SoFi Technologies, Inc.

And with that, you may begin your conference. Thank you and good morning. Welcome to SoFi's first quarter 2025 earnings conference call. Joining me today to talk about our results and recent events are Anthony Noto, CEO, and Chris Lapointe, CFO. You can find the presentation accompanying our earnings release on the investor relations section of our website. Unless otherwise stated, we'll be referring to adjusted results for the first quarter of 2025 versus the first quarter of 2024. Our remarks today will include forward-looking statements that are based on our current expectations and forecasts and involve risks and uncertainties. These statements include, but are not limited to, our competitive advantage and strategy, macroeconomic conditions and outlook, future products and services, and future business and financial performance. Our GAAP consolidated income statement and all reconciliations can be found in today's earnings release, in the subsequent 10 filing, which will be made available next month. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are described in today's press release and our subsequent filings made with the SEC, including our upcoming form 10 . Any forward-looking statements that we make on this call are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events. And now I'd like to turn the call over to Anthony.

Thank you and good morning, everyone. We're off to a tremendous start in 2025 as we continue to drive durable growth and strong returns through our product innovation and brand building. Our battle-tested strategy and diverse business were instrumental in driving an acceleration in revenue growth to 33% and a 3x year-over-year increase in earnings. I'll begin by covering our key results for the first quarter, starting with our durable growth, which continues to be driven by exceptional growth in members and products. We added a record 800,000 new members in Q1, driving 34% year-over-year growth, reaching 10.9 million SoFi members. We also added 1.2 million new products, representing 35% year-over-year growth to over 15.9 million products. Our strong member and product growth powered great revenue growth in the first quarter. Adjusted net revenue was a record at $771 million, up 33% year-over-year. This is our highest growth rate in five quarters. Together, our financial services and technology platform segments generated $407 million of revenue, up 66% year-over-year. In our lending segment, adjusted net revenue grew 27% year-over-year to $412 million, driven by strong originations in the segment of $5.7 billion, up 30% from the prior year. Combined with $1.6 billion of origination in the loan platform business in Q1, originations reached a record of $7.2 billion. Total fee-based revenue across our business was also a quarterly record at $315 million, up 67 percent from the prior year this was driven by strong performance from our loan platform business origination revenue fees referral revenue interchange revenue and brokerage fee revenue on an annualized basis we are now generating nearly 1.3 billion dollars of fee-based revenue reflecting the deliberate diversification of our business towards more capital light revenue streams in addition to delivering strong durable growth we delivered strong returns and profitability In the first quarter, all three segments delivered strong contribution profit at attractive margins. Adjusted EBITDA for the quarter was a record $210 million, up 46% year-over-year. Our adjusted EBITDA margin for the quarter was 27%. Our incremental EBITDA margin was 35% as we continue to reinvest in the business to drive long-term growth and profitability. Net income was $71 million at a margin of 9%. Earnings per share were six cents. Finally, our tangible book value ended the quarter at $5.1 billion, a year-over-year increase of $946 million. Our strong financial performance is the direct result of our continued investments in brand building and product innovation. These investments attract new members and clients into our digital one-stop shop ecosystem and lead them to adopt more products over time. This virtuous cycle, which we call our Financial Services Productivity Loop, or FSPL, fuels our growth and ultimately our returns as we scale. In addition to product growth, we also measure the effectiveness of our productivity loop and the success of our strategy based on cross-buy. And cross-buy continues to be very strong. In the first quarter, 32% of new products were opened by existing SoFi members. Let me take a moment to discuss some of our recent investments in brand building and product innovation across our businesses. A significant amount of our marketing investment goes towards building the SoFi brand name via broad scale, high reach branded marketing. This investment is centered on building SoFi into a trusted household brand name, which we measure based on unaided brand awareness. Having a strong brand creates a halo effect that makes our performance marketing of each product more efficient. Our unaided brand awareness continued to be very strong through the quarter at 7%. During the first quarter, we completed the inaugural season of TGL presented by SoFi, a new tech-driven