1 00:00:00,120 --> 00:00:02,559 Speaker 1: And funnily enough, I'm pretty sure our next guest doesn't 2 00:00:02,560 --> 00:00:04,320 Speaker 1: always want to talk about stock reaction, but we'll want 3 00:00:04,360 --> 00:00:06,320 Speaker 1: to talk a bit more about the numbers. Let's bring 4 00:00:06,320 --> 00:00:09,200 Speaker 1: in Sofi see Anthony Noto. And I'm sure you're going 5 00:00:09,240 --> 00:00:10,920 Speaker 1: to say, oh, we don't go by the day by 6 00:00:11,000 --> 00:00:13,720 Speaker 1: day fluctuations. What do you make though of the optimism 7 00:00:13,800 --> 00:00:16,160 Speaker 1: of release originally seen around the numbers? And what more 8 00:00:16,200 --> 00:00:17,840 Speaker 1: do you want to say to an investor base that 9 00:00:17,880 --> 00:00:20,640 Speaker 1: maybe just well maybe we'll take some profit on the day. 10 00:00:21,600 --> 00:00:23,040 Speaker 2: Well, first, thank you for having me. 11 00:00:23,880 --> 00:00:27,280 Speaker 3: What I'd say is we're really excited about the results 12 00:00:27,320 --> 00:00:30,240 Speaker 3: that we delivered today. I think they're extraordinary in a 13 00:00:30,320 --> 00:00:33,800 Speaker 3: number of different ways, and equally as positive on the outlook. 14 00:00:33,960 --> 00:00:36,920 Speaker 3: There's very few companies that are driving durable growth the 15 00:00:36,920 --> 00:00:40,200 Speaker 3: way we are. Plus twenty five percent revenue growth, really 16 00:00:40,240 --> 00:00:43,680 Speaker 3: strong member growth at forty seven percent accelerated. We had 17 00:00:43,680 --> 00:00:46,960 Speaker 3: a record number of new members added as well as products, 18 00:00:47,200 --> 00:00:49,839 Speaker 3: which is a testament to the value propostion that we're delivering. 19 00:00:50,159 --> 00:00:52,120 Speaker 2: Our profitability continues to improve. 20 00:00:52,840 --> 00:00:55,280 Speaker 3: We now have all three of our business segments that 21 00:00:55,320 --> 00:00:59,040 Speaker 3: are profitable, that being the lending products as well as 22 00:00:59,120 --> 00:01:03,080 Speaker 3: tech platform now financial services sixty seven percent growth in 23 00:01:03,120 --> 00:01:06,080 Speaker 3: our absolute dollars on a year year basis from non lending, 24 00:01:06,400 --> 00:01:08,119 Speaker 3: and that will continue to be the driver and growth 25 00:01:08,120 --> 00:01:11,640 Speaker 3: of the company. And we meaningfully grew tangible book value 26 00:01:11,680 --> 00:01:14,080 Speaker 3: over they're trailing twelve months of about one hundred and 27 00:01:14,120 --> 00:01:17,280 Speaker 3: seventy million dollars. So I feel like we're executing across 28 00:01:17,400 --> 00:01:20,800 Speaker 3: the board on both growth and profitability and shareolder value, 29 00:01:20,800 --> 00:01:23,160 Speaker 3: and it just just a matter of time before that's 30 00:01:23,160 --> 00:01:25,280 Speaker 3: reflected in the stock. We just have to keep delivering 31 00:01:25,319 --> 00:01:25,720 Speaker 3: the way. 32 00:01:25,560 --> 00:01:26,000 Speaker 2: We have been. 33 00:01:27,080 --> 00:01:29,360 Speaker 4: Anthony, it was this interesting to listen to you on 34 00:01:29,400 --> 00:01:31,720 Speaker 4: the call. You kind of really talked up the non 35 00:01:31,840 --> 00:01:35,680 Speaker 4: lending parts of the business, particularly going into twenty twenty four. 36 00:01:36,360 --> 00:01:38,440 Speaker 4: Are those going to continue to be more of growth 37 00:01:38,480 --> 00:01:40,880 Speaker 4: driver for you than the lending business? 