SoFi Technologies, Inc. 10-Q

sofi-20220930 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39606 SoFi Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 98-1547291 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 234 1st Street San Francisco , California 94105 (Address of principal executive offices) (Zip Code) ( 855 ) 456-7634 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.0001 par value per share SOFI The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of October 31, 2022 was 927,938,294 shares. SOFI TECHNOLOGIES, INC. TABLE OF CONTENTS Page PART I – FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Condensed Consolidated Balance Sheets 4 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss 5 Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity 6 Unaudited Condensed Consolidated Statements of Cash Flows 8 Notes to Unaudited Condensed Consolidated Financial Statements 11 Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards 11 Note 2. Business Combinations 20 Note 3. Investments in AFS Debt Securities 24 Note 4. Loans 27 Note 5. Variable Interest Entities 32 Note 6. Transfers of Financial Assets 34 Note 7. Allowance for Credit Losses 36 Note 8. Fair Value Measurements 38 Note 9. Debt 51 Note 10, Temporary Equity 54 Note 11. Permanent Equity 55 Note 12. Share-Based Compensation 56 Note 13. Income Taxes 59 Note 14. Related Parties 59 Note 15. Commitments, Guarantees, Concentrations and Contingencies 59 Note 16. Loss Per Share 61 Note 17. Business Segment Information 62 Note 1 8 . Subsequent Events 67 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 68 Item 3. Quantitative and Qualitative Disclosures about Market Risk 106 Item 4. Controls and Procedures 107 PART II – OTHER INFORMATION Item 1. Legal Proceedings 108 Item 1A. Risk Factors 108 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 156 Item 3. Defaults Upon Senior Securities 156 Item 4. Mine Safety Disclosures 156 Item 5. Other Information 156 Item 6. Exhibits 157 Signatures 158 Supplemental Information F-1 1 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “SoFi”, the “Company”, “we”, “us”, and “our”, and similar references refer to SoFi Technologies, Inc. and its wholly-owned subsidiaries following the Business Combination (as defined herein) and to Social Finance, Inc. prior to the Business Combination. Social Finance, Inc. (“Social Finance”) entered into a merger agreement (the “Agreement”) with Social Capital Hedosophia Holdings Corp. V (“SCH”) on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021 (the “Closing”), in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination”. As a result of the Business Combination, which was completed on May 28, 2021, share and per share amounts for periods prior to the Business Combination for Social Finance, Inc. have been retroactively converted by application of the exchange ratio of 1.7428. In March 2021, we entered into an agreement to acquire Golden Pacific Bancorp, Inc. (“Golden Pacific”), a bank holding company, and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank (the “Bank Merger”). The Bank Merger closed in February 2022, after which we became a bank holding company and renamed Golden Pacific Bank as SoFi Bank, National Association (“SoFi Bank”). In February 2022, we entered into an agreement to acquire Technisys S.A. (“Technisys”), a Luxembourg société anonyme and a cloud-native digital multi-product core banking platform (the “Technisys Merger”). The Technisys Merger closed in March 2022. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for information on our business combinations. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for our future operations; anticipated trends and prospects in the industries in which our business operates; new products, services and related strategies; and macroeconomic conditions. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “opportunity”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors described in Item II, Part 1A. “ Risk Factors ” and elsewhere in this Quarterly Report on Form 10-Q and our filings with the Securities and Exchange Commission (“SEC”) and include, among other things: • our ability to achieve and maintain profitability in the future; • the impact on our business of the regulatory environment and complexities with compliance; • the effect and impact of the expiration of the federal student loan payment moratorium and loan forgiveness, and the potential impact and magnitude of any other governmental actions taken related to student loans; • our ability to manage our growth effectively and our expectations regarding the development and expansion of our business; • our ability to access sources of capital on favorable terms, if at all, including debt financing, deposits and other sources of capital to finance operations and growth; • the impact of and our ability to respond to general economic conditions and other macroeconomic and geopolitical factors, such as increasing interest rates, inflationary pressures, counterparty risk, changing customer demand, capital markets volatility and domestic or international conflicts or disputes; • the success of our marketing efforts and our ability to expand our member base; • our ability to grow market share in existing markets or any new markets we may enter; • our ability to develop new products, features and functionality that are competitive and meet market needs; • our ability to diversify our business and broaden our suite of financial services offerings; 2 SoFi Technologies, Inc. TABLE OF CONTENTS • our ability to realize the benefits of our strategy, including what we refer to as our Financial Services Productivity Loop, and achieve scale in our Financial Services segment; • our ability to successfully operate as a bank holding company, and to operate SoFi Bank; • our ability to make accurate credit and pricing decisions or effectively forecast our loss rates; • our ability to establish and maintain an effective system of internal controls over financial reporting; • our ability to maintain the listing of our securities on The Nasdaq Global Select Market (“Nasdaq”); • our ability to realize the anticipated benefits of the Bank Merger and the Technisys Merger; • our ability to successfully expand our operations into foreign jurisdictions, including compliance with a variety of foreign laws; and • the outcome of any legal or governmental proceedings that may be instituted against us. Forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and reflect current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. TRADEMARKS This document contains references to trademarks, service marks and trade names owned by us or belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this document may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor will not assert, to the fullest extent under applicable law, our or its rights to these trademarks, service marks and trade names. SoFi Technologies does not intend its use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of it by, any other companies. All trademarks, service marks and trade names included in this document are the property of their respective owners. 3 SoFi Technologies, Inc. TABLE OF CONTENTS PART I – FINANCIAL INFORMATION Item 1. Financial Statements SoFi Technologies, Inc. Unaudited Condensed Consolidated Balance Sheets (In Thousands, Except for Share Data) September 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 935,159 $ 494,711 Restricted cash and restricted cash equivalents (1) 326,274 273,726 Investments in available-for-sale securities (amortized cost of $ 204,359 and $ 195,796 , respectively) 195,133 194,907 Loans, less allowance for credit losses on loans at amortized cost of $ 34,370 and $ 7,037 , respectively (1)(2) 11,204,403 6,068,884 Servicing rights 168,438 168,259 Securitization investments 261,672 374,688 Equity method investments — 19,739 Property, equipment and software 164,421 111,873 Goodwill 1,622,951 898,527 Intangible assets 456,771 284,579 Operating lease right-of-use assets 100,411 115,191 Other assets, less allowance for credit losses of $ 1,791 and $ 2,292 , respectively 399,270 171,242 Total assets $ 15,834,903 $ 9,176,326 Liabilities, temporary equity and permanent equity Liabilities: Deposits: Noninterest-bearing deposits $ 89,761 $ — Interest-bearing deposits 4,941,869 — Total deposits 5,031,630 — Accounts payable, accruals and other liabilities (1) 565,910 298,164 Operating lease liabilities 121,729 138,794 Debt (1) 4,568,523 3,947,983 Residual interests classified as debt (1) 45,734 93,682 Total liabilities 10,333,526 4,478,623 Commitments, guarantees, concentrations and contingencies (Note 15) Temporary equity (3) : Redeemable preferred stock, $ 0.00 par value: 100,000,000 shares authorized; 3,234,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 320,374 320,374 Permanent equity: Common stock, $ 0.00 par value: 3,100,000,000 and 3,100,000,000 shares authorized; 927,345,977 and 828,154,462 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively (4) 92 83 Additional paid-in capital 6,654,026 5,561,831 Accumulated other comprehensive loss ( 9,600 ) ( 1,471 ) Accumulated deficit ( 1,463,515 ) ( 1,183,114 ) Total permanent equity 5,181,003 4,377,329 Total liabilities, temporary equity and permanent equity $ 15,834,903 $ 9,176,326 ______________ (1) Financial statement line items include amounts in consolidated variable interest entities (“VIEs”). See Note 5. (2) As of September 30, 2022 and December 31, 2021, includes loans held for sale measured at fair value of $ 10,924,056 and $ 5,952,972 , respectively. (3) Redemption amount is $ 323,400 as of September 30, 2022 and December 31, 2021. (4) Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of September 30, 2022 and December 31, 2021. See Note 11 for additional information. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (In Thousands, Except for Share and Per Share Data) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Interest income Loans $ 191,525 $ 89,844 $ 451,247 $ 246,743 Securitizations 2,633 2,999 7,958 11,260 Related party notes — — — 211 Other 3,881 758 6,758 2,023 Total interest income 198,039 93,601 465,963 260,237 Interest expense Securitizations and warehouses 20,653 19,360 59,158 75,418 Deposits 14,149 — 19,123 — Corporate borrowings 5,270 1,366 11,369 7,752 Other 117 500 801 1,400 Total interest expense 40,189 21,226 90,451 84,570 Net interest income 157,850 72,375 375,512 175,667 Noninterest income Loan origination and sales 163,697 142,147 465,815 362,211 Securitizations ( 8,772 ) ( 4,551 ) ( 31,790 ) ( 6,613 ) Servicing 7,296 458 30,003 ( 11,875 ) Technology products and solutions 82,035 49,951 223,562 140,560 Other 21,879 11,626 53,754 39,314 Total noninterest income 266,135 199,631 741,344 523,597 Total net revenue 423,985 272,006 1,116,856 699,264 Noninterest expense Technology and product development 110,702 74,434 291,976 209,771 Sales and marketing 162,129 114,985 444,121 297,170 Cost of operations 83,083 69,591 232,611 187,785 General and administrative 126,199 40,461 388,533 373,374 Provision for credit losses 16,323 2,401 39,387 2,887 Total noninterest expense 498,436 301,872 1,396,628 1,070,987 Loss before income taxes ( 74,451 ) ( 29,866 ) ( 279,772 ) ( 371,723 ) Income tax benefit (expense) 242 ( 181 ) ( 629 ) ( 1,202 ) Net loss $ ( 74,209 ) $ ( 30,047 ) $ ( 280,401 ) $ ( 372,925 ) Other comprehensive loss Unrealized losses on available-for-sale securities, net ( 1,914 ) ( 150 ) ( 8,360 ) ( 150 ) Foreign currency translation adjustments, net 325 204 231 ( 142 ) Total other comprehensive income (loss) ( 1,589 ) 54 ( 8,129 ) ( 292 ) Comprehensive loss $ ( 75,798 ) $ ( 29,993 ) $ ( 288,530 ) $ ( 373,217 ) Loss per share (Note 16) Loss per share – basic $ ( 0.09 ) $ ( 0.05 ) $ ( 0.35 ) $ ( 0.94 ) Loss per share – diluted $ ( 0.09 ) $ ( 0.05 ) $ ( 0.35 ) $ ( 0.94 ) Weighted average common stock outstanding – basic 916,762,973 800,565,830 893,455,206 429,750,486 Weighted average common stock outstanding – diluted 916,762,973 800,565,830 893,455,206 429,750,486 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at June 30, 2022 922,103,100 $ 92 $ 6,583,405 $ ( 8,011 ) $ ( 1,389,306 ) $ 5,186,180 3,234,000 $ 320,374 Share-based compensation expense — — 83,676 — — 83,676 — — Vesting of RSUs 5,434,536 — — — — — — — Stock withheld related to taxes on vested RSUs ( 270,487 ) — ( 1,630 ) — — ( 1,630 ) — — Exercise of common stock options 234,622 — 429 — — 429 — — Issuance of common stock in acquisition ( 155,794 ) — ( 1,665 ) — — ( 1,665 ) — — Redeemable preferred stock dividends — — ( 10,189 ) — — ( 10,189 ) — — Net loss — — — — ( 74,209 ) ( 74,209 ) — — Other comprehensive loss, net of taxes — — — ( 1,589 ) — ( 1,589 ) — — Balance at September 30, 2022 927,345,977 $ 92 $ 6,654,026 $ ( 9,600 ) $ ( 1,463,515 ) $ 5,181,003 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at January 1, 2022 828,154,462 $ 83 $ 5,561,831 $ ( 1,471 ) $ ( 1,183,114 ) $ 4,377,329 3,234,000 $ 320,374 Share-based compensation expense — — 251,195 — — 251,195 — — Vesting of RSUs 16,746,634 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 932,949 ) — ( 7,476 ) — — ( 7,476 ) — — Exercise of common stock options 1,677,512 — 2,489 — — 2,489 — — Issuance of common stock in acquisition 81,700,318 8 873,369 — — 873,377 — — Vested awards assumed in acquisition — — 2,855 — — 2,855 — — Redeemable preferred stock dividends — — ( 30,236 ) — — ( 30,236 ) — — Net loss — — — — ( 280,401 ) ( 280,401 ) — — Other comprehensive loss, net of taxes — — — ( 8,129 ) — ( 8,129 ) — — Balance at September 30, 2022 927,345,977 $ 92 $ 6,654,026 $ ( 9,600 ) $ ( 1,463,515 ) $ 5,181,003 3,234,000 $ 320,374 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Continued) (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at June 30, 2021 794,692,813 $ 79 $ 5,249,878 $ ( 512 ) $ ( 1,042,055 ) $ 4,207,390 3,234,000 $ 320,374 Share-based compensation expense — — 72,681 — — 72,681 — — Vesting of RSUs 8,081,148 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 555,031 ) — ( 8,637 ) — — ( 8,637 ) — — Exercise of common stock options 3,448,984 — 17,277 — — 17,277 — — Redeemable preferred stock dividends — — ( 10,189 ) — — ( 10,189 ) — — Net loss — — — — ( 30,047 ) ( 30,047 ) — — Other comprehensive income, net of taxes — — — 54 — 54 — — Balance at September 30, 2021 805,667,914 $ 80 $ 5,321,009 $ ( 458 ) $ ( 1,072,102 ) $ 4,248,529 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity (Deficit) Temporary Equity Shares Amount Shares Amount Balance at January 1, 2021 115,084,358 $ — $ 579,228 $ ( 166 ) $ ( 699,177 ) $ ( 120,115 ) 469,150,522 $ 3,173,686 Share-based compensation expense — — 162,289 — — 162,289 — — Vesting of RSUs 12,026,846 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 2,088,755 ) — ( 37,240 ) — — ( 37,240 ) — — Exercise of common stock options 5,652,778 — 20,642 — — 20,642 — — Redeemable preferred stock dividends — — ( 30,236 ) — — ( 30,236 ) — — Issuance of contingently issuable stock 1,281,132 — — — — — — — Cancellation of redeemable preferred stock related to a business combination — — — — — — ( 83,856 ) ( 743 ) Conversion of redeemable preferred stock warrants into permanent equity — — 161,775 — — 161,775 — — Conversion of redeemable preferred stock to common stock 450,832,666 45 2,702,524 — — 2,702,569 ( 450,832,666 ) ( 2,702,569 ) Issuance of common stock in connection with Business Combination and PIPE Investment 222,878,889 22 1,789,579 — — 1,789,601 — — Costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment — — ( 27,539 ) — — ( 27,539 ) — — Repurchase of redeemable common stock — — — — — — ( 15,000,000 ) ( 150,000 ) Change in par for historical SoFi common stock — 12 ( 12 ) — — — — — Net loss — — — — ( 372,925 ) ( 372,925 ) — — Other comprehensive loss, net of taxes — — — ( 292 ) — ( 292 ) — — Balance at September 30, 2021 805,667,914 $ 80 $ 5,321,009 $ ( 458 ) $ ( 1,072,102 ) $ 4,248,529 3,234,000 $ 320,374 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (In Thousands) Nine Months Ended September 30, 2022 2021 Operating activities Net loss $ ( 280,401 ) $ ( 372,925 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 235,018 162,289 Depreciation and amortization 109,007 75,041 Deferred debt issuance and discount expense 12,106 14,228 Provision for credit losses 39,387 2,887 Deferred income taxes ( 4,420 ) 699 Fair value changes in residual interests classified as debt 7,078 19,261 Fair value changes in securitization investments 13,256 ( 7,106 ) Fair value changes in warrant liabilities — 96,504 Other 11,635 ( 7,275 ) Changes in operating assets and liabilities: Originations and purchases of loans ( 11,635,939 ) ( 9,375,583 ) Proceeds from sales and repayments of loans 6,654,289 9,297,238 Other changes in loans 10,566 2,138 Servicing assets ( 179 ) ( 13,877 ) Related party notes receivable interest income — 1,399 Other assets ( 36,691 ) ( 26,883 ) Accounts payable, accruals and other liabilities 28,265 18,037 Net cash used in operating activities $ ( 4,837,023 ) $ ( 113,928 ) Investing activities Purchases of property, equipment, software and intangible assets $ ( 75,976 ) $ ( 38,445 ) Purchases of available-for-sale investments ( 44,974 ) ( 205,128 ) Proceeds from sales of available-for-sale investments 23,497 15,789 Proceeds from maturities and paydowns of available-for-sale investments 14,327 — Changes in loans, net ( 130,100 ) — Proceeds from securitization investments 99,760 201,093 Purchases of non-securitization investments — ( 20,000 ) Proceeds from non-securitization investments — 109,534 Acquisition of businesses, net of cash acquired 58,540 — Proceeds from repayment of related party notes receivable — 16,693 Net cash provided by (used in) investing activities $ ( 54,926 ) $ 79,536 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Continued) (In Thousands) Nine Months Ended September 30, 2022 2021 Financing activities Proceeds from debt issuances $ 7,861,804 $ 6,296,901 Repayment of debt ( 7,306,856 ) ( 8,368,904 ) Payment of debt issuance costs ( 4,076 ) ( 5,136 ) Net change in deposits 4,859,240 — Taxes paid related to net share settlement of share-based awards ( 7,476 ) ( 37,240 ) Proceeds from stock option exercises 2,489 20,642 Payment of redeemable preferred stock dividends ( 20,047 ) ( 20,047 ) Finance lease principal payments ( 364 ) ( 397 ) Purchases of common stock — ( 526 ) Redemptions of redeemable common and preferred stock — ( 282,859 ) Proceeds from Business Combination and PIPE Investment — 1,989,851 Payment of costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment — ( 26,951 ) Net cash provided by (used in) financing activities $ 5,384,714 $ ( 434,666 ) Effect of exchange rates on cash and cash equivalents 231 ( 142 ) Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents $ 492,996 $ ( 469,200 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 768,437 1,323,428 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 1,261,433 $ 854,228 Reconciliation to amounts on unaudited condensed consolidated balance sheets (as of period end) Cash and cash equivalents $ 935,159 $ 533,523 Restricted cash and restricted cash equivalents 326,274 320,705 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 1,261,433 $ 854,228 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (Continued) (In Thousands) Nine Months Ended September 30, 2022 2021 Supplemental non-cash investing and financing activities Issuance of common stock in acquisition $ 873,377 $ — Vested awards assumed in acquisition 2,855 — Loans received in acquisition 84,485 — Debt assumed in acquisition 2,000 — Deposits assumed in acquisition 158,016 — Deposits credited but not yet received in cash 14,374 Available-for-sale securities received in acquisition 10,014 — Property, equipment and software received in acquisition 3,192 — Non-cash loan reduction 1,386 — Share-based compensation capitalized related to internally-developed software 16,177 — Redeemable preferred stock dividends accrued but unpaid 10,189 10,189 Non-cash property, equipment, software and intangible asset additions — 859 Deferred debt issuance costs accrued but unpaid — 850 Securitization investments acquired via loan transfers — 89,111 Available-for-sale investment securities purchased but unpaid — 7,712 Costs directly attributable to the issuance of common stock paid in 2020 — 588 Reduction to temporary equity associated with purchase price adjustments — 743 Warrant liabilities recognized in conjunction with the Business Combination — 200,250 Series H warrant liabilities conversion to common stock warrants — 39,959 Conversion of temporary equity into permanent equity in conjunction with the Business Combination — 2,702,569 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards Organization Social Finance entered into the Agreement with SCH on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021, in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination.” Upon the closing of the Business Combination, holders of Social Finance common stock received shares of SoFi Technologies common stock in an amount determined by application of the exchange ratio of 1.7428 (“Exchange Ratio”), which was based on Social Finance’s implied price per share prior to the Business Combination. Additionally, holders of Social Finance preferred stock (with the exception of the holders of our Series 1 Redeemable Preferred Stock, as defined in Note 10) received shares of SoFi Technologies common stock in amounts determined by application of either the Exchange Ratio or a multiplier of the Exchange Ratio, as provided by the Agreement. SoFi is a financial services platform that was founded in 2011 to offer an innovative approach to the private student loan market by providing student loan refinancing options. The Company conducts its business through three reportable segments: Lending, Technology Platform and Financial Services. Since its founding, SoFi has expanded its lending strategy to offer home loans, personal loans and credit cards. The Company also developed non-lending financial products, such as money management and investment product offerings, and has also leveraged its financial services platform to empower other businesses. The Company has continued to expand its product offerings through strategic acquisitions. During 2020, the Company expanded its investment product offerings into Hong Kong through the acquisition of 8 Limited, and also began to operate as a platform-as-a-service for a variety of financial service providers, providing the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, account funding, direct deposit, authorizations and processing, payments functionality and check account balance features through the acquisition of Galileo. During 2022, the Company became a bank holding company and began operating as SoFi Bank, National Association, through its acquisition of Golden Pacific Bancorp, Inc., and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America through its acquisition of Technisys S.A., allowing the Company to expand its technology platform services to a broader international market. For additional information on our recent business combinations, see Note 2. For additional information on our reportable segments, see Note 17. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and certain consolidated VIEs. All intercompany accounts were eliminated in consolidation. The unaudited condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the rules and regulations of the SEC. We condensed or omitted certain notes and other financial information from the interim financial statements presented herein. These unaudited condensed consolidated financial statements should be read in conjunction with the annual consolidated statements included in our annual filing on Form 10-K filed with the SEC on March 1, 2022. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the Company’s financial condition and results of operations and cash flows for the interim periods presented. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. In our unaudited condensed consolidated statements of operations and comprehensive income (loss), we renamed the financial statement line item for noninterest income—technology platform fees to noninterest income—technology products and solutions in the first quarter of 2022 to accommodate noninterest income earned from Technisys. See Note 1 for our presentation of disaggregated revenue and Note 2 for our discussion of business combinations. In our unaudited condensed consolidated statements of cash flows, in the third quarter of 2022 we reclassified amounts related to the provision for credit losses to a separate financial statement line item from other within the adjustments to reconcile net loss to net cash used in 11 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) operating activities. The prior period amount was recast to conform to the current period presentation. There was no impact to net cash used in operating activities . Use of Judgments, Assumptions and Estimates The preparation of our unaudited condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue, expenses, and the disclosures of contingent assets and liabilities. These estimates and assumptions are inherently subjective in nature and, therefore, actual results may differ from our estimates and assumptions, and the differences could be material. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances. These assumptions and estimates include, but are not limited to, the following: (i) fair value measurements; (ii) share-based compensation expense; (iii) consolidation of variable interest entities; and (v) business combinations. Cash and Cash Equivalents Cash and cash equivalents primarily include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts and certain short-term commercial paper. We consider all highly liquid investments with original maturity dates of three months or less to be cash equivalents. Restricted Cash and Restricted Cash Equivalents Restricted cash and restricted cash equivalents primarily include cash deposits, certificate of deposit accounts held on reserve, money market funds held by consolidated VIEs, and collection balances. These accounts are earmarked as restricted because the balances are either member balances held in our custody, cash segregated for regulatory purposes associated with brokerage activities, escrow requirements for certain debt facilities and derivative agreements, deposits required by various bank holding companies we partner with (“Member Banks”) that support one or more of our products, loan collection balances awaiting disbursement, consolidated VIE cash balances that we cannot use for general operating purposes, or other legally restricted balances. Loans Our loan portfolio consists of (i) personal loans, student loans and home loans, which are held for sale and measured at fair value, and (ii) credit card loans, and commercial and consumer banking loans, which are measured at amortized cost. The commercial and consumer banking portfolio is primarily inclusive of commercial real estate loans, commercial and industrial loans and residential real estate and other consumer loans. Loans Measured at Fair Value Loans that we intend to sell to third-party purchasers or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale. We elected the fair value option to measure our personal loans, student loans and home loans, as we believe that fair value best reflects the expected economic performance of the loans, as well as our intentions given our primary gain-on-sale origination model. Therefore, these loans are carried at fair value on a recurring basis. All direct fees and costs related to the origination process are recognized in earnings as earned or incurred. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). We record cash flows related to loans held for sale within cash flows from operating activities in the unaudited condensed consolidated statements of cash flows. Securitized loans are assets held by consolidated special purpose entities (“SPE”) as collateral for bonds issued, for which fair value changes are recorded within noninterest income—securitizations in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Gains or losses recognized upon deconsolidation of a VIE are also recorded within noninterest income—securitizations . Loans Measured at Amortized Cost For our loans measured at amortized cost, direct loan origination costs are deferred and amortized on a straight-line basis over the privilege period (12 months) for credit card loans and amortized using the effective interest method over the 12 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) contractual term of the loans for commercial and consumer banking loans, within interest income—loans in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three and nine months ended September 30, 2022, we amortized $ 2,150 and $ 5,835 , respectively, of deferred costs into interest income and had a remaining balance of deferred costs of $ 3,974 as of September 30, 2022. Commercial and consumer banking loans are reported as delinquent when they become 30 or more days past due. For all commercial and consumer banking loans, we stop accruing interest and reverse all accrued but unpaid interest after 90 days of delinquency. For consumer banking loans, delinquent loans are charged off after 120 days of delinquency or on the date of confirmed loss. For commercial loans, performance is monitored on an individual loan basis and delinquent loans are charged off when collectability of interest and principal on the loan is not reasonably assured. Purchased Credit Deteriorated Assets In connection with the Bank Merger, as further discussed in Note 2, we obtained purchased credit deteriorated (“PCD”) loans. PCD loans are acquired financial assets (or groups of financial assets with similar risk characteristics) that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination. Indicators that an acquired asset may meet the definition of a PCD asset include days past due status, nonaccrual status, troubled debt restructuring status and other loan agreement violations. We were required to record an allowance for the acquired PCD loans, with a corresponding increase to the amortized cost basis as of the acquisition date. Recognition of the initial allowance for credit losses upon the acquisition of PCD loans does not impact net income. Changes in estimates of expected credit losses after acquisition are recognized through the provision for credit losses. See Note 7 for the rollforward of our allowance for credit losses. Troubled Debt Restructuring In connection with the Bank Merger, as further discussed in Note 2, we obtained troubled debt restructuring (“TDR”) loans. TDR loans are those for which the contractual terms have been restructured to grant one or more concessions to a borrower who is experiencing financial difficulty. Concessions may include several types of assistance to aid customers and maximize payments received, and vary by borrower-specific characteristics. Loans with short-term and other insignificant modifications that are not considered concessions are not TDRs. TDRs identified by Golden Pacific prior to the acquisition were recorded at fair value with a new accounting basis established as of the date of acquisition. Allowance for Credit Losses As of September 30, 2022, we applied ASC 326, Financial Instruments—Credit Losses (“ASC 326”), to the following: (i) cash equivalents and restricted cash equivalents, (ii) accounts receivable from contracts with customers, inclusive of servicing related receivables, (iii) margin receivables, which were attributable to our activities at 8 Limited, (iv) certain loan repurchase reserves representing guarantees of credit exposure, (v) loans measured at amortized cost, including credit card, and commercial and consumer banking loans acquired during the first quarter of 2022, and (vi) investments in available-for-sale debt securities. Our approaches to measuring the allowance for credit losses are disclosed in our Annual Report on Form 10-K. See Note 7 for a rollforward of the allowance for credit losses. Investments in Available-For-Sale Debt Securities An allowance for credit losses on our investments in available-for-sale (“AFS”) debt securities is required for any portion of impaired securities that is attributable to credit-related factors. As of September 30, 2022, we concluded that the credit-related impairment was immaterial. Investments in Equity Securities Our investments in equity securities consist of investments for which fair values are not readily determinable, which we elect to measure using the alternative method of accounting, under which they are measured at cost less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuers. Our investments in equity securities are presented within other assets in our unaudited condensed consolidated balance sheets. Adjustments to the carrying values of our investments in equity securities, such as impairments and unrealized gains, are recognized within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). 13 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) In August 2021, we purchased a 5 % interest in Lower Holding Company (“Lower”) for $ 20,000 and were granted a seat on Lower’s board of directors. We accounted for the investment under the equity method of accounting. In January 2022, we relinquished our seat on Lower’s board of directors, and have no further rights to a seat on Lower’s board of directors. As such, we no longer have significant influence over the investee, and we ceased recognizing Lower equity investment income subsequent to that date. Our equity method investment income for the nine months ended September 30, 2022 was immaterial. Additionally, we did no t receive any distributions during the nine months ended September 30, 2022. As of September 30, 2022, our investment was presented within other assets in the unaudited condensed consolidated balance sheets and was measured using the measurement alternative method of accounting. Restricted Investments Subsequent to operating SoFi Bank, we have investments in Federal Reserve Bank (“FRB”) stock and Federal Home Loan Bank (“FHLB”) stock, which are restricted investment securities that are not marketable. These investments are presented within other assets in our unaudited condensed consolidated balance sheets and are carried at cost and reviewed for impairment if indicators of impairment exist at the reporting date. Goodwill and Intangible Assets Goodwill represents the fair value of an acquired business in excess of the fair value of the identified net assets acquired. Goodwill is tested for impairment annually or whenever indicators of impairment exist. We apply the provisions of Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment , to calculate goodwill impairment (if any) on at least an annual basis, which provides for an unconditional option to bypass the qualitative assessment. Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Therefore, if the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. Our annual impairment testing date is October 1. Definite-lived intangible assets are straight-line amortized over their useful lives and reviewed for impairment annually and whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets. As of September 30, 2022, we did not identify any indicators of goodwill impairment nor any indicators that the carrying amounts of our intangible assets may not be recoverable. See Note 2 for further discussion of goodwill and intangible assets recognized in connection with recent business acquisitions. Deposits We commenced offering deposit accounts (referred to as “SoFi Checking and Savings” accounts) to our members through SoFi Bank in the first quarter of 2022. Our interest-bearing deposits primarily consist of demand deposits, savings deposits and, to a lesser extent, time deposits. We also have noninterest-bearing deposits. The following table presents a detail of interest-bearing deposits: September 30, 2022 Demand deposits (1)(2) $ 2,544,043 Savings deposits (1) 1,885,311 Time deposits (2)(3) 512,515 Total interest-bearing deposits $ 4,941,869 _____________________ (1) For deposit liabilities with no defined maturities, the fair value of the liabilities reflects the amount payable on demand at the reporting date. (2) Includes brokered deposits of $ 593,903 , of which $ 493,525 are time deposits and $ 100,378 are demand deposits. (3) The amount of time deposits that exceeded the insured limit (referred to as “uninsured deposits”) totaled $ 11,695 . 14 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) As of September 30, 2022, future maturities of our total time deposits were as follows: Remainder of 2022 $ 431,759 2023 77,998 2024 2,443 2025 33 2026 282 Total $ 512,515 Derivative Financial Instruments The following table presents the gains (losses) recognized on our derivative instruments: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivative contracts to manage future loan sale execution risk (1) $ 106,240 $ 1,305 $ 336,382 $ 23,439 Derivative contracts to manage securitization investment interest rate risk 5,119 — 14,187 — Interest rate lock commitments (“IRLCs”) (1) ( 2,027 ) ( 3,191 ) ( 4,666 ) ( 11,051 ) Interest rate caps (1) ( 4,112 ) — ( 7,139 ) — Purchase price earn-out (1) 52 7,165 1,094 7,165 Special payment (2) — — — ( 21,181 ) Third-party warrants (3) 81 — ( 88 ) — Total $ 105,353 $ 5,279 $ 339,770 $ ( 1,628 ) _____________________ (1) Recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). (2) In conjunction with the Business Combination, we made a one-time special payment of $ 21.2 million to the holders of Series 1 Redeemable Preferred Stock, which was paid from the proceeds of the Business Combination and settled contemporaneously with the Business Combination in 2021. The special payment was recognized within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss), as this feature was accounted for as an embedded derivative that was not clearly and closely related to the host contract, and will not have a subsequent impact on our consolidated financial results. The Series 1 Redeemable Preferred Stock has no stated maturity. (3) For the three and nine months ended September 30, 2022, includes $( 4 ) and $( 607 ), respectively, recorded within noninterest income—other, $ 217 and $ 651 , respectively, recorded within noninterest expense—general and administrative, and $( 132 ) and $( 132 ), respectively, recorded within noninterest expense—cost of operations in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The amount recorded to —general and administrative represents the amortization of a deferred liability recognized at the initial fair value of the third party warrants acquired of $ 964 , as we are also a customer of the third party. The following table presents information about derivative instruments subject to enforceable master netting arrangements: September 30, 2022 December 31, 2021 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Interest rate swaps $ — $ ( 13,781 ) $ 5,444 $ — Interest rate caps — ( 7,807 ) — ( 668 ) Home loan pipeline hedges 5,953 ( 158 ) 117 ( 313 ) Total, gross $ 5,953 $ ( 21,746 ) $ 5,561 $ ( 981 ) Derivative netting ( 1,657 ) 1,657 ( 117 ) 117 Total, net (1) $ 4,296 $ ( 20,089 ) $ 5,444 $ ( 864 ) _____________________ (1) As of September 30, 2022 and December 31, 2021, we had a cash collateral requirement of $ 13,781 and $ 299 , respectively, related to these instruments. 