EXCLUSIVE: Anthony Noto Reveals SoFi’s 2026 Roadmap

Well, it's my pleasure and thank you guys for having me, but also just thank you for all the incredible work you do to help people stay informed about our great company and provide perspectives that help people make great decisions. So, very much appreciated.

Sure. Well, first on the capital raise, I would definitely encourage people to go to our investor relations website in our area within our website provides a really detailed perspective and one that will dispel many of the myths. The first thing is like our goal is to build long-term shareholder value and there are a lot of different ways to do that. Capital is critical to all the ways that you drive shareholder value. And I know there's a fair amount of people that believe a capital raise is dilutive. We wouldn't do a capital raise if it was dilutive to the company because that would destroy value over time. And so the accretion that comes from the capital raise should be incremental and it should be incremental over time. It so happens that the position that we're in when we raised capital both times was accretive to tangible book value per share. If you think about financial institutions at the essence of it, the company's at least worth the difference between their assets and liabilities and you know subtract goodwill from that and that's tangible book value. Well, you can increase your tangible book value by doing an equity offering. It's unusual to also increase your tangible book value per share, but we are able to do that and that gives us great flexibility to be able to go down whatever growth path we're considering. Gives us great flexibility to opportunistically buy something that we think is strategic and could help us accelerate our growth. Also allows us to reduce our expenses, specifically our cost of capital based on debt expenses. And it does generate income even if the cash is just sitting there based on where interest rates are relative to as we think about our other costs of capital. So it's 100% opportunistic. We wouldn't do it if we didn't think it was accretive over the long term, but this happens to be accretive to tangible book value per share in the near term.

Sure. We'll be worth more than our book value if we can drive high returns on equity. Equity being your book value and we believe we can drive between 20 and 30% return on tangible equity. We're not there today but we've laid out the sort of building blocks to get there. The first is EBITDA margin, which is directly how much do you generate in profits per dollar of revenue. And as you know, our most recent quarter, we've been right around 29-30%. And we've committed in the future to invest back into the business at least 70 cents of every incremental revenue dollar, which is a 30% incremental EBITDA margin. Our EBITDA margins have shown the ability to be much higher than 30%. And so long-term that will be somewhere between 30 and 40%. Then obviously you have to consider the expenses below EBITDA to get to a net income margin which would inherently be the numerator in the return on equity calculation. So today we're not at our normalized level of return on equity but we're showing you the building blocks that will indicate that we can get to 20 to 30%. If you look at companies like American Express, they have traded between four and seven times in the last 12 months their tangible book value per share. And the reason why they trade at that high multiple of tangible book value is because they have return on equity of over 20%. So there's a direct correlation between return on tangible equity and the multiple of book value. Now, you don't have to value our company off of tangible book value. It's just a point of comparison, and I would say it's the point of comparison to the worst way to value the company. I think a better way to value the company is off of our earnings and our growth rate. And so when I covered internet companies back in 1999 to 2007, it was really hard to value companies like Amazon. Everyone wanted to value Amazon like a retailer at like one to two times revenue. And that would translate to like 20 times earnings at a normalized margin over time. And so one of the things I did was really relied on PEG ratios. And so I looked at what is the price to earnings to growth rate ratio, PEG ratio. And I would use a three-year normalized growth rate, not a growth rate that was super high relative to revenue. Some companies are driving 30% earnings growth, but only 15% revenue growth. That's not sustainable. Once you hit your maximum margin, your earnings growth will reflect your revenue growth because you can't drive margin expansion. So, I never used a growth rate in earnings that was more than five percentage points of growth faster than the revenue. If you look at SoFi, we've told the street that we will grow our earnings 40% over the next three years and we've also given a revenue growth number. Well, if you look at the PEG ratio broadly of the market, it's around 1.4 to 1.5 times forward three-year growth. Financial services companies and fintech companies, they trade at about 1.1 times forward three-year growth, which would imply a 44 multiple of earnings. And if you apply a 44 multiple earnings to our earnings in 2026 and 2027 and discount them back to today or 2028 for that matter, you'll see that the value of the stock is in the 30s today and a year from now approaching over $40 a share depending on what discount rate you use. So we have to deliver on the growth and I believe if we deliver on the growth and return on tangible equity the multiple will reflect that.

