SoFi Technologies(SOFI) - 2024 Q4 - Annual Results

Financial and Operational Review Overall Performance Summary SoFi Technologies achieved record Q4 2024 net revenue of $734.1 million and net income of $332.5 million, marking its first full year of GAAP profitability driven by strong growth in capital-light segments - CEO Anthony Noto declared 2024 as SoFi's best year ever, attributing the success to relentless innovation and brand building, resulting in record revenue, profit, members, and products[2] - The Financial Services and Tech Platform segments grew to represent a record 49% of SoFi's adjusted net revenue in Q4 2024, up from 40% in the prior-year quarter, with combined revenue growth of 52% YoY[2] - Record fee-based revenue reached $289 million in Q4, a 63% increase, reinforcing the successful shift towards higher Return on Equity (ROE) revenue streams[1][6] Q4 & Full-Year 2024 Consolidated Financial Results (GAAP vs. Non-GAAP) | ($ in millions, except per share) | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | % Change | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consolidated – GAAP | | | | | | | | Total net revenue | $734.1 | $615.4 | 19% | $2,674.9 | $2,122.8 | 26% | | Net income (loss) | $332.5 | $47.9 | 594% | $498.7 | $(300.7) | n/m | | Diluted EPS | $0.29 | $0.02 | n/m | $0.39 | $(0.36) | n/m | | Consolidated – Non-GAAP | | | | | | | | Adjusted net revenue | $739.1 | $594.2 | 24% | $2,606.2 | $2,073.9 | 26% | | Adjusted EBITDA | $198.0 | $181.2 | 9% | $666.5 | $431.7 | 54% | | Adjusted diluted EPS | $0.05 | $0.02 | 150% | $0.15 | $(0.10) | n/m | Consolidated Financial Results SoFi achieved GAAP net income of $332.5 million in Q4 2024 and $498.7 million for the full year, strengthening its balance sheet with tangible book value per share rising to $4.47 - Achieved fifth consecutive quarter and first full year of GAAP profitability. Q4 GAAP net income was $332.5 million, and adjusted net income was $61.0 million[7] - Full-year 2024 adjusted EBITDA reached a record $666.5 million, a 54% increase from 2023, with a 26% margin[8][10] - Tangible book value grew by $1.4 billion during 2024, ending at $4.9 billion, or $4.47 per share, up from $3.61 in the prior year[10] - Q4 Net Interest Margin (NIM) was 5.91%, up 34 basis points sequentially but down 11 basis points year-over-year[12] Member and Product Growth SoFi achieved record member and product growth in Q4 2024, adding 785,000 new members for a total of 10.1 million and 1.1 million new products reaching 14.7 million total products - Financial Services products grew 34% YoY to 12.7 million, driven by demand for SoFi Money, Relay, and Invest products[19] - Lending products increased by 21% YoY to 2.0 million[20] - Technology Platform enabled accounts grew by 15% YoY to 168 million[20] Member and Product Growth (Year-over-Year) | Metric | Q4 2024 Additions | Total as of Dec 31, 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Members | 785 thousand | 10.1 million | 34% | | Products | 1.1 million | 14.7 million | 32% | Business Segment Performance All three of SoFi's business segments achieved record contribution profit in 2024, with Financial Services revenue surging 84%, Technology Platform securing key partnerships, and Lending delivering $7.2 billion in record origination volume Financial Services Segment The Financial Services segment demonstrated significant growth and profitability, with Q4 net revenue surging 84% YoY to $256.5 million and contribution profit increasing 358% to $114.9 million - Total deposits grew to $26.0 billion, with over 90% of SoFi Money deposits coming from direct deposit members[29] - Monetization improved, with annualized revenue per product reaching $81 in Q4, up 37% year-over-year[28] Financial Services Segment Results (Q4 2024 vs Q4 2023) | ($ in millions) | Q4 2024 | Q4 2023 | % Change | | :--- | :--- | :--- | :--- | | Total net revenue | $256.5 | $139.1 | 84% | | Contribution profit | $114.9 | $25.1 | 358% | | Contribution margin | 45% | 18% | +27 p.p. | Technology Platform Segment The Technology Platform segment reported Q4 net revenue of $102.8 million and secured key long-term partnerships, including with the U.S. Department of the Treasury, expected to significantly contribute to future revenue - Galileo was selected by the U.S. Department of the Treasury as the processing partner for the Direct Express prepaid debit card program, with financial impact expected in 2026[9][39] - Signed new deals with a large U.S. financial services provider and a leading hotel rewards brand, expanding its client base[33][39] Technology Platform Segment Results (Q4 2024 vs Q4 2023) | ($ in millions) | Q4 2024 | Q4 2023 | % Change | | :--- | :--- | :--- | :--- | | Total net revenue | $102.8 | $96.9 | 6% | | Contribution profit | $32.1 | $30.6 | 5% | | Contribution margin | 31% | 32% | -1 p.p. | Lending Segment The Lending segment achieved record Q4 origination volume of $7.2 billion, a 66% YoY increase, while adjusted net revenue grew 22% to $422.8 million and