SoFi Technologies’ cross-selling continues, and certain trends seem well in place as the interest rate environment becomes more benign.
Members are accessing more products across the company’s platform, and momentum in SoFi Money deposits continues to be underpinned by direct deposit members.
Having run up more than 50% through the past three months, investors sent SoFi shares down 6% in early trading Tuesday (Oct. 29).
“Monetization continues to improve across all products,” with annualized revenue per product of $81, up 52% year over year…,” the company said in its third-quarter earnings release Tuesday.
Total deposits grew to $24.4 billion, with over 90% of SoFi Money deposits coming from direct deposit members. SoFi Money accounts as part of the overall “financial services products” came to 4.7 million, up 54% year over year.
Management stated on a conference call that financial services, as a percentage of revenues, was more than a third of the company’s consolidated top line. CEO Anthony Noto said the segment is a $1 billion business, as measured on an annualized revenue basis.
New Member Growth
New member growth was up 35% year over year, to 756,000, and the total installed base was 9.4 million. Galileo accounts were up 17%.
“The one-stop shop continues to attract cross-buying behavior by our members,” Noto said, as 32% of new products were opened by existing members, while 20% of new members opened a second product within their first 30 days on the platform.
Supplemental materials showed the company’s tech platform grew to $103 million in net revenues, up 14%.
“We continue to see a strong pipeline of potential partners that are striving to modernize their platforms,” said Noto, who added later during the call that “we believe there have remained substantial upside in both product growth and monetization.”
Personal loan record originations of $4.9 billion in the third quarter of 2024 were up 26% year over year, the release said. Third-quarter student loan volume of $944 million was up 3% year over year.
“We seized on the improving rate environment in the quarter, our improving credit trends, and strong performance across all lending products,” Noto said.
Elsewhere, the company’s annualized debit spending reached $10.3 billion in the third quarter.
“We will soon improve our self-serve wire transfers, which, similar to introducing Zelle, will further expand members’ money movement options,” Noto said during the call. “In our member team, we’re beta testing a new cash coach product that will analyze members’ cash across all of their financial products at SoFi and beyond.”
Chief Financial Officer Chris Lapointe said on the call that “after seeing credit trends peak in Q1, we have seen continued improvement in personal loans.”
The company’s on-balance sheet 90-day personal loan delinquency rate was 0.57%, a decrease from 0.64% in the second quarter. The personal loan annualized charge-off rate decreased to 3.52% from 3.84% in Q2.
For the full year, the company boosted guidance to $2.53 billion to $2.55 billion in revenues on an adjusted basis, which would be 22% to 23% higher than last year versus previous guidance of 17% to 19% growth. Loan growth on the balance sheet should be “modest in dollar terms,” said management on the call.
