SoFi Technologies’ latest quarterly earnings results released Monday (April 29) showed a surge in direct deposit activity — and that more customers are using SoFi Money accounts for those direct deposits.
CEO Anthony Noto observed on a conference call with analysts that total deposits were up 16% year over year during the first quarter to $21.6 billion. Against that backdrop, 90% of SoFi Money deposits (inclusive of Checking and Savings and cash management accounts) came from direct deposit members.
For the new direct deposit accounts opened during the first quarter of 2024, the median FICO score was 744, with more than half of newly funded SoFi Money accounts setting up direct deposit by day 30. The deposit activity, said Noto, winds up “presenting ample opportunities for cross-buy into other Sofi products.”
Debit transaction volumes exceeded $1.9 billion in the quarter, up 20% from the fourth quarter of 2023 and 150% year over year.
The earnings supplementals noted that new member additions in the quarter stood at 622,000, up 44% year over year. SoFi now has more than 8.1 million members.
New product additions of 989,000 were up more than 38% year over year.
Galileo accounts, the company said, were 20% higher than a year ago, and the accounts have topped 151 million. Client interest in the company’s core offerings, said Noto, “as well as our API-based payments platform and issuing platform is as high as it’s ever been.”
Noto said on the call that SoFi had notched 12 consecutive quarters of greater than 25% revenue growth.
“We continue to see members adopt more products and deepen their relationship with SoFi,” said Noto, who said that 93% of the new product additions came from the Financial Services segment. The company is taking a “more conservative” approach to lending, said the CEO, and personal loan origination growth slowed to 11% year over year to $3.3 billion. Student loan originations grew by 43% year over year to $752 million.
Chief Financial Officer Chris Lapointe said on the call that annualized revenue per product of $59 was up 31% year over year. The company’s personal loan borrower’s weighted average income is $169,000 with a weighted average FICO score of 746. Student loan borrower’s weighted average income is $146,000 with a weighted average FICO of 768.
The annualized personal loan charge-off rate decreased to 3.45% from 4.02% in Q4, Lapointe said.
Looking ahead, the company expects to see 15% to 17% adjusted net revenue growth for the current year. Investors sent the shares 10% lower at the start of trading Monday.
Said Lapointe on the call: “We feel really good about our credit and the underlying performance of our loans. Everything is performing in line with expectations while we continue to see the underlying signs of improvement.”
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