CEO of SoFi, Anthony Noto | Basis Points

Thank you for being here. Thank you guys. That's a lot more energy than I normally feel on YouTube. So, thank you.

I'd say it's a... I feel a tremendous amount of responsibility. You know, I want to deliver for everyone. I want to deliver for our members. I want to deliver for our employees. I want to deliver for our shareholders. I've been at SoFi for eight years. Every day is intoxicating. Every day feels like we have to run faster. Every day there's more urgency to get to where we want to go and to make sure people feel great about what we've achieved and the impact it can have on their lives. I get emails from members that are, you know, in challenging situations. I get emails from members where we haven't done right in their mind. I get emails thanking us for what we do. And the most rewarding thing is when in any three of those cases, we can help solve their problem, help them get there. And it's a tangible way to really get an energy boost, to be motivated, to make me realize how important our company is and how it impacts people's lives every day. We had a woman that sent me an email recently, and I mentioned this at JP Morgan yesterday where her daughter had $230,000 of student loan debt. And that is a lot of debt to have. And the world has been irresponsible by allowing her to take out that much debt. It will be nearly impossible for her to pay that back and save and invest to get to where she wants to go over time. So, that's just one anecdote of the types of things that we see every day and the impact that we can have. So it's rewarding every day, but it's also a tremendous responsibility. And listen, no one takes the pain more than I do with the stock when it underperforms. If you look at the last year, the last two years, last three years, if you look at 23 individually, 24 individually, 25, stock's done great in all those time periods. No one cares. They care about what's happened year to date, they care what happened the last month. So, not only is there tremendous responsibility overall, there's a never-ending scoreboard, a never-ending goal line that keeps getting moved and that's intoxicating, but it's also a lot of pressure and it drives me.

Yeah, I think we're in a period where people have rerated the multiple on FinTechs generally and if you're a fintech that's exposed to credit or exposed to interest rates, that rerating has been even more severe regardless of the other revenue streams that you have. On a trailing 12-month basis, our net revenue is about 50% lending and 50% non-lending. If you look at on a cash basis, which we reported net interest income cash of $690 million. So that's cash that we received from individuals for paying back their loans and their interest. And then we had about $390 million of what we said is non-interest cash revenue. And so that revenue is from things like SoFi Money, things like SoFi brokerage, our LPL business or SoFi Technology Solutions business, interchange revenue from credit card, interchange revenue from a debit card. So those are the two different revenue streams. And that's about 60/40 on a trailing 12-month basis if you use that measure. So we're pretty diversified at this point in time. 85% of our products are now non-lending products. We report products and we break it down by segment. So we're relatively diversified. So, why are we getting rerated? We went into 2026 with the best backdrop you could imagine. We just delivered 35% revenue growth in 2025. Stock did incredibly well in 25. Also did well in 24. What was driving it? Earnings, increased earnings expectations. And so, we outperformed earnings, we raised earnings, we grew tangible book value 100% to $7.20 from 2023. So we had both earnings increases, book value increases and the multiples of earnings and multiple of book values both also went up because we had really high growth and beating and raising, right? In 2026, we came in thinking there'd be three rate cuts. Our plan actually reflected two rate cuts. We report the first quarter and we actually grew faster than we did in 2025. 41% had the same incremental EBITDA margin about 40%. Accelerated member growth, accelerated product growth, had really strong cross-buy at 43%. So the fundamentals are as strong as... credit's performed well, fundamentals have been as strong as they've ever been. So why is the stock down? The stock's down because the market took us from five times tangible book down to two times tangible book. Why is the market doing that? Uncertainty. What's the uncertainty? Well, we came into the year thinking two to three rate cuts. Now people are thinking no rate cuts. We're assuming no rate cuts. We still left our full-year guidance unchanged despite the fact that we moved from two rate cuts to zero and so the market's worried that rates not only don't get cut but they actually could go up, right? And so you have persistent inflation, you have uncertainty geopolitically in the Middle East, and you have economic data that says rates may need to go up not down. When rates went up 500 basis points, our multiple contracted but the day that people thought that rates would stop keep going up, our multiple started to expand. Similarly, as soon as people thought rates were going to go down, the multiple expanded even more. But now they believe rates are not going to go down and they could go up. And so our multiples expanded a lot. So what do I think about the stock here? I've obviously bought the stock. Now the worst way to value our company is on tangible books. So I'll use that as an example. So we have $7.20 in tangible book value and we currently trade at two times tangible book. I would argue if the multiple goes down below two times, then people think our tangible book value is going to go down. It should not go below two times. Not growing it from where it was in 2023 by 100% into 2026. So if the multiple of tangible book value stays at two times and we grow earnings 40% over the next three years, which we've articulated a range, our tangible book value should also grow that amount. Well, if our tangible book value is growing 40% and the multiple doesn't change, what happens? The stock has to go up 40%. You can't grow tangible book value 40%, the multiple stay the same. One of two things has to happen. The stock goes up or the multiple goes down. I don't think the multiple goes down from here unless people have a really dire view of the company or of the economy that would cause our tangible book value to go down. So I think the multiples compressed significantly. I don't really think there's any rational reason for it to depress anymore. So the question becomes can we grow tangible book value 20%, 30%, 40% because on a constant multiple and we grow at 40% the stock goes up 40%. JP Morgan trades at three times tangible book. Why should SoFi trade at more than JP Morgan? Because we're going to have a higher return on equity. We believe we can drive a 20 to 30% return on equity. And if you do a statistical analysis of the correlation between return on equity and the multiple of tangible common equity, then you'll see that the higher your ROE, the higher the multiple of tangible book value is. We use American Express as sort of a benchmark. It trades at six to eight times tangible book value. We've traded as high as five times tangible book value. A five times tangible book value would put us off a 720 over $35. I always like to look at earnings multiples to see what that would imply. And we've talked in the past that if you account for our growth and use a PEG ratio, most financial services companies and FinTechs if you take a comparable group, they have a PEG ratio of about 1.1 times. That means take the forward three-year growth rate. In our case, let's take 40% multiply it by 1.1 times. That's the multiple you apply. That's 44 times. You do that versus our estimate for the year guidance of 60. And you get to a stock price at around $25. So, easily you can get to a justified $25 to $35, which is why I've been buying the stock. When will the market actually pay that? Once they believe rates are going down and I think as that sentiment changes, you'll see people come in and buy the stock. Right now it's really hard to convince a portfolio manager to buy the stock because the question that you cannot answer to them... say this is their revenue growth, this is their product growth, this is their member growth, this is the margins, this is what we expect for the year, they have four new businesses all of which that could grow to $100 million in a year that they didn't have before that they're funding despite all of this and they have five other businesses that are growing very nicely that have enough upside all and but it's changing trading at tangible book value of two times and I think they will have 20 to 30% ROE when and they expand margins and growth slows and then the inevitable question comes well are rates going to go up? I'm not sure. Well rates are going up, I don't want to buy the stock because when rates go up...