stadium golf league with 14 of the top 25 golfers in the world, including Rory McIlroy and Tiger Woods. TGL presented by SoFi attracted over 20 million total viewers on ESPN in its inaugural season. Since the SoFi brand goes everywhere the TGL brand goes, we capitalized on not just the broadcast audience reach that exceeded our expectations, but also the massive social presence as well as the exciting gameplay. We launched a promotion for SoFi Invest tied to players' performance during the playoffs. This on-air and online integrated marketing effort helped drive record engagement levels for SoFi Invest. We also continue to benefit from SoFi Stadium, as well as the continuity of our branding with the NBA and key sports ambassadors in Wyndham Clark, Cameron Brink, Jason Tatum, and of course, the OG SoFi partner athlete, Justin Herber. Additionally, we became the presenting partner of the Country Music Association's CMA Fest. This is our first ever music partnership and an incredible platform to introduce more people to SoFi through the live event, broadcast, and social media channels. This partnership will also allow us to enhance the fan experience for SoFi Plus members through exclusive perks. Turning now to product innovation in our segments. Financial Services is our fastest growing segment, doubling its revenue year-over-year to over $300 million. I'll touch on a few of the most significant contributions to this growth, starting with our SoFi Money business. To scale this business as rapidly as we have, we've invested significant capital to build the strong operational and regulatory capabilities that are required to have a nationally regulated bank with insured deposits, as well as earn the trust of our members. The investment, while not always obvious externally, has been transformational for our business. We've grown annualized debit spending to over $14 billion, just one of our high margin fee-based revenue streams. We've also grown our total deposits to $27.3 billion, lowering our funding expense by an estimated $515 million per year. Along the way, we've more than tripled our money products since the end of 2021 to nearly $5.5 million today by offering an unmatched value proposition with a high APY, P2P payments, bill pay, autopilot, vaults, Zelle, two-day early paycheck, $3 million of FDIC insurance, and unmatched rewards for checking and savings accounts, and so much more. Even with the success of SoFundMoney, we are continuously finding ways to improve the member experience. For example, this quarter, we completed the rollout of self-service wires, which gives members another frictionless way to move money. We are now the only company that offers digital person-to-person payments via phone number or email address and the ability to send money via Zelle, ACH, or self-serve wires. Given the performance of SoFi Money, we expect it to become our second billion-dollar revenue business. Another key contributor to growth in financial services is our loan platform business, where we produce loans on behalf of third parties. In less than a year, we've grown the business to an annualized run rate of over $6 billion of originations and more than $380 million of additional high-margin, high-return, fee-based revenues. And we continue to see strong demand for these loans. This year we finalized a $5 billion deal with Blue Owl, a $2 billion extension with Fortress, and a $1.2 billion joint venture between Fortress and Edge Focus. These additional deals will accelerate the quarterly originations well above the current level of $1.6 billion. Importantly, the LPB loans do not present any ongoing credit risk and contribute to member growth as we hold the relationship and can benefit from cross-buying to other SoFi products. So far, the vast majority of our LPB loans have been within our prime credit box, but over and above the volume we want to put on our balance sheet. However, we have the ability to also meet demand from buyers who want near-prime loans with higher WAC. We can even extend this program to other loan types in the future. We are incredibly optimistic about the depth and breadth of the growth opportunities in the loan platform business, and we see it becoming our third billion-dollar revenue business. Turning to SoFi Invest. In January, we shared that we are accelerating our investment in SoFi Invest, and that decision is already bearing fruit. Q1 2025 marked an acceleration in product growth to 2.7 million products, up 21% year-over-year, and we expect further acceleration in invest product growth throughout the year. The first quarter also marked our best quarter ever of member engagement, even compared to when we offered cryptocurrency or launched IPOs and alternative assets. In the first quarter, we made significant improvements to our single stock presentations, which provide members with insights to help make more informed investment decisions. Our new experience is clearer, easier to navigate, and more informative, driving positive feedback and, importantly, an increase in engagement. We also made it easier to roll over 401 assets with a more intuitive design and stronger backend engineering, which improves completion rates and provides another great way to