38 00:01:41,840 --> 00:01:42,399 Speaker 2: That's correct. 39 00:01:42,400 --> 00:01:45,320 Speaker 3: They've reached the size in terms of their absolute scale 40 00:01:45,360 --> 00:01:49,440 Speaker 3: where their absolute growth in dollars is meaningful at two 41 00:01:49,440 --> 00:01:51,920 Speaker 3: thirds of the overall growth in dollars, and they're profitable, 42 00:01:51,960 --> 00:01:54,720 Speaker 3: which means we can now start investing even more in 43 00:01:54,800 --> 00:01:56,360 Speaker 3: them and have them grow faster. 44 00:01:56,080 --> 00:01:57,160 Speaker 2: Than their lending businesses. 45 00:01:57,200 --> 00:01:59,440 Speaker 3: And so the way we talked about the call is 46 00:01:59,440 --> 00:02:02,640 Speaker 3: that I would tech platform and financial services to be 47 00:02:02,720 --> 00:02:05,760 Speaker 3: the driver of growth and lending to be additive to growth, 48 00:02:05,800 --> 00:02:08,360 Speaker 3: which is the opposite of what happened so far this year. 49 00:02:09,600 --> 00:02:12,480 Speaker 4: The interest rate environment is really interesting because some of 50 00:02:12,520 --> 00:02:17,079 Speaker 4: your sort of technology focused payers, Lending Club being an example, 51 00:02:17,160 --> 00:02:19,799 Speaker 4: is struggling. They've gone through a round of job cuts. 52 00:02:19,800 --> 00:02:23,520 Speaker 4: For example, I look at deposits tripling from a year ago. 53 00:02:24,000 --> 00:02:27,200 Speaker 4: What is the principal driver of that traction you're getting? 54 00:02:27,200 --> 00:02:30,720 Speaker 4: Why are you able to perform when similar business models 55 00:02:30,720 --> 00:02:30,960 Speaker 4: are not. 56 00:02:32,840 --> 00:02:34,960 Speaker 3: The thing that we're benefiting from is that we have 57 00:02:35,120 --> 00:02:38,880 Speaker 3: a great diversification because of our strategy. So our goal 58 00:02:39,000 --> 00:02:41,400 Speaker 3: is to help our members on all the most important 59 00:02:41,480 --> 00:02:43,520 Speaker 3: days in their lives and all the days in between. 60 00:02:43,600 --> 00:02:46,640 Speaker 3: From a financial perspective. That results in us having nine 61 00:02:46,680 --> 00:02:49,520 Speaker 3: different businesses. Some do really well in a high rate environment, 62 00:02:49,919 --> 00:02:52,640 Speaker 3: some will do better in a low rate environment. Right now, 63 00:02:52,720 --> 00:02:55,680 Speaker 3: the strength that we're seeing is behind our flagship products. 64 00:02:55,680 --> 00:02:58,400 Speaker 3: So far, Money, which is the best of checking and 65 00:02:58,400 --> 00:03:01,240 Speaker 3: savings in one account. We give you all the great 66 00:03:01,240 --> 00:03:05,160 Speaker 3: functionality that a digital operator can provide, in addition to 67 00:03:05,880 --> 00:03:10,160 Speaker 3: additional benefits like two day early paycheck, and then most significantly, 68 00:03:10,560 --> 00:03:13,320 Speaker 3: a very unique interest rate at four point six percent, 69 00:03:13,680 --> 00:03:16,760 Speaker 3: apy no fees, and the ability to get a free 70 00:03:16,800 --> 00:03:19,919 Speaker 3: certified financial planner end up to two million dollars of 71 00:03:20,200 --> 00:03:21,280 Speaker 3: FDIC insurance. 72 00:03:21,320 --> 00:03:22,679 Speaker 2: So it's a very unique product. 