You know if you're a portfolio manager you have to do the math like what's the multiple trades at, is the multiple going to expand or contract, what's the estimates that people are using for book value, tangible book value, for EPS and are they going to go up or down and if rates go up people generally worry about earnings going down, earning estimates going down. Why? Can you pass on the higher cost of funds from higher rates to consumers on the loans and higher interest rates? We've actually proven we can do that. We did it as rates went up 500 basis points. Can you manage credit in higher unemployment? We've shown that we could do that. So when there's uncertainty about the economy, uncertainty about rates, uncertainty about losses, people are going to tend not to want to own the stock because they do and they don't answer those questions. It's somewhat irresponsible. But at some point, you just have to say, I'm focused on the next 12 to 24 months, not the next six months. And at two times tangible book, I'm confident tangible book value is going to grow. Tangible book value is going to grow and the multiple really shouldn't contract here unless I've missed something about the solvency of the company. Then you can step in and buy the stock. But if you're focused on the next six months, you need to answer the question on interest rates.

A month. It's a week.

You know, I personally believe at this value, all of those risks that I talked about are baked in. And it's a good buying point. It's one of the reasons why I've bought $2 million this year at higher prices than we're at right now. I think other people will look at it and say, do I want to take on those risks, those uncertainties, or do I want to wait? And I think in this environment, people are choosing to wait. They may at some point say, all of the bad news is priced in, and now's the time to buy the stock. I kind of feel like we're getting to that level, but it's just my instinct having, you know, done this for a long time. What we can control is delivering the results, and that's what we're focused on, and the results have been spectacular. 18 quarters of greater than rule of 40. You know, I mentioned to a really successful portfolio manager about 6 months ago, that's pretty well known, that's on a lot of podcasts. And I said, Brad, I know that you invested in software companies for a long time. Have you looked at a rule of 40? I'm like, it's 60. He goes, 'Oh, that's because your margins are 40%.' No, it's not because our margins are 40%. It's actually because we're growing over 30% and we have 30% margins. How many companies have 30% revenue growth at our scale and 30% EBITDA margins? And our EBITDA margin could easily be 40% if we stopped investing, which means our net income margin is probably 20 to 25%. You then add back your stock-based compensation to net income and you can get to an ROE that's pretty damn attractive. So, at some point, someone will do that math and realize where we are in this moment in time and step back in the big picture and say, 'This is the right time to buy the stock.' But to each their own, and we'll just keep delivering the results and the stock will take care of itself. I don't want to in any way mislead you, like, does it bother me the stock's down as much as it year? Yeah, it bothers me a ton. Does it bother me that people are talking crap about me on Twitter and our company and disrespecting our team?