build long-term durable relationships with members. We continue to expand on our unmatched selection, including investment opportunities that have been typically reserved for the high net wealth segment. Following our highly successful SPV for SpaceX last year, we've expanded our partnership with Templum so members can invest in another privately held company, Anthropic. We're also accelerating our product investment to improve the invest user experience and drive more personalization as well as better discovery of our invest product offerings within our app. We want to ensure that members are aware of all we have to offer and are getting valuable insights and information that are tailored to their specific needs. The more we service our great investment selection, the more engagement we see. So invest stands alone in the breadth of our offering, including the ability to buy and sell single stocks without commissions or fees. Our award-winning robo advisory product that offers three different themes with a total of 15 unique strategies. Four SoFi branded ETFs that are specifically tailored to our members' needs, IPOs, and level two options. We are also providing access to alternative assets, including private equity, private credit, private real estate, venture capital, long-short hedge funds, and private individual company investments. We continue to add more selection, and by the end of the year, if all goes as planned, we will add both level one options and certain crypto or blockchain offerings. Given the evolving regulatory landscape, we see an opportunity to reenter the crypto and blockchain business more comprehensively. In addition to enabling members to invest in crypto coins, we will enter other areas over the next six to 24 months, but potentially much sooner via acquisition or if the changing regulatory landscape allows. Our aspirations over time are as broad and deep as they are for our existing SoFi business, including developing crypto and blockchain offerings across borrowing, investing, paying, saving, and our technology platform services for third parties. Turning to our tech platform segment. Here the market for digitally native financial product platform is significant and continues to evolve. Recognizing the longer lead times associated with large-scale core banking conversions and consolidation among smaller fintech clients, we found innovative ways to broaden our client base. For example, this quarter we launched a first-of-its-kind reward debit program with Wyndham Hotels and Resorts. Later this year, we expect to launch similar co-brand debit card programs with other travel and hospitality companies, further expanding our footprint among consumer brands. And we recently signed a deal with Mercantile Banco, which offers personal and business banking services in Panama and will use our cyber bank digital banking platform. We are pleased with the demand from new client opportunities for the tech platform business and expect these wins and others in the RFP process to have an impact on our revenue in 2026 and beyond. Now turning to our lending segment, starting with our home loans business. Our 2023 acquisition of Wyndham Mortgage strengthened our technology and fulfillment capabilities, creating significant capacity for growth. In Q1, this helped us grow home loan originations by 54%. At the same time, we've expanded to offer home equity loans a great value to members, given the fact that they are sitting on low rate mortgages that they do not want to touch in a higher rate environment. This product, which we didn't have a year ago, accounted for more than one third of our home lending volume during the first quarter. It was our best quarter ever for home equity originations and should only go higher from here. As interest rates come down, we expect in our planning for a significant acceleration in the demand for home loans for both home purchase and refinance. We're also launching new personal loan and student loan refinancing products. The new personal loan product launching next month will be for prime credit card customers that carry revolving balance and are making mostly interest-only payments. These are commonly referred to as revolvers. Members will now get a fairly priced deal instead of being gouged by credit card companies and big banks who charge 20 plus percent interest to earn an ROE of 50% on some of these prime credit revolvers. We will meaningfully cut the cost of debt for this prime borrower, reducing monthly payments by as much as 40%, while generating an attractive target ROE in line with the 30% that we generate on our broader personal loan portfolio. So all you premium credit card holders out there that somehow found yourself with $10,000 to $30,000 or more of debt on your credit card that you're now only making minimum payments on, we are here to help get rid of that debt and get your money right. In the midst of uncertainty around student loan options in the market, we just launched an innovative member-centric refinancing solution known as Smart Start. This allows for lower payments in the early part of the loan and steps up into paying regular payments after this introductory period, helping members find their footing and build