All right. We are going to kick it off now. Kicking us off for the entire conference is Chris Lapointe from SoFi. Very excited to have you. Chris has been the long-serving CFO since 2020 and has been at SoFi for longer than that, so thank you for being here.
No, appreciate you having me. Thanks, Will.
All right. Let's kick it off. I think it might be good to start with the state of the union here. You're coming off several years of really rapid growth. Personal loan originations have grown tremendously. SoFi Plus has seen rapid membership growth straight out of the gate. You've continued to diversify the product set. Where do you think you are in the evolution of the business and the broadening out from the core personal products?
Yeah, absolutely. We've had a tremendous start to the year here in 2026. We've generated approximately 40% year-over-year revenue growth in each of the first two quarters and approximately 30% adjusted EBITDA margins, which puts us at a produced Rule of 40 score of about 70, which is your revenue growth plus adjusted EBITDA margins, which is really unusual given our size and scale as a business. What's just as important is the fact that this isn't a one or two-quarter phenomenon. We've been consistently outpacing the Rule of 40 for the past 20 consecutive quarters. So the last five years, we've had a Rule of 40 score north of 40%. What's even more important is since 2022, our members, our products, and our revenue have all compounded at more than 30% each year.
What we are most excited about is despite all the success that we have had, especially recently, it still feels like we are in early days as a company. It feels just like we were back in 2018 when Anthony and I joined. At that time, we only had 650,000 members. Today, we are adding that many members every 7 to 8 weeks. The quality of that membership is continuing to improve. This past quarter, we added double the amount of products relative to members. We added 2.2 million products versus 1.1 million members, which is the first time that we have achieved that ratio, and cross-buy accelerated to 51%, meaning 51% of all new products that were taken out came from existing members on the platform, which demonstrates that our financial services productivity loop and everything app strategy is really working and hitting an inflection point.
At the same time, we have all of these newer businesses like SMB, SoFi Plus, SoFiUSD, SoFi Tech Solutions, all in their early stages of growth and profitability. The combination of these maturing businesses growing at the pace that they are, as well as all of these new growth vectors, makes us really excited to be at the company at this point in time.
Yeah. I guess one of the big changes this year was the pivot to growing the balance sheet and pivoting away slightly from the third-party loan buyers. Q1, you channeled $5.4 billion of loans to the balance sheet. I think that stepped up to $7.5 billion and then around $10 billion to $11 billion after that. Can you walk us through just the decision framework each quarter, and then talk about how much runway there remains to keep growing the balance sheet at that pace before capital starts to become the binding constraint?
Yep, absolutely. I would not define this necessarily as a pivot away from Loan Platform Business partners. We had excess demand from those parties in each of the last two quarters. In fact, we did not fulfill all of the demand that we have. What I would say is the assessment of risk-adjusted returns and what risk-adjusted return assets would create the most durable revenue given our current capital position is what actually changed. We have a really high risk-based capital ratio, which is far north of the regulatory minimum and where we think we should be operating the business. This past quarter, we originated $10.7 billion of personal loans, $7.6 billion of which came to the balance sheet, $3.1 billion of which went through our LPB business.
What I would say is we don't manage to a predetermined split between what goes on the balance sheet and what goes to the LPB business. What we're managing to is what's going to deliver us the best risk-adjusted returns, given the demand we see from borrowers, the demand that we see from our capital markets partners, and the durability of the resulting revenue that we're able to generate. If we put loans on the balance sheet, we're able to generate predictable recurring net interest income that gives us really good visibility over the course of the next six to eight quarters. On the flip side of that, we can generate revenue through our Loan Platform Business and distribute loans that way, which is much more capital efficient and enables us to serve more members than we otherwise would be able to do.
So putting the two together, we view them as complementary, and we're going to manage the business to the best risk-adjusted return at any given point in time, given where our capital ratios are, and that's what you saw in Q1 and Q2.