73 00:03:23,000 --> 00:03:25,480 Speaker 3: It's helped us grow at the top of our funnel, 74 00:03:25,720 --> 00:03:28,080 Speaker 3: and then we see great cross buying from that product 75 00:03:28,080 --> 00:03:31,040 Speaker 3: as well as others. So the diversification we have is 76 00:03:31,080 --> 00:03:35,560 Speaker 3: definitely helping. Having both lending businesses and depository businesses are 77 00:03:35,600 --> 00:03:38,400 Speaker 3: also very unique. And then of course our investing business 78 00:03:38,760 --> 00:03:40,240 Speaker 3: is a great cross buy product. 79 00:03:40,440 --> 00:03:42,080 Speaker 2: On top of that, one thing. 80 00:03:41,960 --> 00:03:44,520 Speaker 3: A lot of investors don't know in the retail sector 81 00:03:44,520 --> 00:03:47,600 Speaker 3: about SOFI is we have a third business, our technology 82 00:03:47,640 --> 00:03:51,720 Speaker 3: platform business, which is leveraging the technology that we use 83 00:03:51,800 --> 00:03:54,240 Speaker 3: to build SOFI for other partners. 84 00:03:54,240 --> 00:03:55,440 Speaker 2: There's about one hundred. 85 00:03:55,160 --> 00:03:57,800 Speaker 3: And thirty five million accounts that sit on top of 86 00:03:57,800 --> 00:04:00,880 Speaker 3: that technology platform. We often talk about it as the 87 00:04:00,920 --> 00:04:05,920 Speaker 3: fintech of the awsffintech because we enable eight billion transactions year 88 00:04:06,000 --> 00:04:07,280 Speaker 3: across that platform. 89 00:04:07,600 --> 00:04:10,640 Speaker 1: Let's talk about in that offering connector the natural language 90 00:04:10,680 --> 00:04:13,920 Speaker 1: AI driven I think it's like an intelligent digital assistant. Basically, 91 00:04:14,240 --> 00:04:16,480 Speaker 1: how much has AI been a driver of getting clients 92 00:04:16,480 --> 00:04:18,040 Speaker 1: excited of for your technology offering. 93 00:04:19,040 --> 00:04:20,000 Speaker 2: It's a small piece. 94 00:04:20,040 --> 00:04:22,520 Speaker 3: As you mentioned, we have a whole portfolio of products 95 00:04:22,520 --> 00:04:25,760 Speaker 3: in our tech platform, one of which is a chatbot 96 00:04:25,880 --> 00:04:29,240 Speaker 3: for customer service. It helps reduce the time to resolution 97 00:04:29,440 --> 00:04:32,520 Speaker 3: and reduce the context per customer. It does leverage AI, 98 00:04:32,880 --> 00:04:36,000 Speaker 3: natural language AI and answering the questions that our members have. 99 00:04:36,440 --> 00:04:40,200 Speaker 3: They really like the product and improved satisfaction. It's a 100 00:04:40,200 --> 00:04:44,480 Speaker 3: product we're offering to financial institutions. We're also increasingly offering 101 00:04:44,480 --> 00:04:47,280 Speaker 3: it to people that are not currently using some of 102 00:04:47,279 --> 00:04:49,520 Speaker 3: our other products, so it's a standalone product that's in 103 00:04:49,520 --> 00:04:49,960 Speaker 3: the cloud. 104 00:04:50,480 --> 00:04:53,320 Speaker 1: What you're also offering in the retail side of your 105 00:04:53,320 --> 00:04:56,800 Speaker 1: business in particular is IPOs. Of course, this has been 106 00:04:56,800 --> 00:04:59,720 Speaker 1: an interesting thing that we've heard, particularly AI related stories 107 00:04:59,760 --> 00:05:02,280 Speaker 1: around arm which I know that you were helping sell 108 00:05:02,320 --> 00:05:04,479 Speaker 1: down to some retail investors, but also you're on the 109 00:05:04,480 --> 00:05:07,680 Speaker 1: Instacart deal and Oddity Tech. How much will the IPO 110 00:05:07,760 --> 00:05:08,800 Speaker 1: pipeline benefit you? 111 00:05:08,880 --> 00:05:12,560 Speaker 2: Do? You think the IPO pipeline has two benefits. 