
Speaker 1: to AI over in China. But here to discuss the earning,
Speaker 1: SOFI CEO Anthony Noto, a tough day to report earnings. Anthony,
Speaker 1: and I ask you about the forecast, because look, your
Speaker 1: revenue was at record rates. Adjusted revenue up twenty four
Speaker 1: percent for the fourth quarter. But you're pushing us forward
Speaker 1: in a forecast that isn't as high as the market wanted.
Speaker 2: Why well, I think two things.
Speaker 3: One. Twenty twenty four, we took a pretty conservative approach
Speaker 3: to the year in terms of our growth and our profitability.
Speaker 3: We really wanted to make sure that we were able
Speaker 3: to drive strong profitability in twenty four to achieve gap profitability,
Speaker 3: to ensure we reinforced our balance sheet and a capital cushion,
Speaker 3: and we did just that. Prior to twenty twenty four,
Speaker 3: we had committed to a balanced approach to growth and
Speaker 3: profitability where we would reinvest seventy cents of every incremental
Speaker 3: revenue dollar and we call that thirty percent incremental eb
Speaker 3: down margins. So we took our revenue forecast for twenty
Speaker 3: five up and we're in the best position we've been
Speaker 3: since I've been here, at so far for the last
Speaker 3: seven years. We're calling for twenty five percent revenue growth,
Speaker 3: strong margins at twenty six percent, just not an expansion
Speaker 3: in the margins because we want to invest in the
Speaker 3: massive opportunity that still sits in front of us. And
Speaker 3: so we took revenue guidance up and it's about ten
Speaker 3: percent higher than the street, but that will require more
Speaker 3: investment and it will help us ensure we have growth
Speaker 3: beyond twenty five. And we also took our revenue guidance
Speaker 3: for twenty twenty three to twenty twenty six on a
Speaker 3: compound in a growth rate basis higher as well.
Speaker 2: So the profitability the business is there.
Speaker 3: We could drive more to the bottom line, but we
Speaker 3: think that's not the prudent thing to do because we
Speaker 3: just see massive growth in front of us and the
Speaker 3: ability for us to keep driving member growth and product
Speaker 3: growth of more than thirty percent, which we've done, and
Speaker 3: revenue growth of more than twenty five percent. Is you
Speaker 3: know what we're calling for through twenty twenty six.
Speaker 4: Anthony, the investment that you just describe, what portion of
Speaker 4: it will you be putting toward artificial intelligence? It's the
Speaker 4: topic at the top of everybody's minds, and people are
Speaker 4: watching how companies are deploying it. Do you see, for instance,
Speaker 4: an agent driven service? Perhaps at so far, At some point.
Speaker 3: The vast majority of our investment going into twenty twenty
Speaker 3: five and twenty six will be in building unaided bread awareness,
Speaker 3: becoming a trusted household brand name.
Speaker 2: We have great products.
Speaker 3: The reason why we're driving such strong product and member
Speaker 3: growth is because the products are very differentiated, and when
Speaker 3: we make people aware of them and they use the products,
Speaker 3: they not just use the first one and they gain
Speaker 3: trust with us, they use the second and third one.
Speaker 3: Thirty percent of our product growth in the quarter of
Speaker 3: thirty four percent was or existing members. About forty percent
Speaker 3: of our members take out a second product within thirty days,
Speaker 3: So we'll continue to invest in differentiating the product. So
Speaker 3: Ife Money is a great product that has a high
Speaker 3: apy you can do person to person payments. You could
Speaker 3: do Zell auto pay two day early paycheck, and so
Speaker 3: we'll be investing in that. We'll be investing in our
Speaker 3: invest product to expand the selection for invest in addition
Speaker 3: to other product categories like insurance and credit card and
Speaker 3: small medium business lending.
Speaker 1: You want to be able to offer crypto again, and
Speaker 1: that's something the administration's talked a lot about. Look on
Speaker 1: a day where we see such volatility that engulfs crypto
Speaker 1: too because of deep seek, is that really a product
Speaker 1: priacement that you want to get into again?
Speaker 3: If the regulation has changed so that cryptocurrency is permissible
Speaker 3: by bank holding companies, we would absolutely provide not just
Speaker 3: what we used to provide, which was the ability to
Speaker 3: safely and securely trade bitcoin and other cryptocurrencies, but we'll
Speaker 3: also go into other areas like custing and clearing in
Speaker 3: addition to asset back lending, et cetera. But that all
Speaker 3: be gated by the regulators, which we think should be
Speaker 3: coming over the next twenty four months, and we'll be ready.
Speaker 2: When it does.
Speaker 1: Ultimately, are you feeling more risk on in this environment
Speaker 1: the new administration a way in which to develop your business?
Speaker 1: Maybe M and a because it doesn't feel like a
Speaker 1: risk on day today.
Speaker 3: We are definitely leaning into twenty twenty five. Twenty twenty
Speaker 3: four was a record breaking year. We had record revenue, profits, returns,
Speaker 3: member growth, product growth. Couldn't be happier. The year that
Speaker 3: we had the most product's been at the company since
Speaker 3: I've been here. But I think twenty twenty five will
Speaker 3: be even better. We think the outlook is the best
Speaker 3: environment we've operated in over the last seven years. Our
Speaker 3: business is bigger, stronger, and more well known than it's
Speaker 3: ever been, and we have more resources to go after
Speaker 3: the opportunities. So we love our competitive positioning. We like
Speaker 3: the macro backdrop. It's a very different outlook than when
Speaker 3: we came in to twenty twenty four, and we're definitely
Speaker 3: being more aggressive in innovation and driving durable growth and
Speaker 3: strong returns.
Speaker 4: Anthony, back to the regular Tory side of things, What
Speaker 4: is the one thing, one hurdle that you would like
Speaker 4: to see the new administration and Congress is clear for you.
Speaker 3: The biggest question is what what will bank holding companies
Speaker 3: be allowed to do with cryptocurrency? What will be permissible?
Speaker 3: And that clarity is really critically important. The interest rate
Speaker 3: cycle I think has pretty good visibility and transparency to that.
Speaker 3: I think the economy also has really strong economic indicators.
Speaker 2: The big question is how much can we innovate?
Speaker 3: How much can we invest in these different asset classes
Speaker 3: that our members want to reinforce their ability to not
Speaker 3: just borrow better and save better and protect better, but
Speaker 3: to invest better. Investing is critical to reaching their long
Speaker 3: term financial goals. We want to be there for every
Speaker 3: one of the major financial decisions our members making their lives,
Speaker 3: and all the days in between. The key is spending
Speaker 3: less than you make in investing the rest. So the
Speaker 3: more opportunities we can give our members to invest, the
Speaker 3: faster they'll get to their financial outcomes.
Speaker 1: Anthony notos So, if I see you in the day
Speaker 1: of your earnings, great to have you on. Thank you
Speaker 1: so much.