Got it. So as you think about the go-forward levels of capital and funding, risk-based capital came down to 18.8%. You said low to mid-teens is the right long-term level. You have a lot of funding levers between the deposit base, the LPB partnerships, securitization pricing, which has been very favorable. How are you thinking about the funding mix and capital needs over the next couple of years?
Yeah. I'll hit on both the funding mix and the capital separately because we have a lot of flexibility across both of them. From a funding perspective, deposits are the foundation of our funding mix. Right now, 93% of the funding stack is coming from high-quality deposits. Most of which are from direct deposit relationships. Right now, over 90% of our member deposits are coming from direct deposit members. And we can supplement that funding with unused warehouse lines. We have significant capacity from a warehouse perspective. We also have great access to the securitization markets, whole loan sales, and you mentioned the 86 basis point spread that we've been able to achieve through the re-securitizations of loans that we put through the LPB business.
That's a really good proof point of the demand that we have for loans that are originated by SoFi and the quality of those loans to be able to price those at industry-leading levels. On the capital front, we have an 18.8% total risk-based capital ratio, which is well north of the 10.5% regulatory minimum that we have and the low to mid-teens level that we want to operate at. The thing I would say is that our capital capacity is not static. As we continue to grow our profitability, our organic capacity is going to continue to increase. At the same time, we're starting to drive more growth into fee-based revenues streams like LPB, like brokerage, like credit card, et cetera, which is going to naturally increase our ability to use less equity to drive even more revenue.
Taken together, those levers give us a lot of confidence and flexibility in the model and will be used dynamically going forward.
I guess when you think about capital adequacy then for the expected growth you have, do you foresee any changes in the funding profile of originations between kind of on and off balance sheet?
It's going to be dynamic. Like I said, it's going to be based on risk-adjusted returns. At this point in time, we don't see the need to raise any equity capital under our current operating plan, given where our capital ratios are today and the growth that we're seeing in the Loan Platform Business as well as other fee-based revenue streams.
Got it. Just I guess on that note, total originations hit $14.8 billion in Q2, records across three of the major products. You cite the TAM as roughly a trillion dollars of prime revolving credit card debt. How do you frame the opportunity you are actually going after here? Is this a share gaining story from other personal lenders? How much of the growth do you think is sort of gaining share from existing lending activity versus taking share from credit card balances that have never been refinanced?
I think it is both. But I think the larger opportunity is taking existing revolving credit lines that are outstanding and refinancing them into our personal loans. Right now, you have a lot of prime borrowers who have revolving debt at 25% APY. They could come to us and take out a fixed rate mortgage at half the price, at 12%, reduce their interest expense and put themselves on a path to retiring that debt in relatively short order.
One of the inhibitors to that is the fact that it is so largely dependent on awareness. A lot of people just do not know that they can go and refinance their credit card debt into a lower fixed rate personal loan. So we think there is a ton of headroom in that space. We have grown originations quite meaningfully over the course of the last several years as a result of operating in that market.
I think that is the largest opportunity for us. It is a trillion-dollar market, and we are still a relatively small share. I also think we are taking share from legacy financial institutions and banks as well as other digital lenders. Right now, large banks are not incentivized to refi their credit card debt because of the APYs and the returns that they are getting on those asset types. On the flip side, digital lenders that are less mature are capital constrained and have much higher cost of funding. So our unique blend of our brand, our ability to originate our funding source through our direct deposits, which are very high quality, enable us to compete and take share, not only from large banks, but also digital lenders, and continue to tap into the huge market opportunity of revolving prime credit.
What is also important is that our growth ambitions and aspirations are not predicated on moving downstream in credit. There is huge opportunity for us within our existing credit box to serve members in this very large market.
Great. Maybe you just squeeze a quick numbers question in here. If we think about the guidance for the full year, it implies a ramp in profitability in the back half of the year. You have been messaging that all year. I think you have been pretty consistent about that. Can you just talk about puts and takes, first half to second half, your visibility, and maybe what are the one or two things that need to go right in order to achieve that?