112 00:05:12,600 --> 00:05:14,840 Speaker 3: The first is it's a direct revenue stream, which isn't 113 00:05:14,880 --> 00:05:17,720 Speaker 3: that meaningful, But what is more meaningful is that this 114 00:05:17,800 --> 00:05:22,400 Speaker 3: is a unique product that mainstream main mainstream investors retail 115 00:05:22,400 --> 00:05:25,360 Speaker 3: investors typically do not have access to, so we're giving 116 00:05:25,360 --> 00:05:28,720 Speaker 3: them access to IPOs at ipo prices and that helps 117 00:05:28,839 --> 00:05:32,080 Speaker 3: drive more desire to become a SOFI member as well 118 00:05:32,160 --> 00:05:35,320 Speaker 3: as it increases aum and our invest business, so it 119 00:05:35,400 --> 00:05:39,279 Speaker 3: indirectly drives the business in a unique way. We want 120 00:05:39,320 --> 00:05:42,159 Speaker 3: to give our members an opportunity to invest over the 121 00:05:42,200 --> 00:05:45,520 Speaker 3: long term, and giving them more selection like an IPO 122 00:05:45,600 --> 00:05:48,479 Speaker 3: at IPO prices is one way to do that. We're 123 00:05:48,480 --> 00:05:52,920 Speaker 3: working on alternative asset classes as well. We pioneered fractional shares. 124 00:05:53,040 --> 00:05:56,440 Speaker 3: We also offer ETFs and robo accounts, so we're trying 125 00:05:56,480 --> 00:05:58,640 Speaker 3: to be a one stop shop, not just overall as 126 00:05:58,640 --> 00:06:02,760 Speaker 3: a company, but within vertical like investing Anthony. 127 00:06:02,839 --> 00:06:06,440 Speaker 4: Last week he sold one hundred million dollars of personal loans. 128 00:06:06,440 --> 00:06:07,560 Speaker 4: He talked about it on the call. 129 00:06:08,240 --> 00:06:09,400 Speaker 2: Who was the buyer. 130 00:06:11,279 --> 00:06:15,000 Speaker 3: We don't disclose the individual buyers were very pleased with 131 00:06:15,040 --> 00:06:18,599 Speaker 3: the demand we're seeing for our assets, especially with the 132 00:06:18,640 --> 00:06:20,680 Speaker 3: fact that rates are starting to hit a ceiling and 133 00:06:20,720 --> 00:06:23,360 Speaker 3: would likely come down. We've been able to pass on 134 00:06:23,440 --> 00:06:27,720 Speaker 3: the higher benchmark rates and higher rates for our loans 135 00:06:27,760 --> 00:06:31,080 Speaker 3: and that's providing really attractive yields, especially given the fact 136 00:06:31,080 --> 00:06:33,719 Speaker 3: that we have prime customers with an average FYCO score 137 00:06:34,000 --> 00:06:36,560 Speaker 3: in our loans in the seven to fifty range and 138 00:06:36,640 --> 00:06:39,799 Speaker 3: really high yield. So we've had a number of counter 139 00:06:39,839 --> 00:06:43,280 Speaker 3: parties that were now making partners, and one of them, 140 00:06:43,320 --> 00:06:45,160 Speaker 3: as was mentioned in the call, was from one hundred 141 00:06:45,200 --> 00:06:48,360 Speaker 3: million dollar deal that will evolve into a two billion 142 00:06:48,400 --> 00:06:51,520 Speaker 3: dollar forward flow. In addition to that, we filed a 143 00:06:51,560 --> 00:06:55,000 Speaker 3: securitization with Blackrock for three hundred and seventy five million dollars, 144 00:06:55,040 --> 00:06:57,400 Speaker 3: So a lot more to come on the loan asset 145 00:06:57,480 --> 00:07:00,000 Speaker 3: side of the equation, but coming at rates that are 146 00:07:00,040 --> 00:07:02,240 Speaker 3: pre attractive to our relative to our balance sheet. 147 00:07:03,040 --> 00:07:05,240 Speaker 4: All right, So if I see you, Anthony NOTESO, good 148 00:07:05,320 --> 00:07:07,960 Speaker 4: catch up. Thanks for joining us on this busy earnings morning.