Yeah. So one of the things to think about from a guidance standpoint having been a research analyst but also having been a CFO two times, one of a public company one of a private company, is financial services companies are very different than other sectors from the standpoint that your brand that reflects your company reflects its morals, its character, its culture, these intangible things all have to triangulate back to trust. And if people don't trust us, they're not going to give us their money. And so when we're giving guidance, it's not just about what can we deliver to the financial community and to our shareholders, but it's also considering reputational risk and brand and are we building a brand that people can trust, that people can rely on? And we have to be a brand that people trust. So when we're giving guidance, I'm also thinking about that. I never want to miss what we tell someone we're going to do because if we do miss what we tell someone we're going to do, then we're eroding that brand. We're eroding that trust. We're eroding that culture that we're establishing. And so that's not to say that our guidance is sandbagged. It's just meant to say it's a responsible guide, not an irresponsible guide. I see other CEOs on Twitter and other places being very Hollywood. And they boast and they make grand statements. You can't do that as a financial services company. Who wants to give their money to someone that wants to be in the glamour world, wants to be in Hollywood, wants to make these huge grandiose statements and not be able to deliver on them. So, I believe we have an obligation to our shareholders and to our members to be reasonable. It's not to say we don't take any risk. We always take risk, but we want to make sure what we tell you we can deliver. So, and it's not meant to be sandbagging. So, for example, our guidance for 2026, we're guiding to 30% revenue growth plus. And in the first quarter, our revenue growth is 35%. I would be incredibly disappointed if we didn't deliver, if the first quarter of the year was our fastest growth quarter of the year. I would be disappointed if that's what happens. But here we are in February giving guidance for the next 12 months in the world that's shown no one's very good at predicting the forward 12 months in any of the last five years. Interest rates have turned out to be different than people have thought. Inflation has turned out to be different than people thought. We had a global pandemic. We had a president that basically wiped out the student loan refinance business. We have global issues and risks. We have a war in the Ukraine. So if we're going to give guidance for 12 months, which you only do that once at the beginning of the year, you have to have a balanced view that say we have to have an expectation that we can deliver this unless something deviates meaningfully relative to the conditions that we're assuming. So we have a lot more visibility on the first quarter. So our growth in the first quarter happens to be greater than the rest of the year. And that's because the rest of the year is more uncertain. But I would be hugely disappointed if Q1 was our fastest growth quarter of the year.

Sure. And our guidance when we gave it to the street, Chris walked through what was assumed in our guidance. And I believe what he said was two rate cuts. I would tell you I believe our business is diverse enough, our management team is nimble enough. We're good allocators of capital. We're good allocators of resources and changing those allocations based on the conditions. So, if rates didn't change, I believe we could still achieve our financial outlook and our guidance. We will achieve it differently than what we have planned. We didn't actually lay out for you exactly how we're going to get there, but since I've been here for the last eight years, rates have always turned out to be different than what we've thought. And as that reality has come to bear, we make different decisions. I'll go back to 2019. There's supposed to be a bunch of rate increases in 2019. And we took a stance that as those rates increased, people would be looking to refinance their student loans. And as they would do that, we would be able to capture that opportunity. Well, we got to 2019. There was only one rate cut, I believe. And so we had to completely pivot to personal loans which is what we did. So every year the rates turn out to be different than we think and we have to operate within that. What I would tell you is our guidance really reflects just a stable economy, stable situation. Rates could be flat, rates could be up a little bit, rates could be down a little bit, but it really means that we can operate and achieve our guidance in a stable economy. If there's some disruption or big instability, then we'd have to revisit all the assumptions that we have. But there are no rate cuts and we still have a stable economy. Unemployment's below 5%. We'll either achieve or exceed our financial expectations.