long-term savings. Yet another way we innovate to help our members spend less than they make and invest the rest. Let me wrap up the discussion on our results, branding, and product innovation with a perspective on SoFi Relay and SoFi Plus. Both products make their footprint bigger than their foot and are critical elements of our financial services productivity loop. SoFi Relay allows members to easily track and manage all their SoFi and non-Sofi financial products and accounts on our digital platform through an easy to use dashboard. Relay is our second largest product at $5 million, which is up 41% year-over-year. Although Relay doesn't generate revenue directly, it is a lightweight starting point and serves as the tip of the sword with very attractive cross-buy patterns into other SoFi products. As an example of Relay's impact, one-third of the Relay First members that cross by adopt at least three products, with the most common sequence being Relay to Money to Invest. Turning to SoFi Plus, our premium membership tier that brings together the best of all we have to offer through America's most rewarding financial membership, unlocking over $1,000 in value each year. Previously, members needed a direct deposit with us to be a SoFi Plus member, but during the first quarter, we added a fee-based subscription option as well. While this option is new, we are already seeing some promising behaviors among early subscribers. Nearly 90% of the new Plus members were already existing members, demonstrating the validation of making this product more accessible via a pay option, not just via direct deposit. The product has also been a catalyst for our FSPL. driving the second order effects of cross-buy among these members with nearly 30% adopting an additional product within 30 days of enrollment. Among SoFi Plus subscribers who are completely new to SoFi, over 75% adopt at least a second product and over 40% adopt a third product within 30 days of enrollment. Importantly, these members are adopting products across our platform beyond just SoFi money. This data demonstrates that members truly value the one-stop-shop model, and by exposing members to our complete offering, we can accelerate cross-buy. Hopefully, it is as clear to you as it is to me that our strategy continues to deliver great results. That is why we have decided to further accelerate our rate of innovation while still being able to increase our full-year guidance. Our value proposition has never been more relevant to the members and clients we serve. We are stepping on the gas to launch new products faster and iterate to improve our existing products at an even more rapid pace. The opportunity in front of us is too massive to risk under-investing to capture it. I'll be back after Chris covers the detailed financial results and guidance to spend a few more minutes talking about this important topic and the strength of our competitive position.

Thank you, Anthony. It has been a strong start to the year as we continue to drive durable growth and strong returns. We exceeded each metric that we guided to during our last call on the way to delivering accelerating revenue growth in our sixth consecutive profitable quarter. For the quarter, revenue grew 33% year-over-year to a record $771 million. Adjusted EBITDA was also a record at $210 million and a margin of 27%. Net income was $71 million at a margin of 9%. And earnings per share was 6 cents. This included a small benefit of about a penny related to a lower than expected effective tax rate. An important driver of the acceleration of growth was the increased contribution from capital light non-lending as well as fee-based revenue sources. Our non-lending businesses generated $407 million of revenue, up 66% year-over-year, and we also generated record fee-based revenue across all businesses of $315 million, up 67% year-over-year. Turning now to our segment performance. In terms of financial services, for the first quarter, net revenue was $303 million, more than double that of Q1 2024. Contribution profit was $148 million, up 4x from last year. Contribution margin was 49%, almost double what it was last year. Net interest income for this segment was $173 million, up 45% year-over-year, which was primarily driven by growth in member deposits. Non-interest income grew 3.2x to $130 million in the quarter, which equates to over half a billion dollars in high-quality fee-based income on an annualized basis. Importantly, improved modernization continues its strong contribution to revenue growth. Financial services revenue per product increased from $59 in the first quarter of 24 to $88 in the first quarter of 25. That's up nearly 50%, and we see continued upside as newer products mature. In Q1, our loan platform business generated $96 million in adjusted net revenue, up 44% from just last quarter. Of this, $93 million was driven by the $1.6 billion of personal loans originated on behalf of third parties, as well as referrals. I would note that these originations were up 41% quarter over quarter, while the associated platform fees increased approximately 50%, reflecting stronger monetization within this business. Additionally, LPB generated $3 million from servicing cash