15 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the notional amounts of derivative contracts outstanding: September 30, 2022 December 31, 2021 Derivative contracts to manage future loan sale execution risk: Interest rate swaps $ 5,010,250 $ 4,210,000 Home loan pipeline hedges 172,000 421,000 Interest rate caps 405,000 405,000 Interest rate swaps (1) 254,750 — IRLCs (2) 130,312 357,529 Interest rate caps (3) 405,000 405,000 Total $ 6,377,312 $ 5,798,529 _____________________ (1) Represents interest rate swaps utilized to manage interest rate risk associated with certain of our securitization investments. (2) Amounts correspond with home loan funding commitments subject to IRLC agreements. (3) We sold an interest rate cap that was subject to master netting to offset an interest rate cap purchase made in conjunction with a contract to manage future loan sale execution risk. While the notional amounts of derivative instruments give an indication of the volume of our derivative activity, they do not necessarily represent amounts exchanged by parties and are not a direct measure of our financial exposure. See Note 8 for additional information on our derivative assets and liabilities. Safeguarding Asset and Liability Through our SoFi Invest product (via our wholly-owned subsidiary, SoFi Digital Assets, LLC, a licensed money transmitter), our members can invest in digital assets. We engage third parties to provide custodial services for our digital assets offering, which includes holding the cryptographic key information and working to protect the digital assets from loss or theft. The third-party custodians hold digital assets as custodial assets in an account in SoFi’s name for the benefit of our members. We maintain the internal recordkeeping of our members’ digital assets, including the amount and type of digital assets owned by each of our members in the custodial accounts. We currently utilize two third-party custodians. Therefore, we have concentration risk in the event the custodian is not able to perform in accordance with our agreement. In accordance with Staff Accounting Bulletin No. 121 (“SAB 121”), which is further discussed under “Recently Adopted Accounting Standards” in this Note 1, we recognize a digital assets safeguarding liability within accounts payable, accruals and other liabilities in our unaudited condensed consolidated balance sheets reflecting our obligation to safeguard the digital assets held by third-party custodians for the benefit of our members. We also recognize a corresponding safeguarding asset within other assets in our unaudited condensed consolidated balance sheets. The safeguarding liability and corresponding safeguarding asset are measured and recorded at the fair value of the digital assets held by the custodians at each reporting date, as measured in accordance with ASC 820, Fair Value Measurement (“ASC 820”). Subsequent changes to the fair value measure are reflected as equal and offsetting adjustments to the carrying values of the safeguarding liability and corresponding safeguarding asset. We evaluate any potential loss events, such as theft, loss or destruction of the cryptographic keys, that may affect the measurement of the safeguarding asset, which would be reflected in our results of operations in the period the loss occurs. Measurement changes do not impact our unaudited condensed consolidated statements of operations and comprehensive income (loss) unless such a loss event is identified. As of September 30, 2022, we did not identify any loss events. See Note 8 for additional information on the fair value measurement of the safeguarding liability and corresponding safeguarding asset. Foreign Currency Translation Adjustments We revalue assets, liabilities, income and expense denominated in non-United States currencies into United States dollars using applicable exchange rates. For foreign subsidiaries in which the functional currency is the subsidiary’s local currency, gains and losses relating to foreign currency translation adjustments are included in accumulated other comprehensive loss in our unaudited condensed consolidated balance sheets. For foreign subsidiaries in which the functional currency is the United States Dollar, gains and losses relating to foreign currency transaction adjustments are included within earnings in the unaudited condensed consolidated statements of operations and comprehensive income (loss). 16 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Due to the highly inflationary economic environment in Argentina, we use the United States Dollar as the functional currency of our Argentinian operations in accordance with ASC 830, Foreign Currency Matters . Our activities in Argentina are related to our Technology Platform segment and commenced in the first quarter of 2022 with the Technisys Merger. Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), in each of our revenue arrangements, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects our expected consideration in exchange for those goods or services. Our arrangements accounted for under ASC 606 are discussed in our Annual Report on Form 10-K, with notable updates provided herein. Technology Products and Solutions We earn fees for providing an integrated platform as a service for financial and non-financial institutions. Within our technology products and solutions fee arrangements, certain contracts contain a provision for a fixed, upfront implementation fee related to setup activities, which represents an advance payment for future technology platform services. In these arrangements, our implementation fees are recognized ratably over the contract life, as we consider the implementation fee partially earned each month that we meet our performance obligation over the life of the contract. Commencing in March 2022 with the Technisys Merger, we earn subscription and service fees for providing software licenses and associated services. Software license and service arrangements comprise one or more software licenses, implementation, maintenance, and other software-related services. We recognize revenue related to software licenses upon delivery of the license, as we consider the license to be satisfied at a point in time. Software is considered delivered when control passes to the customer following the user-acceptance testing period. We charge a recurring subscription fee for the software license and related maintenance services. Other software-related services are billed on a periodic basis as the services are provided. Certain arrangements for software and related services contain a provision for a fixed upfront payment, which in some cases may provide a material right to the customer with respect to the start and renewal of the subscription. Fees charged are part of the transaction price and are allocated to the performance obligations on a relative standalone selling price basis, as follows: • The standalone selling price of maintenance varies in proportion with the standalone selling price of the underlying license. We allocate the subscription fee between the license and maintenance based upon this proportion. We recognize the maintenance fees ratably over the maintenance period, as we stand ready to provide maintenance services during the period. • Non-maintenance software-related services fees are recognized over the period during which the services are provided, as we consider these services to be satisfied over time. We use an input model based on hours incurred to provide the services, which directly correspond with the value to which the customer is entitled. • If a contract contains a substantive upfront payment that creates a material right to subscribe or renew a subscription, the upfront payment is allocated to the material right and is recognized over the period of benefit associated with the right to subscribe or renew a subscription, typically the product life. We had deferred revenues of $ 6,057 and $ 2,553 as of September 30, 2022 and December 31, 2021, respectively, which are presented within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets. During the three and nine months ended September 30, 2022, we recognized revenue of $ 3,925 and $ 6,699 , respectively, associated with deferred revenues within noninterest income—technology products and solutions in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three and nine months ended September 30, 2021, we recognized revenue of $ 176 and $ 514 , respectively, associated with deferred revenues. Sales commissions: Capitalized sales commissions presented within other assets in the unaudited condensed consolidated balance sheets, which are incurred in connection with obtaining our technology products and solutions, were $ 1,248 and $ 678 as of September 30, 2022 and December 31, 2021, respectively. Additionally, we incur ongoing monthly commissions, which are expensed as incurred, as the benefit of such sales efforts are realized only in the period in which the commissions are earned. During the three and nine months ended September 30, 2022, commissions recorded within noninterest expense—sales and marketing in the unaudited condensed consolidated statements of operations and comprehensive income (loss) were $ 871 and $ 3,088 , respectively, of which $ 57 and $ 246 , respectively, represented amortization of capitalized 17 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) sales commissions. During the three and nine months ended September 30, 2021, commissions were $ 637 and $ 2,407 , respectively, of which $ 60 and $ 203 , respectively, represented amortization of capitalized sales commissions. Referrals We earn specified referral fees in connection with referral activities we facilitate through our platform. This arrangement contains variable consideration that is constrained due to the potential reversal of referral fulfillment fees. We recognize a liability within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets for the estimated referral fulfillment fee penalty, which represents the amount of consideration received that we estimate will reverse. The liability was $ 703 and $ 118 as of September 30, 2022 and December 31, 2021, respectively. Contract Balances As of September 30, 2022 and December 31, 2021, accounts receivable, net associated with revenue from contracts with customers were $ 59,095 and $ 33,748 , respectively, which were reported within other assets in the unaudited condensed consolidated balance sheets. The increase in contract balances during the current period includes the effect of the Technisys Merger, which contributed $ 16,496 to the balance as of September 30, 2022. 18 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Disaggregated Revenue The table below presents revenue from contracts with customers disaggregated by type of service, which best depicts how the revenue and cash flows are affected by economic factors, and by the reportable segment to which each revenue stream relates, as well as a reconciliation of total revenue from contracts with customers to total noninterest income . Revenues from contracts with customers are presented within noninterest income—technology products and solutions and noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). There were no revenues from contracts with customers attributable to our Lending segment for any of the periods presented. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Financial Services Referrals $ 10,210 $ 4,378 $ 26,783 $ 9,772 Brokerage 3,854 4,298 12,740 15,964 Payment network 4,225 1,975 11,518 4,650 Equity capital markets services 1,322 288 1,322 2,048 Enterprise services 240 63 668 2,817 Total financial services $ 19,851 $ 11,002 $ 53,031 $ 35,251 Technology Platform Technology services $ 81,474 $ 49,951 $ 221,742 $ 140,560 Software licenses 561 — 1,820 — Payment network 118 235 854 1,056 Total technology platform $ 82,153 $ 50,186 $ 224,416 $ 141,616 Total Revenue from Contracts with Customers Technology services $ 81,474 $ 49,951 $ 221,742 $ 140,560 Software licenses 561 — 1,820 — Referrals 10,210 4,378 26,783 9,772 Brokerage 3,854 4,298 12,740 15,964 Payment network 4,343 2,210 12,372 5,706 Equity capital markets services 1,322 288 1,322 2,048 Enterprise services 240 63 668 2,817 Total revenue from contracts with customers $ 102,004 $ 61,188 $ 277,447 $ 176,867 Other Sources of Revenue Loan origination and sales $ 163,697 $ 142,147 $ 465,815 $ 362,211 Securitizations ( 8,772 ) ( 4,551 ) ( 31,790 ) ( 6,613 ) Servicing 7,296 458 30,003 ( 11,875 ) Other 1,910 389 ( 131 ) 3,007 Total other sources of revenue 164,131 138,443 463,897 346,730 Total noninterest income $ 266,135 $ 199,631 $ 741,344 $ 523,597 Recently Adopted Accounting Standards In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, rather than at fair value. The standard should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We early adopted the standard effective January 1, 2022 and applied its provisions to our acquisitions in 2022. The adoption of this standard did not have a material impact on our consolidated financial statements. 19 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) In March 2022, the SEC released SAB 121, which provides interpretive guidance for an entity to consider when it has obligations to safeguard crypto-assets held for its platform users, whether directly or through an agent or another third party acting on its behalf. SAB 121 requires an entity to record a liability to reflect its obligation to safeguard the crypto-assets, as well as a corresponding safeguarding asset, both of which should be measured at the fair value of the crypto-assets being safeguarded for the entity’s users. Entities should evaluate any potential loss events, such as theft, loss or destruction of the cryptographic keys, that may affect the measurement of the asset. SAB 121 also requires financial statement disclosure, including the nature and amount of crypto-assets that the entity holds for its users, any vulnerabilities that may arise as a result of any concentration in crypto-assets, and information about who is responsible for the record-keeping of the crypto-assets, the holding of the cryptographic keys and safeguarding the crypto-assets, among other disclosure considerations. Disclosures must also be made in accordance with ASC 820. SAB 121 was effective for us for the interim period ending June 30, 2022. We applied the guidance through retrospective application as of January 1, 2022, at which time the value of our members’ digital assets was $ 266,014 . As of June 30, 2022, the adoption date, the value of our members’ digital assets was $ 112,010 . At each reporting date subsequent to adoption, we determine the value of our members’ digital assets and remeasure our digital assets safeguarding liability and corresponding digital assets safeguarding asset. Our application of this guidance did not impact our results of operations. We also enhanced our disclosures around our digital assets arrangements and our role in safeguarding them. See Note 1 and Note 8 for the applicable disclosures. Recent Accounting Standards Issued, But Not Yet Adopted In March 2022, the FASB issued ASU 2022-02, Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The ASU addresses two topics: (i) TDR by creditors, and (ii) vintage disclosures for gross write offs. Under the TDR provisions, the ASU eliminates the recognition and measurement guidance under ASC 310-40, Receivables — Troubled Debt Restructurings by Creditors, and instead requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with the accounting for other loan modifications. Additionally, the ASU enhances existing disclosure requirements around TDRs and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Under the vintage disclosure provisions, the ASU requires the entity to disclose current period gross write offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20, Financial Instruments — Credit Losses — Measured at Amortized Cost . The standard is effective for fiscal years and interim periods beginning after December 15, 2022. Early adoption is permitted. If an entity elects to early adopt this standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt either of the two topics separately, or both. The standard should be applied prospectively; however, for the TDR provisions, an entity has the option to apply a modified retrospective transition method. We are currently evaluating the effect of adopting this standard on our consolidated financial statements and related disclosures. Note 2. Business Combinations Acquisition of Golden Pacific Bancorp, Inc. On February 2, 2022, we 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, we acquired all of the outstanding equity interests in Golden Pacific for total cash purchase consideration of $ 22.3 million (the “Bank Merger”). After closing the Bank Merger, we became a bank holding company and Golden Pacific began operating as SoFi Bank. We are duly registered as a bank holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve”). SoFi Bank is a national banking association whose primary federal regulator is the Office of the Comptroller of the Currency (the “OCC”). Deposit accounts of SoFi Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit Insurance Fund to the fullest extent permitted by law. The closing of the Bank Merger was subject to regulatory approval. On January 18, 2022, we received approval from the Federal Reserve of our application to become a bank holding company under the Bank Holding Company Act, and we received conditional approval from the OCC to close the Bank Merger. The OCC also approved our application to change the composition of Golden Pacific’s assets in connection with the Bank Merger. The OCC conditional approval imposed a number of conditions, including that SoFi Bank have initial paid-in capital of no less than $ 750 million and adhere to an operating agreement. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. 20 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) A portion of the total cash purchase consideration ($ 0.6 million) was held back by the Company to satisfy any indemnification or certain other obligations (“Holdback Amount”), as certain legal proceedings with which Golden Pacific is involved as a plaintiff were not resolved at the time the Bank Merger closed. Through the third quarter of 2022, we incurred costs associated with the litigation involving Golden Pacific as a plaintiff in excess of the Holdback Amount. Therefore, no ne of the Holdback Amount will be released to the Golden Pacific shareholders. Additionally, we held back a $ 3.3 million payable to a dissenting Golden Pacific shareholder pending resolution of the shareholder’s appraisal claim, which could possibly result in a lower or higher amount paid to the dissenting shareholder once a ruling is made regarding the appraisal claim. The Bank Merger was accounted for as a business combination. The preliminary purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which were measured in accordance with the principles outlined in ASC 820. The excess of the total purchase consideration over the fair value of the net assets acquired of $ 11.2 million was allocated to goodwill, no ne of which is expected to be deductible for tax purposes, and which is allocated to our Financial Services segment. Goodwill is primarily attributable to the expected benefits of operating a national bank. The results of operations of Golden Pacific subsequent to the date of acquisition are included in SoFi’s consolidated financial statements as of and for the three and nine months ended September 30, 2022. As the acquisition was not determined to be a significant acquisition under ASC 805, Business Combinations , we do not disclose the pro forma impact of this acquisition to the results of operations in our interim and annual filings with the SEC. Identifiable intangible net assets at the date of acquisition included finite-lived intangible assets for core deposits with an aggregate fair value of $ 1.0 million. The intangible assets are being amortized over a period of 7.3 years based on the estimated economic life of the underlying assets. We incurred total acquisition-related costs related to the Bank Merger of $ 2.2 million, which were incurred during the three months ended March 31, 2021, and are presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Acquisition of Technisys S.A. On March 3, 2022, we acquired Technisys, pursuant to an Agreement and Plan of Merger dated as of February 19, 2022 and amended as of March 3, 2022, by and among the Company, Technisys, Atom New Delaware, Inc., a Delaware corporation and a wholly owned subsidiary of Atom, and Atom Merger Sub Corporation, a Delaware corporation and wholly owned subsidiary of SoFi Technologies (“Technisys Merger”). In the business combination, we acquired all of the outstanding equity interests in Technisys. Technisys is a cloud-native digital and core banking platform with an existing footprint of financial services customers in Latin America. The Technisys Merger was accounted for as a business combination. The following table presents the components of the purchase consideration to acquire Technisys as of September 30, 2022: Fair value of common stock issued (1) $ 873,377 Fair value of awards assumed (2) 2,855 Amounts payable to settle vested employee performance awards (3) 37,297 Settlement of pre-combination transactions between acquirer and acquiree 235 Total purchase consideration $ 913,764 ___________________ (1) Reflects the shares of SoFi common stock issued in the acquisition of 81,700,318 , which were adjusted in the third quarter of 2022 based on a finalized working capital calculation, as further discussed below, multiplied by the closing stock price of SoFi common stock on the closing date of the Technisys Merger. Additionally, these shares are inclusive of 6,305,595 shares that remain held in escrow. (2) We contemporaneously converted outstanding performance awards into restricted stock units (“RSUs”) to acquire common stock of SoFi (“Replacement Awards”). The fair value of awards assumed in the purchase consideration was based on the closing stock price of SoFi common stock on the closing date of the Technisys Merger. Refer to Note 12 for additional information on our RSUs, including the Replacement Awards. (3) We made payments of $ 17,641 related to this component of purchase consideration during the nine months ended September 30, 2022. During the third quarter of 2022, we finalized the closing net working capital calculation specified in the merger agreement, which resulted in a reduction to the equity consideration of 155,794 shares, representing an adjustment to the total purchase consideration of $ 1,665 , and a corresponding reduction to the carrying value of recognized goodwill. The remaining 21 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) 442,274 shares that were held in escrow associated with the working capital calculation were released to the former Technisys shareholders. The finalized closing net working capital calculation did not impact the estimated fair values of the assets acquired and liabilities assumed in conjunction with the transaction. The following table presents the allocation of the total purchase consideration to the estimated fair values of the identified assets acquired and liabilities assumed of Technisys as of the date of acquisition. The table reflects measurement period adjustments made in the second and third quarters of 2022, as well as an adjustment to the purchase consideration in the third quarter of 2022 associated with the finalized working capital calculation, each of which also impacted the amount of recognized goodwill: Preliminary Purchase Price Allocation Measurement Period Adjustments (1) Updated Purchase Price Allocation Assets acquired Cash and cash equivalents $ 25,710 $ — $ 25,710 Accounts receivable (2) 15,354 ( 2,942 ) 12,412 Intangible assets (3) 239,000 — 239,000 Operating lease right-of-use (“ROU”) assets 587 — 587 Other assets 1,011 2,891 3,902 Total identifiable assets acquired 281,662 ( 51 ) 281,611 Liabilities assumed Accounts payable, accruals and other liabilities 16,462 6,632 23,094 Operating lease liabilities 587 — 587 Deferred income taxes (4) 55,104 2,239 57,343 Total liabilities assumed 72,153 8,871 81,024 Total identified net assets acquired 209,509 ( 8,922 ) 200,587 Goodwill (5) 705,920 7,257 713,177 Total consideration $ 915,429 $ ( 1,665 ) $ 913,764 _________________ (1) The measurement period adjustments did not have a significant impact on our results of operations. The adjustment to accounts payable, accruals and other liabilities included a tax payable adjustment of $ 6,484 . (2) Included accounts receivable and unbilled revenue with a gross contractual amount of $ 14,768 . At the date of acquisition, the Company expected $ 2,356 to be uncollectible. (3) Intangible assets consist of finite-lived intangible assets, as follows: Gross carrying amount Weighted-average useful life (years) Developed technology (a) $ 187,000 8.8 Customer-related (b) 42,000 4.8 Trade names, trademarks and domain names (c) 10,000 8.8 __________________ (a) Valued using the Multi-Period Excess Earnings Method (“MPEEM”), which is a form of the income approach. The significant assumptions include: (i) the estimated annual net cash flows, which are a function of expected earnings attributable to the asset (and include an assumed technology migration curve), contributory asset charges and the applicable tax rate, and (ii) an assumed discount rate, which reflects the risk of the asset relative to the overall risk of Technisys. (b) Valued using the With and Without Method, which is a form of the income approach. The significant assumptions include: (i) the estimated annual revenues and net cash flows both with the existing customer base and without the existing customer base, which include assumptions regarding revenue ramp-up periods and attrition rates, and (ii) an assumed discount rate, consistent with (a) above. (c) Valued using the Relief from Royalty Method, which is a form of the income approach. The significant assumptions include: (i) the estimated annual net cash flows, which are a function of expected earnings attributable to the asset, the probability of use of the asset, the royalty rate and the applicable tax rate, and (ii) the discount rate, consistent with (a) above. (4) The deferred tax liabilities recognized in the acquisition were primarily related to the acquired intangible assets, in which the acquiree had a significantly lower tax basis compared to the fair value. (5) The excess of the total purchase consideration over the fair value of the identified net assets acquired was allocated to goodwill, no ne of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to expected growth opportunities at Technisys, and secondarily attributable to the 22 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) expected synergies from leveraging the Technisys technology to enhance and expand Galileo’s product offerings and operations, as well as expand its market reach. As such, all of the goodwill is allocated to the Technology Platform segment. The Company incurred total acquisition-related costs related to the Technisys Merger of $ 20.7 million, of which $ 3.3 million were incurred during the year ended December 31, 2021, and $ 17.4 million were incurred during the nine months ended September 30, 2022, which were presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). From the date of acquisition through September 30, 2022, the acquired results of operations for Technisys contributed total net revenue of $ 45.9 million and net loss of $ 17.0 million to the Company’s consolidated results, which was inclusive of amortization expense recognized on the acquired intangible assets. The following unaudited supplemental pro forma financial information presents the Company’s consolidated results of operations for relevant periods as if the business combination had occurred on January 1, 2021: Three Months Ended September 30, Nine Months Ended September 30, 2021 2022 2021 Total net revenue $ 289,252 $ 1,127,760 $ 746,504 Net loss ( 36,790 ) ( 271,506 ) ( 409,950 ) The unaudited supplemental pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the actual results of operations that would have been achieved, nor is it indicative of future results of operations. The unaudited supplemental pro forma financial information reflects pro forma adjustments that give effect to applying the Company’s accounting policies and certain events the Company believes to be directly attributable to the acquisition. The pro forma adjustments primarily include: • incremental straight-line amortization expense associated with acquired intangible assets; • an adjustment to reflect post-combination share-based compensation expense associated with the Replacement Awards as if the conversion had occurred on January 1, 2021; • an adjustment to reflect acquisition-related costs for both parties as if they were incurred during the earliest period presented; and • the related income tax effects, at the statutory tax rate applicable for each period, of the pro forma adjustments noted above. The unaudited supplemental pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of Technisys. Goodwill A rollforward of our goodwill balance is presented below: September 30, 2022 Beginning balance $ 898,527 Less: accumulated impairment — Beginning balance, net 898,527 Additional goodwill recognized (1) 724,424 Ending balance (2) $ 1,622,951 _____________________ (1) The additional goodwill recognized as of September 30, 2022 includes $ 713,177 related to the Technisys Merger (inclusive of measurement period adjustments in the second and third quarters of 2022 and an adjustment related to the finalization of the closing net working capital calculation in the third quarter of 2022) and $ 11,247 related to the Bank Merger. (2) As of September 30, 2022, we had goodwill attributable to the following reportable segments: $ 1,585,792 to Technology Platform and $ 37,159 to Financial Services. 23 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 3. Investments in AFS Debt Securities As of September 30, 2022 and December 31, 2021, all of our investments in debt securities were classified as available-for-sale and carried at fair value in the unaudited condensed consolidated balance sheets. During the first quarter of 2022, we acquired additional investments in AFS debt securities with the Bank Merger. The following table presents our investments in AFS debt securities: September 30, 2022 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value Investments in AFS debt securities: U.S. Treasury securities $ 121,105 $ 230 $ — $ ( 4,185 ) $ 117,150 Multinational securities (2) 19,722 75 — ( 831 ) 18,966 Corporate bonds 42,008 222 — ( 2,923 ) 39,307 Agency mortgage-backed securities 9,217 22 — ( 1,049 ) 8,190 Other asset-backed securities 9,570 5 — ( 558 ) 9,017 Other (3) 2,737 10 — ( 244 ) 2,503 Total investments in AFS debt securities $ 204,359 $ 564 $ — $ ( 9,790 ) $ 195,133 December 31, 2021 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value Investments in AFS debt securities: U.S. Treasury securities $ 103,014 $ 73 $ — $ ( 584 ) $ 102,503 Multinational securities (2) 19,911 109 — ( 154 ) 19,866 Corporate bonds 39,894 235 — ( 480 ) 39,649 Agency TBA (4) 7,457 13 4 ( 8 ) 7,466 Agency mortgage-backed securities 4,153 14 — ( 31 ) 4,136 Other asset-backed securities 9,610 5 — ( 91 ) 9,524 Commercial paper 9,939 — — — 9,939 Other (3) 1,818 13 — ( 7 ) 1,824 Total investments in AFS debt securities $ 195,796 $ 462 $ 4 $ ( 1,355 ) $ 194,907 _____________________ (1) As of September 30, 2022 and December 31, 2021, we determined that our unrealized loss positions related to credit losses were immaterial. Additionally, we do not intend to sell the securities in loss positions nor is it more likely than not that we will be required to sell the securities prior to recovery of the amortized cost basis. (2) Includes sovereign foreign and supranational bonds. (3) Includes state and city municipal bond securities. (4) Represented to-be-announced (“TBA”) securities, which were securities that were delivered under the purchase contract at a later date when the underlying security was issued. The December 31, 2021 balance was paid in cash during 2022. 24 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents information about our investments in AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2022. There were no securities in a gross unrealized loss position for 12 months or more as of December 31, 2021. September 30, 2022 Less than 12 Months 12 Months or Longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Investments in AFS debt securities: U.S. Treasury securities $ 33,275 $ ( 1,450 ) $ 83,875 $ ( 2,735 ) $ 117,150 $ ( 4,185 ) Multinational securities — — 18,966 ( 831 ) 18,966 ( 831 ) Corporate bonds 6,075 ( 400 ) 33,232 ( 2,523 ) 39,307 ( 2,923 ) Agency mortgage-backed securities 6,654 ( 851 ) 1,536 ( 198 ) 8,190 ( 1,049 ) Other asset-backed securities 2,999 ( 202 ) 6,018 ( 356 ) 9,017 ( 558 ) Other 1,903 ( 244 ) 600 — 2,503 ( 244 ) Total investments in AFS debt securities $ 50,906 $ ( 3,147 ) $ 144,227 $ ( 6,643 ) $ 195,133 $ ( 9,790 ) Gross realized gains and losses on our investments in AFS debt securities were immaterial during the three and nine months ended September 30, 2022 and 2021. There were no transfers between classifications of our investments in AFS debt securities during the periods presented. See Note 11 for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”). 25 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the amortized cost and fair value of our investments in AFS debt securities by contractual maturity: Due Within One Year Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Total September 30, 2022 Investments in AFS debt securities—Amortized cost: U.S. Treasury securities $ 75,575 $ 45,530 $ — $ — $ 121,105 Multinational securities 3,926 15,796 — — 19,722 Corporate bonds 1,389 37,271 3,348 — 42,008 Agency mortgage-backed securities — 96 637 8,484 9,217 Other asset-backed securities — 7,600 1,970 — 9,570 Other 1,801 — — 936 2,737 Total investments in AFS debt securities $ 82,691 $ 106,293 $ 5,955 $ 9,420 $ 204,359 Weighted average yield for investments in AFS debt securities (1) ( 0.90 ) % ( 6.30 ) % ( 2.71 ) % ( 15.81 ) % ( 4.45 ) % Investments in AFS debt securities—Fair value (2) : U.S. Treasury securities $ 73,507 $ 43,413 $ — $ — $ 116,920 Multinational securities 3,816 15,075 — — 18,891 Corporate bonds 1,349 34,630 3,106 — 39,085 Agency mortgage-backed securities — 90 578 7,500 8,168 Other asset-backed securities — 7,142 1,870 — 9,012 Other 1,764 — — 729 2,493 Total investments in AFS debt securities $ 80,436 $ 100,350 $ 5,554 $ 8,229 $ 194,569 _____________________ (1) The weighted average yield represents the effective yield for the investment securities and is computed based on the amortized cost of each security as of September 30, 2022. (2) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $ 564 as of September 30, 2022. Interest income associated with our investments in AFS debt securities is recognized within interest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). 26 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 4. Loans As of September 30, 2022, our loan portfolio consisted of personal loans, student loans and home loans, which are measured at fair value under the fair value option, and loans measured at amortized cost, including credit card, and commercial and consumer banking loans. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable: September 30, 2022 December 31, 2021 Loans at fair value Personal loans $ 6,803,717 $ 2,054,850 Student loans 3,495,452 2,876,509 Home loans 97,804 212,709 Securitized student loans 429,596 574,328 Securitized personal loans 97,487 234,576 Total loans at fair value 10,924,056 5,952,972 Loans at amortized cost (1) Credit card 188,687 115,912 Commercial and consumer banking: Commercial real estate 80,341 — Commercial and industrial 7,998 — Residential real estate and other consumer 3,321 — Total commercial and consumer banking 91,660 — Total loans at amortized cost 280,347 115,912 Total loans $ 11,204,403 $ 6,068,884 _____________________ (1) Amounts are presented net of the allowance for credit losses. See Note 1 for additional information on our loans at amortized cost as it pertains to the allowance for credit losses pursuant to ASC 326. Loans Measured at Fair Value The following table summarizes the aggregate fair value of our loans measured at fair value on a recurring basis: Student Loans Home Loans Personal Loans Total September 30, 2022 Unpaid principal (1) $ 3,888,642 $ 106,869 $ 6,667,484 $ 10,662,995 Accumulated interest 11,463 166 40,387 52,016 Cumulative fair value adjustments (1) 24,943 ( 9,231 ) 193,333 209,045 Total fair value of loans $ 3,925,048 $ 97,804 $ 6,901,204 $ 10,924,056 December 31, 2021 Unpaid principal (1) $ 3,356,344 $ 210,111 $ 2,188,773 $ 5,755,228 Accumulated interest 9,990 190 12,310 22,490 Cumulative fair value adjustments (1) 84,503 2,408 88,343 175,254 Total fair value of loans $ 3,450,837 $ 212,709 $ 2,289,426 $ 5,952,972 __________________ (1) These items are impacted by charge-offs during the period. 27 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the aggregate fair value of loans 90 days or more delinquent. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent. There were no home loans that were 90 days or more delinquent as of the dates presented. Student Loans Personal Loans Total September 30, 2022 Unpaid principal $ 4,452 $ 20,316 $ 24,768 Accumulated interest 237 804 1,041 Cumulative fair value adjustments ( 2,385 ) ( 17,909 ) ( 20,294 ) Fair value of loans 90 days or more delinquent $ 2,304 $ 3,211 $ 5,515 December 31, 2021 Unpaid principal $ 1,589 $ 4,765 $ 6,354 Accumulated interest 32 149 181 Cumulative fair value adjustments ( 865 ) ( 4,189 ) ( 5,054 ) Fair value of loans 90 days or more delinquent $ 756 $ 725 $ 1,481 28 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in our loans measured at fair value on a recurring basis: Student Loans Home Loans Personal Loans Total Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 3,714,375 $ 135,262 $ 4,109,745 $ 7,959,382 Origination of loans (1) 457,184 216,246 2,809,759 3,483,189 Principal payments ( 148,913 ) ( 934 ) ( 582,188 ) ( 732,035 ) Sales of loans ( 74,080 ) ( 251,821 ) ( 749,648 ) ( 1,075,549 ) Purchases (2) 34 1,260 1,276,175 1,277,469 Change in accumulated interest 1,862 7 17,332 19,201 Change in fair value (3) ( 25,414 ) ( 2,216 ) 20,029 ( 7,601 ) Fair value as of September 30, 2022 $ 3,925,048 $ 97,804 $ 6,901,204 $ 10,924,056 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 2,739,493 $ 182,313 $ 1,763,542 $ 4,685,348 Origination of loans (1) 967,939 793,086 1,640,572 3,401,597 Principal payments ( 218,940 ) ( 953 ) ( 273,590 ) ( 493,483 ) Sales of loans ( 922,271 ) ( 789,259 ) ( 1,196,798 ) ( 2,908,328 ) Purchases (2) — 334 102,032 102,366 Change in accumulated interest ( 853 ) ( 33 ) 1,191 305 Change in fair value (3) ( 10,927 ) ( 609 ) 17,277 5,741 Fair value as of September 30, 2021 $ 2,554,441 $ 184,879 $ 2,054,226 $ 4,793,546 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 3,450,837 $ 212,709 $ 2,289,426 $ 5,952,972 Origination of loans (1) 1,839,710 860,676 7,307,612 10,007,998 Principal payments ( 543,077 ) ( 6,035 ) ( 1,415,820 ) ( 1,964,932 ) Sales of loans ( 877,920 ) ( 959,971 ) ( 2,851,466 ) ( 4,689,357 ) Purchases (2) 121,741 2,088 1,504,112 1,627,941 Change in accumulated interest 1,473 ( 24 ) 28,077 29,526 Change in fair value (3) ( 67,716 ) ( 11,639 ) 39,263 ( 40,092 ) Fair value as of September 30, 2022 $ 3,925,048 $ 97,804 $ 6,901,204 $ 10,924,056 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 2,866,459 $ 179,689 $ 1,812,920 $ 4,859,068 Origination of loans (1) 2,832,121 2,320,918 3,740,645 8,893,684 Principal payments ( 705,048 ) ( 3,712 ) ( 779,597 ) ( 1,488,357 ) Sales of loans ( 2,469,372 ) ( 2,308,467 ) ( 2,946,374 ) ( 7,724,213 ) Purchases (2) 44,850 875 206,571 252,296 Change in accumulated interest ( 2,505 ) ( 51 ) ( 1,149 ) ( 3,705 ) Change in fair value (3) ( 12,064 ) ( 4,373 ) 21,210 4,773 Fair value as of September 30, 2021 $ 2,554,441 $ 184,879 $ 2,054,226 $ 4,793,546 __________________ (1) Represents the principal balance of loans originated during the period. (2) Purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity during the three and nine months ended September 30, 2022 included securitization clean-up calls of $ 129,733 and $ 465,472 , respectively. Additionally, during the three and nine months ended September 30, 2022, we elected to purchase $ 1,140,162 and $ 1,147,452 , respectively, of previously sold loans from certain investors. Purchase activity during the three and nine months ended September 30, 2021 included securitization clean-up calls of $ 100,000 and $ 231,372 , respectively. Additionally, during the nine months ended September 30, 2021, we elected to purchase $ 15,185 of previously sold loans from certain investors. We were not required to buy back these loans. The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. (3) Includes fair value adjustments on loans originated during the period and on loans held at the balance sheet date, as well as loan charge-offs. Changes in fair value of loans are recorded in the unaudited condensed consolidated statements of operations and comprehensive income (loss) within noninterest income—loan origination and sales for loans held on the balance sheet prior to transfer to a third party through a sale or to a VIE and within noninterest 29 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) income—securitizations for loans in a consolidated VIE. Changes in fair value are impacted by valuation assumption changes, as well as sales price execution and amount of time the loans are held prior to sale. The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were $ 15,249 and $ 31,974 during the three and nine months ended September 30, 2022, respectively, and $ 6,192 and $ 8,303 during the three and nine months ended September 30, 2021, respectively. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the loans. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument. Loans Measured at Amortized Cost Loan Portfolio Composition and Aging The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status: Delinquent Loans Current 30–59 Days 60–89 Days ≥ 90 Days (1) Total Delinquent Loans Total Loans (2) September 30, 2022 Credit card $ 201,558 $ 4,078 $ 3,838 $ 8,276 $ 16,192 $ 217,750 Commercial and consumer banking: Commercial real estate 80,463 666 — — 666 81,129 Commercial and industrial 8,315 6 — — 6 8,321 Residential real estate and other consumer (3) 3,327 — — — — 3,327 Total commercial and consumer banking 92,105 672 — — 672 92,777 Total loans $ 293,663 $ 4,750 $ 3,838 $ 8,276 $ 16,864 $ 310,527 December 31, 2021 Credit card $ 115,356 $ 1,893 $ 1,683 $ 2,658 $ 6,234 $ 121,590 _______________ (1) All of the credit card loans ≥ 90 days past due continued to accrue interest. As of September 30, 2022 and December 31, 2021, there were no credit card loans on nonaccrual status. As of September 30, 2022, commercial and consumer banking loans on nonaccrual status were immaterial, and there were no loans that were 90 days or more past due. (2) For credit card, the balance is presented before allowance for credit losses of $ 32,960 and $ 7,037 as of September 30, 2022 and December 31, 2021, respectively, and accrued interest of $ 3,897 and $ 1,359 , respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $ 1,410 and accrued interest of $ 293 as of September 30, 2022. (3) Primarily includes residential real estate loans acquired in the Bank Merger, for which we did not elect the fair value option. 