Yeah. And the loan platform business is a piece of our strategy. I think some people started to believe it was the only strategy. It's not the only strategy. Loan platform business really came to life when we looked at what are the areas that were not capturing value for our members and not creating value for our shareholders and we declined 70% of the applicants for personal loans. And that seemed like a big opportunity. We also kind of gated our marketing based on how much we wanted to put on our balance sheet from an asset standpoint versus how much we could sell as well. And so we knew there was more demand in our credit box for our loans. And we obviously know there's demand for our loans outside of our credit box. And that was the birth of the loan platform business. And so think about that going in a couple different directions. The nearest term direction is actually doing loan platform business loans for partners outside of our credit box, what we call credit expansion. And so we're working on that now. It's a priority that will continue to have an impact on our results in 2026. The second area is what you alluded to, which is going into other products, other loan products. The most likely next loan product is actually student loan refinancing and then potentially in-school loans and then home loans but home loans of a certain size. So home loans today are largely agency loans and if you think about an agency loan we're allowed to put that loan to the agency, the government agency mortgage companies in a similar way to the loan platform business. If we produce the loan according to their formula, their recipe, we know the price they'll pay for that loan and it's off our books within days. So, a big portion of the home loans market is already like loan platform business. There will be some segments of it that we could do the loan platform business in, but I think expanded credit is a much bigger opportunity and student loan refinancing is a much bigger opportunity than LPB for home loans.

Yeah, so I'd like to focus on big business banking. We could talk more about small medium business banking if you have other questions on that. But big business banking actually, the idea came from us talking to partners. There are many crypto companies that are quite sizable that are not banked by the large banks and they have to use a sort of aggregation of smaller banks and no one really does fiat and crypto stable coins etc at scale. There was a company that had done this in the past, but unfortunately they had issues and the bank was closed down. And so that's where the idea came from. And since then, I've only gotten more excited about the idea. And we want to be the bank for the biggest companies in our country and the biggest companies in the world. We even want to be the bank for other banks. And the differentiation is that we can do both fiat and crypto. We have a technology platform that we can leverage to deliver that. And I'm super excited about it. It'll be very different than SoFi Money from a revenue diversification standpoint. First of all, the revenue is being generated by corporations, not by individuals. And that has some characteristics that are really attractive. Your cost of funds are very low. In addition to that, it's a fee based business. We will charge fees of companies for the activity that we do for them. In SoFi Money, we don't really charge the consumer anything to use the SoFi Money account. Now, we do charge for things that are very valuable and very differentiated like self-served wires. I don't know if you guys have ever done a wire or you've done a wire on SoFi, but I can tell you the self-served wire experience on SoFi and SoFi Money is infinitely better than any wire experience I've done in my entire life. And so that's one of the few things that we charge for in SoFi Money. But in big business banking, we'll charge for transactions. We'll charge for bill pay. We'll charge for wires. We may have a subscription service fee to even have an account. And so it's going to be a very attractive business to us. And I think it'll be a very consistent business. And there's really not a bank out there that's doing it today. And I quite frankly don't think there's a bank that could do it the way that we can. One of the things I don't think we get enough credit for is that we have a competitive advantage when it comes to licenses. We have the best license you can have in the United States, which is a national insured depository license. It allows us to take deposits. It allows us for those deposits to be insured, allows us to lend those deposits, but also allows us to go into all these different businesses that fall under the category of banking or financial services. And so it's a huge advantage. We don't have to apply for a new license. We don't have to partner with someone on a license. We have the capability under our license. And because we're on the technology platform, we can enter it pretty quickly. And we'll do some really innovative things. We'll be able to actually have a marketplace for stable coins and have a marketplace for cryptocurrencies where we're crossing the transfer of certain fiat dollars to certain crypto tokens. And you can imagine how that could play into foreign exchange as well as just the conversion from dollars into crypto. Most people don't realize that when you operate with large crypto companies, they don't send fiat dollars. They send stable coins. So SoFi USD will be used for that, but our bank will also use all those different forms of payment outside of fiat.

