SoFi's Q3 2025: Contradictions Emerge on Deposit Funding, Loan Growth, and NIM Strategy

Date of Call: None provided

Financials Results

• Revenue: $950 million, up 38% year over year
• EPS: $0.11 per share (Q3), no YOY comparison provided on call

Guidance:

• Add ~3.5 million members in 2025 (~34% YOY growth, up from prior guide of 3.0M / 30%).
• Adjusted net revenue ~ $3.54B for 2025 (~36% YOY, above prior guide $3.375B).
• Adjusted EBITDA ~ $1.035B for 2025 (implies ~29% margin).
• Adjusted net income ~ $455M and adjusted EPS ~ $0.37 for 2025; Q4 adjusted EPS ~ $0.12 (assumes Q4 tax rate ~10%).
• Tangible book value expected to grow by ~ $2.5B for 2025.

Business Commentary:

* Revenue and Membership Growth: - SoFi Technologies reported a record adjusted net revenue of $950 million for the third quarter, up 38% year over year, with a record 12.6 million SoFi members. - The growth was driven by a significant increase in new members and product offerings, supported by strong cross-buy rates and a strategic focus on being a one-stop shop for financial services.

• Financial Services and Tech Platform Performance:
• The financial services and tech platform segments generated $534 million in revenue, up 57% year over year, representing 56% of total revenue.

• This growth was due to increased contributions from capital-light, non-lending businesses and fee-based revenue streams, reflecting a diversification strategy.

• Loan Platform Business Expansion:

• SoFi's loan platform business generated $168 million in adjusted net revenue, up 29% from the previous quarter.

• The expansion was driven by strong originations, with $3.4 billion of loans originated on behalf of third parties, supported by a flight to quality from capital markets partners.

• Student Loan Refinancing Opportunities:

• SoFi's student loan originations reached $1.5 billion, up 58% year over year.
• The company anticipates increased refinancing activity due to a lowering interest rate environment, which will benefit both student loan refinancing and home equity loan offerings.

Sentiment Analysis:

Overall Tone: Positive

• Management: "We had an excellent third quarter." Financials: "Record $950 million revenue, up 38% year over year," "adjusted EBITDA was a record at $277 million, margin 29%." Operational: "Added a record 905,000 new members in Q3" and "cross buy reached its highest level since 2022."

Q&A:

• Question from Dan Dolev (Mizuho): Consumer credit — can you give an overview of what's going on? Any FICO differentiation that helps SoFi and overall health across FICO cohorts?
  Response: Credit is performing very well across products; net charge-offs improved, underwriting focuses on high-quality loans and durability, lifetime net loss target 7%–8% and current vintages are trending below that.

• Question from John Heck (Jefferies): With rates decreasing, how will that affect lending volume mix and when might student loan refinance spike? Also, thoughts on deposit betas and NIM over next few quarters?
  Response: Lower rates should boost student refis, home lending and overall demand; business benefits as rates fall. Expect continued healthy NIM (recently 5.84%) and historical deposit beta ~65%–70% to persist.

• Question from Kyle Joseph (Stephens): Membership guidance increased — is that driven by marketing/brand or is competition easing? Color on drivers of membership growth.
  Response: Growth driven by higher unaided brand awareness (9.1%), efficient performance marketing, and new product launches (e.g., crypto, SoFi Pay) plus strong cross-buy execution.

• Question from Andrew Jeffrey (William Blair): As non-personal lending grows, how will funding mix evolve between deposits and loan platform (LPB); are there LPB opportunities in non-personal loans?
  Response: Funding will diversify over time; dependency on deposits may decrease as capital markets, LPB expansion and blockchain-related funding options grow; tech & financial services now ~56% of revenue.

• Question from Kyle Peterson (Needham & Co): Was LPB strength broad-based across funding partners or concentrated? Any consolidation of buyers to fewer platforms?
  Response: Strength was broad-based — both new partners and existing partners increased activity; saw partners upsize commitments (a flight to quality) and expect momentum into Q4.

• Question from Reggie Smith (JPMorgan): Can you frame number of buyers on LPB, next-quarter capacity, and process for partners upsizing commitments?
  Response: Won't disclose buyer count; have multiple partners (e.g., Fortress, Blue Owl); executed $3.4B LPB originations this quarter and expect growth; partners upsize intra-quarter when they have excess capacity/demand.

• Question from Peter Christensen (Citigroup): Where are you in the investment cycle across capabilities (marketing, tech platform, crypto, etc.)?
  Response: Actively investing while maintaining at least a 30% incremental EBITDA margin; prioritizing product improvements (SoFi Plus, Smart Card, AI coach, crypto/stablecoin) and will invest until growth slows below ~15%.