flow, which is recorded in our lending segment. The growth opportunity for this business continues to be strong. On the heels of launching our $5 billion partnership with Blue Owl Capital in Q1, we are pleased to have recently secured an additional $3.2 billion through a one-year, $2 billion extension with Fortress and a two-year, $1.2 billion agreement with a joint venture between Fortress and Edge Focus. These partnerships continue to demonstrate the attractiveness of our loan production to investors. In addition to our LPB revenue, we continue to see healthy growth in interchange, up 90% year-over-year, driven by close to $16 billion in total annualized spend in the quarter across money and credit card. Shifting to our tech platform, for the first quarter, we delivered net revenue of $103 million, up 10% year-over-year. Contribution profit was $31 million at a contribution margin of 30%. Revenue growth was driven by continued monetization of existing clients, along with new deals signed in new client segments. We saw a slight decrease in accounts to 158 million, or 6% year-over-year, while revenue still grew 10% year-over-year with similar growth and potential acceleration in Q2. This was driven by a large client's decision last year to diversify their processing providers, which was factored into our outlook for 2025. We continue to diversify our client base by winning new business, and we expect these wins to drive financial performance and an offset in 2026. Turning now to our lending segment. For the first quarter, adjusted net revenue was $412 million, up 27% from the same period last year. Contribution profit was $239 million, with a 58% contribution margin. These strong results were primarily driven by growth in net interest income, which increased 35% year over year to $361 million. During the last quarter, we had record total loan originations of $7.2 billion of 66% year over year. Personal loan originations were a record at $5.5 billion of which $1.6 billion was originated on behalf of third parties through LPB. In total, Personal loan originations were up 69% year-over-year. Student loan originations were $1.2 billion, up 59% from the same period last year. Home loan originations were $518 million, a 54% year-over-year increase. Capital markets activity was very strong in the first quarter. We sold and transferred through our loan platform business $3.1 billion of personal and home loans. In terms of personal loans, we closed $1.1 billion of sales in whole loan form at a blended execution of 106.2%. All deals had similar structures to other recent personal loan sales with cash proceeds at or near par and the majority of the premium consisting of contractual servicing fees that are capitalized. These sales included a small loss share provision that is above our base assumption of losses and immaterial relative to the exposure we would have otherwise had if we had held onto the loans. Additionally, we sold $90 million of late-stage delinquent personal loans. By selling these loans, we're able to generate positive incremental value over time versus selling after they charge off, both from our improved recovery capabilities and by maintaining servicing. In terms of home loan sales, we closed $322 million at a blended execution of 102.1%. In addition to our personal and home loan sales, we executed a $698 million securitization of loans originated through our loan platform business. This was the first securitization of new collateral in our SOFI Consumer Loan Program, or SCLP, since 2021, and the first using collateral originated in the loan platform business. Importantly, this channel provides our partners with meaningful liquidity to support their ongoing investment in the loan platform business. The transaction priced at an industry-leading cost of funds levels with a weighted average spread of 87 basis points and an all-in yield of 5.10%. Turning to credit performance, the health of our consumer remains strong. Despite the market volatility, we are not seeing signs of weakness. Our personal loan borrowers have a weighted average income of $158,000 and a weighted average FICO score of 743. while our student loan borrowers have a weighted average income of $134,000 with a weighted average FICO score of 769. Our credit trends continue to be strong after seeing delinquencies peak one year ago in the first quarter of 2024. For personal loans, the on-balance sheet 90-day delinquency rate was 46 basis points in the quarter, a decrease of nine basis points sequentially. The annualized charge-off rate also declined to 3.31%, versus 3.37% in the prior quarter. Had we not sold any late stage delinquencies, we estimate that including recoveries between 90 and 120 days delinquent, we would have had an all in annualized net charge off rate for personal loans of approximately 4.8% versus 4.9% last quarter. For student loans, the on balance sheet 90 day delinquency rate was in line with last quarter at 13 basis points while our annualized charge off rate decreased 15 basis points to 47 basis points. The data continues to support our 7 to 8% maximum life loan loss assumption for personal loans, in line with our underwriting tolerance, although we continue to trend below these