Yeah. Our second half guide, stepping back for a second, when we originally provided guidance for 2026, we were assuming that there were going to be two rate cuts. What we are now anticipating and what is baked into our guidance is that there are one to two rate hikes. At the same time, our effective tax rate has increased meaningfully as a result of where our share price is. Despite all of that, we have been able to exceed revenue expectations and profit expectations, and we have been able to raise our overall full-year revenue guidance while keeping profitability in line with original expectations. That obviously speaks to the durability of our business and our ability to execute. In terms of what needs to happen, our ability to hit this back-half guidance does not require any favorable change in the macro environment right now.
As I mentioned, we are expecting one to two rate hikes, and it is not determined by any single product outpacing anyone's expectations. It all comes down to execution, continuing to deliver on superior member and product growth, ensuring that credit stays in line to better than expectations. But overall, it is continuing to execute as planned.
Yeah. I think you are covered on the rate hike expectations and guidance. The curve has also been steepening. I think our house view is that you will see a steeper curve over time. How does that impact, given the point on the curve where you guys lend?
Yeah. If rates were to increase from today, like I said, we would be able to hit our back-half guide. Higher rate environment would obviously put pressure on our refi businesses, particularly our student loan refinancing and our home loan refinancing businesses. But we would deploy capital to other products and businesses that tend to do well in higher rate environments, just like we have in the past. We think we are in a good spot from where rates are today. If rates come down, there could be a potential tailwind from us. If rates go up, like I said, that is already baked into our contemplated guide.
Yeah. Sticking with the macro theme, maybe you could just talk a little bit about the consumer. Credit has been more or less stable. I think broader spending levels have also been fairly robust this year, but what is your data telling you about the health of the consumer right now, and any meaningful changes on that as we sit here in September?
Yeah. Our members are really healthy and performing in line with expectations. From a credit perspective, we reported 90-day delinquencies in Q2 at 40 basis points, which was down sequentially from Q1, and NCO rates of 3.7%, which is down 70 basis points as well. So everything is performing in line to better than expected from a consumer credit perspective, and we are also seeing really good spend behavior across our entire membership. We reported $28 billion in annualized spend across our debit and credit products, and we do not see that slowing down here in Q3. So overall, our consumer remains extremely healthy. Spend behavior is really robust. Losses and delinquencies performing in line to better than expected.
Got it. Right. Maybe let us pivot a little bit, talk about the Loan Platform Business. You have talked about the future state of offering partners a menu of asset types, credit profiles, and in Q2 you made a step towards that with a $3 billion funding arrangement for SMB loans and a funding partnership for home equity loans. How are you thinking about the trajectory for LPB volumes from here? Then maybe if you could talk about the fee economics for the new products relative to what we are used to seeing for the standalone personal product, that would be helpful too.
Sure. What I would say is we're really happy with the growth and momentum that we're seeing in that business, as well as the deep bench of partners that we have, particularly on the unsecured personal loan side. Where you're going to see the next leg of growth is going to be continuing to broaden out different asset types. We signed the SMB deal, as you mentioned, and we're starting to pass through closed-end second mortgages through the LPB program as well. You're going to see an uptick in overall origination volumes in the back half of this year as a result of expanding assets and continued growth in unsecured personal loans. We have significant committed capacity on the SMB side. We now have to start generating enough demand to continue to fulfill that, which we expect to be able to do.
You'll see a decent uptick here in the back half of the year. In terms of fee economics, still early days on the SMB and the closed-end second deals. As we generate more and more demand and as those partnerships start to mature and scale, pricing will stabilize and be pretty consistent. But right now it's still early days. So you'll see some fluctuations from a take rate perspective. Right now you could expect it to be generally in line with where we're seeing unsecured personal loan pricing.
Got it. All right. No big mix shift there.
Every deal is different. Every partner has different economics depending on the collateral that they're taking.
Right. Okay. That's helpful. Unaided brand awareness hit an all-time high of, I think you said 10.4% from roughly 2% when you joined. Big deal with Notre Dame announced this year. In the context of higher marketing costs being a factor in the back-half weighted guide for this year, how do you think about unaided brand awareness and how that translates to customer acquisition costs over the long term?