credit quality improved - Q4 adjusted net revenue was $422.8 million, up 22% YoY, with a contribution profit of $246.0 million[38][41] - Credit performance improved, with the 90-day personal loan delinquency rate decreasing to 55 bps from 57 bps in the prior quarter, and the annualized charge-off rate decreasing to 3.37% from 3.52%[9][49][50] Lending Origination Volume (Q4 2024 vs Q4 2023) | ($ in millions) | Q4 2024 | Q4 2023 | % Change | | :--- | :--- | :--- | :--- | | Personal loans | $5,251.9 | $3,222.8 | 63% | | Student loans | $1,349.0 | $790.0 | 71% | | Home loans | $577.4 | $308.9 | 87% | | Total | $7,178.3 | $4,321.6 | 66% | Guidance and Outlook SoFi projects full-year 2025 adjusted net revenue between $3.200 billion and $3.275 billion, with adjusted EBITDA of $845 million to $865 million, and plans to add at least 2.8 million new members - Management expects to add at least 2.8 million new members in 2025, representing 28% growth[62] - Macro assumptions for 2025 guidance include 1.5+ rate cuts, 1-2% GDP expansion, and unemployment normalizing in the 5% range[61] Full-Year 2025 Guidance | Metric | 2025 Full-Year Guidance | | :--- | :--- | | Adjusted Net Revenue | $3.200 - $3.275 billion | | Adjusted EBITDA | $845 - $865 million | | GAAP Net Income | $285 - $305 million | | GAAP EPS | $0.25 - $0.27 | Q1 2025 Guidance | Metric | Q1 2025 Guidance | | :--- | :--- | | Adjusted Net Revenue | $725 - $745 million | | Adjusted EBITDA | $175 - $185 million | | GAAP Net Income | $30 - $40 million | | GAAP EPS | $0.03 | Financial Tables 1. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This table presents the company's detailed income statement for Q4 and full-year 2024, outlining revenues, operating expenses, and net income (loss) figures, including earnings per share Condensed Consolidated Statements of Operations (Full Year) | ($ in millions) | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total net revenue | $2,674.9 | $2,122.8 | | Income (loss) before income taxes | $233.3 | $(301.2) | | Net income (loss) | $498.7 | $(300.7) | | Earnings (loss) per share – diluted | $0.39 | $(0.36) | 2. Reconciliation of GAAP to Non-GAAP Financial Measures This section details reconciliations for non-GAAP financial measures, including Adjusted Net Revenue, Adjusted EBITDA, Tangible Book Value, and Adjusted Net Income, clarifying adjustments made to comparable GAAP figures for core operating performance Adjusted Net Revenue Adjusted Net Revenue is reconciled from total net revenue by excluding non-cash fair value changes and gains on debt extinguishment, totaling $739.1 million for Q4 2024 compared to GAAP total net revenue of $734.1 million Reconciliation of Adjusted Net Revenue | ($ in millions) | Three Months Ended Dec 31, 2024 | Year Ended Dec 31, 2024 | | :--- | :--- | :--- | | Total net revenue (GAAP) | $734.1 | $2,674.9 | | Adjustments | $5.0 | $(68.7) | | Adjusted net revenue (non-GAAP) | $739.1 | $2,606.2 | Adjusted EBITDA Adjusted EBITDA is reconciled from GAAP net income by adding back corporate interest expense, income taxes, depreciation, amortization, share-based expense, and other non-recurring items, totaling $198.0 million for Q4 2024 Reconciliation of Adjusted EBITDA | ($ in millions) | Three Months Ended Dec 31, 2024 | Year Ended Dec 31, 2024 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $332.5 | $498.7 | | Total adjustments | $(134.5) | $167.8 | | Adjusted EBITDA (non-GAAP) | $198.0 | $666.5 | Tangible Book Value Tangible Book Value is calculated by subtracting goodwill and intangible assets from permanent equity, reaching $4.9 billion or $4.47 per share as of December 31, 2024, up from $3.5 billion in 2023 Reconciliation of Tangible Book Value | ($ and shares in millions, except per share) | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Permanent equity (GAAP) | $6,525.1 | $5,234.6 | | Less: Goodwill & Intangible Assets (Net) | $(1,631.2) | $(1,713.4) | | Tangible book value (non-GAAP) | $4,893.9 | $3,521.2 | | Tangible book value per common share (non-GAAP) | $4.47 | $3.61 | Adjusted Net Income (Loss) and Adjusted EPS Adjusted Net Income is reconciled from GAAP net income by excluding non-recurring items and significant one-time tax benefits, resulting in $61.0 million for Q4 2024, or $0.05 per share Reconciliation of Adjusted Net Income | ($ in millions) | Three Months Ended Dec 31, 2024 | Year Ended Dec 31, 2024 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $332.5 | $498.7 | | Non-GAAP adjustments | $(271.4) | $(271.4) | | Adjusted net income (loss) (non-GAAP) | $61.0 | $227.2 | 3. Condensed Consolidated Balance Sheets This table presents SoFi's balance sheet as of December 31, 2024, showing total assets increased to $36.3 billion, driven by growth in loans and deposits, with total deposits reaching $26.0 billion Key Balance Sheet Items | ($ in millions) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total assets | $36,251.0 | $30,074.9 | | Loans (held for sale & investment) | $26,282.3 | $22,122.3 | | Total deposits | $25,978.2 | $18,620.7 | | Total liabilities | $29,725.8 | $24,519.9 | | Total permanent equity | $6,525.1 | $5,234.6 | 4. Average Balances and Net Interest Earnings Analysis This table details net interest income components, including average balances, interest income/expense, and yields/rates for assets and liabilities, showing a Q4 2024 net interest margin of 5.91% - For Q4 2024, the average yield on total interest-earning assets was 9.34%, while the average rate on total interest-bearing liabilities was 3.85%, resulting in a net interest margin of 5.91%[128] 5. Condensed Consolidated Cash Flow Data This table summarizes full-year 2024 cash flows, reporting net cash used in operating activities of $1.12 billion, net cash used in investing activities of $4.82 billion, and net cash provided by financing activities of $5.03 billion Condensed Consolidated Cash Flow Data (Full Year) | ($ in millions) | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,119.8) | $(7,227.1) | | Net cash used in investing activities | $(4,821.0) | $(1,889.9) | | Net cash provided by financing activities | $5,034.6 | $10,885.6 | 6. Company Metrics This section provides a quarterly breakdown of key company metrics, including Members, Total Products, and Technology Platform Accounts from Q4 2022 to Q4 2024, along with their definitions Key Metrics Trend | | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | :--- | | Members | 10,127,323 | 7,541,860 | 5,222,533 | | Total Products | 14,745,435 | 11,142,476 | 7,894,636 | | Tech Platform Accounts | 167,713,818 | 145,425,391 | 130,704,351 | 7. Segment Financials This table presents a quarterly summary of key financial data for each business segment (Lending, Technology Platform, Financial Services) and Corporate/Other, including net interest income, total net revenue, and contribution profit - The table shows consistent quarterly growth in contribution profit for the Financial Services segment, turning from a loss of $(43.6) million in Q4 2022 to a profit of $114.9 million in Q4 2024[141] 8. Disaggregated Revenue This table provides a detailed breakdown of noninterest income, separating revenue from contracts with customers and other sources, with full-year 2024 total noninterest income at $958.4 million - For the full year 2024, revenue from contracts with customers was $503.1 million, a significant increase from $421.5 million in 2023, driven by growth in interchange and technology services[145] 9. Analysis of Charge-Offs This table details net charge-offs and charge-off ratios for each loan category for Q4 and full-year 2024, showing an improved annualized net charge-off ratio for personal loans at 3.37% Net Charge-off Ratios (Q4 2024 vs Q4 2023) | Loan Type | Q4 2024 Ratio | Q4 2023 Ratio | | :--- | :--- | :--- | | Personal loans | 3.37% | 3.98% | | Student loans | 0.62% | 0.59% | | Credit card | 12.31% | 14.05% | | Total loans | 2.48% | 3.07% | 10. Regulatory Capital This table displays SoFi's key regulatory capital ratios as of December 31, 2024, showing all ratios well above required minimums, indicating a strong capital position Regulatory Capital Ratios (Estimated) | (As of Dec 31, 2024) | Ratio | Required Minimum | | :--- | :--- | :--- | | CET1 risk-based capital | 16.0% | 7.0% | | Tier 1 risk-based capital | 16.0% | 8.5% | | Total risk-based capital | 16.2% | 10.5% | | Tier 1 leverage | 13.4% | 4.0% | Other Information Earnings Webcast and Investor Communications This section provides details for the earnings webcast and directs investors to the company's investor relations website and social media for supplemental financial information - SoFi's executive management will host a live audio webcast to discuss the financial results, with a replay available on the investor relations website[64] - The company communicates material information to investors through its website, investor relations site, and social media channels like X and LinkedIn[71] Cautionary Statement Regarding Forward-Looking Statements This standard legal disclaimer warns that the report contains forward-looking statements, including financial guidance and strategic plans, which are subject to various risk factors that could cause actual results to differ materially - The report contains forward-looking statements regarding 2025 guidance, business growth, and macroeconomic assumptions[65] - Key risk factors include changing market conditions, ability to maintain profitability, regulatory environment, and credit performance[65] About SoFi This section describes SoFi as a member-centric digital financial services company with over 10.1 million members, offering products across Lending, Financial Services, and Technology Platform segments - SoFi is a digital financial services company serving over 10.1 million members with products for borrowing, saving, spending, investing, and protecting money[69] - The company operates across three segments: Lending, Financial Services, and Technology Platform, and is a bank holding company regulated by the Federal Reserve[70]