30 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Credit Quality Indicators Credit Card The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) based on FICO scores, which are obtained at the origination of the account and are updated as new credit information is available. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data. FICO September 30, 2022 December 31, 2021 ≥ 800 $ 11,117 $ 10,016 780 – 799 8,758 8,624 760 – 779 10,327 9,976 740 – 759 13,042 13,581 720 – 739 17,465 18,358 700 – 719 23,525 22,579 680 – 699 28,568 21,736 660 – 679 29,996 14,044 640 – 659 24,393 1,969 < 640 50,559 707 Total credit card $ 217,750 $ 121,590 Commercial and Consumer Banking We evaluate the credit quality of our commercial and consumer banking loan portfolio on a quarterly basis based on regulatory risk ratings. Loans are categorized into risk ratings based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard. • Pass — Loans that management believes will fully repay in accordance with the contractual loan terms. • Watch  —  Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring. • Special mention — Loans with a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date. • Substandard  — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. 31 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator: Term Loans by Origination Year September 30, 2022 2022 2021 2020 2019 2018 Prior Total Term Loans Revolving Loans Commercial real estate Pass $ 23,593 $ 5,785 $ 7,634 $ 8,484 $ 5,549 $ 15,636 $ 66,681 $ 202 Watch 1,240 1,694 — 2,052 2,138 2,941 10,065 — Special mention — — — 682 2,249 410 3,341 — Substandard — — — — — 840 840 — Total commercial real estate $ 24,833 $ 7,479 $ 7,634 $ 11,218 $ 9,936 $ 19,827 $ 80,927 $ 202 Commercial and industrial Pass $ — $ 9 $ 107 $ — $ 91 $ 5,800 $ 6,007 $ 224 Watch — — — 137 — 296 433 24 Substandard — — — 227 529 877 1,633 — Total commercial and industrial $ — $ 9 $ 107 $ 364 $ 620 $ 6,973 $ 8,073 $ 248 Residential real estate and other consumer Pass $ — $ — $ — $ — $ — $ 3,211 $ 3,211 $ 72 Watch — — — — — 41 41 3 Total residential real estate and other consumer $ — $ — $ — $ — $ — $ 3,252 $ 3,252 $ 75 Total commercial and consumer banking $ 24,833 $ 7,488 $ 7,741 $ 11,582 $ 10,556 $ 30,052 $ 92,252 $ 525 Note 5. Variable Interest Entities Consolidated VIE s We consolidate certain securitization trusts in which we have a variable interest and are deemed to be the primary beneficiary. The VIEs are SPEs with portfolio loans securing debt obligations. The SPEs were created and designed to transfer credit and interest rate risk associated with consumer loans through the issuance of collateralized notes and trust certificates. We make standard representations and warranties to repurchase or replace qualified portfolio loans. Aside from these representations, the holders of the asset-backed debt obligations have no recourse to the Company if the cash flows from the underlying portfolio loans securing such debt obligations are not sufficient to pay all principal and interest on the asset-backed debt obligations. We hold a significant interest in these financing transactions through our ownership of a portion of the residual interest in certain VIEs. In addition, in some cases, we invest in the debt obligations issued by the VIE. Our investments in consolidated VIEs eliminate in consolidation. The residual interest is the first VIE interest to absorb losses should the loans securing the debt obligations not provide adequate cash flows to satisfy more senior claims and is the interest that we expect to absorb the expected gains and losses of the VIE. Our exposure to credit risk in sponsoring SPEs is limited to our investment in the VIE. VIE creditors have no recourse against our general credit. 32 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) As of September 30, 2022 and December 31, 2021, we had 12 and 13 consolidated VIEs, respectively, on our unaudited condensed consolidated balance sheets. The following table presents the assets and liabilities of consolidated VIEs that were included in our unaudited condensed consolidated balance sheets. The assets in the below table may only be used to settle obligations of consolidated VIEs and were in excess of those obligations as of the dates presented. Additionally, the assets and liabilities in the table below exclude intercompany balances, which eliminate upon consolidation. September 30, 2022 December 31, 2021 Assets: Restricted cash and restricted cash equivalents $ 27,609 $ 53,161 Loans 527,083 808,904 Total assets $ 554,692 $ 862,065 Liabilities: Accounts payable, accruals and other liabilities $ 222 $ 388 Debt (1) 453,078 660,419 Residual interests classified as debt 45,734 93,682 Total liabilities $ 499,034 $ 754,489 ___________________ (1) Debt is presented net of debt issuance costs and debt premiums (discounts). Nonconsolidated VIEs We have created and designed personal loan and student loan trusts to transfer associated credit and interest rate risk associated with the loans through the issuance of collateralized notes and residual certificates. We have a variable interest in the nonconsolidated loan trusts, as we own collateralized notes and residual certificates in the loan trusts that absorb variability. We also have continuing, non-controlling involvement with the trusts as the servicer. As servicer, we have the power to perform the activities which most impact the economic performance of the VIE, but since we hold an insignificant financial interest in the trusts, we are not the primary beneficiary. We define an insignificant financial interest as less than 10% of the expected gains and losses of the VIE. This financial interest represents the equity ownership interest in the loan trusts, wherein there is an obligation to absorb losses and the right to receive benefits from residual certificate ownership. The maximum exposure to loss as a result of our involvement with the nonconsolidated VIEs is limited to our investment. There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in nonconsolidated VIEs. Personal Loans As of September 30, 2022 and December 31, 2021, we had investments in six and nine nonconsolidated personal loan VIEs, respectively. We did no t establish any personal loan trusts during the nine months ended September 30, 2022 and established two personal loan trusts during the nine months ended September 30, 2021. We did not provide financial support to any personal loan trusts beyond our initial equity investment and we did no t deconsolidate any personal loan VIEs during the nine months ended September 30, 2022 and 2021. Student Loans As of each of September 30, 2022 and December 31, 2021, we had investments in 24 nonconsolidated student loan VIEs. We did no t establish any student loan trusts during the nine months ended September 30, 2022 and established four student loan trusts during the nine months ended September 30, 2021, which were not consolidated as of the balance sheet date. We did not provide financial support to any student loan trusts beyond our initial equity investment during the periods presented. We deconsolidated one student loan VIE during the nine months ended September 30, 2022. We did not deconsolidate any student loan VIEs during the nine months ended September 30, 2021. 33 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the aggregate outstanding value of asset-backed bonds and residual interests owned by the Company in nonconsolidated VIEs: September 30, 2022 December 31, 2021 Personal loans $ 33,961 $ 62,925 Student loans 227,711 311,763 Securitization investments $ 261,672 $ 374,688 Note 6. Transfers of Financial Assets We regularly transfer financial assets and account for such transfers as either sales or secured borrowings depending on the facts and circumstances. The following table summarizes our student and personal loan securitization transfers qualifying for sale accounting treatment. There were no loan securitization transfers qualifying for sale accounting treatment during the three and nine months ended September 30, 2022. Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Student loans Fair value of consideration received: Cash $ 491,450 $ 1,187,714 Securitization investments 25,999 62,783 Servicing assets recognized 5,847 36,948 Total consideration 523,296 1,287,445 Aggregate unpaid principal balance and accrued interest of loans sold 500,874 1,227,379 Gain from loan sales $ 22,422 $ 60,066 Personal loans Fair value of consideration received: Cash $ 300,508 $ 498,999 Securitization investments 15,847 26,328 Servicing assets recognized 1,687 2,925 Total consideration 318,042 528,252 Aggregate unpaid principal balance and accrued interest of loans sold 301,302 502,108 Gain from loan sales $ 16,740 $ 26,144 34 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes our whole loan sales: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Student loans Fair value of consideration received: Cash $ 77,089 $ 434,751 $ 883,859 $ 1,282,461 Servicing assets recognized 460 3,574 9,275 12,172 Repurchase liabilities recognized ( 13 ) ( 75 ) ( 134 ) ( 233 ) Total consideration 77,536 438,250 893,000 1,294,400 Aggregate unpaid principal balance and accrued interest of loans sold 74,311 423,576 881,922 1,248,888 Gain from loan sales $ 3,225 $ 14,674 $ 11,078 $ 45,512 Home loans Fair value of consideration received: Cash $ 244,788 $ 806,027 $ 926,707 $ 2,358,541 Servicing assets recognized 3,432 8,386 12,152 24,292 Repurchase liabilities recognized ( 269 ) ( 745 ) ( 1,004 ) ( 2,719 ) Total consideration 247,951 813,668 937,855 2,380,114 Aggregate unpaid principal balance and accrued interest of loans sold 252,168 789,402 960,680 2,308,705 Gain (loss) from loan sales $ ( 4,217 ) $ 24,266 $ ( 22,825 ) $ 71,409 Personal loans Fair value of consideration received: Cash $ 773,005 $ 934,888 $ 2,954,723 $ 2,547,577 Servicing assets recognized 6,789 5,842 20,872 16,923 Repurchase liabilities recognized ( 2,074 ) ( 2,221 ) ( 7,161 ) ( 6,285 ) Total consideration received 777,720 938,509 2,968,434 2,558,215 Aggregate unpaid principal balance and accrued interest of loans sold 753,259 900,633 2,864,351 2,456,356 Gain from loan sales $ 24,461 $ 37,876 $ 104,083 $ 101,859 35 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents information about the unpaid principal balances of transferred loans that are not recorded in our unaudited condensed consolidated balance sheets, but with which we have a continuing involvement through our servicing agreements: Student Loans Home Loans Personal Loans Total September 30, 2022 Loans in repayment $ 8,497,495 $ 5,072,302 $ 3,937,655 $ 17,507,452 Loans in-school/grace/deferment 41,854 — — 41,854 Loans in forbearance 27,166 17,779 1,086 46,031 Loans in delinquency 116,522 12,329 104,503 233,354 Total loans serviced $ 8,683,037 $ 5,102,410 $ 4,043,244 $ 17,828,691 December 31, 2021 Loans in repayment $ 9,852,957 $ 4,575,001 $ 5,138,299 $ 19,566,257 Loans in-school/grace/deferment 37,949 — — 37,949 Loans in forbearance 44,833 40,353 1,120 86,306 Loans in delinquency 112,885 7,465 75,275 195,625 Total loans serviced $ 10,048,624 $ 4,622,819 $ 5,214,694 $ 19,886,137 The following table presents additional information about the servicing cash flows received and net charge-offs related to transferred loans with which we have a continuing involvement: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Student loans Servicing fees collected $ 8,224 $ 12,393 $ 28,437 $ 35,687 Charge-offs, net of recoveries (1) 7,372 8,750 24,784 16,454 Home Loans Servicing fees collected $ 3,686 $ 2,349 $ 9,252 $ 5,880 Personal Loans Servicing fees collected $ 9,825 $ 8,467 $ 27,413 $ 25,742 Charge-offs, net of recoveries (1) 28,469 19,206 69,515 85,382 Total Servicing fees collected $ 21,735 $ 23,209 $ 65,102 $ 67,309 Charge-offs, net of recoveries 35,841 27,956 94,299 101,836 _____________________ (1) Student loan and personal loan charge-offs, net of recoveries, are impacted by the timing of charge-off sales performed on behalf of the purchasers of our loans, which lower the net amount disclosed. Note 7. Allowance for Credit Losses We measure our allowance for credit losses on accounts receivable under ASC 326, which primarily relates to our Technology Platform segment, and on loans measured at amortized cost, including credit card as well as commercial and consumer banking loans acquired in the Bank Merger, which relate to our Financial Services segment. Given our methods of collecting funds on servicing receivables, our historical experience of infrequent write offs, and that we have not observed meaningful changes in our counterparties’ abilities to pay, we determined that the future exposure to credit losses on servicing related receivables was immaterial. 36 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes the activity in the balances of allowance for credit losses: Accounts Receivable (1) Credit Card (1) Commercial and Consumer Banking (1) Three Months Ended September 30, 2022 Balance at June 30, 2022 $ 2,720 $ 21,974 $ 1,204 Provision for credit losses (2) ( 929 ) 16,119 204 Write-offs charged against the allowance (3) — ( 5,133 ) 2 Balance at September 30, 2022 $ 1,791 $ 32,960 $ 1,410 Three Months Ended September 30, 2021 Balance at June 30, 2021 $ 1,230 $ 691 $ — Provision for credit losses (2) 930 2,401 — Write-offs charged against the allowance ( 201 ) ( 92 ) — Balance at September 30, 2021 $ 1,959 $ 3,000 $ — Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 2,292 $ 7,037 $ — Provision for credit losses (2) ( 408 ) 38,361 1,026 Allowance for PCD loans (4) — — 382 Write-offs charged against the allowance (3) ( 93 ) ( 12,438 ) 2 Balance at September 30, 2022 $ 1,791 $ 32,960 $ 1,410 Nine Months Ended September 30, 2021 Balance at December 31, 2020 $ 562 $ 219 $ — Provision for credit losses (2) 2,710 2,887 — Write-offs charged against the allowance ( 1,313 ) ( 106 ) — Balance at September 30, 2021 $ 1,959 $ 3,000 $ — _____________________ (1) Accounts receivable balances, net of allowance for credit losses, are presented within other assets in the unaudited condensed consolidated balance sheets. Credit card and commercial and consumer banking loans measured at amortized cost, net of allowance for credit losses, are presented within loans in the unaudited condensed consolidated balance sheets. (2) The provision for credit losses on accounts receivable is presented within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). During the three and nine months ended September 30, 2022, recoveries of amounts previously reserved related to accounts receivable were $ 937 and $ 2,697 , respectively. During the three and nine months ended September 30, 2021, recoveries of amounts previously reserved related to accounts receivable were immaterial . The provision for credit losses on credit card and commercial and consumer banking loans is presented within noninterest expense—provision for credit losses. There were immaterial recoveries of amounts previously reserved related to credit card during the three and nine months ended September 30, 2022 and 2021 and related to commercial and consumer banking during the three and nine months ended September 30, 2022. (3) The increases in credit card write-offs charged against the allowance during the three and nine months ended September 30, 2022 relative to the corresponding periods in 2021 were commensurate with our increased loan portfolio combined with elevated loss rates. (4) We measured a PCD allowance for the loans acquired in the Bank Merger upon acquisition, which resulted in a gross-up to the allowance for credit losses, but had no impact on earnings. Credit card : Accrued interest receivables written off during the three and nine months ended September 30, 2022 were $ 1,171 and $ 2,456 , respectively. Accrued interest receivables written off during the three and nine months ended September 30, 2021 were immaterial . 37 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 8. Fair Value Measurements Recurring Fair Value Measurements The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our assets and liabilities measured at fair value on a recurring basis in the unaudited condensed consolidated balance sheets: September 30, 2022 December 31, 2021 Fair Value Fair Value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Investments in AFS debt securities (1) $ 136,116 $ 59,017 $ — $ 195,133 $ 129,835 $ 65,072 $ — $ 194,907 Loans at fair value — — 10,924,056 10,924,056 — — 5,952,972 5,952,972 Servicing rights — — 168,438 168,438 — — 168,259 168,259 Asset-backed bonds (2) — 174,838 — 174,838 — 253,669 — 253,669 Residual investments (2) — — 86,834 86,834 — — 121,019 121,019 Non-securitization investments – ETFs — — — — 1,486 — — 1,486 Third party warrants (3) — — 630 630 — — 1,369 1,369 Derivative assets (4)(5) — 5,953 — 5,953 — 5,444 — 5,444 Purchase price earn-out (6) — — 124 124 — — 4,272 4,272 IRLCs (7) — — — — — — 3,759 3,759 Student loan commitments (7) — — — — — — 2,220 2,220 Interest rate caps (5) — 8,060 — 8,060 — 493 — 493 Digital assets safeguarding asset (8) — 132,456 — 132,456 — — — — Total assets $ 136,116 $ 380,324 $ 11,180,082 $ 11,696,522 $ 131,321 $ 324,678 $ 6,253,870 $ 6,709,869 Liabilities Residual interests classified as debt $ — $ — $ 45,734 $ 45,734 $ — $ — $ 93,682 $ 93,682 Derivative liabilities (4)(5) — 21,746 — 21,746 196 668 — 864 IRLCs (7) — — 927 927 — — — — Student loan commitments (7) — — 1,409 1,409 — — — — Digital assets safeguarding liability (8) — 132,456 — 132,456 — — — — Total liabilities $ — $ 154,202 $ 48,070 $ 202,272 $ 196 $ 668 $ 93,682 $ 94,546 _____________________ (1) The investments in AFS debt securities that were classified as Level 2 rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. See Note 3 for additional information. (2) These assets represent the carrying value of our holdings in VIEs wherein we were not deemed the primary beneficiary. See Note 5 for additional information. (3) The key unobservable assumption used in the fair value measurement of the third party warrants was the price of the stock underlying the warrants. The fair value was measured as the difference between the stock price and the strike price of the warrants. As the strike price was insignificant, we concluded that the impact of time value on the fair value measure was immaterial. (4) For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. These instruments are presented on a gross basis herein. See Note 1 for additional information. (5) Mortgage pipeline hedges represent TBAs used as economic hedges of loan fair values and are classified as Level 2, as we rely on quoted market prices from similar loan pools that transact in the marketplace. Interest rate swaps and interest rate caps are classified as Level 2, because these financial instruments do not trade in active markets with observable prices, but rely on observable inputs other than quoted prices. As of September 30, 2022, interest rate swaps and interest rate caps were valued using the overnight Secured Overnight Financing Rate (“SOFR”) curve and the implied volatilities suggested by the SOFR rate curve. As of December 31, 2021, interest rate swaps were valued using the three-month LIBOR swap yield curve. These were determined to be observable inputs from active markets. (6) The purchase price earn-out provision is classified as Level 3 because of our reliance on unobservable inputs, such as conditional prepayment rates, annual default rates and discount rates. (7) IRLCs and student loan commitments are classified as Level 3 because of our reliance on assumed loan funding probabilities. The assumed probabilities are based on our internal historical experience with home loans and student loans similar to those in the funding pipelines on the measurement date. (8) The digital assets safeguarding liability and corresponding safeguarding asset are classified as Level 2, because they do not trade in active markets, and are valued using quoted prices on an active exchange that has been identified as the principal market for the underlying digital assets that are being held by our third-party custodians for the benefit of our members. 38 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Significant Inputs and Fair Value Rollforwards Loans The following key unobservable assumptions were used in the fair value measurement of our loans: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Student loans Conditional prepayment rate 16.0 % – 23.7 % 20.2 % 16.5 % – 26.3 % 19.2 % Annual default rate 0.2 % – 5.2 % 0.5 % 0.2 % – 4.2 % 0.4 % Discount rate 3.5 % – 9.1 % 4.1 % 1.9 % – 7.1 % 2.9 % Home loans Conditional prepayment rate 2.3 % – 8.1 % 6.9 % 4.8 % – 16.4 % 12.4 % Annual default rate 0.1 % – 0.5 % 0.1 % 0.1 % – 0.2 % 0.1 % Discount rate 4.5 % – 13.0 % 5.6 % 2.5 % – 13.0 % 2.6 % Personal loans Conditional prepayment rate 17.5 % – 46.0 % 19.3 % 18.4 % – 37.7 % 20.5 % Annual default rate 4.5 % – 33.7 % 5.0 % 4.2 % – 30.0 % 4.4 % Discount rate 5.5 % – 10.4 % 6.1 % 3.9 % – 7.0 % 4.0 % The key assumptions are defined as follows: • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of borrowers who do not make loan payments on time. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. See Note 4 for additional loan fair value disclosures. Servicing Rights Servicing rights for student loans and personal loans do not trade in an active market with readily observable prices. Similarly, home loan servicing rights infrequently trade in an active market. At the time of the underlying loan sale or the assumption of servicing rights, the fair value of servicing rights is determined using a discounted cash flow methodology based on observable and unobservable inputs. Management classifies servicing rights as Level 3 due to the use of significant unobservable inputs in the fair value measurement. 39 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Student loans Market servicing costs 0.1 % – 0.2 % 0.1 % 0.1 % – 0.2 % 0.1 % Conditional prepayment rate 15.4 % – 23.0 % 18.9 % 15.2 % – 25.6 % 20.4 % Annual default rate 0.3 % – 4.3 % 0.4 % 0.2 % – 4.3 % 0.4 % Discount rate 7.5 % – 7.5 % 7.5 % 7.3 % – 7.3 % 7.3 % Home loans Market servicing costs 0.1 % –  0.1 % 0.1 % 0.1 % –  0.1 % 0.1 % Conditional prepayment rate 4.9 % – 11.0 % 5.2 % 10.0 % – 16.4 % 11.5 % Annual default rate 0.1 % – 0.1 % 0.1 % 0.1 % – 0.2 % 0.1 % Discount rate 9.0 % – 9.0 % 9.0 % 7.5 % – 7.5 % 7.5 % Personal loans Market servicing costs 0.2 % – 0.8 % 0.3 % 0.2 % – 1.1 % 0.2 % Conditional prepayment rate 17.2 % – 44.7 % 24.1 % 22.5 % – 41.4 % 26.0 % Annual default rate 3.4 % – 7.7 % 4.7 % 3.2 % – 7.0 % 4.4 % Discount rate 7.5 % –  7.5 % 7.5 % 7.3 % –  7.3 % 7.3 % The key assumptions are defined as follows: • Market servicing costs  — The fee a willing market participant, which we validate through actual third-party bids for our servicing, would require for the servicing of student loans, home loans and personal loans with similar characteristics as those in our serviced portfolio. An increase in the market servicing cost, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of default within the total serviced loan balance. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the servicing rights. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 40 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the estimated decrease to the fair value of our servicing rights if the key assumptions had each of the below adverse changes: September 30, 2022 December 31, 2021 Market servicing costs 2.5 basis points increase $ ( 10,797 ) $ ( 10,822 ) 5.0 basis points increase ( 21,629 ) ( 21,644 ) Conditional prepayment rate 10% increase $ ( 4,875 ) $ ( 6,260 ) 20% increase ( 9,446 ) ( 12,031 ) Annual default rate 10% increase $ ( 188 ) $ ( 205 ) 20% increase ( 374 ) ( 408 ) Discount rate 100 basis points increase $ ( 4,505 ) $ ( 3,782 ) 200 basis points increase ( 8,716 ) ( 7,349 ) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the effect of an adverse variation in a particular assumption on the fair value of our servicing rights is calculated while holding the other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. 41 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in the Company’s servicing rights: Student Loans Home Loans Personal Loans Total Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 84,919 $ 62,166 $ 29,879 $ 176,964 Recognition of servicing from transfers of financial assets 460 3,432 6,789 10,681 Servicing rights assumed from third parties — — 1,062 1,062 Derecognition of servicing — ( 57 ) ( 3,908 ) ( 3,965 ) Change in valuation inputs or other assumptions 4,780 ( 1,448 ) 2,850 6,182 Realization of expected cash flows and other changes ( 9,293 ) ( 3,387 ) ( 9,806 ) ( 22,486 ) Fair value as of September 30, 2022 $ 80,866 $ 60,706 $ 26,866 $ 168,438 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 99,601 $ 37,557 $ 22,609 $ 159,767 Recognition of servicing from transfers of financial assets 9,421 8,386 7,529 25,336 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing — — ( 168 ) ( 168 ) Change in valuation inputs or other assumptions ( 1,698 ) 600 1,507 409 Realization of expected cash flows and other changes ( 11,305 ) ( 2,398 ) ( 8,216 ) ( 21,919 ) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 90,003 $ 50,533 $ 27,723 $ 168,259 Recognition of servicing from transfers of financial assets 9,275 12,152 20,872 42,299 Servicing rights assumed from third parties — — 3,008 3,008 Derecognition of servicing ( 1,072 ) ( 57 ) ( 4,423 ) ( 5,552 ) Change in valuation inputs or other assumptions 11,779 7,494 7,587 26,860 Realization of expected cash flows and other changes ( 29,119 ) ( 9,416 ) ( 27,901 ) ( 66,436 ) Fair value as of September 30, 2022 $ 80,866 $ 60,706 $ 26,866 $ 168,438 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 100,637 $ 23,914 $ 25,046 $ 149,597 Recognition of servicing from transfers of financial assets 49,120 24,292 19,848 93,260 Servicing rights assumed from third parties — — 49 49 Derecognition of servicing ( 392 ) — ( 356 ) ( 748 ) Change in valuation inputs or other assumptions ( 17,813 ) 2,146 3,743 ( 11,924 ) Realization of expected cash flows and other changes ( 35,533 ) ( 6,207 ) ( 25,020 ) ( 66,760 ) Fair value as of September 30, 2021 $ 96,019 $ 44,145 $ 23,310 $ 163,474 42 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Asset-Backed Bonds The fair value of asset-backed bonds is determined using a discounted cash flow methodology. Management classifies asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. The following key inputs were used in the fair value measurement of our asset-backed bonds: September 30, 2022 December 31, 2021 Discount rate (range) 3.3 % – 6.1 % 0.6 % – 3.7 % Conditional prepayment rate (range) 18.7 % – 35.6 % 19.5 % – 32.2 % As of the dates indicated, the fair value of our asset-backed bonds was not materially impacted by default assumptions on the underlying securitization loans, as the subordinate residual interests are expected to absorb all estimated losses based on our default assumptions for the respective periods. Residual Investments and Residual Interests Classified as Debt Residual investments and residual interests classified as debt do not trade in active markets with readily observable prices, and there is limited observable market data for reference. The fair values of residual investments and residual interests classified as debt are determined using a discounted cash flow methodology. Management classifies residual investments and residual interests classified as debt as Level 3 due to the use of significant unobservable inputs in the fair value measurements. The following key unobservable inputs were used in the fair value measurements of our residual investments and residual interests classified as debt: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 18.7 % – 36.9 % 21.3 % 19.5 % – 33.6 % 23.0 % Annual default rate 0.3 % – 5.3 % 0.8 % 0.3 % – 5.7 % 0.9 % Discount rate 4.3 % – 10.5 % 5.6 % 2.6 % – 10.5 % 4.4 % Residual interests classified as debt Conditional prepayment rate 19.0 % – 54.7 % 27.9 % 20.0 % – 41.8 % 31.5 % Annual default rate 0.5 % – 6.0 % 2.4 % 0.5 % – 5.6 % 3.2 % Discount rate 6.5 % – 9.5 % 7.0 % 5.0 % – 9.5 % 5.7 % The key assumptions are defined as follows: • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period for the pool of loans in the securitization. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 43 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in the residual investments and residual interests classified as debt. We record changes in fair value within noninterest income—securitizations in the unaudited condensed consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to interest expense—securitizations and warehouses for residual interests classified as debt and to interest income—securitizations for residual investments, but does not impact the liability or asset balance, respectively. Residual Investments Residual Interests Classified as Debt Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 94,978 $ 54,436 Change in valuation inputs or other assumptions (1) 664 1,453 Payments (2) ( 8,808 ) ( 10,155 ) Fair value as of September 30, 2022 $ 86,834 $ 45,734 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 143,100 $ 112,545 Additions 6,360 — Change in valuation inputs or other assumptions (1) 2,230 5,593 Payments (2) ( 20,189 ) ( 14,240 ) Fair value as of September 30, 2021 $ 131,501 $ 103,898 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 121,019 $ 93,682 Change in valuation inputs or other assumptions (1) 1,716 7,078 Payments (2) ( 35,901 ) ( 55,026 ) Fair value as of September 30, 2022 $ 86,834 $ 45,734 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 139,524 $ 118,298 Additions 44,528 2,170 Change in valuation inputs or other assumptions (1) 9,082 19,261 Payments (2) ( 61,633 ) ( 35,831 ) Fair value as of September 30, 2021 $ 131,501 $ 103,898 ___________________ (1) For residual investments, the estimated amounts of gains and losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during the periods presented. (2) Payments of residual investments included residual investment sales of $ 490 and $ 710 during the three and nine months ended September 30, 2022, respectively, and $ 1,615 and $ 4,291 during the three and nine months ended September 30, 2021, respectively. 44 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loan Commitments We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a plethora of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments: September 30, 2022 December 31, 2021 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 26.0 % – 56.0 % 42.7 % 75.0 % – 75.0 % 75.0 % Student loan commitments Loan funding probability (1) 95.0 % – 95.0 % 95.0 % 95.0 % – 95.0 % 95.0 % ___________________ (1) The aggregate amount of student loans we committed to fund was $ 69,977 as of September 30, 2022. See Note 1 under “Derivative Financial Instruments” for the aggregate notional amount associated with IRLCs. The key assumption is defined as follows: • Loan funding probability  — Our expectation of the percentage of IRLCs or student loan commitments which will become funded loans. A significant difference between the actual funded rate and the assumed funded rate at the measurement date could result in a significantly higher or lower fair value measurement of our IRLCs and student loan commitments. An increase in the loan funding probabilities, in isolation, would result in an increase in a fair value measurement. The weighted average assumptions were weighted based on relative fair values. 45 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in our IRLCs and student loan commitments. Changes in the fair values are recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). IRLCs Student Loan Commitments Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 1,120 $ ( 254 ) Revaluation adjustments ( 927 ) ( 1,409 ) Funded loans (1) ( 477 ) 22 Unfunded loans (1) ( 643 ) 232 Fair value as of September 30, 2022 $ ( 927 ) $ ( 1,409 ) Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ 7,760 $ — Revaluation adjustments 4,569 4,190 Funded loans (1) ( 5,458 ) — Unfunded loans (1) ( 2,302 ) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 3,759 $ 2,220 Revaluation adjustments ( 2,846 ) ( 1,640 ) Funded loans (1) ( 1,042 ) ( 2,118 ) Unfunded loans (1) ( 798 ) 129 Fair value as of September 30, 2022 $ ( 927 ) $ ( 1,409 ) Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 15,620 $ — Revaluation adjustments 19,447 4,190 Funded loans (1) ( 20,943 ) — Unfunded loans (1) ( 9,555 ) — Fair value as of September 30, 2021 $ 4,569 $ 4,190 ___________________ (1) For the quarter-to-date periods presented, funded and unfunded loan fair value adjustments represent the unpaid principal balance of funded and unfunded loans, respectively, during the quarter multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. For the year-to-date periods presented, amounts represent the summation of the per-quarter effects. Purchase Price Earn-Out We recognize a derivative asset for a purchase price earn-out in conjunction with a loan sale agreement we entered in 2018. We receive a capped contractual payout based on the respective loan pool internal rate of return over a certain hurdle rate, which is adjusted for the loan purchaser’s expenses, which are generally immaterial. 46 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The fair value of the purchase price earn-out is determined using a discounted cash flow methodology. Management classifies the purchase price earn-out as Level 3 due to the use of significant unobservable inputs in the fair value measurement. A significant difference between the expected performance of the loans included in the loan sale agreement and the actual results as of the measurement date could result in a higher or lower fair value measurement. Our key valuation inputs were as follows: Purchase Price Earn-Out September 30, 2022 December 31, 2021 Conditional prepayment rate 21.6 % 22.9 % Annual default rate 33.7 % 30.0 % Discount rate 25.0 % 25.0 % The key assumptions are defined as follows: • Conditional prepayment rate — The monthly annualized proportion of the principal of the pool of loans included in the loan sale agreement that is assumed to be paid off prematurely. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. • Annual default rate — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans included in the loan sale agreement. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. • Discount rate — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the purchase price earn-out derivative. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. 47 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the changes in our purchase price earn-out. Changes in the fair value are recorded within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Purchase Price Earn-Out Three Months Ended September 30, 2022 Fair value as of June 30, 2022 $ 625 Payments ( 553 ) Changes in valuation inputs or assumptions (1) 52 Fair value as of September 30, 2022 $ 124 Three Months Ended September 30, 2021 Fair value as of June 30, 2021 $ — Initial recognition 7,165 Payments ( 1,754 ) Fair value as of September 30, 2021 $ 5,411 Nine Months Ended September 30, 2022 Fair value as of January 1, 2022 $ 4,272 Payments ( 5,242 ) Changes in valuation inputs or assumptions (1) 1,094 Fair value as of September 30, 2022 $ 124 Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ — Initial recognition 7,165 Payments ( 1,754 ) Fair value as of September 30, 2021 $ 5,411 ___________________ (1) The estimated amount of losses included in earnings attributable to changes in instrument-specific credit risk were immaterial during all periods presented. The losses attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the purchase price earn-out. These assumptions are based on historical performance and performance expectations over the term of the underlying instrument. 48 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Safeguarding Assets and Liabilities The following table presents the significant digital assets held by our third-party custodians on behalf of our members: September 30, 2022 Bitcoin (BTC) $ 51,834 Ethereum (ETH) 45,707 Cardano (ADA) 8,949 Solana (SOL) 4,305 Ethereum Classic (ETC) 4,063 Dogecoin (DOGE) 4,060 Litecoin (LTC) 1,982 All other (1) 11,556 Digital assets safeguarding liability and corresponding safeguarding asset $ 132,456 ___________________ (1) Includes 24 digital assets, none of which were determined to be individually significant. Financial Instruments Not Measured at Fair Value The following table summarizes the carrying values and estimated fair values, by level within the fair value hierarchy, of our assets and liabilities that are not measured at fair value on a recurring basis in the unaudited condensed consolidated balance sheets: Fair Value Carrying Value Level 1 Level 2 Level 3 Total September 30, 2022 Assets Cash and cash equivalents (1) $ 935,159 $ 935,159 $ — $ — $ 935,159 Restricted cash and restricted cash equivalents (1) 326,274 326,274 — — 326,274 Loans at amortized cost (2) 280,347 — — 293,620 293,620 Total assets $ 1,541,780 $ 1,261,433 $ — $ 293,620 $ 1,555,053 Liabilities Time deposits (3) $ 512,515 $ — $ 512,412 $ — $ 512,412 Debt (4) 4,568,523 815,400 3,390,506 — 4,205,906 Total liabilities $ 5,081,038 $ 815,400 $ 3,902,918 $ — $ 4,718,318 December 31, 2021 Assets Cash and cash equivalents (1) $ 494,711 $ 494,711 $ — $ — $ 494,711 Restricted cash and restricted cash equivalents (1) 273,726 273,726 — — 273,726 Loans at amortized cost (2) 115,912 — — 118,412 118,412 Total assets $ 884,349 $ 768,437 $ — $ 118,412 $ 886,849 Liabilities Debt (4) $ 3,947,983 $ 1,240,560 $ 2,807,253 $ — $ 4,047,813 Total liabilities $ 3,947,983 $ 1,240,560 $ 2,807,253 $ — $ 4,047,813 ___________________ (1) The carrying amounts of our cash and cash equivalents and restricted cash and restricted cash equivalents approximate their fair values due to the short-term maturities and highly liquid nature of these accounts. (2) The fair value of our credit card loans was based on market factors and credit factors specific to our portfolio. The fair value of our commercial and consumer banking loans was determined using a discounted cash flow model with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults. (3) The fair value of our time-based deposits is estimated by a discounted cash flow method using rates currently offered for deposits of similar remaining maturities. 49 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (4) The carrying value of our debt is net of unamortized discounts and debt issuance costs. The fair value of our convertible notes was classified as Level 1, as it was based on an observable market quote. The fair values of our warehouse facility debt and revolving credit facility debt were classified as Level 2 and based on market factors and credit factors specific to these financial instruments. The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. Nonrecurring Fair Value Measurements Non-securitization investments — Other of $ 22,798 and $ 6,054 as of September 30, 2022 and December 31, 2021, respectively, include investments for which fair values are not readily determinable, which we elect to measure using the measurement alternative method of accounting. The fair value measurements are classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs in the fair value measurements. Adjustments to the carrying value, such as impairments and unrealized gains, are recognized within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). In the first quarter of 2022, we measured a former equity method investment under the measurement alternative method, which primarily drove the increase in the balance from year end. The fair value of this investment was $ 19,739 as of September 30, 2022. In the second quarter of 2022, we wrote off an investment with a carrying value of $ 2,168 for a loss, which reflected the impact of observable market changes. We had previously recognized a gain of $ 3,967 on this investment during the second quarter of 2021, which reflected a value based on the investee’s latest round of financing in an orderly transaction in an issuance similar to our investment holding. In that same quarter in 2021, we sold a portion of our investment for $ 2,000 at the same valuation. In the nine months ended September 30, 2022, we made net downward adjustments of $ 827 to an investment with a fair value of $ 1,059 as of September 30, 2022 and $ 1,886 as of December 31, 2021. We also had another investment with a fair value of $ 2,000 as of both September 30, 2022 and December 31, 2021 for which no adjustments were made during 2022. 