Yeah, absolutely. Our brand strategy has been relatively consistent over time. We think that the most optimal level of brand spend relative to overall marketing spend is 25% brand, 75% direct product marketing. We're not quite at that mix yet, but we're well on our way, and that helps make all of your direct product marketing work that much more efficiently. Our overall strategy hasn't changed. We want to partner with iconic venues, iconic brands, iconic athletes and artists that embody ambition and enable us to reach an audience that we want to have. Our SoFi Stadium deal, our TGL deal, all of the artists and athletes that we've partnered with over the years have enabled us to increase brand awareness, which is a really tough metric to move from 2% back in 2018 when Anthony and I joined to 11% today.
We've made really good progress as a result of these investments that we've made. Notre Dame, which we just announced, is a natural extension to that strategy. It's a world-class institution with an unmatched national audience and reach. Their mission and their values are directly in line with ours. We're really excited about the partnership and the broad reach and recurring exposure that it's going to give us. In terms of how we think about customer acquisition costs and the return on these investments, we look at things like awareness. We look at things like traffic. We look at customer acquisition costs. We look at LTV. We look at cross-buy. All of the metrics that we're observing right now are heading in the right direction.
We've moved brand awareness from 2% to 11%, while keeping customer acquisition costs generally flat on a per product basis over the course of the last several years. Our overall mission is to continue to increase the lifetime value of our members relative to that customer acquisition cost. You're seeing the proof in the pudding with 51% cross-buy and stable customer acquisition costs.
I guess on that note, on cross-buy, you have seen a nice increase in that over the past year. You mentioned adding twice as many products as members for the first time. Where in the member base are you seeing the most cross-buy activity? I guess ask through the other dimension, where in the product set are you seeing the most cross-buy activity?
Yep. Hitting 51% cross-buy is a great indication that our everything app strategy is really working. Right now, members are commonly coming through our broadly appealing products like SoFi Money and SoFi Relay, and then typically cross-buying into our credit card business, our Invest business, and other Loan Platform Businesses. Because we don't have to pay a second customer acquisition cost for those people who are cross-buying into those other products, it meaningfully increases the lifetime value of every single member that we're bringing on. We're super focused on cross-buy and continuing to drive that as it results in better unit economics, better lifetime value. One other thing that people typically talk about is looking at average revenue per user. We tend to focus on average revenue per product in our business.
What's going to continue to drive lifetime value for our members, as well as the financial results, is increasing our members, increasing our products per member, and increasing revenue per product. We're seeing meaningful growth across all three of those metrics. If you look at average revenue per product and you exclude Relay because it's not a revenue-generating product, that has increased 60% over the course of the last two years. The strategy is certainly working, and that's what's going to continue to drive the momentum and the lifetime value in our business.
Yeah. Makes sense. On that note, on the product side, you launched SoFi Plus on April 1st as a subscription offering. You already hit 200,000 paying subscribers. I think Anthony said he'd be disappointed if you weren't at 1 million a year from when he said that. Can you unpack the unit economics of this product, 4.5% APY, 1% Invest match, credit card boost, all for $10 a month? How do you measure the halo effect that this product has on activity levels, engagement, and cross-buy?
SoFi Plus has been a great business for us. It's still early days, but it's doing exactly what it was designed to do. At the end of Q2, we'd surpassed 200,000 million paying subscribers, which translates to $24 million of annualized revenue. What I would say is that we evaluate the economics across the entire member relationship, not just by comparing the $10 fee that they're paying every single month and tying that to any individual benefit that they're getting. SoFi Plus is specifically designed to increase product adoption, increase AUM, increase spend behavior, and ultimately increasing lifetime value of each of our members. Q2 data that we reported was really encouraging. If you look at all new SoFi Plus paid subscribers, 85% of them came from existing members on the platform, and 25% of those actually took out another product after becoming a paid subscriber.
Among the members who were new through SoFi Plus, SoFi Money was the biggest beneficiary of that. They were typically coming in through SoFi Plus and then going to SoFi Money. For those who were existing members, SoFi Invest was the biggest beneficiary to that.