So, you know, listen, at the end of the day, we're being held to a high standard. I've accepted that responsibility. I'll work my butt off to make sure we deliver on it, but it does bother me and I'm doing everything I can to change it. We're not changing our plans. We're not changing our priorities because they're the right plans and priorities to deliver the growth that we've told the street which is over 30% revenue growth and a 30% incremental EBITDA margin. So 30 and 30 is a pretty good outcome. Could we beat that? Sure. We beat in Q1. We did 41% revenue growth on a billion dollars of revenue with great incremental margins of 40%.

Yeah, the metric that we report out that would be the leading indicator of that and then I'll talk about what drives the leading indicator of that. The metric that we report out is members, member growth and products, and products growth. But the critical success factor that drives that and the critical success factor that will give us competitive advantage is lifetime value. We have the highest lifetime value. It's a function of a lot of factors. One, we're a low-cost operator. Why are we a low-cost operator? We're 100% digital. Two, we own our own technology. It's not in every one of our businesses, but it will. It's in a lot of our businesses. So, on a unit economic basis, we look at each individual product to get to a great variable profit in dollars. We think we have a variable profit dollars that is better than others. But when you combine it with members doing more than one product, that those variable profit dollars increase pretty meaningfully. So, as an example, these are illustrative numbers. They're not actually in our financials, but it's analysis that we've done over time. If you look at a personal loan, on average that personal loan will generate about $800 of variable profit based on the revenue that it will generate, the size of loan, the interest rate, etc. Subtract operating cost, subtract customer acquisition cost, it's about $800. If that loan is taken out by an existing member, we don't pay a customer acquisition cost. And that $800 goes to over $1,500, $1,600. That's a very high lifetime value. And that doesn't even include the other products that they do. So, our lending business has risk. Our lending business requires credit, but it's a huge driver of our lifetime value. When we get a member to take out two or three or four products, that lifetime value goes higher. Now, why is that the critical success factor? That allows us to price better than anybody else. And if we can give the best prices and the best services, we win. If you look at Walmart and you look at Amazon, they both are low-cost operators. In Amazon's case, allows them to have the lowest prices on products. It allows them to give the best selection, the fastest delivery, and the flywheel keeps spinning. I call that the retail productivity loop for SoFi. If we have the highest lifetime value, we can give members the best interest rate on checking and savings. We can give them the lowest interest rates on loans. We can actually serve more people with loans than other people because we have these great unit economics. And so it also allows us to give services that they otherwise wouldn't get. And you'll see us actually launch a bunch of what I'd say are service-driven capabilities that no one's paying for, but they add to the flywheel of what else they do with us. Things like that we'll put into SoFi Plus. So our lifetime value is our competitive advantage and that's our critical success factor and to drive that it is about having this broad suite of products, driving more than one product, driving cross-buy and really solving the equation of spending less than you make and invest the rest and if we solve that equation no one's going to catch us on lifetime value. It's already superior but if we get to the point where I think we can, it'll be indomitable.