50 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 9. Debt The following table summarizes the Company’s principal outstanding debt, debt discounts/premiums and debt issuance costs: Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of September 30, 2022 (5) December 31, 2021 Student Loan Warehouse Facilities SoFi Funding I $ — 1M SOFR + 100 bps April 2023 $ 200,000 $ — $ — SoFi Funding III (6) — PR –  134 bps September 2024 75,000 — 3,930 SoFi Funding V (7) 241,456 SOFR + 105 bps November 2023 225,000 218,524 — SoFi Funding VI — 3ML + 125 bps March 2024 600,000 — 56,709 SoFi Funding VII 232,150 SOFR + 85 bps September 2024 500,000 210,832 284,475 SoFi Funding VIII — SOFR + 100 bps May 2023 300,000 — 245,723 SoFi Funding IX (8) — SOFR+ 210 bps and CP + 87.5 bps May 2025 500,000 — 9,816 SoFi Funding X (9) 551,832 CP + 95 bps April 2025 500,000 486,820 29,647 SoFi Funding XI (10) 324,781 CP + 100 bps November 2024 500,000 284,160 — SoFi Funding XII (11) — CP + 115 bps November 2024 200,000 — 20,267 SoFi Funding XIII 498,064 SOFR + 55 bps April 2024 450,000 437,339 424,348 Total, before unamortized debt issuance costs $ 1,848,283 $ 4,050,000 $ 1,637,675 $ 1,074,915 Unamortized debt issuance costs $ ( 6,676 ) $ ( 7,540 ) Personal Loan Warehouse Facilities SoFi Funding PL I (12) $ — CP + 137.5 bps September 2023 $ 250,000 $ — $ 11,911 SoFi Funding PL II — SOFR + 150 bps July 2024 100,000 — — SoFi Funding PL III 203,201 SOFR + 125 bps November 2023 175,000 169,294 — SoFi Funding PL IV (13) 118,168 CP + 170 bps November 2023 500,000 100,406 — SoFi Funding PL VI (14) — CP + 170 bps September 2024 50,000 — — SoFi Funding PL VII — SOFR + 125 bps June 2023 250,000 — 71,572 SoFi Funding PL X 205,822 1ML + 142.5 bps February 2023 200,000 165,783 — SoFi Funding PL XI 116,686 1M SOFR + 125 bps January 2023 200,000 99,606 — SoFi Funding PL XIII — 1M SOFR + 110 bps January 2032 300,000 — — SoFi Funding PL XIV — SOFR + 100 bps October 2024 300,000 — 144,662 SoFi Funding PL XV (15) 164,188 SOFR + 80 bps October 2024 425,000 142,186 — Total, before unamortized debt issuance costs $ 808,065 $ 2,750,000 $ 677,275 $ 228,145 Unamortized debt issuance costs $ ( 3,002 ) $ ( 3,898 ) Home Loan Warehouse Facilities Mortgage Warehouse VI $ — SOFR + 200 bps October 2022 $ 1,000 $ — $ — Total, before unamortized debt issuance costs $ — $ 1,000 $ — $ — Unamortized debt issuance costs $ — $ — Credit Card Warehouse Facilities SoFi Funding CC I LLC (16) $ — CP + 100 bps December 2023 $ 100,000 $ — $ 11,810 Total, before unamortized debt issuance costs $ — $ 100,000 $ — $ 11,810 Unamortized debt issuance costs $ ( 116 ) $ ( 312 ) Risk Retention Warehouse Facilities (17) SoFi RR Funding I $ 28,003 3ML + 200 bps January 2024 $ 100,000 $ 17,704 $ 22,608 SoFi RR Repo — 3ML + 185 bps January 2022 — — 69,843 SoFi RR Funding II 25,807 1ML + 125 bps November 2024 19,223 98,031 SoFi RR Funding III (18) 34,180 1ML + 125 bps November 2024 34,981 39,158 SoFi RR Funding IV 88,129 SOFR + 150 bps October 2027 100,000 70,133 66,555 SoFi RR Funding V 33,378 298 bps December 2025 4,623 29,453 Total, before unamortized debt issuance costs $ 209,497 $ 146,664 $ 325,648 Unamortized debt issuance costs $ ( 1,332 ) $ ( 2,086 ) 51 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Borrowing Description Collateral Balances (1) Interest Rate (2) Termination/ Maturity (3) Total Capacity (4) Outstanding as of September 30, 2022 (5) December 31, 2021 Revolving Credit Facility SoFi Corporate Revolver (19) n/a 1ML + 100 bps September 2023 $ 560,000 $ 486,000 $ 486,000 Total, before unamortized debt issuance costs $ 560,000 $ 486,000 $ 486,000 Unamortized debt issuance costs $ ( 356 ) $ ( 626 ) Other Financing Convertible senior notes n/a — % October 2026 $ 1,200,000 $ 1,200,000 Total, before unamortized debt issuance costs and discount $ 1,200,000 $ 1,200,000 Unamortized debt issuance costs $ ( 1,379 ) $ ( 1,634 ) Unamortized discount ( 19,309 ) ( 22,858 ) Other financing (20) $ 23,889 $ 22,480 $ — $ — Student Loan Securitizations SoFi PLP 2016-B LLC $ 36,532 1ML + ( 120 – 380 bps) April 2037 $ 31,265 $ 43,186 SoFi PLP 2016-C LLC 41,102 1ML + ( 110 – 335 bps) May 2037 36,168 49,685 SoFi PLP 2016-D LLC 55,672 1ML + ( 95 – 323 bps) January 2039 49,317 61,760 SoFi PLP 2016-E LLC 63,510 1ML + ( 344 – 443 bps) October 2041 56,301 74,242 SoFi PLP 2017-A LLC 80,331 1ML + ( 70 – 443 bps) March 2040 72,132 92,972 SoFi PLP 2017-B LLC 67,371 274  –  444 bps May 2040 60,527 78,811 SoFi PLP 2017-C LLC 89,903 1ML + ( 60 – 421 bps) July 2040 80,513 102,814 Total, before unamortized debt issuance costs and discount $ 434,421 $ 386,223 $ 503,470 Unamortized debt issuance costs $ ( 2,644 ) $ ( 3,851 ) Unamortized discount ( 772 ) ( 1,094 ) Personal Loan Securitizations SoFi CLP 2018-3 LLC $ 38,945 467  bps August 2027 $ 32,288 $ 76,535 SoFi CLP 2018-4 LLC 44,669 476 bps November 2027 39,206 86,835 Total, before unamortized debt issuance costs, premiums and discount $ 83,614 $ 71,494 $ 163,370 Unamortized debt issuance costs $ ( 1,287 ) $ ( 1,683 ) Unamortized premium 65 207 Total, before unamortized debt issuance costs, premiums and discounts $ 4,605,331 $ 3,993,358 Less: unamortized debt issuance costs, premiums and discounts ( 36,808 ) ( 45,375 ) Total reported debt $ 4,568,523 $ 3,947,983 _________________ (1) As of September 30, 2022, represents unpaid principal balances, with the exception of the risk retention warehouse facilities, which include securitization-related investments carried at fair value. In addition, certain securitization interests that eliminate in consolidation are pledged to risk retention warehouse facilities. Collateral balances relative to debt balances as presented may vary period to period due to the timing of the next scheduled payment to the warehouse facility. (2) Unused commitment fees ranging from 0 to 65 basis points (“bps”) on our various warehouse facilities are recognized within noninterest expense—general and administrative in our unaudited condensed consolidated statements of operations and comprehensive income (loss). “ML” stands for “Month LIBOR”. As of September 30, 2022, 1ML and 3ML was 3.14% and 3.75%, respectively. “SOFR” in this table refers to the overnight SOFR, unless otherwise indicated. “1M SOFR” stands for “one-month SOFR”. As of September 30, 2022, SOFR was 2.98% and 1M SOFR was 3.04%. “PR” stands for “Prime Rate”. As of September 30, 2022, PR was 6.25%. (3) For securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts. Our maturity date represents the legal maturity of the last class of maturing notes. Securitization debt matures as loan collateral payments are made. (4) Represents total capacity as of September 30, 2022. (5) There were no debt discounts or premiums issued during the nine months ended September 30, 2022. We paid $ 700 during the nine months ended September 30, 2022 related to debt issuance costs accrued in 2021. (6) Warehouse facility has a prime rate floor of 309 bps. (7) Warehouse facility has a SOFR floor of 0 %. 52 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (8) Warehouse facility incurs different interest rates on its two types of asset classes. One such class incurs interest based on a commercial paper (“CP”) rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.14 %. (9) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.07 %. (10) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.14 %. The facility was amended in the first quarter of 2022 to allow up to $ 250 million of securitization risk retention securities to be pledged to the warehouse. As of September 30, 2022, $ 91.8 million of the collateral balance for the facility was related to securitization risk retention securities, with the remainder of the collateral balance related to student loans. (11) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.14 %. Under certain conditions, warehouse facility could incur an interest rate spread of 215 bps. (12) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 1.40 %. (13) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.14 %. (14) Warehouse facility incurs interest based on a CP rate, which is determined by the facility lender. As of September 30, 2022, the CP rate for this facility was 3.14 %. (15) Total capacity was increased by $ 100 million for a three-month period ending October 2022. (16) Warehouse facility incurs interest at a spread of 100 bps plus the lower of (a) three-month SOFR plus 35 bps or (b) the CP rate for this facility, which is determined by the facility lender. (17) Financing was obtained for both asset-backed bonds and residual investments in various personal loan and student loan securitizations, and the underlying collateral are the underlying asset-backed bonds and residual investments. We only state capacity amounts in this table for risk retention facilities wherein we can pledge additional asset-backed bonds and residual investments as of September 30, 2022. (18) In certain circumstances, cash payments may first be applied to a cash margin account prior to pay down of the outstanding balance, which may cause the collateral balance to exceed the outstanding balance. (19) As of September 30, 2022, $ 6.0 million of the revolving credit facility total capacity was not available for general borrowing purposes because it was utilized to secure a letter of credit. Refer to our letter of credit disclosures in Note 15 for more details. Additionally, the interest rate presented is the interest rate on standard withdrawals on our revolving credit facility, while same-day withdrawals incur interest based on PR. (20) Includes $ 23.9 million of loans pledged as collateral to secure $ 14.9 million of available borrowing capacity with the FHLB, of which $ 11.7 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15 for more details. Also includes unsecured available borrowing capacity of $ 7.6 million with correspondent banks. Material Changes to Debt Arrangements During the nine months ended September 30, 2022, we opened one personal loan warehouse facility with a maximum available capacity of $ 325,000 , which was increased by $ 100,000 for a three-month period ending October 2022, and closed one risk retention warehouse facility that had a maximum available capacity of $ 192,141 . Our warehouse and securitization debt is secured by a continuing lien and security interest in the loans financed by the proceeds. Within each of our debt facilities, we must comply with certain operating and financial covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum cash and cash equivalents, and (iii) a maximum leverage ratio of total debt to tangible net worth. Our debt covenants can lead to restricted cash classifications in our unaudited condensed consolidated balance sheets. Our subsidiaries are restricted in the amount that can be distributed to the parent company only to the extent that such distributions would cause the financial covenants to not be met. We were in compliance with all financial covenants. We assumed $ 2,000 of debt in the Bank Merger, which was paid off during the first quarter of 2022. We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of September 30, 2022, we have not identified any risks of nonpayment by our wholly-owned subsidiaries. 53 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Maturities of Borrowings Future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows: September 30, 2022 Remainder of 2022 $ — 2023 486,000 2024 — 2025 — 2026 1,200,000 Thereafter — Total $ 1,686,000 Note 10. Temporary Equity Pursuant to SoFi Technologies’ Certificate of Incorporation dated May 28, 2021, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $ 0.0001 per share (“SoFi Technologies Preferred Stock”) and 100,000,000 shares of redeemable preferred stock having a par value of $ 0.0000025 per share (“SoFi Technologies Redeemable Preferred Stock”). The Company’s Board of Directors has the authority to issue SoFi Technologies Preferred Stock and SoFi Technologies Redeemable Preferred Stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of those shares. The authorized shares of SoFi Technologies Redeemable Preferred Stock is inclusive of 4,500,000 shares of Series 1 redeemable preferred stock (“Series 1 Redeemable Preferred Stock”), which reflect the conversion on a one -for-one basis of shares of Social Finance Series 1 preferred stock in conjunction with the Business Combination. Shares of SoFi Technologies Series 1 Redeemable Preferred Stock that are redeemed, purchased or otherwise acquired by the Company will be canceled and may not be reissued by the Company. The Series 1 Redeemable Preferred Stock remains classified as temporary equity because the Series 1 Redeemable Preferred Stock is not fully controlled by the issuer, SoFi Technologies. As of September 30, 2022, there were no shares of SoFi Technologies Preferred Stock issued and outstanding and there were 3,234,000 shares of Series 1 Redeemable Preferred Stock issued and outstanding, which had an original issuance price of $ 100.00 . In conjunction with the Business Combination, we made a one-time special payment of $ 21.2 million to the holders of Series 1 Redeemable Preferred Stock, which was paid from the proceeds of the Business Combination and settled contemporaneously with the Business Combination in 2021. The special payment was recognized within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss), as this feature was accounted for as an embedded derivative that was not clearly and closely related to the host contract, and will not have a subsequent impact on our consolidated financial results. Dividends During each of the three months ended September 30, 2022 and 2021 and each of the nine months ended September 30, 2022 and 2021, the holders of Series 1 Redeemable Preferred Stock were entitled to dividends of $ 10,189 and $ 30,236 , respectively. Dividends payable were $ 10,189 as of September 30, 2022. There were no dividends payable as of December 31, 2021. There have been no dividend deferrals related to the Series 1 Redeemable Preferred Stock. Warrants In connection with the Series 1 and Series H preferred stock issuances during the year ended December 31, 2019, we also issued 12,170,990 Series H warrants, which were initially accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity , and were included within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets. Prior to the Business Combination, the Series H warrants were measured at fair value on a recurring basis and classified as Level 3 because of our reliance on unobservable assumptions, with fair value changes recognized within noninterest expense—general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income (loss). On May 28, 2021, in conjunction with the Closing of the Business Combination, we measured the final fair value of our Series H warrants. At that time, we reclassified the Series H warrant 54 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) liability into permanent equity, as the terms of the Series H instrument no longer necessitated liability accounting. Therefore, we did not measure the warrants at fair value subsequent to May 28, 2021. The following table presents the changes in the fair value of the Series H warrant liabilities prior to the reclassification to permanent equity: Warrant Liabilities Nine Months Ended September 30, 2021 Fair value as of January 1, 2021 $ 39,959 Change in valuation inputs or other assumptions 121,816 Reclassification to permanent equity in conjunction with the Business Combination ( 161,775 ) Fair value as of September 30, 2021 $ — Note 11. Permanent Equity On June 1, 2021, the Company’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “SOFI”. Pursuant to SoFi Technologies’ Certificate of Incorporation, the Company is authorized to issue 3,000,000,000 shares of common stock, with a par value of $ 0.0001 per share, and 100,000,000 shares of non-voting common stock, with a par value of $ 0.0001 per share. As of September 30, 2022, the Company had 927,345,977 shares of common stock and no shares of non-voting common stock issued and outstanding. The Company reserved the following common stock for future issuance: September 30, 2022 December 31, 2021 Outstanding stock options, RSUs and performance stock units (“PSUs”) 103,341,190 92,829,067 Outstanding common stock warrants 12,170,990 12,170,990 Conversion of convertible notes (1) 53,538,000 53,538,000 Possible future issuance under stock plans 38,777,480 32,470,481 Total common stock reserved for future issuance 207,827,660 191,008,538 ____________________ (1) Represents the number of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the balance sheet date. Dividends There were no dividends declared or paid to common stockholders during the nine months ended September 30, 2022 and 2021. Accumulated Other Comprehensive Income (Loss) AOCI primarily consists of accumulated net unrealized gains or losses associated with our investments in AFS debt securities and foreign currency translation adjustments. 55 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the rollforward of AOCI, inclusive of the changes in the components of other comprehensive loss: AFS Debt Securities Foreign Currency Translation Adjustments Total Three Months Ended September 30, 2022 AOCI, beginning balance $ ( 7,797 ) $ ( 214 ) $ ( 8,011 ) Other comprehensive income (loss) before reclassifications (1) ( 1,787 ) 325 ( 1,462 ) Amounts reclassified from AOCI into earnings ( 127 ) — ( 127 ) Net current-period other comprehensive income (loss) (2) ( 1,914 ) 325 ( 1,589 ) AOCI, ending balance $ ( 9,711 ) $ 111 $ ( 9,600 ) Three Months Ended September 30, 2021 AOCI, beginning balance $ — $ ( 512 ) $ ( 512 ) Other comprehensive income (loss) before reclassifications (1) ( 150 ) 204 54 Net current-period other comprehensive income (loss) (2) ( 150 ) 204 54 AOCI, ending balance $ ( 150 ) $ ( 308 ) $ ( 458 ) Nine Months Ended September 30, 2022 AOCI, beginning balance $ ( 1,351 ) $ ( 120 ) $ ( 1,471 ) Other comprehensive income (loss) before reclassifications (1) ( 8,518 ) 231 ( 8,287 ) Amounts reclassified from AOCI into earnings 158 — 158 Net current-period other comprehensive income (loss) (2) ( 8,360 ) 231 ( 8,129 ) AOCI, ending balance $ ( 9,711 ) $ 111 $ ( 9,600 ) Nine Months Ended September 30, 2021 AOCI, beginning balance $ — $ ( 166 ) $ ( 166 ) Other comprehensive loss before reclassifications (1) ( 150 ) ( 142 ) ( 292 ) Net current-period other comprehensive loss (2) ( 150 ) ( 142 ) ( 292 ) AOCI, ending balance $ ( 150 ) $ ( 308 ) $ ( 458 ) ____________________ (1) Gross realized gains and losses from sales of our investments in AFS debt securities that were reclassified from AOCI to earnings are recorded within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss). There were no reclassifications related to foreign currency translation adjustments during the nine months ended September 30, 2022 and 2021. (2) There were no tax impacts during any of the periods presented due to reserves against deferred tax assets in jurisdictions where other comprehensive loss activity was generated. Note 12. Share-Based Compensation 2021 Stock Option and Incentive Plan In connection with the Closing of the Business Combination, the Company adopted the 2021 Stock Option and Incentive Plan (the “2021 Plan”), which authorized for issuance 63,575,425 shares of common stock in connection with the Business Combination. Under the 2021 Plan, effective January 1, 2022, our Board of Directors authorized the issuance of an additional 8,937,242 shares. In the third quarter of 2022, the Company’s stockholders approved the amendment and restatement of the 2021 Stock Option and Incentive Plan (the “Amended and Restated 2021 Plan”), including a modification to the evergreen provision and an increase in the number of shares of common stock available for issuance under the plan. As of September 30, 2022, the Amended and Restated 2021 Plan includes an aggregate of 104,983,148 shares of common stock authorized for issuance of awards. The Amended and Restated 2021 Plan allows for the number of authorized shares to increase on the first day of each fiscal year beginning on January 1, 2023 and ending on and including January 1, 2030 equal to the lesser of (a) five percent of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year, and (b) such smaller number of shares of common stock as determined by the Board. The Amended and Restated 2021 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units (including performance stock units), dividend equivalents and other stock or cash based awards for issuance to its employees, 56 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) non-employee directors and non-employee third parties. Shares associated with option exercises and RSU vesting are issued from the authorized pool. During the nine months ended September 30, 2022 and 2021, we incurred cash outflows of $ 7,476 and $ 37,240 , respectively, related to the payment of withholding taxes for vested RSUs. These cash outflows are presented within net cash provided by (used in) financing activities in the unaudited condensed consolidated statements of cash flows. Share-based compensation expense related to stock options, RSUs and PSUs is presented within the following line items in the unaudited condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Technology and product development $ 20,856 $ 19,633 $ 56,690 $ 47,867 Sales and marketing 6,593 4,681 17,734 10,821 Cost of operations 5,075 3,482 14,034 7,672 General and administrative 45,331 44,885 146,560 95,929 Total $ 77,855 $ 72,681 $ 235,018 $ 162,289 Stock Options The following is a summary of stock option activity: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding as of January 1, 2022 21,171,147 $ 6.81 5.8 Granted (1) — n/a Exercised ( 1,677,512 ) 1.49 Forfeited ( 1,126 ) 6.84 Expired ( 445,159 ) 4.89 Outstanding as of September 30, 2022 19,047,350 $ 7.33 4.6 Exercisable as of September 30, 2022 18,964,882 $ 7.33 4.6 ____________________ (1) There were no stock options granted during the nine months ended September 30, 2022. Total compensation cost related to unvested stock options not yet recognized as of September 30, 2022 was $ 2.1 million and will be recognized over a weighted average period of approximately 0.5 years. Restricted Stock Units RSUs are equity awards granted to employees that entitle the holder to shares of our common stock when the awards vest. For employees hired on or after January 1, 2022, new hire RSU grants typically vest 12.5 % on the first vesting date, which occurs approximately six months after the date of grant, and ratably each quarter of the ensuing 14 -quarter period. For employees hired before January 1, 2022, new hire RSU grants typically vest 25 % on the first vesting date, which occurs approximately one year after the date of grant, and ratably each quarter of the ensuing 12 -quarter period. RSUs have been issued under other vesting schedules, including grants to existing employees. 57 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes RSU activity: Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 48,687,524 $ 12.23 Granted 40,806,923 8.08 Replacement Awards (1) 630,654 10.69 Vested (2) ( 16,746,634 ) 11.44 Forfeited ( 9,430,388 ) 11.01 Outstanding as of September 30, 2022 (3) 63,948,079 $ 10.03 ________________________ (1) In connection with the Technisys Merger, we converted outstanding Technisys performance awards into RSUs to acquire common stock of SoFi, and for which $ 2,855 of the fair value was attributed to pre-combination services. See Note 2 for additional information. (2) The total fair value, based on grant date fair value, of RSUs that vested during the nine months ended September 30, 2022 was $ 191.6 million. (3) Includes 178,021 RSUs that were granted in 2020 and later modified in an improbable-to-probable modification (Type III), related to which $ 1,695 of share-based compensation expense was recorded during the nine months ended September 30, 2022. The awards were fully expensed through the second quarter of 2022. As of September 30, 2022, there was $ 594.5 million of unrecognized compensation cost related to unvested RSUs, which will be recognized over a weighted average period of approximately 2.9 years. Performance Stock Units The following table summarizes PSU activity: Number of PSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 22,970,396 $ 9.52 Granted 122,190 3.71 Vested — n/a Forfeited ( 2,746,825 ) 7.53 Outstanding as of September 30, 2022 20,345,761 $ 9.75 Compensation cost associated with PSUs is recognized using the accelerated attribution method for each of the three vesting tranches over the respective derived service period. We determine the grant-date fair value of PSUs utilizing a Monte Carlo simulation model. The following table summarizes the inputs used for estimating the fair value of PSUs granted: Input Nine Months Ended September 30, 2022 Risk-free interest rate 1.6 % Expected volatility 37.7 % Fair value of common stock $ 12.06 Dividend yield — % Our use of a Monte Carlo simulation model requires the use of subjective assumptions: • Risk-free interest rate — Based on the U.S. Treasury rate at the time of grant commensurate with the remaining term of the PSUs. • Expected volatility — Based on the implied volatility of our common stock from a set of comparable publicly-traded companies. • Fair value of common stock — Based on the closing stock price on the date of grant. • Dividend Yield — We assumed no dividend yield because we have historically not paid out dividends to common stockholders. 58 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) As of September 30, 2022, there was $ 72.2 million of unrecognized compensation cost related to unvested PSUs, which will be recognized over a weighted average period of approximately 1.8 years. Note 13. Income Taxes For interim periods, we follow the general recognition approach whereby tax expense is recognized using an estimated annual effective tax rate, which is applied to the year-to-date operating results. Additionally, we recognize tax expense or benefit for any discrete items occurring within the interim period that were excluded from the estimated annual effective tax rate. Our effective tax rate may be subject to fluctuations during the year due to impacts from the following items: (i) changes in forecasted pre-tax and taxable income or loss, (ii) changes in statutory law or regulations in jurisdictions where we operate, (iii) audits or settlements with taxing authorities, (iv) the tax impact of expanded product offerings or business acquisitions, and (v) changes in valuation allowance assumptions. For the three and nine months ended September 30, 2022, we recorded income tax benefit (expense) of $ 242 and $( 629 ), respectively. For the three and nine months ended September 30, 2021, we recorded income tax expense of $( 181 ) and $( 1,202 ), respectively. Income taxes were primarily due to income tax expense associated with the profitability of SoFi Lending Corp. and, for the 2022 periods, SoFi Bank, in some state jurisdictions where separate company filing is required. In the 2022 periods, this expense was offset by income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to the Technisys Merger. See Note 2 for additional information. During the nine months ended September 30, 2022, we increased our unrecognized tax benefits by $ 9,885 , of which $ 6,548 would impact the Company’s effective tax rate if realized. The increase resulted from the recognition of historical tax reserves that existed at the time of the Technisys Merger and were recorded through goodwill. See Note 2 for additional information. As part of our purchase consideration, there are shares held in escrow, which could be returned to SoFi to indemnify us against future tax settlements during the escrow period. We do not expect to have any significant changes to unrecognized tax benefits over the next 12 months. During the nine months ended September 30, 2022, we maintained a full valuation allowance against our net deferred tax assets in applicable jurisdictions. In certain foreign and state jurisdictions where sufficient deferred tax liabilities exist, no valuation allowance is recognized. Management reviews all available positive and negative evidence in assessing the realizability of deferred tax assets. We will continue to recognize a full valuation allowance until there is sufficient positive evidence to support its release. Note 14. Related Parties The Company defines related parties as members of our Board of Directors, entity affiliates, executive officers and principal owners of the Company’s outstanding stock and members of their immediate families. Related parties also include any other person or entity with significant influence over the Company’s management or operations. Apex Loan In February 2021, Apex Clearing Holdings, LLC (“Apex”), in which we historically had a minority ownership, paid us $ 18,304 in settlement of all of their outstanding obligations to us, which consisted of outstanding principal balances of $ 16,693 and accrued interest of $ 1,611 . During the nine months ended September 30, 2021, we recognized interest income of $ 211 within interest income—related party notes , and we reversed the remainder of the loss for the discount to fair value that had not yet been accreted of $ 169 within noninterest income—other in the unaudited condensed consolidated statements of operations and comprehensive income (loss), which was only applicable to the nine-month period. Note 15. Commitments, Guarantees, Concentrations and Contingencies Leases We primarily lease our office premises under multi-year, non-cancelable operating leases. Our operating leases have terms expiring from 2022 to 2040, exclusive of renewal option periods. Our office leases contain renewal option periods ranging from one to ten years from the expiration dates. These options were not recognized as part of our ROU assets and operating lease liabilities, as we did not conclude at the commencement date of the leases that we were reasonably certain to 59 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) exercise these options. However, in our normal course of business, we expect our office leases to be renewed, amended or replaced by other leases. Associated with these leases, we obtained non-cash operating lease ROU assets in exchange for new operating lease liabilities of $ 764 during the nine months ended September 30, 2022, which were related to our recent acquisitions. Our finance leases expire in 2040. Lease Concession The lessor for one of our operating leases allowed us to defer payments on the lease beginning in April 2020 as a result of our inability to use the leased premises during the COVID-19 pandemic. During the concession period, we did not recognize operating lease cost and we did not remeasure the ROU asset or lease liability. We regained access to the leased premises in September 2021 and resumed lease amortization at that time. In the absence of this concession, we would have recognized additional operating lease cost of $ 377 and $ 1,509 during the three and nine months ended September 30, 2021, respectively. Concentrations Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash and restricted cash equivalents, residual investments and loans. We hold cash and cash equivalents and restricted cash and restricted cash equivalents in accounts at regulated domestic financial institutions in amounts that may exceed FDIC insured amounts. We believe these institutions are of high credit quality. We are dependent on third-party funding sources to originate loans. Additionally, we sell loans to various third parties. We have historically sold loans to a limited pool of third-party buyers. No individual third-party buyer accounted for 10% or more of consolidated total net revenues for any of the periods presented. The Company is exposed to default risk on borrower loans originated and financed by us. There is no single borrower or group of borrowers that comprise a significant concentration of the Company’s loan portfolio. Likewise, the Company is not overly concentrated within a group of channel partners or other customers, with the exception of our distribution of personal loan residual interests in our sponsored personal loan securitizations, which we market to third parties, and the aforementioned whole loan buyers. Given we have a limited number of prospective buyers for our personal loan securitization residual interests, this might result in us utilizing a significant amount of our own capital to fund future residual interests in personal loan securitizations, or impact the execution of future securitizations if we are limited in our own ability to invest in the residual interest portion of future securitizations, or find willing buyers for securitization residual interests. Contingencies Legal Proceedings In limited instances, the Company may be subject to a variety of claims and lawsuits in the ordinary course of business. Regardless of the final outcome, defending lawsuits, claims, government investigations, and proceedings in which we are involved is costly and can impose a significant burden on management and employees, and there can be no assurances that we will receive favorable final outcomes. SoFi Stadium. In September 2019, we established a 20 -year partnership with LA Stadium and Entertainment District at Hollywood Park in Inglewood, California (“StadCo”), through a naming and sponsorship agreement, which, among other things, provides SoFi with exclusive naming rights of SoFi Stadium and an official partnership with the Los Angeles Chargers and Los Angeles Rams and with the performance venue, which shares a roof with the stadium, and the surrounding planned entertainment district, which is anticipated to include office space, retail space and hotel and dining options. In September 2020, we discussed certain provisions of the naming and sponsorship agreement with StadCo in light of the COVID-19 pandemic. Based on these discussions, SoFi paid sponsorship fees for the initial contract year (July 1, 2020 to March 31, 2021) of $ 9.8 million, of which $ 6.5 million was paid during 2020 and $ 3.3 million was paid in January 2021. The Company was exposed to additional potential sales and marketing expense of up to $ 12.7 million, which reflected the difference between the actual sponsorship fees paid during the initial contract year and the commitment for the initial contract year made under the Naming and Sponsorship Agreement. During the third quarter of 2022, the parties signed an amended agreement in which the fees paid for the initial contract year were acknowledged and the contingency was fully resolved. Juarez et al v. SoFi Lending Corp. During January 2022, the parties advised the court that they had reached agreement on nearly all material terms of the settlement and were in the process of documenting the settlement and accompanying class 60 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) action settlement notice and claim form. The settlement agreement was fully executed in April 2022 and the plaintiffs have moved for preliminary approval of the settlement. The proposed class settlement, which contemplates an aggregate payment by SoFi of an immaterial amount, remains subject to final court review and approval, which we expect to occur in 2023. In re Renren Inc. Derivative Litigation. In April 2022, the Supreme Court of New York (the “Court”) held a mediation with the plaintiffs and announced that, given the parties' inability to reach an agreement, the Court is going to approve a settlement over objections. On June 9, 2022, the Court issued a final order and judgment approving the settlement. During July 2022, two sets of shareholders that had objected to the settlement filed notices of appeal from the Court’s order and judgment approving the settlement. On October 20, 2022, both intervenors withdrew their appeal and the settlement, in which all claims against Social Finance are dismissed with prejudice, became effective. Guarantees We have three types of repurchase obligations that we account for as financial guarantees, which are disclosed in our Annual Report on Form 10-K. In the event of a repurchase, we are typically required to pay the purchase price of the loans transferred. As of September 30, 2022 and December 31, 2021, the Company accrued liabilities within accounts payable, accruals and other liabilities in the unaudited condensed consolidated balance sheets of $ 3,775 and $ 7,441 , respectively, related to our estimated repurchase obligation, with the corresponding charges recorded within noninterest income—loan origination and sales in the unaudited condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2022 and December 31, 2021, the amounts associated with loans sold that were subject to the terms and conditions of our repurchase obligations totaled $ 5.9 billion and $ 6.5 billion, respectively. As of September 30, 2022 and December 31, 2021, the Company had a total of $ 9.1 million in letters of credit outstanding with financial institutions, which were issued for the purpose of securing certain of the Company’s operating lease obligations. A portion of the letters of credit was collateralized by $ 3.1 million of the Company’s cash, which is included within restricted cash and restricted cash equivalents in the unaudited condensed consolidated balance sheets. As of September 30, 2022, the Company had a total of $ 11.7 million in letters of credit outstanding with the FHLB, which serve as collateral for public deposits and were collateralized by loans. Mortgage Banking Regulatory Mandates The Company is subject to certain state-imposed minimum net worth requirements for the states in which the Company is engaged in the business of a residential mortgage lender. As of September 30, 2022 and December 31, 2021, the Company was in compliance with all minimum net worth requirements and, therefore, has not accrued any liabilities related to fines or penalties. Note 16. Loss Per Share We compute loss per share attributable to common stock using the two-class method required for participating interests. Series 1 Redeemable Preferred Stock has preferential cumulative dividend rights. Pursuant to ASC 260, Earnings Per Share , for each period presented, we increased net loss by the contractual amount of dividends payable to holders of Series 1 Redeemable Preferred Stock. Subsequent to the Business Combination, we did not have any participating interests. Basic loss per share of common stock was computed by dividing net loss, adjusted for the impact of Series 1 Redeemable Preferred Stock dividends, by the weighted average number of shares of common stock outstanding during the period. We excluded the effect of all potentially dilutive common stock elements from the denominator in the computation of diluted loss per share, as their inclusion would have been anti-dilutive. 61 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The calculations of basic and diluted loss per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net loss $ ( 74,209 ) $ ( 30,047 ) $ ( 280,401 ) $ ( 372,925 ) Less: Redeemable preferred stock dividends ( 10,189 ) ( 10,189 ) ( 30,236 ) ( 30,236 ) Net loss attributable to common stockholders – basic and diluted $ ( 84,398 ) $ ( 40,236 ) $ ( 310,637 ) $ ( 403,161 ) Denominator: Weighted average common stock outstanding – basic 916,762,973 800,565,830 893,455,206 429,750,486 Weighted average common stock outstanding – diluted 916,762,973 800,565,830 893,455,206 429,750,486 Loss per share – basic $ ( 0.09 ) $ ( 0.05 ) $ ( 0.35 ) $ ( 0.94 ) Loss per share – diluted $ ( 0.09 ) $ ( 0.05 ) $ ( 0.35 ) $ ( 0.94 ) We excluded the effect of the below elements from our calculation of diluted loss per share, as their inclusion would have been anti-dilutive, as there were no earnings attributable to common stockholders. These amounts represent the number of instruments outstanding at the end of the period. September 30, 2022 2021 Common stock options 19,047,350 24,143,373 Common stock warrants 12,170,990 40,295,990 Unvested RSUs 63,948,079 53,323,597 Unvested PSUs 20,345,761 23,141,462 Convertible notes (1) 53,538,000 — Contingent common stock (2) 6,305,595 320,649 ________________________ (1) Represents the shares of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the date indicated. (2) As of September 30, 2022, includes contingently returnable common stock in connection with the Technisys Merger, which consists of shares that may be used to satisfy certain indemnification claims, subject to certain limitations, and to cover any outstanding claims or indemnifications pursuant to the merger agreement. These escrow shares are expected to be released no later than 15 months after the close of the acquisition. See Note 2 for additional information. As of September 30, 2021, included contingently issuable common stock in connection with our acquisition of 8 Limited, which was subsequently issued during the fourth quarter of 2021. Note 17. Business Segment Information Segment Organization and Reporting Framework The Company has three reportable segments: Lending, Technology Platform and Financial Services. Each of our reportable segments is a strategic business unit that serves specific needs of our members based on the products and services provided. The segments are based on the manner in which management views the financial performance of the business. The reportable segments also reflect the Company’s organizational structure. Each segment has a segment manager who reports directly to the Chief Operating Decision Maker (“CODM”). The CODM has ultimate authority and responsibility over resource allocation decisions and performance assessment. The operations of acquired businesses have been integrated into, or managed as part of, our existing reportable segments. Activities that are not part of a reportable segment, such as management of our corporate investment portfolio and asset/liability management by our centralized treasury function (as further discussed below), are included in the Corporate/Other non-reportable segment (previously referred to as the “Other” non-reportable segment). Contribution profit (loss) is the primary measure of segment profit and loss reviewed by the CODM and is intended to measure the direct profitability of each segment in the manner in which management evaluates performance and makes 62 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) decisions about funding our operations and allocating resources. Contribution profit (loss) is defined as total net revenue for each reportable segment less: • fair value changes in servicing rights and residual interests classified as debt that are attributable to assumption changes, which impact the contribution profit within the Lending segment. These fair value changes are non-cash in nature and are not realized in the period; therefore, they do not impact the amounts available to fund our operations; and • expenses directly attributable to the corresponding reportable segment. Directly attributable expenses primarily include compensation and benefits and sales and marketing, and vary based on the amount of activity within each segment. Directly attributable expenses also include loan origination and servicing expenses, professional services, product fulfillment, lead generation and occupancy-related costs. Expenses are attributed to the reportable segments using either direct costs of the segment or labor costs that can be attributed based upon the allocation of employee time for individual products. During the first quarter of 2022, we implemented a funds transfer pricing (“FTP”) framework to attribute net interest income to our business segments based on their usage and/or provision of funding. The primary objective of the FTP framework is to transfer interest rate risk from the business segments by providing matched duration of funding of assets and liabilities to allocate interest income and interest expense to each segment. Therefore, the financial impact, management and reporting of interest rate risk is centralized in Corporate/Other, where it is monitored and managed. Under the FTP framework, treasury provides a funds credit for sources of funds, such as deposits generated by our Financial Services segment, and a funds charge for the use of funds, such as loan originations in our Lending segment. The process for determining FTP credits and charges is based on a number of factors and assumptions, including prevailing market interest rates, the expected duration of interest-earning and interest-bearing assets and liabilities, contingent risks and behaviors, and the Company’s broader funding profile. As the durations of assets and liabilities are typically not perfectly matched, the residual impact of the FTP framework is reflected within Corporate/Other. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in further refinements or changes to the framework in future periods. During the second quarter of 2022, we further refined the FTP framework for determining average asset and liability balances. The application of the FTP framework impacts the measure of net interest income and, thereby, total net revenue and contribution profit (loss) for our Lending and Financial Services segments, as well as the total net revenue of Corporate/Other, but has no impact on our consolidated results of operations. Prior to implementing the FTP framework, the presentation of our Lending and Financial Services segments’ net interest income reflected the difference between interest income earned on our loans and the actual interest expense incurred on any loans that were financed. Under the FTP framework, such interest expense is incurred by treasury within Corporate/Other and replaced by an FTP charge. Application of our current FTP framework during the comparative three and nine month periods ended September 30, 2021, would have impacted Lending segment net interest income by $ 1,942 and $ 4,593 , respectively, and Financial Services segment net interest income by $( 21 ) and $( 93 ), respectively. The offsetting impact would have been reflected within net interest income in Corporate/Other. If we had applied the refined methodology during the first quarter of 2021, Lending and Financial Services segment net interest income would have been impacted by $ 1,258 and $( 21 ), respectively, relative to the net interest income reported in the comparative period. The accounting policies of our reportable segments are consistent with those described in Note 1 and in our Annual Report on Form 10-K, except for the application of the FTP framework and the allocations of consolidated income and consolidated expenses. Assets are not allocated to reportable segments, as our CODM does not evaluate reportable segments using discrete asset information. Segment Information Lending. The Lending segment includes our personal loan, student loan and home loan products and the related servicing activities. We originate loans primarily with the objective of either selling whole loans or securitizing a pool of originated loans for transfer to third-party purchasers. Revenues in the Lending segment are driven by changes in the fair value of our whole loans and securitization interests (inclusive of our economic hedging activities), gains or losses recognized on transfers that meet the true sale requirements, and our servicing-related activities, which mainly consist of servicing fees and the changes in our servicing assets over time. In our Lending segment, we also earn the difference between interest income earned on our loans and interest expense, as determined using the FTP framework for the three-month 2022 period and the majority of 63 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) the nine-month 2022 period, and from our warehouse financing in the remainder of the nine-month 2022 period and the full 2021 period. Our CODM considers net interest income in addition to contribution profit in evaluating the performance of our Lending segment and making resource allocation decisions. Therefore, we present interest income net of interest expense. Technology Platform. The Technology Platform segment includes our technology products and solutions revenue, which was primarily related to our platform-as-a-service through Galileo, which provides the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, accounting funding, direct deposit, authorizations and processing, payments functionality and check account balance features. Beginning in March 2022, this segment also includes our revenue earned by Technisys, which expanded our segment to include a cloud-native digital and core banking platform offering and which results in the sale of software licenses and the provision of related technology solutions. See Note 2 for additional information on the Technisys Merger. Financial Services. The Financial Services segment primarily includes our SoFi Money product (inclusive of SoFi Checking and Savings, which commenced in the first quarter of 2022, and cash management accounts), SoFi Invest product, SoFi Credit Card product, SoFi Relay personal finance management product and other financial services, such as equity capital markets and advisory services, lead generation, and content for other financial services institutions and our members. SoFi Checking and Savings provides members a digital banking experience that offers no account fees, 2-day early paycheck and a competitive annual percentage yield. SoFi Money cash management provides members a digital cash management experience. Effective June 5, 2022, our SoFi Money cash management accounts no longer earn interest, as we implemented our plan to build new features only for SoFi Checking and Savings and reduce support of our SoFi Money cash management accounts. SoFi Invest provides investment features and financial planning services that we offer to our members. Revenues in the Financial Services segment include interest income earned and interest expense incurred under the FTP framework, payment network fees on our member transactions and pay for order flow, digital assets transaction fees and share lending arrangements in SoFi Invest. We also earn referral fees in connection with referral activity we facilitate through our platform. The referral fee is paid to us by third-party partners that offer services to end users who do not use one of our product offerings, but who were referred to the partners through our platform. Beginning in the third quarter of 2021, referral fees also include referral fulfillment fees earned for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator. Our CODM considers net interest income in addition to contribution profit (loss) in evaluating the performance of our Financial Services segment and making resource allocation decisions. Under the FTP framework, the Financial Services segment earns interest income that is reflective of an FTP credit for deposits provided to the overall business, as well as incurs interest expense that is reflective of an FTP charge related to the use of funding for SoFi Credit Card. Corporate/Other. Non-segment operations are classified as Corporate/Other (previously referred to as “Other”), which includes net revenues associated with corporate functions that are not directly related to a reportable segment. Beginning in the first quarter of 2022, net interest income (expense) within Corporate/Other reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. These non-segment net revenue (loss) also include interest income earned on corporate cash balances, nonrecurring income on certain investments from available cash on hand, such as our investments in AFS debt securities (which investments are not interconnected with our core business lines and, thereby, reportable segments), and interest expense on other corporate borrowings, such as our revolving credit facility and the amortization of debt issuance costs and original issue discount on our convertible notes. 64 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Segment Results The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment: Three Months Ended September 30, 2022 Lending Technology Platform (1) Financial Services (1) Reportable Segments Total Corporate/Other (1) Total Net interest income (expense) $ 139,516 $ — $ 28,158 $ 167,674 $ ( 9,824 ) $ 157,850 Noninterest income (expense) 162,178 84,777 20,795 267,750 ( 1,615 ) 266,135 Total net revenue (loss) $ 301,694 $ 84,777 $ 48,953 $ 435,424 $ ( 11,439 ) $ 423,985 Servicing rights – change in valuation inputs or assumptions (2) ( 6,182 ) — — ( 6,182 ) Residual interests classified as debt – change in valuation inputs or assumptions (3) 1,453 — — 1,453 Directly attributable expenses ( 116,403 ) ( 65,241 ) ( 101,576 ) ( 283,220 ) Contribution profit (loss) $ 180,562 $ 19,536 $ ( 52,623 ) $ 147,475 Three Months Ended September 30, 2021 Lending Technology Platform Financial Services Reportable Segments Total Corporate/Other Total Net interest income (expense) $ 72,257 $ 39 $ 1,209 $ 73,505 $ ( 1,130 ) $ 72,375 Noninterest income 138,034 50,186 11,411 199,631 — 199,631 Total net revenue (loss) $ 210,291 $ 50,225 $ 12,620 $ 273,136 $ ( 1,130 ) $ 272,006 Servicing rights – change in valuation inputs or assumptions (2) ( 409 ) — — ( 409 ) Residual interests classified as debt – change in valuation inputs or assumptions (3) 5,593 — — 5,593 Directly attributable expenses ( 97,807 ) ( 34,484 ) ( 52,085 ) ( 184,376 ) Contribution profit (loss) $ 117,668 $ 15,741 $ ( 39,465 ) $ 93,944 65 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Nine Months Ended September 30, 2022 Lending Technology Platform (1) Financial Services (1) Reportable Segments Total Corporate/Other (1) Total Net interest income (expense) $ 347,873 $ — $ 46,965 $ 394,838 $ ( 19,326 ) $ 375,512 Noninterest income (expense) 463,927 229,481 55,894 749,302 ( 7,958 ) 741,344 Total net revenue (loss) $ 811,800 $ 229,481 $ 102,859 $ 1,144,140 $ ( 27,284 ) $ 1,116,856 Servicing rights – change in valuation inputs or assumptions (2) ( 26,860 ) — — ( 26,860 ) Residual interests classified as debt – change in valuation inputs or assumptions (3) 7,078 — — 7,078 Directly attributable expenses ( 336,814 ) ( 169,849 ) ( 258,697 ) ( 765,360 ) Contribution profit (loss) $ 455,204 $ 59,632 $ ( 155,838 ) $ 358,998 Nine Months Ended September 30, 2021 Lending Technology Platform Financial Services Reportable Segments Total Corporate/Other Total Net interest income (expense) $ 180,856 $ ( 29 ) $ 1,980 $ 182,807 $ ( 7,140 ) $ 175,667 Noninterest income 343,703 141,616 34,142 519,461 4,136 523,597 Total net revenue (loss) $ 524,559 $ 141,587 $ 36,122 $ 702,268 $ ( 3,004 ) $ 699,264 Servicing rights – change in valuation inputs or assumptions (2) 11,924 — — 11,924 Residual interests classified as debt – change in valuation inputs or assumptions (3) 19,261 — — 19,261 Directly attributable expenses ( 261,202 ) ( 97,148 ) ( 135,851 ) ( 494,201 ) Contribution profit (loss) $ 294,542 $ 44,439 $ ( 99,729 ) $ 239,252 ____________________ (1) During the three and nine months ended September 30, 2022, total net revenue for the Technology Platform segment included $ 1,065 and $ 2,788 , respectively, of intercompany fees earned by Galileo from SoFi, which is a Galileo client. There is an equal and offsetting expense reflected within the Financial Services segment directly attributable expenses representing the intercompany fees incurred to Galileo. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense is adjusted in our reconciliation of directly attributable expenses below. We did not recast the segment information for these intercompany amounts for the three and nine months ended September 30, 2021, but rather reflected the full year 2021 impact within the fourth quarter of 2021, as inter-quarter amounts were determined to be immaterial. Additionally, for the three and nine months ended September 30, 2022, total net revenue for the Technology Platform segment included $ 692 and $ 1,410 , respectively, of intercompany fees earned by Technisys from Galileo, which is a Technisys client. There is an equal and offsetting expense reflected within the Technology Platform segment directly attributable expenses representing the intercompany fees incurred by Galileo to Technisys. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense is adjusted in our reconciliation of directly attributable expenses below. (2) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment, default rates and discount rates. This non-cash change, which is recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss) is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, the changes in fair value attributable to assumption changes are adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (3) Reflects changes in fair value inputs and assumptions, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The fair value change attributable to assumption changes has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to securitization collateral cash flows), or the general operations of our business. As such, this non-cash change in fair value during the period is adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. 66 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (Continued) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table reconciles reportable segments total contribution profit to loss before income taxes. Expenses not allocated to reportable segments represent items that are not considered by our CODM in evaluating segment performance or allocating resources. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reportable segments total contribution profit $ 147,475 $ 93,944 $ 358,998 $ 239,252 Corporate/Other total net loss ( 11,439 ) ( 1,130 ) ( 27,284 ) ( 3,004 ) Intercompany expenses 1,757 — 4,198 — Servicing rights – change in valuation inputs or assumptions 6,182 409 26,860 ( 11,924 ) Residual interests classified as debt – change in valuation inputs or assumptions ( 1,453 ) ( 5,593 ) ( 7,078 ) ( 19,261 ) Expenses not allocated to segments: Share-based compensation expense ( 77,855 ) ( 72,681 ) ( 235,018 ) ( 162,289 ) Depreciation and amortization expense ( 40,253 ) ( 24,075 ) ( 109,007 ) ( 75,041 ) Fair value change of warrant liabilities — 64,405 — ( 96,504 ) Employee-related costs (1) ( 49,248 ) ( 39,601 ) ( 137,254 ) ( 108,825 ) Special payment (2) — — — ( 21,181 ) Other corporate and unallocated expenses (3) ( 49,617 ) ( 45,544 ) ( 154,187 ) ( 112,946 ) Loss before income taxes $ ( 74,451 ) $ ( 29,866 ) $ ( 279,772 ) $ ( 371,723 ) __________________ (1) Includes compensation, benefits, recruiting, certain occupancy-related costs and various travel costs of executive management, certain technology groups and general and administrative functions that are not directly attributable to the reportable segments. (2) Represents a special payment to the Series 1 preferred stockholders in connection with the Business Combination. (3) Represents corporate overhead costs that are not allocated to reportable segments, which primarily includes corporate marketing and advertising costs, tools and subscription costs, professional services costs, corporate and FDIC insurance costs and transaction-related expenses. No single customer accounted for more than 10% of our consolidated revenues for any of the periods presented. Note 18. Subsequent Events Management of the Company performed an evaluation of subsequent events that occurred after the balance sheet date through the date of this Quarterly Report on Form 10-Q and determined that there were no subsequent events to report. 67 SoFi Technologies, Inc. TABLE OF CONTENTS Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as SoFi Technologies’ audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 1, 2022. Certain amounts may not foot or tie to other disclosures due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and Item II, Part 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements. Business Overview We are a member-centric, one-stop shop for financial services that, through our Lending and Financial Services products, allows members to borrow, save, spend, invest and protect their money. We refer to our customers as “members”. Our mission is to help our members achieve financial independence in order to realize their ambitions. To us, financial independence does not mean being wealthy, but rather represents the ability of our members to have the financial means to achieve their personal objectives at each stage of life, such as owning a home, having a family, or having a career of their choice — more simply stated, to have enough money to do what they want. We were founded in 2011 and have developed a suite of financial products that offers the speed, selection, content and convenience that only an integrated digital platform can provide. In order for us to achieve our mission, we have to help people get their money right, which means providing them with the ability to borrow better, save better, spend better, invest better and protect better. Everything we do today is geared toward helping our members “Get Your Money Right” and we strive to innovate and build ways for our members to achieve this goal. Our three reportable segments and their respective offerings as of September 30, 2022 were as follows: Lending Technology Platform Financial Services • Student Loans (1) • Technology Products and Solutions • SoFi Money (SoFi Checking and Savings and cash management accounts) • Loan referrals • Personal Loans • SoFi Invest (2) • SoFi At Work • Home Loans • SoFi Relay • SoFi Protect • SoFi Credit Card • Lantern Credit • Equity capital markets and advisory services __________________ (1) Composed of in-school loans and student loan refinancing. (2) Our SoFi Invest service is composed of three products: active investing accounts, robo-advisory accounts and digital assets accounts. SoFi Invest also includes our brokerage accounts through 8 Limited in Hong Kong. Members. We offer our members (as defined under “Key Business Metrics” ) a suite of financial products and services, enabling them to borrow, save, spend, invest and protect their finances across one integrated platform. Our aim is to create a best-in-class, integrated financial services platform that will generate a virtuous cycle whereby positive member experiences will lead to more products adopted per member and enhanced profitability for each additional product by lowering overall member acquisition costs and increasing the lifetime value of our members. We refer to this virtuous cycle as our “Financial Services Productivity Loop”. We believe that developing a relationship with our members and gaining their trust is central to our success as a financial services platform. Through our mobile technology and continuous effort to improve our financial services products, we are seeking to build a financial services platform that members can access for all of their financial services needs. We believe we are in the early stages of realizing the benefits of our Financial Services Productivity Loop. Enterprises. In addition to benefiting our members, our products and capabilities are also designed to appeal to enterprises, such as financial services institutions that subscribe to our enterprise services called SoFi At Work, and have become interconnected with the SoFi platform. We have continued to expand our platform capabilities for enterprises through our acquisition of Galileo in 2020, which provides technology platform services to financial and non-financial institutions and which has allowed us to vertically integrate across more of our financial services, and the Technisys Merger in the first quarter 68 SoFi Technologies, Inc. TABLE OF CONTENTS of 2022, through which we expanded our technology platform services to a broader international market. We believe that these expansions will deepen our participation in the entire technology ecosystem powering digital financial services, allowing us to not only reduce costs to operate our member-centric business, but also deliver increasing value to our enterprise customers. While our enterprises are not considered members, they are important contributors to the growth of the SoFi platform, and also have their own constituents who might benefit from our products in the future. International Operations. While we primarily operate in the United States, we expanded into Hong Kong with our acquisition of 8 Limited (an investment business) in 2020, we gained clients in Canada, Mexico and Colombia with our acquisition of Galileo in 2020, and we further expanded into Latin America with the Technisys Merger in 2022. National Bank Charter. In February 2022, we closed the Bank Merger, pursuant to which we acquired all of the outstanding equity interests in Golden Pacific Bancorp, Inc. and its wholly-owned subsidiary, Golden Pacific Bank, a national bank. Upon closing the Bank Merger, we became a bank holding company and Golden Pacific began operating as SoFi Bank. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. As a bank holding company, we offer SoFi Checking and Savings accounts held at SoFi Bank. Additionally, we are originating all new loan applications within SoFi Bank and transferred SoFi Credit Card and the majority of other lending products to SoFi Bank. We intend to continue to explore other products for SoFi Bank over time. The key current and expected financial benefits to us of operating a national bank include: (i) lowering our cost to fund loans, as we can utilize deposits held at SoFi Bank to fund loans, which have a lower borrowing cost of funds than our warehouse and securitization financing model, (ii) increasing our flexibility to hold loans on our balance sheet for longer periods, thereby enabling us to earn interest on these loans for a longer period, and (iii) supporting origination volume growth by providing an alternative financing option, while also maintaining our warehouse capacity. See Part II, Item 1A “ Risk Factors ” for a discussion of certain potential risks related to being a bank holding company . Our Reportable Segments We conduct our business through three reportable segments: Lending, Technology Platform and Financial Services. In the first quarter of 2022, we implemented a funds transfer pricing (“FTP”) framework to attribute net interest income to our business segments based on their usage and/or provision of funding. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the FTP framework. Lending Segment We offer personal loans, student loans and home loans and related servicing. Our lending process primarily leverages an in-application, digital borrowing experience, which we believe serves as a competitive advantage as digital lending becomes increasingly ubiquitous. A key element of our underwriting process is the ability to facilitate risk-based interest rates that are appropriate for each loan using proprietary risk models through which we project quarterly loan performance, including expected losses and prepayments. The outcome of this process helps us determine a more data-driven, risk-adjusted interest rate that we can offer our members. Although our lending business remains primarily a gain-on-sale model, whereby we seek to originate loans, recognize a gain from these loans and sell them into either our whole loan or securitization channels, operating SoFi Bank also provides us with more flexibility to hold loans on our balance sheet for longer periods, thereby enabling us to earn interest on these loans for a longer period. We sell our whole loans primarily to large financial institutions, such as bank holding companies, for which we target a premium to par, and in excess of our costs to originate the loans. Our loan premiums fluctuate from time to time based on benchmark rates and credit spreads, and we are not guaranteed a gain on all or any of our loan sales. In securitization transactions that do not qualify for sale accounting, the related assets remain on our balance sheet and cash proceeds received are reported as liabilities, with related interest expense recognized over the life of the related borrowing. In securitization transactions that qualify for sale accounting, we typically have insignificant continuing involvement as an investor. In the case of both whole loan sales and securitizations, and with the exception of certain of our home loans, we also continue to retain servicing rights to our originated loans following transfer. Furthermore, our platform supports the full transaction lifecycle, including credit application, underwriting, approval, funding and servicing. Through data derived at loan origination and throughout the servicing process, SoFi has life-of-loan performance data on each loan in our ecosystem that we originate and on which we retain servicing, which provides a meaningful data asset. 69 SoFi Technologies, Inc. TABLE OF CONTENTS Prior to selling our loans, we rely upon deposits, warehouse financing and our own capital to enable us to expand our origination capabilities. We believe our ability to utilize deposits held at SoFi Bank to fund our loans can continue to lower our overall cost of asset-backed financing over time. Net interest income, which we define as the difference between the earned interest income and interest expense to finance loans, is a key component of the profitability of our Lending segment. In the first quarter of 2022, we implemented an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, under which Lending segment net interest income represents the difference between interest income earned on our loans and an FTP charge for the segment’s use of funds to originate loans, which can fluctuate based on changes in interest rates, funding curves, the composition of our balance sheet and the availability of capital. Technology Platform Segment Our Technology Platform segment consists of Galileo, which we acquired in May 2020, and Technisys, which we acquired in March 2022. Galileo is a provider of technology platform services to financial and non-financial institutions. Through Galileo, we provide services through a suite of program, event and authorization application programming interfaces for financial and non-financial institutions. Technisys is a cloud-native digital and core banking platform with financial services customers predominantly in Latin America. Through Technisys, we earn technology product and solutions revenue through sales of software licenses and provision of maintenance and support services related to those software licenses. We also provide additional technology solutions for our customers as their business needs evolve over time, which we refer to as “evolution labs.” Many technology platform segment contracts are multi-year contracts. In certain of our contracts, we provide for a variety of integrated platform services, which vary by client and are either non-cancellable or cancellable with a substantive payment. Pricing structures under these contracts are typically volume-based, or a combination of activity and volume-based, and payment terms are predominantly monthly in arrears. Some of these contracts contain minimum monthly payments with agreed upon monthly service levels and may contain penalties if service levels are not met. Our technology platform software licenses are either perpetual or term based, and are recognized at a point in time, with the transaction price dependent upon the enforceable term of the software license in the case of a term-based license. We also have arrangements that are time and materials based, wherein the contractual term varies by customer. Finally, maintenance and support services are performed over time, and typically have a defined period of service. Financial Services Segment Our digital suite of financial services products, by nature, provides more daily interactions with our members and is, therefore, differentiated from our lending products, which inherently have less consistent touchpoints with our members. We offer a suite of financial services solutions, some of which include: • SoFi Checking and Savings: Provides a digital banking experience. Following the Bank Merger, we began to allow members to convert their cash management accounts into SoFi Checking and Savings accounts held at SoFi Bank. Effective June 5, 2022, our cash management accounts no longer earn interest, as we implemented our plan to build new features only for SoFi Checking and Savings and reduced support of our cash management accounts. • SoFi Invest: A mobile-first investment platform offering members access to trading and advisory solutions, such as active investing, robo-advisory and digital assets accounts. • SoFi Credit Card: Features no annual fee and is designed to help our members save, invest and pay down debt through a variable rewards program, with higher rewards offerings when redeeming into other SoFi products. • Loan referrals: A service through which we present loan referral leads to our enterprise partner customers. • SoFi Relay: A personal finance management product that allows members to track all of their financial accounts in one place and utilize credit score monitoring services. • SoFi At Work: A service through which we partner with other enterprises looking for a seamless way to provide financial benefits to their employees, such as student loan payments made on their employees’ behalf. • Lantern Credit: A financial services marketplace platform developed to help applicants that do not qualify for SoFi products with alternative products from other providers, as well as to provide a product comparison experience. We primarily earn revenues in connection with our Financial Services segment in the following ways: • Referral fees : Through strategic partnerships, we earn a specified referral fee in connection with referral activity we facilitate through our platform. Referral fees are paid to us by third-party partners that offer services to end users who 70 SoFi Technologies, Inc. TABLE OF CONTENTS do not use one of our product offerings, but who were referred to the partners through our platform. As such, the third-party enterprise partners are our customers in these referral arrangements. Beginning in the third quarter of 2021, we entered into a referral arrangement whereby we earn referral fulfillment fees for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator. The referral fulfillment fee is determined as either of two fixed amounts based on the aggregate origination principal balance of the loan. • Brokerage fees : We earn brokerage fees from our share lending and payment for order flow arrangements related to our SoFi Invest product, exchange conversion services and digital assets activity. In our share lending arrangements and payment for order flow arrangements, we benefit through a negotiated multi-year revenue sharing arrangement, since our members' brokerage activity drives the share lending and payment for order flow volume. In our digital assets arrangements, our fee is calculated as a negotiated percentage of the transaction volume. In our exchange conversion arrangements, we earn fees for exchanging one currency for another. • Payment network fees : We earn payment network fees, which primarily constitute interchange fees from our SoFi-branded debit cards and our SoFi Credit Card product, which are reduced by fees payable to card associations and our fulfillment partners. These fees are remitted by merchants and are calculated by multiplying a set fee percentage by the transaction volume processed through such network. We arrange for performance by a card association and the bank issuer to enable certain aspects of the SoFi-branded transaction card process. We enter into contracts with both parties that establish the shared economics of SoFi-branded transaction cards. As we continue to transition our cash management accounts to SoFi Checking and Savings accounts held at SoFi Bank, we expect to decrease certain fees payable to third parties over time. • Net interest income : Our Financial Services segment earns interest income from deposits held at SoFi Bank through our implementation of an FTP framework in the first quarter of 2022, whereby the Financial Services segment is credited for the deposit funding it provides to our Lending segment. This interest income has no impact on our consolidated financial statements. To a lesser degree, we generate interest income from deposits sitting in our Member Banks, which are member bank holding companies that we exclusively relied on prior to becoming a bank holding company to provide cash management services to our members through our bank sweep program at our broker-dealer subsidiary. While we continue to utilize Member Banks, we now also sweep cash management accounts to SoFi Bank. We also generate interest income on SoFi Credit Card and on cash balances that we hold through SoFi Invest. Finally, we earn interest income in the Financial Services segment on certain commercial real estate and other commercial loans, such as small business loans. We incur interest expense on SoFi Credit Card through the FTP framework, which is eliminated in consolidation, as well as incur interest expense related to SoFi Checking and Savings and cash management balances. 71 SoFi Technologies, Inc. TABLE OF CONTENTS Executive Overview The following tables display key financial measures for our three reportable segments and our consolidated company that are used, along with our key business metrics, by management to evaluate our business, measure our performance, identify trends and make strategic decisions. Contribution profit (loss) is the primary measure of segment-level profit and loss reviewed by management and is defined as total net revenue for each reportable segment less expenses directly attributable to the reportable segment and, in the case of our Lending segment, adjusted for fair value adjustments attributable to assumption changes associated with our servicing rights and residual interests classified as debt. See “ Results of Operations ”, “ Summary Results by Segment ” and “ Non-GAAP Financial Measures ” herein for discussion and analysis of these key financial measures. Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Lending Net interest income $ 139,516 $ 72,257 $ 347,873 $ 180,856 Noninterest income 162,178 138,034 463,927 343,703 Total net revenue 301,694 210,291 811,800 524,559 Adjusted net revenue (1) 296,965 215,475 792,018 555,744 Contribution profit 180,562 117,668 455,204 294,542 Technology Platform Net interest income (expense) $ — $ 39 $ — $ (29) Noninterest income 84,777 50,186 229,481 141,616 Total net revenue (2) 84,777 50,225 229,481 141,587 Contribution profit 19,536 15,741 59,632 44,439 Financial Services Net interest income $ 28,158 $ 1,209 $ 46,965 $ 1,980 Noninterest income 20,795 11,411 55,894 34,142 Total net revenue 48,953 12,620 102,859 36,122 Contribution loss (2) (52,623) (39,465) (155,838) (99,729) Corporate/Other (3) Net interest expense $ (9,824) $ (1,130) $ (19,326) $ (7,140) Noninterest income (loss) (1,615) — (7,958) 4,136 Total net loss (2) (11,439) (1,130) (27,284) (3,004) Consolidated Net interest income $ 157,850 $ 72,375 $ 375,512 $ 175,667 Total noninterest income 266,135 199,631 741,344 523,597 Total net revenue 423,985 272,006 1,116,856 699,264 Adjusted net revenue (1) 419,256 277,190 1,097,074 730,449 Net loss (74,209) (30,047) (280,401) (372,925) Adjusted EBITDA (1) 44,298 10,256 73,286 25,628 ___________________ (1) Adjusted net revenue and adjusted EBITDA are non-GAAP financial measures. For information regarding our uses and definitions of these measures and for reconciliations to the most directly comparable U.S. Generally Accepted Accounting Principles (“GAAP”) measures, see “ Non-GAAP Financial Measures ” herein. (2) Technology Platform segment total net revenue for the three and nine months ended September 30, 2022 includes intercompany fees earned by Galileo from SoFi, which is a Galileo client. There is an equal and offsetting expense reflected within the Financial Services segment contribution loss representing the intercompany fees incurred to Galileo. The intercompany revenue and expense are eliminated in consolidation. For the year ended December 31, 2021, all intercompany amounts were reflected in the fourth quarter, as inter-quarter amounts were determined to be immaterial. Additionally, for the three and nine months ended September 30, 2022, total net revenue for the Technology Platform segment included intercompany fees earned by Technisys from Galileo, which is a Technisys client. There is an equal and offsetting expense reflected within the Technology Platform segment directly attributable expenses representing the intercompany fees incurred by Galileo to Technisys. The intercompany revenue and expense are eliminated in consolidation. See Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. 72 SoFi Technologies, Inc. TABLE OF CONTENTS (3) Corporate/Other (previously referred to as “Other”) primarily includes total net loss associated with corporate functions, non-recurring gains and losses from non-securitization investment activities and interest income and realized gains and losses associated with investments in available-for-sale (“AFS”) debt securities, all of which are not directly related to a reportable segment. For the three and nine months ended September 30, 2022, net interest expense within Corporate/Other also reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. Key Recent Developments We continue to execute on our growth and other strategic initiatives and we continue to celebrate launches across our product suite and strategic partnerships, further establishing ourselves as a platform that enables individuals to borrow, save, spend, invest, and protect their assets. In March 2022, we closed the Technisys Merger, which added a cloud-native digital and core banking platform with an existing footprint of clients into our technology platform offerings. We believe that the combination of the Technisys core banking platform with our existing technology platform offerings provides an end-to-end vertically integrated technology stack, which we expect will meet both the expanding needs of our existing and expected future clients. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the Technisys Merger. In February 2022, we closed the Bank Merger, after which we became a bank holding company and Golden Pacific began operating as SoFi Bank. We believe operating a national bank allows us to provide members and prospective members broader and more competitive options across their financial services needs and lowers our cost of asset-backed financing (by utilizing deposits held at SoFi Bank to fund our loans). We also believe that operating as a national bank enables us to offer lower interest rates on loans to members as well as offer higher interest rates on deposit accounts. See “Business Overview—National Bank Charter” herein and Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information on the Bank Merger. Non-GAAP Financial Measures Our management and Board of Directors use adjusted net revenue and adjusted EBITDA, which are non-GAAP financial measures, to evaluate our operating performance, formulate business plans, help better assess our overall liquidity position, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that adjusted net revenue and adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. Adjusted Net Revenue Adjusted net revenue is defined as total net revenue, adjusted to exclude the fair value changes in servicing rights and residual interests classified as debt due to valuation inputs and assumptions changes, which relate only to our Lending segment. We adjust total net revenue to exclude these items, as they are non-cash charges that are not realized during the period, and therefore positive or negative changes do not impact the cash available to fund our operations. This measure helps provide our management with an understanding of the net revenue available to finance our operations and helps management better decide on the proper expenses to authorize for each of our operating segments, to ultimately help achieve target contribution profit margins. Therefore, the measure of adjusted net revenue serves as both the starting point for how we think about the liquidity generated from our operations and also the starting point for our annual financial planning, the latter of which focuses on the cash we expect to generate from our operating segments to help fund the current year’s strategic objectives. Adjusted net revenue has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as total net revenue. The primary limitation of adjusted net revenue is its lack of comparability to other companies that do not utilize this measure or that use a similar measure that is defined in a different manner. 