• Question from Moshe Orenbuch (TD Securities): Competitive dynamic in personal loans after a competitor sale to a large bank; how much will capital-light shift come out of personal loans vs LPB?
  Response: Personal loans remain attractive and largely competed by non-top-10 banks; SoFi expects to maintain leadership (current share ~15%), will continue originations on balance sheet while LPB scales to drive capital-light growth.

• Question from Devin Ryan (Citizens Financial Group): Views on student loan market actions (administration policies, potential govt portfolio sales) and implications for SoFi?
  Response: Potential government actions (including asset sales) would be positive — SoFi would evaluate acquisitions as customer-acquisition tools; in-school loans and filling federal gaps are attractive, profitable opportunities.

Contradiction Point 1

Deposit Funding Strategy

It highlights a potential shift in the company's strategic approach to funding, which is crucial for its lending and growth prospects.

What factors drive membership growth, and is the competitive environment lessening? - Kyle Joseph (Stephens)

2025Q3: We aim to ultimately diversify away from deposit funding. We are no longer thinking of SoFi as a traditional bank, and we want to use our balance sheet for long-term strategic invest. - Chris Lapointe(CFO)

Can you outline the future funding mix given strong loan and deposit growth? - Andrew William Jeffrey (William Blair & Company L.L.C.)

2025Q2: We aim for 85% to 90% deposit funding. The Loan Platform Business is capital-light and expands beyond our credit box. It provides headroom for growth without deposit constraints. - Anthony J. Noto(CEO), Christopher Lapointe(CFO)

Contradiction Point 2

Loan Platform Business Guidance

It involves changes in guidance for the growth of a key business segment, which is critical for investors to understand the company's trajectory.

How does growth in non-personal loans impact funding, and are there opportunities in the non-personal loan platform business? - Andrew Jeffrey (William Blair)

2025Q3: We expect originations to grow roughly 40% year-over-year in 2025. We expect our loan platform business to originate roughly $4 billion in loans in 2025, about a $1.5 billion increase from 2024. - Chris Lapointe(CFO)

How sustainable is the Loan Platform Business growth, and what does the Q2 run rate imply? - Kyle David Peterson (Needham & Company, LLC)

2025Q2: We expect continued growth in LPB in Q3 and Q4, but not specifically guiding originations. Momentum is strong, and we expect further growth. - Christopher Lapointe(CFO)

Contradiction Point 3

Deposit and NIM Strategy in a Low-Rate Environment

It involves differing expectations on the impact of a low-rate environment on deposit beta and NIM, which are critical for SoFi's revenue and profitability.

How will the declining rate environment impact lending volume mix, especially student loan refinancing? What are your expectations for deposit beta and NIM? - John Heck (Jefferies)

2025Q3: In terms of deposit beta and NIM, we anticipate maintaining healthy margins and deposit growth despite lower rates. - Chris Lapointe(CFO)

Has the tech platform business changed due to recent macroeconomic uncertainty? - Kyle Peterson (Needham and Co.)

2025Q1: We continue to expect a deposit beta of about 30%. So for every 100 basis points that the Fed lowers rates, we expect a decline of about $60 million in our top-line NIM. - Chris Lapointe(CFO)

Contradiction Point 4

Deposit Growth and Funding Strategy

It involves the company's strategy for deposit growth and the balance between deposit growth and loan growth, which impacts their funding costs and overall financial strategy.

How does growth in the non-personal loan business impact funding, and are there opportunities in this sector? - Andrew Jeffrey (William Blair)

2025Q3: We're seeing a significant increase in deposits over the last 2 years, and at this point, deposits have grown to about 95% of our loan funding. - Chris Lapointe(CFO)

Can you explain how your deposit strategy improved NIM this quarter? You increased deposits and lowered APYs more than peers. Why have you reduced funding costs more effectively than peers despite the higher-for-longer interest rate environment? - Kyle Peterson (Needham & Co.)

2024Q4: We'd like to grow deposits at a similar pace to our overall loans, which we expect to be in the single-digit billions in 2025. - Chris Lapointe(CFO)

Contradiction Point 5

Impact of Rate Environment on Loan Volume

It highlights differing expectations regarding the impact of the interest rate environment on loan volumes, which directly affects the company's revenue and growth projections.

How will the declining rate environment impact your lending portfolio mix, especially regarding student loan refinance activity? How do you expect deposit beta and NIM to evolve? - John Heck (Jefferies)

2025Q3: As rates come down, our student loan business will benefit significantly. We expect a surge in student loan refinancing as rates fall. - Anthony Noto(CEO)

What are your expectations for revenue and contribution margins at the segment level, particularly in the Financial Services segment? - Mihir Bhatia (Bank of America)

2024Q4: Our revenue growth is driven by our products and services, and we are not highly dependent on the rate environment. - Anthony Noto(CEO)