Sure, let me take the first thing you said. So owning our own technology is an incredibly important element of getting to the highest lifetime value and the best unit economics. As you mentioned, owning our own technology allows us to innovate faster. It allows us to have better data for better personalization. We don't have to wait in line. The motivation for the technology platform which we call SoFi Technology Solutions now was driven by the fact that we originally launched SoFi Money in 2019 with a sponsor bank and a different payment processor. And every time I tried to drive innovation in the product during that launch and leading up to that launch, whether it was roundups or vaults or two-day early paycheck or mobile check upload, our technology provider said, 'Sorry, we can't do that. No one else wants that. We're not going to invest in that. You have to wait in line.' And so that's when I quickly realized if we're truly going to have better products than someone else on the five differentiators that we have, we have to own the technology. So it is a critical element that delivers that lifetime value. We're a lower-cost operator because of it and we have better product innovation and faster product innovation. You know, three quick examples. We wouldn't be launching big business banking with an API-driven ability to do ACH payments if we didn't own the technology platform. Wouldn't be launching. It would take two years. We'll launch that officially on July 1. It's already in marketplace now. We wouldn't have launched commercial payments which most people don't know about for SoFi Bank and partnering with companies like Mesh Pay without the technology platform. We wouldn't be able to sort of rebuild our core in a way that allows us to build things like payment hub without the SoFi Technology Solutions platform. So it's absolutely critical. So let's focus on SoFi USD for a second. This is one of the four big areas that are completely new for SoFi. No revenue being generated. So you have SoFi Plus, you have SoFi USD, you have big business banking, then you have crypto, both crypto trading but also crypto lending. So those four areas are brand new, were not expenses that we had in our P&L at any point in time in the past until we rolled out the 26 plan. And in fact, at this point in time last year, we weren't contemplating doing any of them other than doing SoFi Plus, which at that point was really struggling. We had to figure it out and I think we have. So in SoFi USD, here's the best way to think about what that is. This is a payment capability that will appeal to both enterprises and consumers. The first place that SoFi USD is being used is actually between SoFi and our trading partners on cryptocurrency. And so if you think about market makers and you think about exchanges, money has to flow between a company like SoFi who has members buying coins on those platforms and those entities. Today that's USDC. Tomorrow that will be SoFi USD. So we'll change the underlying stable coin that sends payments to all those intermediaries. The second place that SoFi USD will be used is for new partners that we aren't necessarily doing business with today. So, we announced the deal with Mastercard and I saw some people on Twitter kind of poo-pooing our deal with Mastercard. Our deal with Mastercard's real. They're going to use SoFi USD to enable 24/7 payments. Today, Mastercard's only settling Monday to Friday, and they're not doing it 24 hours a day. With SoFi USD in July, it'll be launched and they'll be able to actually do settlement 24/7, seven days a week, 24 hours a day.

No, this has nothing to do with SoFi members. This is Mastercard and their merchant partners, the retail partners.

It has nothing to do with SoFi members. This is completely an enterprise solution. So, one of the things that I've pointed out in the last two days, but somehow it's just not getting through, is we do 8 billion payment transactions today in SoFi Technology Solutions for non-SoFi transactions. There's some in there for SoFi, but 8 billion transactions are being done by all of the partners that we have on the Galileo platform, their ACH transactions and their debit transactions. I want all those transactions to migrate towards SoFi USD. It's cheaper, faster, and safer. So, that's the third place it'll be used. But the deal with Mastercard has nothing to do with the transactions that are taking place with SoFi and SoFi members. They can use it to settle, but it's really meant to settle all of their other partnerships. So those are three places SoFi USD will be used. SoFi USD will also be available in the next week or so on our SoFi crypto capabilities and crypto investing. And what we'll be able to do over time, this will be launched probably in the next two weeks. So, you can go on SoFi, you can go to the crypto area, you can buy SoFi USD 100% back, dollar for dollar. Money sits in our Fed bank account earning Fed funds. And I'll talk about that in a second. That person that has that SoFi USD, they can use that to pay in other places. When it's on our platform, we will actually treat it like a tokenized deposit and give it FDIC insurance and give it interest of about 3.8%. When it's used as a payment stable coin, we cannot provide interest or FDIC insurance. So it will move from a tokenized deposit to a stable coin and then be sent out as a form of payment. And that will also appeal to small businesses and large businesses. And that's the other place that SoFi USD will be used is big business banking. And so as we were launching buy, sell and hold crypto and we're talking to all these crypto-centric companies, you guys know them all. They asked us to build banking for them. And the big question I had was why do we need to build banking for you? Why don't you use the largest banks in the country? And they said, the banks that we can use are small, they're unproven, they have small balance sheets, and we need someone that can do both fiat and crypto together. So, we went out and hired the person that built this at Silvergate Bank, Ben Reynolds, and he's building it for us. Right now, it's launched. You can actually do big business banking with us. Now, it doesn't have all the functionality and API capabilities that it will have on July 1st, but on July 1st, you'll be able to tap into an API, build your own portal for your company, do your own assignments internally to users below you, and you can actually operate in both fiat and crypto on big business banking platform. And what we'll use there is SoFi USD.