73 SoFi Technologies, Inc. TABLE OF CONTENTS Quarterly Adjusted Net Revenue In Thousands We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, as presented below: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Total net revenue $ 423,985 $ 272,006 $ 1,116,856 $ 699,264 Servicing rights – change in valuation inputs or assumptions (1) (6,182) (409) (26,860) 11,924 Residual interests classified as debt – change in valuation inputs or assumptions (2) 1,453 5,593 7,078 19,261 Adjusted net revenue $ 419,256 $ 277,190 $ 1,097,074 $ 730,449 ___________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. Moreover, these non-cash charges are unrealized during the period and, therefore, have no impact on our cash flows from operations. As such, these positive and negative changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations and our overall performance. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization variable interest entities (“VIEs”) by purchasing residual interests, we receive proceeds at the time of the closing of the securitization and, thereafter, pass along contractual cash flows to the residual interest owner. These residual debt obligations are measured at fair value on a recurring basis, but they have no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations. We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, as presented below: Quarter Ended ($ in thousands) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 Total net revenue $ 423,985 $ 362,527 $ 330,344 $ 285,608 $ 272,006 Servicing rights – change in valuation inputs or assumptions (1) (6,182) (9,098) (11,580) (9,273) (409) Residual interests classified as debt – change in valuation inputs or assumptions (2) 1,453 2,662 2,963 3,541 5,593 Adjusted net revenue $ 419,256 $ 356,091 $ 321,727 $ 279,876 $ 277,190 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. 74 SoFi Technologies, Inc. TABLE OF CONTENTS The reconciling items to determine our non-GAAP measure of adjusted net revenue are applicable only to the Lending segment. The table below presents adjusted net revenue for the Lending segment: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Total net revenue – Lending $ 301,694 $ 210,291 $ 811,800 $ 524,559 Servicing rights – change in valuation inputs or assumptions (1) (6,182) (409) (26,860) 11,924 Residual interests classified as debt – change in valuation inputs or assumptions (2) 1,453 5,593 7,078 19,261 Adjusted net revenue – Lending $ 296,965 $ 215,475 $ 792,018 $ 555,744 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Adjusted EBITDA Adjusted EBITDA is defined as net income (loss), adjusted to exclude, as applicable: (i) corporate borrowing-based interest expense (our adjusted EBITDA measure is not adjusted for warehouse or securitization-based interest expense, nor deposit interest expense and finance lease liability interest expense, as these are not direct operating expenses), (ii) income tax expense (benefit), (iii) depreciation and amortization, (iv) share-based expense (inclusive of equity-based payments to non-employees), (v) impairment expense (inclusive of goodwill impairment and property, equipment and software abandonments), (vi) transaction-related expenses, (vii) fair value changes in warrant liabilities, and (viii) fair value changes in each of servicing rights and residual interests classified as debt due to valuation assumptions. We believe adjusted EBITDA provides a useful measure for period-over-period comparisons of our business, as it removes the effect of certain non-cash items and certain charges that are not indicative of our core operating performance or results of operations. It is also a measure that management relies upon to evaluate cash flows generated from operations, and therefore the extent of additional capital, if any, required to invest in strategic initiatives. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income (loss). Some of the limitations of adjusted EBITDA include that it does not reflect the impact of working capital requirements or capital expenditures and it is not a universally consistent calculation among companies in our industry, which limits its usefulness as a comparative measure. Quarterly Adjusted EBITDA In Thousands 75 SoFi Technologies, Inc. TABLE OF CONTENTS The tables below reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure: Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Net loss $ (74,209) $ (30,047) $ (280,401) $ (372,925) Non-GAAP adjustments: Interest expense – corporate borrowings (1) 5,270 1,366 11,369 7,752 Income tax expense (benefit) (2) (242) 181 629 1,202 Depreciation and amortization (3) 40,253 24,075 109,007 75,041 Share-based expense 77,855 72,681 235,018 162,289 Transaction-related expense (4) 100 1,221 17,446 24,580 Fair value changes in warrant liabilities (5) — (64,405) — 96,504 Servicing rights – change in valuation inputs or assumptions (6) (6,182) (409) (26,860) 11,924 Residual interests classified as debt – change in valuation inputs or assumptions (7) 1,453 5,593 7,078 19,261 Total adjustments 118,507 40,303 353,687 398,553 Adjusted EBITDA $ 44,298 $ 10,256 $ 73,286 $ 25,628 ___________________ (1) Our adjusted EBITDA measure adjusts for corporate borrowing-based interest expense, as these expenses are a function of our capital structure. Corporate borrowing-based interest expense primarily included (i) interest on our revolving credit facility, (ii) for the 2022 periods, the amortization of debt discount and debt issuance costs on our convertible notes, and (iii) for the nine-month 2021 period, interest on the seller note issued in connection with our acquisition of Galileo. Revolving credit facility interest expense for the three- and nine-month periods increased due to higher interest rates during the 2022 periods on identical outstanding debt period over period. (2) Our income tax expense positions for the nine-month periods were primarily a function of SoFi Lending Corp.’s profitability, and for the 2022 period, SoFi Bank, in state jurisdictions where separate filings are required. The income tax expense in the 2022 period was partially offset by an income tax benefit at Technisys. See Note 13 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. (3) Depreciation and amortization expense for the three- and nine-month 2022 periods increased compared to the comparable 2021 periods primarily in connection with our recent acquisitions and growth in our software balance, partially offset by the acceleration of core banking infrastructure amortization during the nine-month 2021 period. (4) Transaction-related expenses in the nine-month 2022 period primarily included financial advisory and professional services costs associated with our acquisition of Technisys. Transaction-related expenses in the three-month 2021 period included costs associated with our then-exploratory acquisition of Technisys. Transaction-related expenses in the nine-month 2021 period also included the special payment to the holders of Series 1 Redeemable Preferred Stock in conjunction with the Business Combination and financial advisory and professional services costs associated with our then-pending acquisition of Golden Pacific. (5) Our adjusted EBITDA measure excludes the non-cash fair value changes in warrants accounted for as liabilities, which were measured at fair value through earnings. In conjunction with the Business Combination, SoFi Technologies assumed certain common stock warrants (“SoFi Technologies warrants”) that were accounted for as liabilities and measured at fair value on a recurring basis. The amount in the three-month 2021 period and a portion of the nine-month 2021 period relate to the SoFi Technologies warrants. The fair value of the SoFi Technologies warrants was based on the closing price of ticker SOFIW and, therefore, fluctuated based on market activity. In addition, a portion of the amount in the nine-month 2021 period related to changes in the fair value of Series H warrants issued by Social Finance in 2019 in connection with certain redeemable preferred stock issuances. We did not measure the Series H warrants at fair value subsequent to May 28, 2021 in conjunction with the Business Combination, as they were reclassified into permanent equity. (6) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment, default rates and discount rates. This non-cash change is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, these positive and negative changes in fair value attributable to assumption changes are adjusted out of net loss to provide management and financial users with better visibility into the earnings available to finance our operations. (7) Reflects changes in fair value inputs and assumptions, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, which has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of net loss to provide management and financial users with better visibility into the earnings available to finance our operations. 76 SoFi Technologies, Inc. TABLE OF CONTENTS Quarter Ended ($ in thousands) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 Net loss $ (74,209) $ (95,835) $ (110,357) $ (111,012) $ (30,047) Non-GAAP adjustments: Interest expense – corporate borrowings 5,270 3,450 2,649 2,593 1,366 Income tax expense (benefit) (242) 119 752 1,558 181 Depreciation and amortization 40,253 38,056 30,698 26,527 24,075 Share-based expense 77,855 80,142 77,021 77,082 72,681 Transaction-related expense 100 808 16,538 2,753 1,221 Fair value changes in warrant liabilities — — — 10,824 (64,405) Servicing rights – change in valuation inputs or assumptions (6,182) (9,098) (11,580) (9,273) (409) Residual interests classified as debt – change in valuation inputs or assumptions 1,453 2,662 2,963 3,541 5,593 Total adjustments 118,507 116,139 119,041 115,605 40,303 Adjusted EBITDA $ 44,298 $ 20,304 $ 8,684 $ 4,593 $ 10,256 Key Business Metrics The table below presents the key business metrics that management uses to evaluate our business, measure our performance, identify trends and make strategic decisions: September 30, 2022 September 30, 2021 % Change Members 4,742,673 2,937,379 61 % Total Products 7,199,298 4,267,665 69 % Total Products — Lending segment 1,280,493 1,030,882 24 % Total Products — Financial Services segment 5,918,805 3,236,783 83 % Total Accounts — Technology Platform segment (1) 124,332,810 88,811,022 40 % ___________________ (1) Total accounts refers to the number of open accounts at Galileo as of the reporting date. Beginning in the fourth quarter of 2021, we included SoFi accounts on the Galileo platform-as-a-service in our total accounts metric to better align with the Technology Platform segment revenue reported in Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements. Intercompany revenue is eliminated in consolidation. We did not recast the total accounts as of September 30, 2021 to conform to the current year presentation, as the impact was determined to be immaterial. See “Summary Results by Segment” for additional metrics we review at the segment level. Members We refer to our customers as “members”, which we define as someone who has a lending relationship with us through origination and/or ongoing servicing, opened a financial services account, linked an external account to our platform, or signed up for our credit score monitoring service. Once someone becomes a member, they are always considered a member unless they violate our terms of service. Our members have continuous access to our certified financial planners (“CFPs”), our career advice services, our member events, our content, educational material, news, and our tools and calculators, which are provided at no cost to the member. Additionally, our mobile app and website have a member home feed that is personalized and delivers content to a member about what they must do that day in their financial life, what they should consider doing that day in their financial life, and what they can do that day in their financial life. We view members as an indication not only of the size and a measurement of growth of our business, but also as a measure of the significant value of the data we have collected over time. The data we collect from our members helps us to, among other things: (i) assess loan life performance data on each loan in our ecosystem, which can inform risk-based interest rates that we can offer our members, (ii) understand our members’ spending behavior to identify and suggest other products we offer that may align with the members’ financial needs, and (iii) enhance our opportunities to sell additional products to our members, as our members represent a vital source of marketing opportunities. When we provide additional products to members, it helps improve our unit economics per member, as we save on marketing costs that we would otherwise incur to attract new members. It also increases the lifetime value of an individual member. This in turn enhances our Financial Services Productivity Loop. Member growth is generally an indicator of future revenue, but is not directly correlated with revenues, since not all members who sign up for one of our products fully utilize or continue to use our products, and not all of our products (such as our complimentary product, SoFi Relay) provide direct sources of revenue. 77 SoFi Technologies, Inc. TABLE OF CONTENTS Since our inception through September 30, 2022, we have served approximately 4.7 million members who have used approximately 7.2 million products on the SoFi platform. Members In Thousands Total Products Total products refers to the aggregate number of lending and financial services products that our members have selected on our platform since our inception through the reporting date, whether or not the members are still registered for such products. In our Lending segment, total products refers to the number of home loans, personal loans and student loans that have been originated through our platform through the reporting date, whether or not such loans have been paid off. If a member has multiple loan products of the same loan product type, such as two personal loans, that is counted as a single product. However, if a member has multiple loan products across loan product types, such as one personal loan and one home loan, that is counted as two products. In our Financial Services segment, total products refers to the number of SoFi Money accounts (presented inclusive of cash management accounts and SoFi Checking and Savings accounts held at SoFi Bank), SoFi Invest accounts, SoFi Credit Card accounts (including accounts with a zero dollar balance at the reporting date), referred loans (which are originated by a third-party partner to which we provide pre-qualified borrower referrals), SoFi At Work accounts and SoFi Relay accounts (with either credit score monitoring enabled or external linked accounts) that have been opened through our platform through the reporting date. Our SoFi Invest service is composed of three products: active investing accounts, robo-advisory accounts and digital assets accounts. Our members can select any one or combination of the three types of SoFi Invest products. If a member has multiple SoFi Invest products of the same account type, such as two active investing accounts, that is counted as a single product. However, if a member has multiple SoFi Invest products across account types, such as one active investing account and one robo-advisory account, those separate account types are considered separate products. Total products is a primary indicator of the size and reach of our Lending and Financial Services segments. Management relies on total products metrics to understand the effectiveness of our member acquisition efforts and to gauge the propensity for members to use more than one product. 78 SoFi Technologies, Inc. TABLE OF CONTENTS Products In Thousands Total lending products were composed of the following: Lending Products September 30, 2022 September 30, 2021 Variance % Change Home loans 25,707 21,318 4,389 21 % Personal loans 783,645 578,772 204,873 35 % Student loans 471,141 430,792 40,349 9 % Total lending products 1,280,493 1,030,882 249,611 24 % Total financial services products were composed of the following: Financial Services Products September 30, 2022 September 30, 2021 Variance % Change Money (1) 2,002,791 1,161,322 841,469 72 % Invest 2,067,621 1,233,527 834,094 68 % Credit Card 153,978 65,595 88,383 135 % Referred loans (2) 36,538 — 36,538 n/m Relay 1,600,102 749,972 850,130 113 % At Work 57,775 26,367 31,408 119 % Total financial services products 5,918,805 3,236,783 2,682,022 83 % ___________________ (1) Includes SoFi Checking and Savings accounts held at SoFi Bank, beginning in the first quarter of 2022, and cash management accounts. (2) Limited to loans wherein we provide third party fulfillment services. Technology Platform Total Accounts In our Technology Platform segment, total accounts refers to the number of open accounts at Galileo as of the reporting date. Beginning in the fourth quarter of 2021, we included SoFi accounts on the Galileo platform-as-a-service in our total accounts metric to better align with the Technology Platform segment revenue reported in Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements, which includes intercompany revenue from SoFi. Intercompany revenue is eliminated in consolidation. We did not recast total accounts as of September 30, 2021 to conform to the current year presentation, as the impact was determined to be immaterial. Total accounts is a primary indicator of the accounts dependent upon our technology platform to use virtual card products, virtual wallets, make peer-to-peer and bank-to-bank transfers, receive early paychecks, separate savings from spending balances, make debit transactions and rely upon real-time authorizations, all of which result in revenues for the Technology Platform segment. We do not measure total accounts for the 79 SoFi Technologies, Inc. TABLE OF CONTENTS Technisys products and solutions, as the revenue model is not primarily dependent upon being a fully integrated, stand-ready service. September 30, 2022 September 30, 2021 Variance % Change Total Accounts 124,332,810 88,811,022 35,521,788 40 % Key Factors Affecting Operating Results Our future operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our loan origination volume, financial services products and member activity on our platform, growth in technology platform customers, competition and industry trends, general economic conditions and our ability to optimize our national bank charter. The key factors affecting our operating results are discussed in our Annual Report on Form 10-K, with notable updates provided herein. Industry Trends and General Economic Conditions The Federal Reserve has increased the benchmark interest rate multiple times in 2022, largely in response to increasing inflation. We anticipate that in a rising interest rate environment, and operating under a bank charter, we will be able to offer more competitive interest rates to our members on their deposits, which we believe would result in increasing demand for our deposits. However, rising interest rates could unfavorably impact demand for refinancing loan products. In addition, if the Federal Reserve does not effectively curb inflation or interest rates rise unexpectedly or too quickly, it could have a negative impact on the overall economy which could adversely impact our results of operations. In addition to rising interest rates, the U.S. economy has experienced negative gross domestic product growth during 2022 and consumer confidence indicators are down. Negative changes to macroeconomic conditions may result in decreased demand for our products, increased operating costs and negatively impact our results of operations. Student Loan Relief In August 2022, President Biden directed a final extension of the federal student loan payment moratorium through December 31, 2022. President Biden also announced additional relief measures for federal student loan borrowers, subject to income caps, including up to $20,000 in debt cancellation for Pell Grant recipients, and up to $10,000 in debt cancellation for non-Pell Grant recipients, as well as certain changes to income-driven repayment plans. While the number of applicants under President Biden’s program and the impact of legal challenges to the program are unknown, we expect demand for our student loan refinancing products to benefit from these factors beginning in the fourth quarter of 2022, as borrowers who are not eligible for the debt relief or whose debt relief was processed timely may look to refinance ahead of the moratorium expiration. The timing and extent of such benefits to our student loan refinancing product will largely depend on the timing of execution of debt cancellation as well as the interest rate environment. 80 SoFi Technologies, Inc. TABLE OF CONTENTS Results of Operations The following table sets forth condensed consolidated statements of income data: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Interest income Loans $ 191,525 $ 89,844 113 % $ 451,247 $ 246,743 83 % Securitizations 2,633 2,999 (12) % 7,958 11,260 (29) % Related party notes — — — % — 211 (100) % Other 3,881 758 412 % 6,758 2,023 234 % Total interest income 198,039 93,601 112 % 465,963 260,237 79 % Interest expense Securitizations and warehouses 20,653 19,360 7 % 59,158 75,418 (22) % Deposits 14,149 — n/m 19,123 — n/m Corporate borrowings 5,270 1,366 286 % 11,369 7,752 47 % Other 117 500 (77) % 801 1,400 (43) % Total interest expense 40,189 21,226 89 % 90,451 84,570 7 % Net interest income 157,850 72,375 118 % 375,512 175,667 114 % Noninterest income Loan origination and sales 163,697 142,147 15 % 465,815 362,211 29 % Securitizations (8,772) (4,551) 93 % (31,790) (6,613) 381 % Servicing 7,296 458 n/m 30,003 (11,875) (353) % Technology products and solutions 82,035 49,951 64 % 223,562 140,560 59 % Other 21,879 11,626 88 % 53,754 39,314 37 % Total noninterest income 266,135 199,631 33 % 741,344 523,597 42 % Total net revenue 423,985 272,006 56 % 1,116,856 699,264 60 % Noninterest expense Technology and product development 110,702 74,434 49 % 291,976 209,771 39 % Sales and marketing 162,129 114,985 41 % 444,121 297,170 49 % Cost of operations 83,083 69,591 19 % 232,611 187,785 24 % General and administrative 126,199 40,461 212 % 388,533 373,374 4 % Provision for credit losses 16,323 2,401 580 % 39,387 2,887 n/m Total noninterest expense 498,436 301,872 65 % 1,396,628 1,070,987 30 % Loss before income taxes (74,451) (29,866) 149 % (279,772) (371,723) (25) % Income tax benefit (expense) 242 (181) (234) % (629) (1,202) (48) % Net loss $ (74,209) $ (30,047) 147 % $ (280,401) $ (372,925) (25) % Other comprehensive loss Unrealized losses on available-for-sale securities, net (1,914) (150) n/m (8,360) (150) n/m Foreign currency translation adjustments, net 325 204 59 % 231 (142) (263) % Total other comprehensive income (loss) (1,589) 54 n/m (8,129) (292) n/m Comprehensive loss $ (75,798) $ (29,993) 153 % $ (288,530) $ (373,217) (23) % 81 SoFi Technologies, Inc. TABLE OF CONTENTS Interest Income The following table presents the components of our total interest income: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Loans $ 191,525 $ 89,844 113 % $ 451,247 $ 246,743 83 % Securitizations 2,633 2,999 (12) % 7,958 11,260 (29) % Related party notes — — — % — 211 (100) % Other 3,881 758 412 % 6,758 2,023 234 % Total interest income $ 198,039 $ 93,601 112 % $ 465,963 $ 260,237 79 % Total interest income increased by $104.4 million, or 112%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and increased by $205.7 million, or 79%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, the components of which are discussed below. Loans Three Months. Loans interest income increased by $101.7 million, or 113%, primarily driven by increases in non-securitization personal loan and student loan interest income of $94.1 million (202%) and $10.0 million (43%), respectively, which were primarily a function of increases in aggregate average balances for personal loans and student loans of $2.9 billion (179%) and $1.2 billion (57%), respectively. The personal loan average balance increase was primarily attributable to higher origination volume combined with a higher weighted average interest rate earned on whole loans and longer loan holding periods. The student loan average balance increase was primarily attributable to longer loan holding periods, partially offset by a lower weighted average interest rate earned on whole loans. These increases were offset by decreases in interest income from consolidated personal loan and student loan securitizations of $5.7 million (65%) and $2.2 million (25%), respectively, which were impacted by decreases in average balances primarily attributable to payment activity and the absence of additions to our consolidated securitization loan balances. The remaining increase in interest income also included $4.1 million attributable to credit card loans. Nine Months. Loans interest income increased by $204.5 million, or 83%, primarily driven by increases in non-securitization personal loan and student loan interest income of $191.6 million (169%) and $28.5 million (43%), respectively, which were primarily a function of increases in average balances for personal loans and student loans of $2.1 billion (150%) and $1.2 billion (59%), respectively. The personal loan average balance increase was primarily attributable to higher origination volume combined with a higher weighted average interest rate earned on whole loans and longer loan holding periods. The student loan average balance increase was primarily attributable to longer loan holding periods, partially offset by a lower weighted average interest rate earned on whole loans. These increases were offset by decreases in interest income from consolidated personal loan and student loan securitizations of $19.9 million (61%) and $9.3 million (31%), respectively, which were impacted by decreases in average balances for personal loans and student loans of $265.9 million (63%) and $255.3 million (34%), respectively. The decreases in aggregate average balances were primarily attributable to payment activity and the absence of additions to our consolidated securitization loan balances. The remaining increase in interest income also included $9.9 million attributable to credit card loans. Securitizations Three Months. Securitizations interest income decreased by $0.4 million, or 12%, which was primarily attributable to decreases in residual investment interest income and asset-backed bonds related to decreases in average securitization investment balances period over period due to securitization payment activity. Nine Months. Securitizations interest income decreased by $3.3 million, or 29%, which was primarily attributable to decreases in residual investment interest income of $1.8 million and asset-backed bonds of $2.0 million related to decreases in average securitization investment balances period over period due to securitization payment activity. Other Three Months. Other interest income increased by $3.1 million, or 412%, primarily due to $3.2 million higher interest income earned on our interest-bearing cash and cash equivalents balances primarily due to higher average balances period over period. 82 SoFi Technologies, Inc. TABLE OF CONTENTS Nine Months. Other interest income increased by $4.7 million, or 234%, primarily due to $4.4 million higher interest income earned on our interest-bearing cash and cash equivalents balances primarily due to higher average balances period over period. Interest Expense The following table presents the components of our total interest expense: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Securitizations and warehouses $ 20,653 $ 19,360 7 % $ 59,158 $ 75,418 (22) % Deposits 14,149 — n/m 19,123 — n/m Corporate borrowings 5,270 1,366 286 % 11,369 7,752 47 % Other 117 500 (77) % 801 1,400 (43) % Total interest expense $ 40,189 $ 21,226 89 % $ 90,451 $ 84,570 7 % Total interest expense increased by $19.0 million, or 89%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and increased by $5.9 million, or 7%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, the components of which are discussed below. Securitizations and Warehouses. The following tables present the components of securitizations and warehouses interest expense and other pertinent information. Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Securitization debt interest expense $ 4,492 $ 8,186 (45) % $ 15,229 $ 28,548 (47) % Warehouse debt interest expense 12,539 6,360 97 % 32,159 26,261 22 % Residual interests classified as debt interest expense 904 2,036 (56) % 3,469 6,381 (46) % Debt issuance cost interest expense 2,718 2,778 (2) % 8,301 14,228 (42) % Securitizations and warehouses interest expense $ 20,653 $ 19,360 7 % $ 59,158 $ 75,418 (22) % Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Average debt balances (1) Securitization debt $ 487,141 $ 844,747 (42) % $ 553,790 $ 999,752 (45) % Warehouse facilities 1,752,032 1,620,392 8 % 2,167,493 2,258,908 (4) % Weighted average interest rates (2) Securitization debt 3.7% 3.9% n/m 3.7% 3.8% n/m Warehouse facilities 2.9% 1.6% n/m 2.0% 1.5% n/m ___________________ (1) Average balances were calculated based on four- and ten-month ending balances. (2) Calculated as annualized interest expense divided by average debt balance for the respective debt category. Interest rates on securitization debt and warehouse facilities exclude the effect of debt issuance cost interest expense and amortization of debt discounts and premiums. Table excludes residual interests classified as debt, as interest expense is dependent on the timing and extent of securitization loan cash flows and, therefore, a derived weighted average interest rate using the methodology in the table herein is not meaningful for the purposes of understanding the change in residual interests classified as debt interest expense. Securitizations and warehouses interest expense increased by $1.3 million, or 7%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and decreased by $16.3 million, or 22%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, driven by the following: • Securitization debt interest expense (exclusive of debt issuance and discount amortization) decreased by $3.7 million (45%) for the three-month period, and decreased by $13.3 million (47%) for the nine-month period primarily driven by 83 SoFi Technologies, Inc. TABLE OF CONTENTS declines in the average balances of securitization debt of 42% and 45%, respectively, which were attributable to payment activity and the absence of additional securitization debt during the 2022 periods. • Warehouse debt interest expense (exclusive of debt issuance amortization) increased by $6.2 million (97%) for the three-month period, and by $5.9 million (22%) for the nine-month period. The three-month increase in interest expense was attributable to sharp increases in benchmark rates combined with an increase in our average warehouse debt balance. The nine-month increase in interest expense was primarily related to share increases in benchmark rates, partially offset by the utilization of warehouse facilities with lower spreads during the 2022 period combined with a moderate decrease in our average warehouse debt balance. • Residual interests classified as debt interest expense decreased by $1.1 million (56%) for the three-month period, and by $2.9 million (46%) for the nine-month period, which were correlated with lower balances of residual interests classified as debt during the 2022 periods, as the residual debt balances continue to pay down over time and there were no additions to the balances during the 2022 periods. • Debt issuance cost interest expense decreased by $5.9 million (42%) for the nine-month period, which was primarily driven by a lower run rate on our issuance cost amortization related to our loan warehouse facilities, as we have extended certain loan warehouse facilities over time, which had the effect of lowering the quarterly debt issuance cost amortization. The variance was also impacted by the acceleration of certain debt issuance costs during the nine-month 2021 period, which contributed to a favorable variance of $2.8 million period over period. Deposits. Deposits interest expense of $14.1 million and $19.1 million for the three and nine months ended September 30, 2022, respectively, was related to interest earned by members on deposits held at SoFi Bank, which had average balances of $3.8 billion and $2.1 billion, respectively. Deposit accounts also earned a higher interest rate during the third quarter of 2022. Corporate Borrowings. Corporate borrowings interest expense increased by $3.9 million, or 286%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and increased by $3.6 million, or 47%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to the following: • Interest expense of $1.3 million and $3.8 million for the three- and nine-month 2022 periods, respectively, was associated with our issuance of convertible notes in the fourth quarter of 2021, which consisted of the amortization of the debt discount and debt issuance costs. • Interest expense on our revolving credit facility increased by $2.6 million and $3.5 million for the three- and nine-month periods, respectively, as one-month LIBOR increased during 2022, while the average balance remained constant. • Interest expense incurred on the Galileo seller note, which was repaid in February 2021, decreased by $3.6 million for the nine-month period. Noninterest Income and Net Revenue The following table presents the components of our total noninterest income, as well as total net revenue: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Loan origination and sales $ 163,697 $ 142,147 15 % $ 465,815 $ 362,211 29 % Securitizations (8,772) (4,551) 93 % (31,790) (6,613) 381 % Servicing 7,296 458 n/m 30,003 (11,875) (353) % Technology products and solutions 82,035 49,951 64 % 223,562 140,560 59 % Other 21,879 11,626 88 % 53,754 39,314 37 % Total noninterest income $ 266,135 $ 199,631 33 % $ 741,344 $ 523,597 42 % Total net revenue $ 423,985 $ 272,006 56 % $ 1,116,856 $ 699,264 60 % Total noninterest income increased by $66.5 million, or 33%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and increased by $217.7 million, or 42%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, the components of which are discussed below. 84 SoFi Technologies, Inc. TABLE OF CONTENTS Loan Origination and Sales The following table presents the components of noninterest income–loan origination and sales : Three Months Ended September 30, 2022 vs 2021 Change Nine Months Ended September 30, 2022 vs 2021 Change ($ in thousands) 2022 2021 2022 2021 In period originations, loan sale execution and fair value adjustments (1) $ 88,026 $ 133,196 $ (45,170) $ 183,098 $ 342,319 $ (159,221) Economic derivative hedges of loan fair values 106,240 1,305 104,935 336,382 23,439 312,943 Other derivative instruments (2) (6,087) 3,974 (10,061) (10,711) (3,886) (6,825) Home loan origination fees 2,238 3,502 (1,264) 6,169 11,292 (5,123) Loan write-off expense – whole loans (3) (26,021) (3,830) (22,191) (47,698) (12,555) (35,143) Loan repurchase (expense) benefit (4) 479 (190) 669 2,266 (2,588) 4,854 Other (1,178) 4,190 (5,368) (3,691) 4,190 (7,881) Loan origination and sales noninterest income $ 163,697 $ 142,147 $ 21,550 $ 465,815 $ 362,211 $ 103,604 ___________________ (1) Includes fair value adjustments on loans originated during the period, fair value adjustments of loans held at the balance sheet date, as well as gains (losses) on loans sold during the period. (2) Includes IRLCs, interest rate caps and purchase price earn-out. (3) For the three months ended September 30, 2022 and 2021, includes gross write-offs of $31.4 million and $6.1 million, respectively. During the three-month 2022 period, $2.7 million of the $5.4 million of recoveries were captured via loan sales to a third-party collection agency. During the three-month 2021 period, $0.5 million of the $2.3 million of recoveries were captured via loan sales to a third-party collection agency. For the nine months ended September 30, 2022 and 2021, includes gross write-offs of $60.9 million and $20.1 million, respectively. During the nine-month 2022 period, $4.4 million of the $13.2 million of recoveries were captured via loan sales to a third-party collection agency. During the nine-month 2021 period, $2.4 million of the $7.5 million of recoveries were captured via loan sales to a third-party collection agency. (4) Represents the (expense) benefit associated with our estimated loan repurchase obligation. See Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information. Three Months. Loan origination and sales increased by $21.6 million, or 15%, primarily due to the following: • an increase of $43.8 million (53%) in personal loan origination and sales income, which was attributable to increases of $45.8 million related to personal loan interest rate swap positions primarily driven by increases in interest rates, and $26.9 million related to fair value adjustments primarily driven by higher origination volume in the 2022 period. These increases were partially offset by $21.8 million higher loan write offs, which were primarily attributable to a higher average loan balance and elevated charge off rates in the 2022 period; • an increase of $1.0 million (3%) in student loan origination and sales income, which was attributable to an increase of $48.4 million on our student loan interest rate swap positions primarily driven by increases in interest rates, largely offset by a decrease of $41.6 million related to fair value adjustments primarily driven by lower origination volume in the 2022 period, and lower execution prices on sales activity, combined with a $5.4 million loss related to student loan commitments; and • a decrease of $22.7 million (106%) in home loan origination and sales related income, which was attributable to a decrease of $30.5 million related to fair value adjustments primarily driven by lower origination volume in the 2022 period, and lower execution prices on sales activity. This decline was partially offset by the favorable impact related to hedging activities of $7.8 million, which was primarily related to gains on home loan pipeline hedges due to decreases in the underlying hedge price index. Nine Months. Loan origination and sales increased by $103.6 million, or 29%, primarily due to the following: • an increase of $152.3 million (89%) in personal loan origination and sales income, which was attributable to increases of $119.6 million related to personal loan interest rate swap positions primarily driven by increases in interest rates, and $72.4 million related to fair value adjustments primarily driven by higher origination volume in the 2022 period, net of lower execution prices on sales activity. These increases were partially offset by $33.6 million higher loan write offs, which were primarily attributable to a higher average loan balance and elevated charge off rates in the 2022 period; 85 SoFi Technologies, Inc. TABLE OF CONTENTS • an increase of $8.1 million (7%) in student loan origination and sales income, which was attributable to an increase of $146.4 million on our student loan hedging activities primarily related to our student loan interest rate swap positions, which were primarily driven by increases in interest rates, largely offset by a decrease of $128.9 million related to fair value adjustments, which were primarily driven by lower origination volume in the 2022 period, and lower execution prices on sales activity, combined with a $7.9 million loss related to student loan commitments; and • a decrease of $56.5 million (88%) in home loan origination and sales related income, which was attributable to a decrease of $102.7 million related to fair value adjustments primarily driven by lower origination volume in the 2022 period, and lower execution prices on sales activity. This decline was partially offset by the favorable impact related to hedging activities of $46.2 million, which was primarily related to gains on home loan pipeline hedges due to decreases in the underlying hedge price index. Securitizations Three Months. Securitizations income decreased by $4.2 million, or 93%, primarily due to an aggregate decrease of $8.6 million in securitization loan fair market value changes, principally due to increases in market interest rates. We also had a decline in securitization investment fair values of $4.3 million, which was primarily attributable to negative fair value adjustments on our securitization bonds that were impacted by the interest rate volatility during the 2022 period. These unfavorable variances were partially offset by gains of $5.1 million in the 2022 period on our economic hedges of securitization investments. Offsetting these declines, securitizations income was favorably impacted by a reduction in securitization loan write-offs of $0.7 million in the 2022 period, which was correlated with lower average securitization loan balances and stronger securitization loan credit performance during the 2022 period, as well as favorable changes in residual debt fair value adjustments of $3.0 million. Nine Months. Securitizations income decreased by $25.2 million, or 381%, primarily due to an aggregate decrease of $36.5 million in securitization loan fair market value changes, principally due to increases in market interest rates. We also had a decline in securitization investment fair values of $17.6 million, which was primarily attributable to negative fair value adjustments on our securitization bonds that were impacted by the interest rate volatility during the 2022 period. These unfavorable variances were partially offset by gains of $14.2 million in the 2022 period on our economic hedges of securitization investments. Offsetting these declines, securitizations income was favorably impacted by a reduction in securitization loan write-offs of $6.3 million in the 2022 period, which was correlated with lower average securitization loan balances and stronger securitization loan credit performance during the 2022 period, as well as favorable changes in residual debt fair value adjustments of $9.3 million. Servicing We own the master servicing on all of the servicing rights that we retain and, in each case, recognize the gross servicing rate applicable to each serviced loan. Sub-servicers are utilized for all serviced student loans and home loans, which represents a cost to SoFi, but these arrangements do not impact our calculation of the weighted average basis points earned for each loan type serviced. Further, there is no impact on servicing income due to forbearance and moratoriums on certain debt collection activities, and there are no waivers of late fees. The table below presents information related to our loan servicing activities: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Servicing income recognized Home loans (1) $ 3,387 $ 2,398 41 % $ 9,416 $ 6,207 52 % Student loans (2) 9,293 11,305 (18) % 29,119 35,533 (18) % Personal loans (3) 9,806 8,216 19 % 27,901 25,020 12 % Servicing rights fair value change Home loans $ (1,460) $ 6,588 (122) % $ 10,173 $ 20,231 (50) % Student loans (4,053) (3,582) 13 % (9,137) (4,618) 98 % Personal loans (3,013) 701 (530) % (857) (1,736) (51) % ______________ (1) The contractual servicing earned on our home loan servicing portfolio was 25 bps during all periods presented. (2) The weighted average bps earned for student loan servicing was 42 bps and 43 bps during the three months ended September 30, 2022 and 2021, respectively, and 42 bps during each of the nine months ended September 30, 2022 and 2021. 