Got it. Okay. A lot of momentum on the investing side.
Yeah.
Similar theme then. You're the first nationally chartered bank to launch a consumer crypto trading platform, and your own stablecoin on a public blockchain. You're settling crypto trades in SoFiUSD. Big picture, what kind of opportunity does crypto represent for SoFi? Of everything on the roadmap, trading, staking, custody, lending, which products do you think are ultimately the most impactful to the model?
Yeah. So we view consumer crypto and SoFiUSD as distinct but complementary opportunities for us. Consumer crypto trading broadens our Invest product and provides our members with a new type of asset to invest in. If you look at SoFiUSD, that is primarily a payment infrastructure, not necessarily something that every consumer needs to use directly. It is our view that dollars need to be able to move 24 hours a day, 7 days a week, and having a fully reserved stablecoin that is issued by a nationally chartered bank can make settlement that much easier, that much faster, more cost-effective, and always available 24/7. We are already settling our crypto trading via SoFiUSD. Big Business Banking provides another great commercial opportunity for that. Our Mastercard partnership is moving towards 24/7 card settlement. Then you have international remittances, which provide another great opportunity for that.
Over time, these capabilities are going to be able to provide strong fee-based revenue for us, as well as net interest income, as well as broaden our overall customer relationships. It is really too early to say which one of these opportunities or use cases is going to drive the business going forward. Over time, we view the underlying payment rails to have a really significant impact on the SoFi ecosystem longer term.
Yeah. Great. Maybe sticking with the same Big Business Banking, this went from kind of announcement to live clients over the course of this year, built entirely on your own systems. You made a big hire to run the business, Ben Reynolds, who I remember from Silvergate, was instrumental at building the relationships across the crypto ecosystem. What is your vision for this business? For people who do not kind of understand the history, what is the primary value prop of something like the SoFi Exchange Network?
Yeah. We are excited about Big Business Banking. Let me step back and talk a little bit about the origins of it. It originally originated from direct customer demand. The exchanges, the market makers, and all of the institutions that we were talking to told us that they really needed a regulated banking partner that could match and connect fiat with digital assets and operate 24/7 around the clock. What this platform does is it allows businesses to collect and hold deposits, move money through APIs, and convert directly between fiat and digital assets, all within our regulated banking environment. That creates a standalone revenue opportunity for us to generate fee-based income as well as interest income. It is also going to drive greater adoption and real-world usage of our SoFiUSD product. A good example of this is the partnership that we just announced last week, which is Payward.
It's a really good example of it. Payward's going to be joining the SoFi Exchange Network and listing SoFiUSD, which will expand our reach to all of their retail and institutional investors. We'll also be using Kraken Prime to increase liquidity as well. Over time, we expect that this will evolve from pure crypto-native companies to other institutions and companies who need to move money real-time, 24/7, and settle payments in a much faster and more efficient way. This is just another example of how our bank, our infrastructure, SoFiUSD, all reinforces one another and the flywheel's working.
How do you think about just the revenue model in that business? Do you see it more as a deposit gathering engine or a fee income business?
It's going to be both. We'll have the ability to hold money at the Fed and generate net interest income, but there will be opportunities to generate true fee income as well.
Got it.
as it starts to scale.
Okay. Maybe pivoting to the tech platform business, which you've rebranded to SoFi Technology Solutions across four platforms, processing, banking core, ledgers, payments, risk, and fraud. You bought Peach Finance in the quarter. Maybe talk about where you're taking this business strategically, and then address the question that we get from investors on why is SoFi the right owner of a third-party tech platform business?
Yeah. We used to get that question a lot back in the day when we first acquired Galileo, so I'll hit that one first. SoFi's the right owner for SoFi Tech Solutions because we're both a customer, but we're also a product development partner for the business. The technology allows us to iterate and innovate at a much faster clip than we otherwise would, and we're able to get to market with innovative products like our SoFi Smart Card business or Big Business Banking in a much faster way than we otherwise would. We're also providing for a demanding, regulated governing body to test these new products that are going to market and help validate the platform. We're currently in the process of migrating SoFi Money to the new cloud-native banking platform, in Core, which makes SoFi Bank the first major bank reference customer.