That's my goal. My goal is to get it to, you know, tens of billions of volume on an annual basis. And we'll make money on SoFi USD. And I do think it's important to point out what's different about SoFi versus others that will have stable coins. Everyone else that has a stable coin today is going down a path of applying for a national trust. National trusts have been granted the ability to do payment stable coins through the Genius Act. They're not going to be able to provide interest, which has been laid out in the Clarity bill. The interesting thing about all of those companies is that they have to take the reserves and go out and buy securities to generate a yield, right? A NIM. When they do that, whenever you buy any security, I don't care if it's a Treasury bill or a T-bond, there is duration risk, there is credit risk, and there's liquidation risk. And those things play themselves out in market dislocations like 2008 when you saw money markets break a dollar. We don't actually have those risks. And the reason we don't have those risks is because we're a national bank and we can take the reserves that we have and put them in our Fed master account. You don't get access to a Fed Master account as a trust, but you do as a national bank, which we are. We'll earn Fed funds in that cash. So, we have no credit risk because it's just sitting there in cash. We have no liquidation risk because that money could be sent via Fed wire instantly. And we have no duration risk. You don't have to wait. So, it's a huge advantage. So what we're pitching to companies are if you're going to operate in a stable coin and send payments via stable coin, you should partner with SoFi because we have the best regulatory license you can have with the best flexibility and we eliminate these three risks for you. So you know that yield that we get on the NIM. So let's just say we have $5 billion of existing reserves in SoFi stable coin, SoFi USD, and it's at Fed funds, you know, we're earning 3.8% on that. We'll probably give a portion of that away to market makers and exchanges as an incentive for them to use SoFi USD versus other choices. And so as you think about critical success factors, if we can drive the highest most reliable risk-reward on NIM as it relates to SoFi USD, we can then incent people to use our currency and our payment rails compared to somebody else's. So, and we have other things that we can do from a services standpoint. Even if we gave away all of the NIM, right, we would make money on big business banking or we make money on trading or we make money on these other types of capabilities and value-added services because for big business banking, we will charge a subscription fee and we'll charge payment transactional fees as well. In addition to all the other services that we offer in fiat which again are all fee-based businesses. So if we get to $5 billion and the 3.8% interest, we give away 1.8 of it and we have 2% that's left over. You can do the math yourself. It's a hundred million dollar business sort of overnight. So, and I think the opportunity is to really capture not just all of the stable coin revenue that exists today in transactions, but really convert debit transactions and wire transactions and FedNow transactions to SoFi USD or stable coin transactions.

We're definitely blitz scaling. We ran through walls to get SoFi USD. It's right now it's being burned and minted with a partner with BitGo. As I mentioned, and so if you wanted to buy SoFi USD today, you'd have to go to BitGo, but very shortly you'll be able to do that just on SoFi on the app itself as a consumer and at big business banking on July 1 on that product. So super excited about what it can be. It's going to be a game changer. It's obviously a payment network that also has a stored value. Today payments when they're made, that value ends immediately. As soon as the payment's done, in this case, the payment once it's initiated is the starting point of value and it doesn't end once it gets to the destination and it stays in the ecosystem and the value actually continues to build.

I don't... you know I'll say this and I'll get criticized for it but it's what I truly believe. I don't see why it can't be a trillion dollar company really. I think our products are more differentiated. I think what we deliver for members is more impactful. We're the only company that I know that has every product that we have on our digital platform. You know, at the end of the day, we're trying to solve something that people really care about. We're trying to help them achieve their American dream, right? Have the size family they want, live where they want, the career they want, retire when they want. Like that is a very aspirational thing, but it's 100% what we can deliver. And their products that we have can help people spend less than they make and invest the rest. You know, 70% of our invest members are existing members. So, we're actually teaching people how to invest. I like to say that if you save, it'll help you get by, but it won't help you get ahead. You have to invest to get ahead. I've been investing since I was 16. It's made a huge difference in my life. Yes, I've been fortunate to have jobs that pay really well, but well before I've had those jobs, I've been investing that's helped me get ahead along the way. So I don't think anyone else has the platform that we have. I think it'll be really hard for anyone else to catch us. So all we have to do is become a household brand name that people trust and we have ubiquity. If we can get the 30 to 40% of the world basically naming SoFi when they think about us as a financial solution or financial choice, that's unaided brand awareness. We'll be bigger than all the companies that exist today. And because we're digital, we can serve and scale at a much lower cost and we'll continue to provide very differentiated value. I think we can provide better interest rates on checking and savings, better interest rates on loans, better services that other people do not provide. And it just keeps fueling itself.