86 SoFi Technologies, Inc. TABLE OF CONTENTS (3) The weighted average bps earned for personal loan servicing was 78 bps and 70 bps during the three months ended September 30, 2022 and 2021, respectively, and 73 bps and 70 bps during the nine months ended September 30, 2022 and 2021, respectively. Three Months. Servicing income increased by $6.8 million, of which $5.8 million was related to favorable changes in valuation inputs and assumptions, consisting of $6.5 million related to student loans and $1.3 million related to personal loans, partially offset by $2.0 million related to home loans. The favorable variances in student loans and personal loans were primarily attributable to decreased prepayment rate assumptions during the 2022 period compared to increased assumptions during the 2021 period, partially offset by increased discount rate assumptions during the 2022 period. The unfavorable variance in home loans was primarily attributable to decreased prepayment rate assumptions in the 2021 period combined with increased discount rate assumptions in the 2022 period. We also earned increased servicing income of $1.0 million in the 2022 period associated with referral activity we facilitate through our platform. Nine Months. Servicing income increased by $41.9 million, or 353%,of which $38.8 million was related to favorable changes in valuation inputs and assumptions, consisting of $29.6 million related to student loans, $5.3 million related to home loans and $3.8 million related to personal loans. The favorable variances in student loans and personal loans were primarily attributable to decreased prepayment rate assumptions during the 2022 period compared to increased assumptions during the 2021 period, partially offset by increased discount rate assumptions during the 2022 period. The favorable variance in home loans was primarily attributable to a larger decrease in prepayment rate assumptions during the 2022 period compared to the 2021 period, partially offset by increased discount rate assumptions during the 2022 period. We also earned increased servicing income of $3.0 million in the 2022 period associated with referral activity we facilitate through our platform that began in the third quarter of 2021. Technology Products and Solutions Three and Nine Months. Technology products and solutions fees for the three and nine months ended September 30, 2022 increased by $32.1 million, or 64%, and $83.0 million, or 59%, respectively, relative to the comparable periods in 2021. The 2022 periods were bolstered by $18.5 million and $45.0 million, respectively, of revenue contribution from the Technisys Merger, which closed in March 2022. In addition, our existing integrated technology solutions contributed increases in revenue of $13.5 million and $38.0 million, respectively, which was predominantly a function of account growth combined with increased activity from existing clients. Other Three Months. Other income increased by $10.3 million, or 88%, primarily due to increases in referral fees of $5.8 million, and payment network fees of $2.1 million. The increase in referral fees was primarily attributable to growth in our partner relationships and related activity, as well as an increase associated with referral fulfillment activity. The increase in payment network fees (which includes interchange fees) was primarily attributable to increased credit card spending on our platform. Nine Months. Other income increased by $14.4 million, or 37%, primarily due to increases in referral fees of $17.0 million and payment network fees of $6.7 million. The increase in referral fees was primarily attributable to growth in our partner relationships and related activity, as well as an increase associated with a referral fulfillment activity that we began in the third quarter of 2021. The increase in payment network fees (which includes interchange fees) was primarily attributable to increased credit card spending on our platform. The favorable variance was also impacted by lower SoFi Invest trading losses of $1.6 million period over period. These impacts were partially offset by (i) a $7.0 million impact from losses on venture capital investments in the 2022 period compared to gains in the 2021 period, (ii) a $3.2 million decrease in brokerage fees related to lower digital assets trading activity, and (iii) a $2.1 million decrease in enterprise services revenue primarily due to the absence of advisory service revenues in the 2022 period. 87 SoFi Technologies, Inc. TABLE OF CONTENTS Noninterest Expense The following table presents the components of our total noninterest expense: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Technology and product development $ 110,702 $ 74,434 49 % $ 291,976 $ 209,771 39 % Sales and marketing 162,129 114,985 41 % 444,121 297,170 49 % Cost of operations 83,083 69,591 19 % 232,611 187,785 24 % General and administrative 126,199 40,461 212 % 388,533 373,374 4 % Provision for credit losses 16,323 2,401 580 % 39,387 2,887 n/m Total noninterest expense $ 498,436 $ 301,872 65 % $ 1,396,628 $ 1,070,987 30 % Total noninterest expense increased by $196.6 million, or 65%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, and increased by $325.6 million, or 30%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, the components of which are discussed below. Technology and Product Development Three Months. Technology and product development expenses increased by $36.3 million, or 49%, primarily due to: • an increase in employee compensation and benefits of $18.0 million (inclusive of an increase in share-based compensation expense of $1.2 million), of which $12.9 million was attributable to Technisys. The remaining increase was related to an increase in technology and product personnel in support of our growth, as well as an increase in average compensation in the 2022 period; • an increase in purchased and internally-developed software amortization of $7.6 million, which was primarily reflective of increased investments in technology in our Technology Platform segment; and • an increase in amortization expense on intangible assets of $5.6 million, which was primarily associated with acquired intangible assets in the Technisys Merger. Nine Months. Technology and product development expenses increased by $82.2 million, or 39%, primarily due to: • an increase in employee compensation and benefits of $45.0 million (inclusive of an increase in share-based compensation expense of $8.8 million), of which $26.6 million was attributable to Technisys. The remaining increase was related to an increase in technology and product personnel in support of our growth, as well as an increase in average compensation in the 2022 period; • an increase in purchased and internally-developed software amortization of $18.0 million, which was primarily reflective of increased investments in technology in our Technology Platform segment; and • an increase in amortization expense on intangible assets of $8.8 million, which was primarily related to intangible asset amortization of $12.9 million associated with acquired intangible assets in the Technisys Merger, partially offset by $4.1 million associated with the acceleration of our core banking infrastructure in the first half of 2021. Sales and Marketing Three Months. Sales and marketing expenses increased by $47.1 million, or 41%, primarily due to: • an increase in advertising expenditures of $17.3 million, which was primarily attributable to an increase in direct mail, digital media, search and social network advertising expenditures in the 2022 period; • an increase of $13.8 million related to increasing utilization of lead generation channels during the 2022 period; • an increase in employee compensation and benefits of $8.6 million (inclusive of an increase in share-based compensation expense of $1.9 million), of which $1.9 million was attributable to Technisys. The remaining increase was correlated with an increase in sales and marketing personnel to support our growth, as well as an increase in average compensation in the 2022 period; and • an increase in direct customer promotional expenditures of $4.6 million, which is one of our levers for stimulating member product adoption and engagement. 88 SoFi Technologies, Inc. TABLE OF CONTENTS Nine Months. Sales and marketing expenses increased by $147.0 million, or 49%, primarily due to: • an increase in advertising expenditures of $56.6 million, which was primarily attributable to an increase in direct mail, digital media, search and social network advertising expenditures in the 2022 period; • an increase of $42.1 million related to increasing utilization of lead generation channels during the 2022 period; • an increase in employee compensation and benefits of $23.7 million (inclusive of an increase in share-based compensation expense of $6.9 million), of which $4.3 million was attributable to Technisys. The remaining increase was correlated with an increase in sales and marketing personnel to support our growth, as well as a modest increase in average compensation in the 2022 period; • an increase in direct customer promotional expenditures of $11.1 million, which is one of our levers for stimulating member product adoption and engagement; and • an increase in amortization expense on intangible assets of $5.0 million, which was associated with acquired intangible assets in the Technisys Merger. Cost of Operations Three Months. Cost of operations increased by $13.5 million, or 19%, primarily due to: • an increase in employee compensation and benefits of $8.8 million (inclusive of an increase in share-based compensation expense of $1.6 million), which was correlated with an increase in cost of operations personnel in support of our growth, as well as an increase in average compensation in the 2022 period; • an increase of $2.8 million in third-party fulfillment costs, which was primarily related to payment processing network association fees associated with increased activity in the Technology Platform segment; • an increase in software licenses, tools and subscriptions and other related fees of $1.9 million, consistent with headcount increases and internal technology initiatives; and • a decrease in loan origination and servicing expenses of $5.1 million, of which $6.2 million was related to home loans, partially offset by an increase of $1.2 million related to personal loans, which were primarily attributable to changes in origination volume period over period. Nine Months. Cost of operations increased by $44.8 million, or 24%, primarily due to: • an increase in employee compensation and benefits of $28.1 million (inclusive of an increase in share-based compensation expense of $6.4 million), which was correlated with an increase in cost of operations personnel in support of our growth, as well as an increase in average compensation in the 2022 period; • an increase of $7.2 million in third-party fulfillment costs, which was primarily related to payment processing network association fees associated with increased activity in the Technology Platform segment; • an increase in software licenses, tools and subscriptions and other related fees of $7.1 million, consistent with headcount increases and internal technology initiatives; • an increase in operational losses of $3.0 million; and • a decrease in loan origination and servicing expenses of $11.5 million, of which $15.2 million was related to home loans, partially offset by an increase of $4.1 million related to personal loans, which were primarily attributable to changes in origination volume period over period. General and Administrative Three Months. General and administrative expenses increased by $85.7 million, or 212%, primarily due to: • unfavorability resulting from a $64.4 million decrease in the fair value of the SoFi Technologies warrants assumed in the Business Combination during the 2021 period. The SoFi Technologies warrants were exercised or redeemed during the fourth quarter of 2021 and, therefore, had no impact on the 2022 period; • an increase in employee compensation and benefits of $14.1 million (inclusive of an increase in share-based compensation expense of $0.4 million), of which $1.4 million was attributable to Technisys. The remaining increase was related to an increase in personnel to support our growing infrastructure and administrative needs, as well as a modest increase in average compensation in the 2022 period; and • an increase of $5.0 million related to third party fraud events in the 2022 period. 89 SoFi Technologies, Inc. TABLE OF CONTENTS Nine Months. General and administrative expenses increased by $15.2 million, or 4%, primarily due to: • favorability of $96.5 million related to our warrant liabilities, resulting from the absence in the 2022 period of $160.9 million of expense incurred in the 2021 period associated with the fair value increase of our Series H warrant liabilities, which were reclassified to permanent equity in the second quarter of 2021 in conjunction with the Business Combination and, therefore, had no impact on the 2022 period, partially offset by a fair value decrease of $64.4 million related to the SoFi Technologies warrants assumed in the Business Combination during the 2021 period, which were exercised or redeemed during the fourth quarter of 2021 and, therefore, had no impact on the 2022 period; • an increase in employee compensation and benefits of $86.4 million (inclusive of an increase in share-based compensation expense of $50.6 million), of which $4.0 million was attributable to Technisys. The remaining increase was related to an increase in personnel to support our growing infrastructure and administrative needs in addition to a modest increase in average compensation in the 2022 period; • an increase of $18.7 million related to third party fraud events in the 2022 period; • an increase in corporate insurance of $3.6 million and professional services costs of $0.9 million, which were primarily attributable to the increased costs of being a public company; • an increase in software licenses, tools and subscriptions and other related fees of $3.8 million; and • a decrease in transaction-related expenses of $7.1 million during the 2022 period, which was attributable to the special payment of $21.2 million to the Series 1 preferred stockholders in the second quarter of 2021 associated with the Business Combination, partially offset by costs associated with our acquisitions in the 2022 period. Provision for Credit Losses Three and Nine Months. The provision for credit losses for the three and nine months ended September 30, 2022 increased by $13.9 million and $36.5 million, respectively, relative to the comparable periods in 2021, which reflected higher average credit card balances combined with elevated credit card loss rates during the 2022 periods. Net Loss We had a net loss of $74.2 million for the three months ended September 30, 2022 compared to $30.0 million for the three months ended September 30, 2021, and a net loss of $280.4 million for the nine months ended September 30, 2022 compared to $372.9 million for the nine months ended September 30, 2021. The changes in losses for the current periods were due to the factors discussed above, net of the changes in income taxes. For the three months ended September 30, 2022 and 2021, we recorded income tax benefit (expense) of $0.2 million and $(0.2) million, respectively. For the nine months ended September 30, 2022 and 2021, we recorded income tax expense of $(0.6) million and $(1.2) million, respectively. The income tax expense in the nine month periods was primarily due to income tax expense associated with the profitability of SoFi Lending Corp. and, for the 2022 periods, SoFi Bank, in some state jurisdictions where separate company filing is required. In the 2022 periods, this expense was partially offset by income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to the Technisys Merger. 90 SoFi Technologies, Inc. TABLE OF CONTENTS Summary Results by Segment Lending Segment In the table below, we present certain metrics related to our Lending segment: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change Metric 2022 2021 2022 2021 Total products (number, as of period end) 1,280,493 1,030,882 24 % 1,280,493 1,030,882 24 % Origination volume ($ in thousands, during period) Home loans $ 216,246 $ 793,086 (73) % $ 860,676 $ 2,320,918 (63) % Personal loans 2,809,759 1,640,572 71 % 7,307,612 3,740,645 95 % Student loans 457,184 967,939 (53) % 1,839,710 2,832,121 (35) % Total $ 3,483,189 $ 3,401,597 2 % $ 10,007,998 $ 8,893,684 13 % Loans with a balance (number, as of period end) (1) 717,148 594,730 21 % 717,148 594,730 21 % Average loan balance ($, as of period end) (1) Home loans $ 286,855 $ 286,522 — % $ 286,855 $ 286,522 — % Personal loans 24,772 22,207 12 % 24,772 22,207 12 % Student loans (2) 47,152 49,723 (5) % 47,152 49,723 (5) % __________________ (1) Loans with a balance and average loan balance include loans on our balance sheet and transferred loans with which we have a continuing involvement through our servicing agreements. (2) In-school loans carry a lower average balance than student loan refinancing products. Total Products Total products in our Lending segment is a subset of our total products metric. See “ Key Business Metrics ” for further discussion of this measure as it relates to our Lending segment. Origination Volume We refer to the aggregate dollar amount of loans originated through our platform in a given period as origination volume. Origination volume is an indicator of the size and health of our Lending segment and an indicator (together with the relevant loan characteristics, such as interest rate and prepayment and default expectations) of revenues and profitability. Changes in origination volume are driven by the addition of new members and existing members, the latter of which at times will either refinance into a new SoFi loan or secure an additional, concurrent loan, as well as macroeconomic factors impacting consumer spending and borrowing behavior. Since the profitability of the Lending segment is largely correlated with origination volume, management relies on origination volume trends to assess the need for external financing to support the Financial Services segment and the expense budgets for unallocated expenses. Home Loans. During the three and nine months ended September 30, 2022, home loan origination volume declined relative to the corresponding 2021 periods due to continued rising interest rates relative to the 2021 levels, which tends to lower demand for home loans overall and shift demand from refinance originations to purchase originations, the latter of which is a more competitive landscape. Although purchase originations have historically represented a smaller percentage of our home loan originations, our mix has shifted toward more purchase originations in the third quarter of 2022. Personal Loans. During the three and nine months ended September 30, 2022, personal loan origination volume increased significantly relative to the corresponding 2021 periods, primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment, combined with a positive impact from increased loan application approval rates that were implemented during the second half of 2021 and largely maintained during 2022. Student Loans. During the three and nine months ended September 30, 2022, student loan origination volume decreased relative to the corresponding 2021 periods, as demand for student loan refinancing products continued to be unfavorably impacted by the suspension of principal and interest payments on federally-held student loans through the end of 2022 and the debt cancellation for certain federal student loan borrowers that was announced during the third quarter, combined with a rising interest rate environment in 2022. See “Key Factors Affecting Operating Results—Student Loan Relief” for additional discussion of student loans. 91 SoFi Technologies, Inc. TABLE OF CONTENTS Loans with a Balance and Average Loan Balance Loans with a balance refers to the number of loans that have a balance greater than zero dollars as of the reporting date. Loans with a balance allows management to better understand the unit economics of acquiring a loan in relation to the lifetime value of that loan. Average loan balance is defined as the total unpaid principal balance of the loans divided by loans with a balance within the respective loan product category as of the reporting date. Average loan balance tends to fluctuate based on the pace of loan originations relative to loan repayments and the initial loan origination size. The following table presents additional information on the terms as of September 30, 2022 of the lending products we offer: Product Loan Size Rates (1) Term Student Loan Refinancing $5,000+ (2) Variable rate: 2.99% – 8.24% 5 – 20 years Fixed rate: 3.49% – 8.24% In-School Loans $1,000+ (2) Variable rate: 1.44% – 13.79% 5 – 15 years Fixed rate: 3.75% – 13.60% Personal Loans $5,000 – $100,000 (2) Fixed rate: 7.99% – 23.43% 2 – 7 years Home Loans $100,000 – $647,200 (3)(4) Fixed rate: 2.75% – 7.63% 10, 15, 20 or 30 years (Conforming Normal Cost Areas) OR $970,800 (4) (Conforming High Cost Areas) OR $3,000,000 (4) (Jumbo Loans) __________________ (1) Loan annual percentage rates reflect rates as advertised as of the date indicated, inclusive of an auto-pay discount, as applicable. (2) Minimum loan size may be higher within certain states due to legal or licensing requirements. (3) Exceptions for loan sizes less than $100,000 are considered on a case-by-case basis. (4) Represents the maximum loan size offered within each category as of the reporting date. “Conforming High Cost Areas” refers to Government-Sponsored Enterprises (“GSE”) eligible loans above the normal conforming limit, which is determined by county. “Jumbo Loans” refers to loans in the jumbo loan program. In the table below, we present additional information related to our lending products during the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Overall weighted average origination FICO 749 758 752 761 Student Loans Weighted average origination FICO 771 775 773 775 Weighted average interest rate earned (1) 4.23 % 4.64 % 4.09 % 4.59 % Interest income recognized ($ in thousands) (2) $ 40,019 $ 32,210 $ 115,859 $ 96,578 Sales of loans ($ in thousands) $ 74,080 $ 922,271 $ 877,920 $ 2,469,372 Home Loans Weighted average origination FICO 747 753 747 756 Weighted average interest rate earned (1) 4.37 % 2.01 % 3.24 % 1.85 % Interest income recognized ($ in thousands) (2) $ 1,499 $ 1,002 $ 3,731 $ 2,678 Sales of loans ($ in thousands) $ 251,821 $ 789,259 $ 959,971 $ 2,308,467 Personal Loans Weighted average origination FICO 746 749 747 754 Weighted average interest rate earned (1) 12.22 % 11.20 % 11.65 % 10.70 % Interest income recognized ($ in thousands) (2) $ 143,757 $ 55,368 $ 317,342 $ 145,574 Sales of loans ($ in thousands) $ 749,648 $ 1,196,798 $ 2,851,466 $ 2,946,374 __________________ (1) Weighted average interest rate earned represents annualized interest income recognized divided by the average of the four- and ten-month unpaid principal balances of loans outstanding during the period, which are impacted by the timing and extent of loan sales and purchases. The weighted average interest rates earned for the comparative 2021 periods were recast to conform to the current period methodology for calculating average balances. (2) See “ Results of Operations—Interest Income ” for a discussion of interest income recognized during the periods indicated. 92 SoFi Technologies, Inc. TABLE OF CONTENTS Lending Segment Results of Operations The following table presents the measure of contribution profit for the Lending segment. The information is derived from our internal financial reporting used for corporate management purposes. In the first quarter of 2022, we implemented an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, as further discussed below. Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Net interest income $ 139,516 $ 72,257 93 % $ 347,873 $ 180,856 92 % Noninterest income 162,178 138,034 17 % 463,927 343,703 35 % Total net revenue 301,694 210,291 43 % 811,800 524,559 55 % Servicing rights – change in valuation inputs or assumptions (1) (6,182) (409) n/m (26,860) 11,924 (325) % Residual interests classified as debt – change in valuation inputs or assumptions (2) 1,453 5,593 (74) % 7,078 19,261 (63) % Directly attributable expenses (3) (116,403) (97,807) 19 % (336,814) (261,202) 29 % Contribution profit $ 180,562 $ 117,668 53 % $ 455,204 $ 294,542 55 % Adjusted net revenue (4) $ 296,965 $ 215,475 38 % $ 792,018 $ 555,744 43 % ___________________ (1) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment, default rates and discount rates. This non-cash change, which is recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss) is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, the changes in fair value attributable to assumption changes are adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (2) Reflects changes in fair value inputs and assumptions, including conditional prepayment and default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The fair value change attributable to assumption changes has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, this non-cash change in fair value is adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations. (3) For a disaggregation of the directly attributable expenses allocated to the Lending segment in each of the periods presented, see “ Directly Attributable Expenses ” below. (4) Adjusted net revenue is a non-GAAP financial measure. For information regarding our use and definition of this measure and for a reconciliation to the most directly comparable U.S. GAAP measure, total net revenue, see “ Non-GAAP Financial Measures ” herein. Net interest income Net interest income in our Lending segment increased by $67.3 million, or 93%, and by $167.0 million, or 92%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, the components of which are discussed below. Loans Interest Income. Loans interest income increased by $96.7 million, or 109%, and by $192.0 million, or 78%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Interest Income—Loans” for information on the primary drivers of the variances related to our personal loans, student loans and home loans. Securitizations Interest Income. Securitizations interest income decreased by $0.4 million, or 12%, and by $3.3 million, or 29%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Interest Income—Securitizations” for information on the primary drivers of the variances. Interest Expense. Interest expense increased by $29.1 million, or 150%, and by $21.7 million, or 29%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. For the three and nine month 2022 periods relative to the comparable 2021 periods, interest expense in our Lending segment reflected the following: (i) a decline in securitization debt interest expense (exclusive of debt issuance and discount amortization) of $3.7 million and $13.3 million, respectively; (ii) a decline in residual interests classified as debt interest expense of $1.1 million and $2.9 million, respectively; and (iii) a decline in debt issuance cost interest expense of $0.1 million 93 SoFi Technologies, Inc. TABLE OF CONTENTS and $6.2 million, respectively. Additionally, in the three-month 2022 period, we recognized FTP interest expense of $40.3 million compared to $6.3 million of actual interest incurred on our use of securitizations and warehouse facilities in the corresponding 2021 period prior to our implementation of the FTP framework. In the nine-month 2022 period, we recognized the actual interest incurred on our use of securitizations and warehouse facilities for one month of $1.7 million and FTP interest expense for eight months of $68.5 million, compared to $26.1 million of actual interest expense on our use of securitizations and warehouse facilities in the corresponding 2021 period. Noninterest income Noninterest income in our Lending segment increased by $24.1 million, or 17%, and by $120.2 million, or 35%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, the components of which are discussed below. Loan Origination and Sales. Loan origination and sales increased by $21.6 million, or 15%, and by $103.6 million, or 29%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Noninterest Income and Net Revenue—Loan Origination and Sales ” for information on the primary drivers of the variances. Securitizations. Securitizations income decreased by $4.2 million, or 93%, and by $25.2 million, or 381%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Noninterest Income and Net Revenue—Securitizations” for information on the primary drivers of the variances. Servicing. Servicing income increased by $6.8 million and by $41.7 million, or 352%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Noninterest Income and Net Revenue—Servicing” for information on the primary drivers of the variances. Directly attributable expenses The directly attributable expenses allocated to the Lending segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Direct advertising $ 44,813 $ 31,581 42 % $ 127,704 $ 88,897 44 % Compensation and benefits 27,717 23,697 17 % 77,855 66,004 18 % Lead generation 25,999 17,278 50 % 69,381 35,690 94 % Loan origination and servicing costs 10,736 15,810 (32) % 31,838 43,347 (27) % Professional services 1,896 1,896 — % 5,765 4,593 26 % Other (1) 5,242 7,545 (31) % 24,271 22,671 7 % Directly attributable expenses $ 116,403 $ 97,807 19 % $ 336,814 $ 261,202 29 % ______________ (1) Other expenses primarily include loan marketing expenses, third party loan fraud, member promotional expenses, tools and subscriptions, travel and occupancy-related costs. Lending segment directly attributable expenses for the three and nine months ended September 30, 2022 increased by $18.6 million, or 19%, and $75.6 million, or 29%, respectively, compared to the same periods in 2021, primarily due to the following: • increases of $13.2 million for the three-month period and $38.8 million for the nine-month period in direct advertising related to direct mail, search engine and social network advertising, partially offset by declines in television advertisement; • increases of $8.7 million for the three-month period and $33.7 million for the nine-month period due to increasing utilization of lead generation channels primarily associated with increased personal loan origination volume in the 2022 periods; • increases of $4.0 million for the three-month period and $11.9 million for the nine-month period in allocated compensation and related benefits, which primarily reflected increases in headcount allocated to the lending segment, partially offset by decreases in home loan commissions attributable to decreases in home loan originations; 94 SoFi Technologies, Inc. TABLE OF CONTENTS • an increase for the nine-month 2022 period related to third-party personal loan fraud of $5.3 million; and • decreases of $5.1 million for the three-month period and $11.5 million for the nine-month period in loan origination and servicing costs, which were largely attributable to decreases in home loan origination costs of $6.2 million and $15.2 million, respectively, that correlated with decreases in home loan origination volume. These decreases were partially offset by increases in personal loan origination costs of $1.6 million and $4.4 million, respectively, which corresponded with increases in personal loan origination volume. Technology Platform Segment In the table below, we present a metric that is related to Galileo within our Technology Platform segment: September 30, 2022 September 30, 2021 2022 vs 2021 % Change Total accounts 124,332,810 88,811,022 40 % See “ Key Business Metrics ” for further discussion of this measure as it relates to our Technology Platform segment. Technology Platform Segment Results of Operations The following table presents the measure of contribution profit for the Technology Platform segment. The information is derived from our internal financial reporting used for corporate management purposes. Refer to Note 17 to the Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding Technology Platform segment performance. Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Net interest income (expense) $ — $ 39 (100) % $ — $ (29) (100) % Noninterest income 84,777 50,186 69 % 229,481 141,616 62 % Total net revenue 84,777 50,225 69 % 229,481 141,587 62 % Directly attributable expenses (65,241) (34,484) 89 % (169,849) (97,148) 75 % Contribution profit $ 19,536 $ 15,741 24 % $ 59,632 $ 44,439 34 % Noninterest income Noninterest income in our Technology Platform segment increased by $34.6 million, or 69%, and by $87.9 million, or 62%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. Technology Products and Solutions. Technology products and solutions revenues increased by $33.8 million, or 68%, and by $87.2 million, or 62%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. See “Results of Operations—Noninterest Income and Net Revenue—Technology Products and Solutions” for information on the primary drivers of the variances. In addition, the variances are inclusive of $1.8 million and $4.2 million of intercompany revenue for the three and nine months ended September 30, 2022, respectively. 95 SoFi Technologies, Inc. TABLE OF CONTENTS Directly attributable expenses The directly attributable expenses allocated to the Technology Platform segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Compensation and benefits $ 39,862 $ 17,469 128 % $ 101,544 $ 49,971 103 % Product fulfillment 10,531 8,696 21 % 29,489 23,154 27 % Tools and subscriptions 5,425 2,840 91 % 13,552 7,433 82 % Professional services 3,609 912 296 % 10,492 4,828 117 % Other (1) 5,814 4,567 27 % 14,772 11,762 26 % Directly attributable expenses $ 65,241 $ 34,484 89 % $ 169,849 $ 97,148 75 % ___________________ (1) Other expenses are primarily related to advertising and marketing, travel and occupancy-related costs, bad debt and data center expenses. Technology Platform segment directly attributable expenses increased by $30.8 million, or 89%, and by $72.7 million, or 75%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, primarily due to the following: • increases of $22.4 million for the three-month period and $51.6 million for the nine-month period in compensation and benefits expense, which was correlated with an increase in personnel to support segment growth. Technisys compensation and benefits contributed $15.7 million and $34.3 million during the three- and nine-month 2022 periods, respectively; • increases of $1.8 million for the three-month period and $6.3 million for the nine-month period in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the integrated platform-as-a-service; • increases of $2.6 million for the three-month period and $6.1 million for the nine-month period in tools and subscriptions costs, primarily related to headcount increases and internal technology initiatives to support the growth of the platform, of which $0.5 million and $1.8 million, respectively, were related to the operations of Technisys; • increases of $2.7 million for the three-month period and $5.7 million for the nine-month period in professional services costs, of which $1.7 million and $4.8 million, respectively, were related to the operations of Technisys; and • increases of $1.2 million for the three-month period and $3.0 million for the nine-month period in other expenses, which were primarily related to advertising, marketing and travel and occupancy-related costs that were largely incurred at Technisys, partially offset by lower data center expenses. Financial Services Segment In the table below, we present a key metric related to our Financial Services segment: Metric September 30, 2022 September 30, 2021 2022 vs. 2021 % Change Total products (number, as of period end) 5,918,805 3,236,783 83 % Total products in our Financial Services segment is a subset of our total products metric. See “Key Business Metrics” for a further discussion of this measure as it relates to our Financial Services segment. 96 SoFi Technologies, Inc. TABLE OF CONTENTS Financial Services Segment Results of Operations The following table presents the measure of contribution loss for the Financial Services segment. The information is derived from our internal financial reporting used for corporate management purposes. During the first quarter of 2022, we implemented an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, as further discussed below. Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Net interest income (1) $ 28,158 $ 1,209 n/m $ 46,965 $ 1,980 n/m Noninterest income 20,795 11,411 82 % 55,894 34,142 64 % Total net revenue 48,953 12,620 288 % 102,859 36,122 185 % Directly attributable expenses (101,576) (52,085) 95 % (258,697) (135,851) 90 % Contribution loss $ (52,623) $ (39,465) 33 % $ (155,838) $ (99,729) 56 % ___________________ (1) Net interest income and, thereby, total net revenue and contribution loss for our Financial Services segment reported for the three and nine months ended September 30, 2022 reflects the implementation of an FTP framework, under which Financial Services segment net interest income reflects the difference between an FTP credit for the segment’s provision of deposits as a source of funding and an FTP charge for the segment’s use of funds to originate credit card loans. For the comparative periods ended September 30, 2021, our Financial Services segment net interest income was nominal, as it did not have deposits and the credit card product was nascent. If we had applied our current FTP framework during the comparative three and nine month periods, the Financial Services segment net interest income would not have materially changed. Net interest income Net interest income in our Financial Services segment increased by $26.9 million and $45.0 million for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. For the three- and nine-month 2022 periods, net interest income primarily reflected net interest income earned on our deposits of $22.3 million and $33.7 million, respectively, which includes interest income based on our FTP framework (which eliminates in consolidation) and interest expense to members, and corresponds with the level of deposits at SoFi Bank. In addition, net interest income earned on our credit card loans increased by $3.0 million and $7.9 million for the three and nine month periods, respectively, which was primarily attributable to growth in the average balance. Noninterest income Noninterest income in our Financial Services segment increased by $9.4 million, or 82%, and by $21.8 million, or 64%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, primarily due to the following: • increases in referral fees of $5.8 million for the three-month period and $17.0 million for the nine-month period, which were primarily attributable to growth in referral fulfillment activity that we began in the third quarter of 2021, as well as growth in our partner relationships and related activity, as we continue to onboard new partners and help drive volume to these partners; • increases in payment network fees of $2.3 million for the three-month period and $6.9 million for the nine-month period, which coincided with increased credit card and debit card transaction volume; • increases of $0.4 million for the three-month period and $1.5 million for the nine-month period in non-payment network related credit card fees; • a reduction in trading losses related to our SoFi Invest product during the nine-month period of $1.6 million; • decreases in brokerage-related fees of $0.4 million for the three-month period and $3.2 million for the nine-month period, which coincided with lower digital assets trading volume on our platform during the 2022 periods; and • a decrease in enterprise service fees of $2.1 million for the nine-month period, which was primarily related to advisory service revenues of $2.6 million recognized in the second quarter of 2021 that did not recur in the 2022 period. 