Summary

  • SoFi TechnoIogies is a member-centric, one-stop shop for financial services that, allows members to borrow, save, spend, invest and protect their money.
  • Recenlty SoFi acquired Technisys and Golden Pacific Bancorp.

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SoFi TechnoIogies (Nasdaq: SOFI) is a member-centric, one-stop shop for financial services that, through its Lending and Financial Services products, allows members to borrow, save, spend, invest and protect their money. The company primarily operate in the United States, the company expanded into Hong Kong with its acquisition of 8 Limited (an investment business), the company gained clients in Mexico and Colombia with its acquisition of Galileo, and the company expect to further expand into Latin America with its anticipated acquisition of Technisys.

On February 2, 2022, the company acquired Golden Pacific, pursuant to an Agreement and Plan of Merger dated as of March 8, 2021 by and among the Company, a wholly-owned subsidiary of the Company, and Golden Pacific. In the business combination, the company acquired all of the outstanding equity interests in Golden Pacific for total cash purchase consideration of $22.3 million. After closing the Bank Merger, the company became a bank holding company and Golden Pacific began operating as SoFi Bank.

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Recent Developments

SoFi Completes Acquisition of Technisys

March 3, 2022;  SoFi Technologies announced the completion of its acquisition of Technisys S.à.r.l. a leading cloud-native, digital multi-product core banking platform.1

The acquisition is also expected to add to the high revenue growth rate of SoFi and accelerate its three-year revenue CAGR. Together, the companies can better serve Galileo’s consumer fintech and enterprise partners seeking to add product offerings to their 100 million enabled customer accounts across the U.S., Mexico and Colombia, and Technisys’ more than 60 established bank, fintech and non-financial brands in Latin America and the U.S., while expanding both companies’ partner bases in the U.S. and an addressable market across 16 countries. The estimated incremental revenue from the acquisition, including base revenue of Technisys and revenue synergies of the vertically integrated capabilities, is expected to add a cumulative $500 to $800 million through year-end 2025, at high incremental margins.

SoFi Completes Acquisition of Golden Pacific Bancorp

February 2, 2022, SoFi Technologies announced the completion of its acquisition of Golden Pacific Bancorp, Inc. and its wholly owned subsidiary Golden Pacific Bank, National Association. Golden Pacific Bank is a Sacramento, California-based community bank that is regulated by the Office of the Comptroller of the Currency (“OCC”) and has approximately $150 million in assets.2

With this acquisition, SoFi will be able to offer improved features to members to help them get their money right. In the coming weeks, SoFi will offer better banking through, among other things, a more user-friendly interface, automated savings, as well as differentiated checking and savings accounts for easy budgeting. Additionally, SoFi will offer an industry-leading annual percentage yield up to 1.00%1 for members, providing 33 times the national average interest on balances2.

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Financial Highlights

Third Quarter 2022 Results

Third quarter total GAAP net revenue increased 56% to $424.0 million from the prior-year period's $272.0 million. Third quarter adjusted net revenue of $419.3 million was up 51% from the same prior-year period's $277.2 million. Strength in all three of SoFi's business segments — Lending, Technology Platform and Financial Services — drove the robust year-over-year growth.3

SoFi recorded a GAAP net loss of $74.2 million for the third quarter of 2022, an increase from the prior-year period's net loss of $30.0 million. The third quarter of 2021 included the benefit of $64.4 million from the change in fair value of warrant liabilities. Excluding this impact, GAAP net loss would have improved by $20.2 million year-over-year. Third quarter record adjusted EBITDA of $44.3 million increased 118% sequentially

SoFi achieved strong year-over-year growth in both members and products in the third quarter of 2022. New member additions of nearly 424,000 brought total members to 4.7 million by quarter-end, up over 1.8 million, or 61%, from the end of 2021's third quarter.

New product additions of over 635,000 in the third quarter brought total products to nearly 7.2 million at quarter end, up 69% from 4.3 million at the same prior year quarter-end.

In the Financial Services segment, total products increased by 83% year-over-year, to 5.9 million from 3.2 million in the third quarter of 2021. SoFi Money (inclusive of SoFi Money cash management accounts and SoFi Checking and Savings accounts) grew 72% year-over-year to 2.0 million products, SoFi Invest grew 68% during the period to approximately 2.1 million products, and SoFi Relay grew 113% year-over year to 1.6 million products.

Lending products rose 24% year over year, up from the second quarter’s 22% year-over-year growth and resulting in the sixth straight quarter of accelerating year-over-year growth, driven primarily by continued record demand for personal loans.

Technology Platform enabled accounts increased by 40% year over year to 124.3 million, due to both diverse new client additions and growth among existing clients.

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Company Overview

SoFi TechnoIogies is a member-centric, one-stop shop for financial services that, through its Lending and Financial Services products, allows members to borrow, save, spend, invest and protect their money. The company offer its members a suite of financial products and services all in one digital native application to help members get their money right. In 2011, the company started its company with an innovative approach to the private student loan market and later expanded its lending product offerings to include personal loans and home loans. SoFi TechnoIogies has continued to expand its overall strategy to not only include products that enable its members to borrow better, but also to save better, spend better, invest better and protect better.

International Operations. While the company primarily operate in the United States, the company expanded into Hong Kong with its acquisition of 8 Limited (an investment business) in 2020, the company gained clients in Canada, Mexico and Colombia with its acquisition of Galileo in 2020, and the company further expanded into Latin America with the Technisys Merger in 2022.

Company History

YearMilestones
Aug-2011Social Finance, Inc is founded by Stanford business school students—originally using an alumni-funded lending model to connect recent grads with alumni in their community.
May-2012SoFi introduces Student Loan Refinancing, becoming the first company to refinance federal and private student loans.
Oct-2014SoFi launches mortgages.
2015SoFi begins offering personal loans and also becomes the first U.S-based fintech company to receive a $1 billion funding round.
Sep-2016SoFi announces their SoFi at Work program to offer employee benefits like student loan contributions and refinancing.
Oct-2017SoFi announces a student loan refinancing product for medical residents and fellows.
Jan-2019SoFi launches SoFi Money® and SoFi Invest®.
Jan-2020SoFi celebrates 1,000,000 members

References

  1. ^ https://www.sofi.com/press/sofi-completes-acquisition-technisys/
  2. ^ https://www.sofi.com/press/sofi-completes-acquisition-of-gpb
  3. ^ https://s27.q4cdn.com/749715820/files/doc_financials/2022/q3/Q3-2022-Earnings-Release.pdf
Tags: US:SOFI USA
Created by Asif Farooqui on 2022/12/19 13:15
     
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