Yeah, we're focused with the SoFi brand on the US today. At some point we'll go internationally. The SoFi Technology Solutions business is international. It's in a number of LATAM countries and it's a big opportunity. You know, people are pushing us to go internationally and I'm like, you know, we will do something internationally. It'll be slow. It'll be smart. It'll be very thorough. It'll tie into our overall investment thesis and portfolio. But if I look at SoFi Invest, it's up 100% year-over-year. Home loans is up 100% year-over-year. Our credit card business is up 100% or more year-over-year. These businesses are just at their inflection point. In invest we've gotten to the point now where we have the right products. It's scaling very nicely. It's monetizing really well. I think the monetization per AUM could double. Credit card. It took us a long time to figure it out. We have the formula working now. You know, our effective interest rate on credit cards going from 13% because we gave a bunch of people zero APR for a period of time to 17%. That's a big inflection point. We've figured out how to market the credit card to existing new members and can build that very responsibly and not have this huge J-curve on every person. So money has been phenomenal. It's not slowing down. It's very differentiated. So we have four businesses, invest, money, credit card, and...

Doing incredibly well and will continue to grow. And then we have these businesses, big business banking, SoFi USD, SoFi Plus, which we haven't talked about, and SoFi USD that are also incredible growth opportunities that we're just starting with. And we're funding all of that despite the fact that we're investing so much, our margins are still intact at 30%.

Sure.

So we launched SoFi Plus in 2025 and this is like the best case study of SoFi's mentality and our culture. The product didn't do that well. We I think we added like 60,000 paying SoFi Plus members last year roughly.

Uh $10 a month. And then we had a bunch of direct deposit customers that were also SoFi Plus members because they got it for free. And so we spent the year iterating and iterating on what we needed to deliver from a product standpoint to differentiate it to drive greater appeal and acceptance. The positioning is the following. We want SoFi Plus to be the best of all of SoFi. So if you're a SoFi Plus member, you'll get a better invest experience than just an invest member. If you're a SoFi Plus member, you'll get a better money experience that even a direct deposit customer would. Same thing on loans, etc. And so as we thought about that positioning, we thought about what value to put in there. It caused us to start to bifurcate SoFi money and SoFi direct money and direct deposit offering. SoFi invest and SoFi plus invest offering. And basically we launched it on April 1st after iterating like crazy. I think most people in the company wanted to kill me because I kept pushing and pushing and pushing, asked for more analysis because I wanted to figure out the right economic formula where people were really motivated and it was so telegraphic that it was a better value that they would just do it. So we launched on April 1. One of the big differentiators is that you now have to pay for it. So it's $10 a month but we give you 4.5% interest on your cash up to $20,000. And so if someone had $10,000 and they're a direct deposit customer in their savings account, they're getting 3.8% interest on $10,000. They pay $10 a month and all of a sudden they get 4.5% on $10,000. So 70 basis point increase. You can quickly do the math on how much they have to increase their deposits for that deposit interest to exceed the $120 a year, right? And that formula is pretty easy. And so I think we nailed it on bifurcating it. The growth has been way better than I thought. We now have 160,000 paying SoFi Plus members and it's only been out for six weeks. So that could get to a million pretty quickly. We have more than 15 million members. I'd be super disappointed if we can't get 1 million of them to be SoFi Plus members. In fact, every one of our direct deposit customers should be a SoFi Plus member. It's sort of an IQ test to make that choice. It's got tremendous value in it. So I'm super excited about it. If we get a million members, it's $120 million of direct revenue. But it's more than that. When people switch to it, 90% of our SoFi Plus members are existing members. When they switch to it, two behaviors happen. One, they're now paying us $120 a year, $10 a month. Two, they've actually increased what they're doing with us in the products they already have. They increase their deposits, which then increases their spending. And so all of a sudden the revenue we get from just the SoFi money member increases or the SoFi invest member adds more AUM. We're getting 70 basis points per dollar of AUM and it's increasing. But then a large percentage of people after they sign up for SoFi Plus, in addition to that increased activity on things they already do, they're taking on another product. And if you go back to what I talked about earlier about unit economics and lifetime value being our competitive advantage, we're just driving the financial services productivity loop to the next level. Someone takes out a loan that previously was just a SoFi money member and a direct deposit customer. That's $1,600 of LTV literally overnight because we're not paying a customer acquisition cost. And oh, by the way, we now have more data about the person and maybe we give them a credit card so we can monitor their debt and help them avoid, you know, normally when someone takes out a PL, they're actually paying off a credit card debt that they have. And so they should also have our credit card and we could see how their debt's increasing over time and stop them before that credit card gets back to $10,000 of balances that are revolving. So the product is not only going to have a direct benefit of the $120 per year, it'll have increased activity on the existing products and it's clearly driving new products. So super excited about it.