Yeah. So, I think there's two ways to think about crypto revenue. Well, first I'd say I think it will be very large. But there's two ways to think about its impact. Let's take the trading business. So investing in crypto, we charge transaction fees. We charge trading fees for that. But that business also generates revenue indirectly. Just like our invest business does. Funny enough, in our invest business for equities, we don't charge any fees, but we generate revenue from payment for order flow and stock loan and other B2B revenue streams. Crypto will be the same thing except we actually charge the consumer on a per trade basis. Crypto lending, great revenue stream that could scale to be quite sizable. You know, BlockFi was a company that existed. You could probably see their financials online, but a really sizable revenue stream. We're already in lending, so being able to offer secured lending will allow people to borrow at lower rates than unsecured lending. And it's a really attractive business from a security standpoint because your credit risk is much much lower because it's secured by these other assets. Now, you have to know how to manage risk and your exposure, but that's what we do. So, I'm excited about that. The institutional trading piece, I don't know that it will be that big of a revenue stream directly. I think it will be a big revenue stream indirectly. Think about SoFi Pay. We're charging people to use SoFi Pay. It's going to run on crypto rails. So, that will create indirect revenue. And there's a lot of other ways we'll create indirect revenue, including big business banking because we're offering crypto and crypto services. We'll charge for them, but that by itself, we wouldn't be in the big business banking business if crypto didn't exist. It just wouldn't be a need or if there was a need, it wouldn't be that differentiated without crypto.

Yeah, it's a critical part of our strategy. It gives us the central nervous system. Without SoFi Relay, it'd be a lot harder for us to solve for the equation: spend less than you make and invest the rest. In order for you to get your money right, for you to reach your ambitions, you have to invest. Savings just let you get by. Investing lets you get ahead. And so, we're solving for that equation. Spend less than you make, invest the rest. If we have Relay and we have all of your checking and savings accounts attached to it and your credit cards and your mortgage and your other debts, we can then help optimize for you what you have to do in your life to solve that equation. What must you do to get there? So, it does not drive revenue directly today. When we look at our P&Ls, we look at each business on a standalone P&L and it's a pretty simplistic way. There's more complicated ways, but the way I love to look at it is what are the marketing dollars? What do those marketing dollars produce from a member acquisition standpoint? What's the cost per acquisition? What's the revenue that gets generated from that member with inputs? So like SoFi Money, their deposit level, their spending level, it builds it up at a micro economic basis. And when we do that for Relay there is no revenue directly but we do attribute to that P&L revenue from cross-buy. So that's how we justify what we spend on driving marketing in Relay. And the revenue stream for Relay is really a function of what we would have paid to acquire that second purchase of that other product. So someone comes in through Relay they then cross-buy into a loan. That loan would have had a customer acquisition cost. We actually don't have a customer acquisition cost because we did it through Relay but we take the assumption for that customer acquisition cost would have been and put it in the Relay P&L so that we don't underinvest in Relay and oh by the way every P&L we have has both direct revenue and cross-buy revenue so that we don't underinvest and then we allocate our resources. The second area that really is really important is AI because we can use that data that we have from you to help answer questions that you have for us. So we're working on something called Coach. We've talked about in the past. Coach is meant to help you get your money right. Spend less than you make, invest the rest. So if we have Relay and we have the data, like I'm using Coach now testing it. How much did I spend in the last month? It literally has all of my spending across all of my accounts, all of my family's accounts in one view and it's super powerful to have that data.

It could. I mean, we have Cash Coach. It tells you where, it tells you how much cash you have everywhere. Again, if we didn't have Relay, we wouldn't know that. So, I hit Cash Coach. It shows me how much cash I have in aggregate. Suggests what I should use that cash for. So, for example, if it's sitting in an account with no interest and I have credit card debt that's revolving, it says pay down your credit card and you'll get 25% return instantly because that's the interest rate that you're paying. So it absolutely can get there. But I wouldn't say that's the sort of value. I think the value is helping you make decisions that solve that equation. And whether those get executed automatically or manually by you, that's not important. It's actually the decision that's really critical.