That should hopefully help unlock and work with other institutions who are looking to modernize their infrastructure. Strategically, we have unified the business, like you said, around four key pillars. It's Banking core and ledgers, it's our core processing business, payment hub, and risk and fraud. The Peach acquisition that we just did expands that to lending and servicing. We view right now 2026 as being a transition and investment year that positions the business really well, heading into stronger growth and momentum into 2027. The strategic benefits that SoFi gets as a result of owning this business are unparalleled given our ability to innovate at the pace that we do.
Makes sense. Maybe we can talk about some of the company's AI initiatives. SoFi Coach launched in June, nearly half a million conversations, good feedback from customers. This is powered by the Relay dataset which came up earlier in the conversation. You also launched Composer on the Invest side. How do you think about monetizing customer-facing AI? Do you view this as more of a retention and engagement tool or potentially its own revenue line down the line?
Yeah, we think that we're uniquely positioned from an AI perspective just because of our everything app strategy. We provide the ability to provide financial information across a member's whole financial life if they connect their external accounts. Composer's now integrated into SoFi Invest, so it can generate revenue through greater investing activity, engagement, and having more assets on the platform. Coach is more around providing better engagement, better adoption, retention, and lifetime value for our members. It uses differentiated data that we are able to obtain from customers, as long as they provide us permission to do so, and provides them with great tailored advice to what they should be doing in their financial lives each and every day. So it's more of a retention and cross-buy product as opposed to generating revenue on day one. Over time, we could charge for value-added services and generate more fees.
But right now it's about adoption, building that trust and loyalty, and having them deepen their overall relationship with us. One interesting stat is, since launch, our SoFi Coach business has had half a million conversations on it with over a 90% approval rating from those conversations, which speaks to the efficacy of the product and the fact that it's really working and building that trust and loyalty with our members. So we're excited about the opportunity. Everything that we've built within Coach, it was one of those things when we first started, we didn't think it would ever take it to the level that it has. But it's been really beneficial for our members, and we're excited about the future.
That's great. We got a couple minutes left here. I wanted to finish off with just a longer-term financial question. The growth has been really strong. What is your level of confidence in meeting the 30% revenue growth target going forward through 2028? Over what time period do you think you can get the target returns up to the 20% to 30% level that you've talked about?
We feel confident. We have large and mature businesses that are growing extremely well. At the same time, we have less mature businesses, like I said at the top of the hour, that are starting to scale but not contributing meaningfully. We have strong confidence in our ability to grow revenue. We're growing products and members, like I said, at more than a 30% compounded rate over the course of the last few years, and revenue is following. In terms of the ROTCE and our ability to get to our 25%-30% target, it's pretty simple formula in our mind. It's net income margin multiplied by revenue to average tangible equity. On the net income margin, we're already delivering 30% incremental net income margins. If you look back over the last 12 months relative to the prior 12 months, our incremental margin was 29%.
If you look forward to what's implied in our guide, that implies an incremental margin of 30% as well. Similar to when we first went public and we had aspirations to deliver 30% incremental EBITDA margins, net income margins are following suit, and we're already operating at that level while growing revenue at 40% year-over-year. On the other side of the equation, the revenue to average equity, we're continuing to scale our fee-based revenue streams, which will allow us to generate more revenue for less incremental dollars of equity that we're putting into the business. We just need that ratio to get to one to one, and we see a clear line of sight to getting there over the course of the coming years as we continue to scale our fee-based revenue.
If we get our net income margin to 30% and our revenue to equity to one to one or even slightly less, you're already at your 25%-30% margin. For the first time, you're actually able to start seeing that in the numbers.
That's great. Well, I think we're just about out of time, but thanks for joining us today. Really appreciate it.
Great. Thanks for having me.