Let me answer that question first. I would think of the revenue model and the cost model as a financial business. If you look at companies like Twitter, their financial model is actually advertising. Our financial model is the business of finance, which is considered banking, but the way we deliver our service is 100% technology-driven. There's no buildings that we build, there's no real estate that we buy. We wouldn't exist without technology. It's all ones and zeros. So at the end of the day, I think people will say that about a bank because they're debating multiples of revenue. They're debating valuation and the revenue streams are financially oriented like other financial services companies. My view is I actually don't care what you call us. I do care if you believe we can drive compounding growth of 30% in revenue and earnings growth of 40%. If you believe those things, and 20 to 30% ROE, everything else will take care of itself because I can get the outstanding values whether I value this as a tech company or a bank or diversified financial services company if you believe 30% revenue growth compounding, 40% earnings growth and ROE of 20 to 30%.

Yeah, so SoFi Technology Solutions I think is probably the most misunderstood thing about the company and that's my fault. And so first let me say this. The concept and the vision of being the AWS of fintech will never go away. Part of being the AWS of fintech is building technologies that financial services companies need and non-financial services companies need to do financial services. The company that has the greatest needs is SoFi. No one has bigger needs for SoFi technology solutions products other than SoFi. No one else has all the products that we have on only a digital platform. So we have greater need for cores. We have a greater need for processing capability. We have a greater need for payment hub capability. And we have a greater need for risk and fraud. No one else. So, SoFi Technology Solutions builds for the company that has the greatest needs. And if we build for the company that has the greatest needs, shouldn't all those products be used by other people? They should be. If they're built for the company with the greatest needs and the most complexity, we should build the best product. So we would not be where we are today if we did not make the acquisitions we did in Galileo and Technis and built out the capabilities across the four areas that I mentioned. And I spoke about this earlier so I don't belabor the point but there's so many examples I could give you where we wouldn't generate revenue in this other business if we didn't own that business. And so we're excited that this July we'll roll out to SoFi money a new modern core that's in the cloud that's better than any other core. Technis has had a core before. We decided to take it to the next level and the next version of it and we're excited about that. But today there's four basic revenue segments to think about. You have core, you have processing, so that's debit, ACH processing, the Galileo business and issuing which there's still a lot of demand for. We did uncouple ledgers from that. So the second area is core banking cores and ledgers and all the banking as a service APIs that we've offered over years in terms of account opening or two-day early paycheck or mobile check upload or rewards or disputes and so all the APIs are still there. So first thing is processing, second thing is cores and ledgers which are independent now and then all the APIs. Third thing is payment hub. So today if you look at SoFi we do self-serve wires. The SoFi technology solutions teams built self-serve wires. Today we enable FedNow. So instant movement of money. So the SoFi technology services team built that product. We already do debit. We do Zelle. We do person-to-person payment via phone number. We do person-to-person payment via email. We'll do stable coin payments as well. So payment hub is meant to be a self-serve business API enabled for companies to come in and enable those types of payments including Apple Pay and Venmo and all the other versions. Right. And then on the fraud and risk side of the equation, you can imagine we have a lot of fraudsters that try to open accounts or steal accounts on SoFi. Some people lose their cards or their credentials and so we have transactional fraud. And so we have a great need for this. It cuts across all of our 12 businesses. And so we have seven products in the fraud and risk bucket and the go to market. The team's in the process of changing the go to market against those four areas. I think it's a much cleaner way to go to market than with brands. And we're going to market with products instead of the brands of the companies that we bought.

Yes. We aspire to do all those things. One of the other things that we're doing is removing the responsibility for building infrastructure software almost entirely out of SoFi. And the reason for that is one of the principles I've been emphasizing for eight years is that regardless of who builds a technology at SoFi, whether it's the money team, the invest team, the member team, credit card team, doesn't matter who it is, they have to build that technology for themselves, their business, but also anyone else at SoFi can use it. So, it has to be enabled for anyone else to use it and anyone else outside of SoFi to use it. Well, the reality is that that principle doesn't always get upheld when you're trying to get to market really fast and people have to cut corners and shorten timelines. So my view is if we actually put all the infrastructure capabilities and development into SoFi technology solutions, they have no products that they use, they're building for other people by definition. So it will by default result in every product that we build 100% being built for anyone at SoFi or any third party. So the actual talent won't even sit underneath the businesses with SoFi brands. It'll all sit in SoFi technology solutions.