levels. Our recent vintages originated from Q4 2022 to Q2 2024 have net cumulative losses of 4.09% with 43% unpaid principal balance remaining. This is well below the 5.53% observed at the same point in time for the 2017 vintage, the last vintage that approached our 7 to 8% tolerance. The gap between the newer cohort curve and the 2017 cohort curve widened by a more favorable 16 basis points after widening improvements of 15 basis points in Q4. Additionally, looking at our Q1 2020 through Q4 2024 originations, 59% of principal has already been paid down, with 6.7% in net cumulative losses. Therefore, for life of loan losses on this entire cohort of loans to reach 8%, the charge off rate on the remaining 41% of unpaid principal would need to be approximately 10%. This would be well above past levels, further underscoring our confidence in achieving loss rates below our 8% tolerance. Turning to our fair value marks and key assumptions. As a reminder, we mark our loans at fair value each quarter, which considers a number of factors, including the weighted average coupon, the constant default rate, the conditional prepayment rate, and the discount rate comprised of benchmark rates and spreads. At the end of the first quarter, our personal loans were marked at 105.5%, up 55 basis points from the end of the prior quarter. This change was primarily a function of the discount rate decreasing by 42 basis points to 4.87% due to the underlying benchmark rate decreasing by 34 basis points and spreads tightening by 8 basis points. As we've previously noted, both of these changes are empirical based on actual market data, not assumptions. Additionally, any fair value impacts that resulted from interest rates increasing were offset nearly one for one by hedge losses. Additionally, the annual default rate decreased by 18 basis points. Slightly offsetting these impacts was a 14 basis point decrease in the weighted average coupon and a 52 basis point increase in our conditional prepayment rate. When a borrower prepays, we are still capturing the principal and the impact to the value of the asset is only based on the premium above par at a given point in time, which is very small relative to the principal outstanding. At the end of the first quarter, our student loans were marked at 105.2%, up 107 basis points from the end of the prior quarter. This change was a function of the discount rate decreasing by 18 basis points to 4.22%, driven by the underlying benchmark rate decreasing by 38 basis points, partially offset by 20 basis points of spread widening, and a 10 basis point increase in the weighted average coupon. There were no material changes to the annual default rate or the conditional prepayment rate. Turning to our balance sheet. In the first quarter, total assets grew by $1.5 billion, driven by $1.6 billion of loan growth, and approximately $265 million of growth in cash, cash equivalents, and investment securities, partially offset by a reduction in other assets. Total company-wide cash at quarter end was $2.7 billion. On the liability side, member deposits grew by $2.2 billion for the quarter, bringing total deposits to over $27 billion. Net interest margin was 6.01% for the quarter, up 10 basis points sequentially, reflecting our ability to sustain healthy deposit versus lending betas. This included a 27 basis point decrease in cost of funds, which was partially offset by a 13 basis point decrease in average yields. we continue to expect a healthy net interest margin above 5% for the foreseeable future. In terms of our regulatory capital ratios, we remain very well capitalized. Our total capital ratio of 15.5% at quarter end remains comfortably above the regulatory minimum of 10.5%. Tangible book value grew more than $167 million sequentially to $5.1 billion, and tangible book value per share at quarter end is $4.58, up from $3.90 a year ago. Let me finish by providing our revised outlook for 2025. Given our strong start to the year, we continue to expect to add over 2.8 million members, which represents at least 28% year-over-year growth. We now expect adjusted net revenue of $3.235 to $3.310 billion above our prior guidance of $3.2 to $3.275 billion. This equates to year-over-year growth of approximately 24 to 27%, an increase from our prior guide of 23 to 26%. We now expect an adjusted EBITDA of $875 to $895 million above our prior guidance of $845 to $865 million. This represents a 27% margin. We now expect adjusted net income in the range of $320 to $330 million above our prior guidance of $285 to $305 million. An adjusted EPS of 27 to 28 cents above our prior guidance of 25 to 27 cents. We now expect growth in tangible book value of $585 to $600 million for the year above our prior guidance of $550 to $575 million. For the second quarter of 2025, assuming credit spreads are in line with the range we've observed year to date, we expect to deliver adjusted net revenue of $785 to $805 million, adjusted EBITDA of $200 to $210 million, adjusted net income of $60 to $70 million, and adjusted EPS of 5 to 6 cents. Overall, it's been a strong start to 2025, and we're looking forward to a great year overall. I'll hand it back to Anthony to wrap us up and kick off the Q&A. Thank you, Chris.