I'm going to avoid saying a better way. I think use our SEC filed documents or 10Qs and 10Ks, 8-Ks, etc. Use GAAP accounting as one way to do it. The reason why we released cash revenue is we want to make it easier for people to understand the business and the accounting is complicated. Fair market value accounting is complicated. Cost accounting and CECL cost accounting, they all have pros and cons. So, as we were debating how to make it easier for people to understand the business and answer questions we would have on accounting and the differences between companies, I literally said, 'What if we actually just reported cash revenue?' And if you ran went around the room at that point in time and said, 'What percent of our revenue do you think is cash versus non-cash?' People would have said about 50 to 60%. So, imagine their shock when we came back and said the 2024 and 2025 revenue was almost 100% cash. And the reason why that's the case is the business scaled to such a point where the accounting almost kind of washes itself out, right? And I'm simplifying things and my goal isn't to like tell you everything you have to consider. There's many many things beyond what we'll be able to cover here in the accounting that you have to consider to come to these conclusions. But one way to model the business if you just want to do it in a simplistic way and not complicate matters is you just take our net interest income and see what it's been over time. That is literally cash. I mean a very very small piece of it would not be cash. But I did this a couple days ago in preparation for the JP Morgan conference. I looked at from Q1 of 2024 until Q1 of 2026. So a long time period, nine quarters, how much net interest income did we generate? Turns out to be $4.6 billion of net interest income. In the first quarter of 26, we announced $690 million of cash net interest income, which happens to be the same number that's on the income statement in our disclosures for net interest income. So $4.6 billion of cash net interest income. If you looked at the premium value from fair market value on the balance sheet disclosures, it was $2 billion. What does that mean? That means we generated more than 2x in cash revenue from the loans that had recognized $2 billion of non-cash premium. So when people talk about fair market value accounting and premiums, it's $2 billion of a premium, but the actual cash generated by those loans that have non-cash revenue recognition of the $2 billion is two times that amount, which is pretty amazing. Which says the loans are producing more cash than the initial marks on the book that are non-cash marks. So you can now model that. You could look at our balance sheet, take the ending balance sheet, beginning balance sheet, apply a net interest income number that's calculable over all those quarters. We actually disclose it and you can get to the next quarter's cash revenue number and next quarter's NII. Not very complicated at all. If you look at the other revenue stream, $390 million of non-interest income cash revenue, which I mentioned before is basically fee revenue and interchange revenue, etc. I'm not going through all the pieces of it. LPB revenue, tech platform revenue, it's $390 million. If you take out of that the LPB revenue, which isn't really product driven, because then the rest of the revenue is product driven. The LPB revenue is literally just we're producing loans for somebody and we're getting paid a fee for that. So, it's not a product driven metric. If you take that out, which is $120 million, you take the remaining revenue and divide it by our number of products, you now have a revenue per product metric, a monetization metric. You can then decide what you want the products to grow over time. They currently just grew 37%. So, whatever number you want to put in there, 35%. And then look at the revenue per product and say, why would revenue per product go higher? Well, revenue per product could go, and this is excluding LPB, revenue per product could go higher because the amount of AUM that they have in invest is low. And as they add more products like retirement products, margin options, etc. the revenue and AUM will go up in invest. And so the revenue per product will go up. As they get more deposits, the revenue per product will go up. As they monetize credit card better, the revenue per product will go up. As SoFi Plus grows, revenue per product will go up. So all of a sudden you could look at product growth and revenue per product growth and you can model the other number.

I think the accounting is hard. I think the math is hard. And every time someone questions the accounting, I literally go back and look at everything all over again and I get to the truth and I feel comfortable with it. And this is a shorter way to get comfortable with it. Like if our cash and interest income is below the non-cash revenue recognition, there's a real problem, right? But it's 2x that. So, I feel really good about the quality of what we're underwriting. And you can see what the actual loans are producing in cash revenue, which they have to exceed the non-cash recognition that's up front over time. So, you can't hide from reality when it comes to cash. And I would also say that you can't hide from the members and the members growing not declining tells a very powerful story especially the way that you're currently scaling.

Yeah, I think on the digital side there are businesses where there's no reason to have a physical building. So brokerage, you don't need to go into a physical building. People have been comfortable doing brokerage digitally for years. Credit card, why do you need to go? There's nowhere to go. We're giving you money to spend. The businesses that I do think you need, people will have to make a choice on is withdrawing cash and putting cash in. And so we try to make that very easy. But if you believe you need to have a branch within a few miles of your home until you get comfortable with SoFi, what I'd say is open an account, put some amount of money there, use it for a month, see how reliable it is, see how valuable it is, and then slowly make the change. Now, I have five children and a wife, obviously.