97 SoFi Technologies, Inc. TABLE OF CONTENTS Directly attributable expenses The directly attributable expenses allocated to the Financial Services segment that were used in the determination of the segment's contribution loss were as follows: Three Months Ended September 30, 2022 vs 2021 % Change Nine Months Ended September 30, 2022 vs 2021 % Change ($ in thousands) 2022 2021 2022 2021 Compensation and benefits $ 31,369 $ 22,087 42 % $ 81,678 $ 60,671 35 % Provision for credit losses 16,323 2,401 580 % 39,387 2,887 n/m Member incentives 11,712 4,456 163 % 27,517 13,746 100 % Direct advertising 10,063 6,299 60 % 26,214 13,097 100 % Product fulfillment 8,416 6,539 29 % 23,841 16,656 43 % Lead generation 7,751 2,668 191 % 16,324 7,874 107 % Professional services 1,020 1,003 2 % 3,354 3,407 (2) % Intercompany technology platform expenses 1,065 — n/m 2,788 — n/m Other (1) 13,857 6,632 109 % 37,594 17,513 115 % Directly attributable expenses $ 101,576 $ 52,085 95 % $ 258,697 $ 135,851 90 % ___________________ (1) Other expenses primarily include tools and subscriptions, operational product losses, third party fraud expense, travel and occupancy-related costs, and marketing-related expenses. Financial Services directly attributable expenses increased by $49.5 million, or 95%, and by $122.8 million, or 90%, for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021, primarily due to the following: • increases of $13.9 million for the three-month period and $36.5 million for the nine-month period related to our provision for credit losses, which were primarily related to increases in the provision for credit card loans of $13.7 million and $35.5 million, respectively, due to higher average credit card balances combined with elevated credit card loss rates during the 2022 periods. The remaining changes were associated with loans acquired in the Bank Merger during the first quarter of 2022; • increases of $9.3 million for the three-month period and $21.0 million for the nine-month period in compensation and benefits expense, which reflected our ongoing prioritization of growth in the Financial Services segment that required additional staffing; • increases of $7.3 million for the three-month period and $13.8 million for the nine-month period primarily related to increased direct member incentives utilized to drive adoption and usage of our Financial Services products, the most significant of which was SoFi Checking and Savings, partially offset by lower incentives related to SoFi Invest; • increases of $3.8 million for the three-month period and $13.1 million for the nine-month period in direct advertising costs primarily driven by an increase in search engine and social network marketing. The marketing initiatives were primarily related to the continued promotion of SoFi Checking and Savings; • increases of $5.1 million for the three-month period and $8.5 million for the nine-month period related to lead generation, primarily related to SoFi Checking and Savings; • increases of $1.9 million for the three-month period and $7.2 million for the nine-month period in product fulfillment costs related to SoFi Checking and Savings and cash management accounts, which included such activities as brokerage expenses and debit card fulfillment services, operating SoFi Bank, and operating our cash management sweep program. The nine-month variance was also driven by $1.9 million of higher costs related to credit card fulfillment; and • increases of $7.2 million for the three-month period and $20.1 million for the nine-month period in other costs, which were primarily related to increases in third-party credit card fraud of $5.0 million and $13.4 million, respectively, and increases in operational product losses of $0.7 million and $3.4 million, respectively. In addition, we had increases in travel and occupancy-related costs and tools and subscriptions costs. 98 SoFi Technologies, Inc. TABLE OF CONTENTS Corporate/Other Non-Reportable Segment Non-segment operations are classified as Corporate/Other (previously referred to as “Other”), which includes net revenues associated with corporate functions that are not directly related to a reportable segment, as well as, beginning in the first quarter of 2022, the financial impact of our capital management activities within the treasury function, which reflects the residual impact from the FTP charges and FTP credits on our reportable segments under our FTP framework. Reconciliation of Directly Attributable Expenses The following table reconciles directly attributable expenses allocated to our reportable segments to total noninterest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Reportable segments directly attributable expenses $ (283,220) $ (184,376) $ (765,360) $ (494,201) Intercompany expenses 1,757 — 4,198 — Expenses not allocated to segments: Share-based compensation expense (77,855) (72,681) (235,018) (162,289) Depreciation and amortization expense (40,253) (24,075) (109,007) (75,041) Employee-related costs (1) (49,248) (39,601) (137,254) (108,825) Fair value change of warrant liabilities — 64,405 — (96,504) Special payment (2) — — — (21,181) Other corporate and unallocated expenses (3) (49,617) (45,544) (154,187) (112,946) Total noninterest expense $ (498,436) $ (301,872) $ (1,396,628) $ (1,070,987) ___________________ (1) Includes compensation, benefits, recruiting, certain occupancy-related costs and various travel costs of executive management, certain technology groups and general and administrative functions that are not directly attributable to the reportable segments. (2) Included a special payment to the Series 1 preferred stockholders in connection with the Business Combination in the second quarter of 2021. (3) Represents corporate overhead costs that are not allocated to reportable segments, which primarily includes corporate marketing and advertising costs, tools and subscription costs, professional services costs, corporate and FDIC insurance costs and transaction-related expenses. Liquidity and Capital Resources Liquidity We strive to maintain access to diverse funding sources and ample liquidity to fund our operating requirements, to pursue strategic growth initiatives and to meet our legal and regulatory requirements. Our principal sources of liquidity are our cash and cash equivalents, including cash from operations, and investments in other highly liquid assets. We maintain a Capital and Asset Liability Management policy (“CALM”) that outlines specific requirements relating to the oversight of SoFi Technologies, Inc. (and its subsidiaries) capital planning, financial planning and forecasting, liquidity risk management, contingency funding planning, interest rate risk management, cash management and financial operations, among other activities. Oversight of these activities is the responsibility of our Asset Liability Committee (the "ALCO"). The ALCO is comprised of a cross-functional leadership team that is responsible for managing our use of capital, liquidity, sources and uses of funding, and sensitivities to various market risks, by identifying key risks and exposures, monitoring them appropriately, establishing tolerances and limits, and mitigating risks where appropriate, to ensure the company has the ability to meet its obligations. The following table summarizes our on-balance sheet liquidity: ($ in thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 935,159 $ 494,711 Investments in available-for-sale debt securities 195,133 194,907 Available liquidity $ 1,130,292 $ 689,618 We believe our existing balance sheet liquidity will be sufficient to cover net losses, meet our existing working capital and capital expenditure needs, as well as our planned growth for at least the next 12 months. 99 SoFi Technologies, Inc. TABLE OF CONTENTS Sources of Funding Our primary funding sources include SoFi Bank deposits, warehouse funding, common and preferred equity capital, convertible debt, corporate revolving credit facility, securitizations, and other financings. Deposits We commenced offering deposit accounts (SoFi Checking and Savings accounts) to our members through SoFi Bank in the first quarter of 2022. During the third quarter of 2022, we also sourced brokered and non-brokered wholesale deposits, which include certificates of deposit. As of September 30, 2022, time deposit balances due in less than one year totaled $509.3 million. We did not have any deposits as of December 31, 2021. Borrowing Capacity The following table summarizes our available capacity on our borrowings: September 30, 2022 December 31, 2021 ($ in thousands) Available Capacity Maturity Available Capacity Maturity Warehouse facilities $ 4,586,050 October 2022 - January 2032 $ 5,561,130 January 2022 - January 2030 Revolving credit facility 74,000 September 2023 74,000 September 2023 Total available capacity $ 4,660,050 $ 5,635,130 Uses of Funding Our primary uses of funds include loan originations, the losses generated by our Financial Services segment, and investments in our business, such as technology and product investments and sales and marketing initiatives. Our capital expenditures have historically been less significant relative to our operating and financing cash flows, and we expect this trend to continue for the foreseeable future. As of September 30, 2022, we had debt obligations, common stock and redeemable preferred stock outstanding. Our borrowings primarily included our loan and risk retention warehouse facilities, asset-backed securitization debt, revolving credit facility and convertible notes. In connection with the issuance of the convertible notes, we entered into privately negotiated capped call transactions with certain financial institutions (the “capped call transactions”), which are expected to generally reduce the potential dilutive effect on the common stock upon any conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of the converted notes, as the case may be. A detailed description of each of our borrowing arrangements is included in Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements in this Form 10-Q and in Note 10 to the Notes to Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2021 (the “Form 10-K”). Refer to Note 12 in the Form 10-K for additional information on the Capped Call Transactions. The amount owed and outstanding on our loan warehouse facilities fluctuates significantly based on our origination volume, sales volume, the amount of time we strategically hold loans on our balance sheet, and the amount of loans being self-funded with cash. The amount of financing actually advanced on each individual loan under our loan warehouse facilities, as determined by agreed-upon advance rates, may be less than the stated advance rate depending, in part, on changes in underlying characteristics of the loans securing the financings. Covenants We have various affirmative and negative financial covenants, as well as non-financial covenants, related to our warehouse debt and revolving credit facility, as well as our Series 1 Redeemable Preferred Stock. Additionally, we have compliance requirements associated with our convertible notes, and certain provisions of the arrangement could change in the event of a “Make-Whole Fundamental Change”, as defined in the indenture. The availability of funds under our warehouse facilities and revolving credit facility is subject to, among other conditions, our continued compliance with the covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum cash and cash equivalents, and (iii) a maximum leverage ratio of total debt to tangible net worth. A breach of these covenants can result in an event of default under these facilities and allows the 100 SoFi Technologies, Inc. TABLE OF CONTENTS lenders to pursue certain remedies. Our subsidiaries are restricted in the amount that can be distributed to SoFi only to the extent that such distributions would cause the financial covenants to not be met. In addition, pursuant to our amended and restated agreement related to our Series 1 Redeemable Preferred Stock, we are subject to the following financial covenants: • Tangible net worth to total debt ratio requirement, which excludes our warehouse, risk retention and securitization related debt; • Tangible net worth to Series 1 Redeemable Preferred Stock ratio requirement; and • Minimum excess equity requirements, where the measure of equity includes permanent equity and SoFi Technologies Redeemable Preferred Stock (exclusive of Series 1 Redeemable Preferred Stock), as applicable. We were in compliance with all covenants. Capital Management SoFi Technologies, a bank holding company, and SoFi Bank, a nationally chartered association, are required to comply with regulatory capital rules issued by the Federal Reserve and other U.S. banking regulators, including the OCC and FDIC. Shortly after we closed the Bank Merger, we allocated $750 million in capital to SoFi Bank and may contribute more capital as SoFi Bank continues to grow. We are required to manage our capital position to maintain sufficient capital to satisfy these regulatory rules and support our business activities, including the requirement to maintain minimum regulatory capital ratios in accordance with the Basel Committee on Banking Supervision standardized approach for U.S. banking organizations (U.S. Basel III). If the Federal Reserve finds that we are not “well-capitalized” or “well-managed”, we would be required to take remedial action to comply with all applicable capital and management requirements, which may contain additional limitations or conditions relating to our activities. Additionally, the applicable federal regulatory authority is authorized to determine, under certain circumstances relating to the financial condition of a bank or bank holding company, that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The requirements establish required minimum ratios for Common Equity Tier 1 (“CET1”) risk-based capital, Tier 1 risk-based capital, total risk-based capital and a Tier 1 leverage ratio; set risk-weighting for assets and certain other items for purposes of the risk-based capital ratios; and define what qualifies as capital for purposes of meeting the capital requirements. Additionally, regulatory capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios in order to avoid restrictions on capital distributions and discretionary bonuses. 101 SoFi Technologies, Inc. TABLE OF CONTENTS The risk- and leverage-based capital ratios and amounts are presented below: September 30, 2022 Amount Ratio Required Minimum (1) Well-Capitalized Minimum (2) SoFi Bank CET1 risk-based capital $ 973,457 16.4 % 7.0 % 6.5 % Tier 1 risk-based capital 973,457 16.4 % 8.5 % 8.0 % Total risk-based capital 1,007,447 17.0 % 10.5 % 10.0 % Tier 1 leverage 973,457 17.2 % 4.0 % 5.0 % Risk-weighted assets $ 5,919,709 Quarterly adjusted average assets 5,664,896 SoFi Technologies CET1 risk-based capital $ 3,157,539 24.2 % 7.0 % N/A Tier 1 risk-based capital 3,157,539 24.2 % 8.5 % N/A Total risk-based capital 3,511,903 26.9 % 10.5 % N/A Tier 1 leverage 3,157,539 31.0 % 4.0 % N/A Risk-weighted assets $ 13,048,370 Quarterly adjusted average assets 10,196,750 ____________________ (1) Required minimums presented for risk-based capital ratios include the required capital conservation buffer. (2) The well-capitalized minimum measure is applicable at the bank level only. As of September 30, 2022, our regulatory capital ratios exceeded the thresholds required to be regarded as a well-capitalized institution, and meet all capital adequacy requirements to which we are subject. There have been no events or conditions since September 30, 2022 that management believes would change the categorization. Commitments In addition to our warehouse facility borrowings, revolving credit facility borrowings and convertible senior notes, our material commitments requiring, or potentially requiring, the use of cash in future periods primarily include commitments associated with being the named sponsor of SoFi Stadium, including operating lease obligations and finance lease obligations, which expire in 2040, as well as sponsorship and advertising opportunities related to the stadium itself and the surrounding performance venue and planned retail district. Additional material commitments include operating lease obligations primarily associated with office premises and the remaining commitment related to a four-year cloud computing services arrangement that we executed in the fourth quarter of 2021. Guarantees We may require liquidity resources associated with our guarantee arrangements. As a component of our loan sale agreements, we make certain representations to third parties that purchased our previously held loans. We have a three-year obligation to GSEs on loans that we sell to GSEs, to repurchase any originated loans that do not meet certain GSE guidelines, and we are required to pay the full initial purchase price back to the GSEs. In addition, we make standard representations and warranties related to student, personal and home loan transfers, as well as limited credit-related repurchase guarantees on certain such transfers. If realized, any of the repurchases would require the use of cash. See Note 15 to the Notes to Unaudited Condensed Consolidated Financial Statements for further information on these and other guarantee obligations. We believe we have adequate liquidity to meet these expected obligations. Factors Affecting Liquidity We are currently dependent on the success of our lending business. The primary drivers of operating cash flows related to our Lending segment are origination volume, the holding period of our loans, loan sale execution and the timing of loan repayments. Our ability to access whole loan buyers, to sell our loans on favorable terms, to maintain adequate warehouse capacity at favorable terms, to access new SoFi bank deposits and grow existing bank deposits and to strategically manage our continuing financial interest in securitization-related transfers is critical to our growth strategy and our ability to have adequate 102 SoFi Technologies, Inc. TABLE OF CONTENTS liquidity to fund our balance sheet. Our ability to attract and maintain bank deposits can be impacted by, among other things, general economic conditions, competition from other financial services firms, idiosyncratic events and the interest rates we offer, which can impact our liquidity from deposits. Additionally, there is no guarantee that we will be able to execute on our strategy as it relates to the timing and pricing of securitization-related transfers. Therefore, we may hold securitization interests for longer than planned or be forced to liquidate at suboptimal prices. Securitization transfers are also negatively impacted during recessionary periods, wherein purchasers may be more risk averse. Our cash flows from operations have also been impacted by material net losses. If our current net losses continue for the foreseeable future, we may raise additional capital in the form of equity or debt, which may not be at favorable terms when compared to previous financing transactions. Further, future uncertainties around the demand for our personal loans, home loans and around the student loan refinance market in general, including as a result of worsening macroeconomic conditions, should be considered when assessing our future liquidity and solvency prospects. In the future, our loan origination volume and our resulting loan balances, and any positive cash flows thereof, could also be lower based on strategic decisions to tighten our credit standards. In addition to our ability to pledge unencumbered loans against available warehouse capacity, we have relationships with whole loan buyers who have historically demonstrated strong demand for our loans. Securitization markets can also generate additional liquidity; however, financing through the securitization market could result in worse execution as compared to whole loans sales depending on market conditions and, in certain cases, we are required to maintain a minimum investment due to securitization risk retention rules. Additionally, our securitization transactions require us to maintain a continuing financial interest in the form of securitization investments when we deconsolidate the SPE or in consolidation of the SPE when we have a significant financial interest. In either instance, the continuing financial interest requires us to maintain capital in the SPE that would otherwise be available to us if we had sold loans through a different channel. As it relates to our securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts, the timing of which cannot be reasonably estimated. Our own liquidity resources are not required to make any contractual payments on our securitization borrowings. Our long-term liquidity strategy includes continuing to grow our SoFi bank deposit base, maintaining adequate warehouse capacity, maintaining corporate debt and other sources of financing, as well as effectively managing the capital raised through debt and equity transactions. Although our goal is to increase our cash flow from operations, there can be no assurance that our future operating plans will lead to improved operating cash flows. On August 16, 2022, the Inflation Reduction Act (the "IRA"), was signed into law. The IRA enacted a 15% corporate book minimum tax and a 1% excise tax on stock repurchases effective after December 31, 2022. The IRA is not expected to have a material impact on our operations or cash flows for the foreseeable future. Cash Flow and Liquidity Analysis The following table provides a summary of cash flow data: Nine Months Ended September 30, ($ in thousands) 2022 2021 Net cash used in operating activities $ (4,837,023) $ (113,928) Net cash provided by (used in) investing activities (54,926) 79,536 Net cash provided by (used in) financing activities 5,384,714 (434,666) Cash Flows from Operating Activities For the nine months ended September 30, 2022, net cash used in operating activities of $4.8 billion stemmed from a net loss of $280.4 million and an unfavorable change in our operating assets net of operating liabilities of $5.0 billion, partially offset by a positive adjustment for non-cash items of $423.1 million. The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities. We originated loans of $10.0 billion during the period and also purchased loans of $1.6 billion. These cash uses were largely offset by principal payments on loans of $2.0 billion and proceeds from loan sales of $4.7 billion. 103 SoFi Technologies, Inc. TABLE OF CONTENTS For the nine months ended September 30, 2021, net cash used in operating activities of $113.9 million stemmed from a net loss of $372.9 million and an unfavorable change in our operating assets net of operating liabilities of $97.5 million, which were offset by a positive adjustment for non-cash items of $356.5 million. The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities. We originated loans of $9.1 billion during the period and also purchased loans of $252.3 million. These cash uses were offset by principal payments on loans of $1.7 billion and proceeds from loan sales of $7.6 billion. Cash Flows from Investing Activities For the nine months ended September 30, 2022, net cash used in investing activities of $54.9 million was primarily attributable to proceeds of $99.8 million from our securitization investments, the aggregate net cash acquired from the Technisys Merger and Bank Merger of $58.5 million, and proceeds of $37.8 million from sales, maturities and paydowns of our investments in AFS debt securities. These sources were more than offset by net cash uses of $130.1 million related to loan activities, primarily driven by credit card loans, $76.0 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and cash uses of $45.0 million related to purchases of AFS debt securities. For the nine months ended September 30, 2021, net cash provided by investing activities of $79.5 million was primarily attributable to proceeds of $107.5 million from the call on our Apex equity method investment and $16.7 million from repayment of the outstanding principal balance on related party notes, as well as proceeds of $201.1 million from our securitization investments. These cash proceeds were partially offset by $205.1 million of investments in AFS debt securities, reduced by proceeds of $15.8 million from sales of these investments. Additionally, we made an equity method investment of $20.0 million during the third quarter of 2021. Lastly, we used cash of $38.4 million for purchases of property, equipment and software, which primarily included internally-developed software, purchased software, and furniture and fixtures. Cash Flows from Financing Activities For the nine months ended September 30, 2022, net cash provided by financing activities of $5.4 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $4.9 billion. Additionally, our debt repayments related to our lending activities of $7.3 billion, of which $7.0 billion were related to our warehouse facilities, were largely offset by proceeds from debt financing activities of $7.9 billion. Our payments of debt issuance costs were in the normal course of business and reflective of our recurring debt warehouse facility activity, which involves securing new warehouse facilities and extending existing warehouse facilities. Finally, we paid redeemable preferred stock dividends of $20.0 million and taxes related to RSU vesting of $7.5 million. For the nine months ended September 30, 2021, net cash used in financing activities was $434.7 million. We received proceeds from the Business Combination and PIPE Investment of $2.0 billion, and paid costs directly related to the Business Combination and PIPE Investment of $27.0 million. We received $6.3 billion of proceeds from debt financing activities related to our lending activities. These debt proceeds were more than offset by $8.4 billion of debt repayments, of which $7.6 billion were related to our warehouse facilities. Our payments of debt issuance costs were in the normal course of business and reflective of our recurring debt warehouse facility activity, which involves securing new warehouse facilities and extending existing warehouse facilities. We also paid taxes related to RSU vesting of $37.2 million, as well as redeemable preferred stock dividends of $20.0 million. Finally, we paid $282.9 million to repurchase redeemable common and preferred stock, of which $150.0 million related to redeemable common stock repurchased in conjunction with the Business Combination, and $0.5 million to repurchase common stock during the period. Other Arrangements We enter into arrangements in which we originate loans, establish an SPE and transfer loans to the SPE, which has historically served as an important source of liquidity. We also retain the servicing rights of the underlying loans and hold additional interests in the SPE. When an SPE is determined not to be a VIE or when an SPE is determined to be a VIE but we are not the primary beneficiary, the SPE is not consolidated. In addition, a significant change to the pertinent rights of other parties or our pertinent rights, or a significant change to the ranges of possible financial performance outcomes used in our assessment of the variability of cash flows due to us, could impact the determination of whether or not a VIE is consolidated. VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability. Historically, we have established personal loan trusts and student loan trusts that were created and designed to transfer credit and interest rate risk associated with the underlying loans through the issuance of collateralized notes and residual certificates. We hold a variable interest in the trusts through our ownership of collateralized notes in the form of asset-backed 104 SoFi Technologies, Inc. TABLE OF CONTENTS bonds and residual certificates in the trusts. The residual certificates absorb variability and represent the equity ownership interest in the equity portion of the personal loan trusts and student loan trusts. We are also the servicer for all trusts in which we hold a financial interest. Although we have the power as servicer to perform the activities that most impact the economic performance of the VIE, we do not hold a significant financial interest in the trusts and, therefore, we are not the primary beneficiary. Further, we do not provide financial support beyond our initial equity investment, and our maximum exposure to loss as a result of our involvement with nonconsolidated VIEs is limited to our investment. For a more detailed discussion of nonconsolidated VIEs, including activity in relation to the establishment of trusts, the aggregate outstanding values of variable interests and the deconsolidation of VIEs, see Note 5 to the Notes to Unaudited Condensed Consolidated Financial Statements. Financial Condition Summary September 30, 2022 compared to December 31, 2021 Changes in the composition and balance of our assets and liabilities as of September 30, 2022 compared to December 31, 2021 were principally attributed to the following: • an increase of $493.0 million in cash and cash equivalents and restricted cash and restricted cash equivalents. See “ Cash Flow and Liquidity Analysis ” for further discussion of our cash flow activity; • an increase in total loans of $5.1 billion, which was primarily related to personal loans; • an increase in goodwill of $724.4 million related to our two acquisitions during the first quarter of 2022. See Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for additional information; • an increase in intangible assets of $172.2 million, of which $240.0 million was related to our two acquisitions during the first quarter of 2022, with a partially offsetting decrease attributable to amortization expense; • a decrease in securitization investments of $113.0 million, of which $99.8 million was related to cash receipts. There were no securitization investments made during 2022; • an increase in deposits of $5.0 billion, which was attributable to our launch of SoFi Bank during the first quarter of 2022; • an increase of $821.1 million in gross warehouse facility debt to support our originations during the current period, which reflected the net impact of $7.0 billion of cash repayments and $7.9 billion of cash borrowings; • a decrease of $209.1 million in liabilities related to gross securitization debt, which was settled with proceeds from related collateral repayments; and • an increase in deferred tax liabilities of $51.1 million, which was primarily attributable to the separately identifiable intangible assets acquired in the Technisys Merger. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In preparing our consolidated financial statements, we make judgments, estimates and assumptions that affect reported amounts of assets and liabilities, as well as revenues and expenses. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. The results involve judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly evaluate our estimates, assumptions and judgments, particularly those that include the most difficult, subjective or complex judgments and are often about matters that are inherently uncertain. We evaluate our critical accounting policies and estimates on an ongoing basis and update them as necessary based on changes in market conditions or factors specific to us. There have been no material changes in our significant accounting policies or critical accounting estimates during 2022. For a complete discussion of our significant accounting policies and critical accounting estimates, refer to our Annual Report on Form 10-K for the year ended December 31, 2021 within Note 1 to the Notes to Consolidated Financial Statements for a summary of our significant accounting policies and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates ”. Recent Accounting Standards Issued, But Not Yet Adopted See Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements herein and Note 1 to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. 105 SoFi Technologies, Inc. TABLE OF CONTENTS Item 3. Quantitative and Qualitative Disclosures about Market Risk In the normal course of business, we are subject to a variety of market-related risks that can affect our operations and profitability. We broadly define these areas of risk as interest rate risk, credit risk, market risk, and counterparty risk. Historically, substantially all of our revenue and operating expenses were denominated in United States dollars. We may in the future be subject to increasing foreign currency exchange rate risk with our recent acquisition of a foreign company. Foreign currency exchange rate risk is the risk that our financial position or results of operations could be positively or negatively impacted by fluctuations in exchange rates. Exchange rate risk was not a material risk for the Company during the periods presented. For additional information on our market risks, see Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2021. Interest Rate Risk We are subject to interest rate risk associated with our loans, securitization investments (including residual investments and asset-backed bonds), servicing rights, variable-rate debt, deposit accounts and investments in AFS debt securities. Our loans with variable interest rates are exposed to interest rate volatility, which impacts the amount of recognized interest income. Our securitization residual investments are carried at fair value, which is subject to changes in market value by virtue of the impact of interest rates on the market yield of the residual investments. The value and earnings of our asset-backed bonds, which are associated with our personal loans and student loans, have a converse relationship to the movement of interest rates. That is, as interest rates rise, bond values and earnings fall and vice versa. Additionally, we are subject to interest rate risk on our variable-rate warehouse facilities and our revolving credit facility. Market interest rates may also drive the interest we offer to members on their deposits. Future funding activities may increase our exposure to interest rate risk, as the interest rates payable on such funding may be tied to SOFR or another representative alternative reference rate. Interest rate risk also occurs in periods where changes in short-term interest rates result in loans being originated with terms that provide a smaller interest rate spread above the financing terms of our warehouse facilities or above the interest rate we offer on deposits, which can negatively impact our realized net interest income. Credit Risk We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required loan payments, inclusive of our credit card product, or declines in home loan collateral values. Generally, all loans sold into the secondary market are sold without recourse. For such loans, our credit risk is limited to repurchase obligations due to fraud or origination defects. For loans that were repurchased or not sold in the secondary market, we are subject to credit risk to the extent a borrower defaults and we are not able to fully recover the principal balance. We believe that this risk is mitigated through the implementation of stringent underwriting standards, strong fraud detection tools and technology designed to comply with applicable laws and our standards. In addition, we believe that this risk is mitigated through the quality of our loan portfolio. Market Risk We are exposed to the risk of loss to future earnings, values or future cash flows that may result from changes in market discount rates or overall market conditions. We are exposed to such market risk directly through our investments in AFS debt securities, loans, servicing rights and securitization investments held on our unaudited condensed consolidated balance sheets, all of which are measured at fair value on a recurring basis. Investments in AFS debt securities are valued utilizing quoted prices in actively traded markets or rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. The other assets mentioned are measured at fair value using a discounted cash flow methodology in which the discount rate represents an estimate of the required rate of return by market participants. The discount rates for our loans and securitization investments may change due to expected loan performance or changes in the expected returns of similar financial instruments available in the market. For our servicing rights, the discount rate is commensurate with the risk of the servicing asset cash flow, which varies based on the characteristics of the serviced loan portfolio. We are also exposed to market risk through our investments in equity securities, which are either measured at fair value using the net asset value practical expedient or which may have positive or negative adjustments that impact our results of operations resulting from observable price changes based on current market conditions. Counterparty Risk We are subject to risk that arises from our debt warehouse facilities, interest rate risk hedging activities, third-party custodians, and capped call options on our common stock. These activities generally involve an exchange of obligations with unaffiliated lenders or other individuals or entities, referred to in such transactions as “counterparties”. If a counterparty was to default, we could potentially be exposed to reputational damage and financial loss if such counterparty was unable to meet its 106 SoFi Technologies, Inc. TABLE OF CONTENTS obligations to us. We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among multiple such counterparties, placing contractual limits on the amount of dependence on any single counterparty, and entering into netting agreements with the counterparties, as appropriate. In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association trading agreements with all material trading partners. Each such agreement provides for an exchange of margin money should either party’s exposure exceed a predetermined contractual limit. Such margin requirements limit our overall counterparty exposure. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent our maximum counterparty credit risk. We incurred no losses due to nonperformance by any of our counterparties during the nine months ended September 30, 2022. As of September 30, 2022, gross derivative asset and liability positions subject to master netting arrangements were $6.0 million and $21.7 million, respectively. In the case of our loan warehouse facilities, we are subject to risk if the counterparty chooses not to renew a borrowing agreement and we are unable to obtain financing to originate loans. With our loan warehouse facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our funding needs. As of September 30, 2022, we had total borrowing capacity under loan warehouse facilities of $7.1 billion, of which $2.5 billion was utilized. Refer to Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements for a listing of our loan warehouse facilities. In the case of our call options on our common stock (referred to herein as the “capped call transactions”), if the Capped Call Counterparties, which are financial institutions and initial purchasers of our convertible notes, are unable to meet their obligations under the contract, we may not be able to mitigate the dilutive effect on our common stock upon conversions of our convertible notes or offset any potential cash payments we may be required to make in excess of the principal amount of converted convertible notes. We are also subject to counterparty risk associated with our use of third-party custodians to safeguard digital assets on behalf of our members. Refer to Note 1 to the Notes to Unaudited Condensed Consolidated Financial Statements under the section entitled “Safeguarding Asset and Liability” and to Part II, Item 1A. Risk Factors under “ Regulatory, Tax and Other Legal Risks ” for additional information on our counterparty risk as it relates to our digital assets product offering. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q and designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 107 SoFi Technologies, Inc. TABLE OF CONTENTS PART II – OTHER INFORMATION Item 1. Legal Proceedings The information required by Item 103 of Regulation S-K is included in Note 15 to the Notes to Unaudited Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. Item 1A. Risk Factors In evaluating our company and our business, y ou should carefully consider the risks and uncertainties described below, together with the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations or future prospects, in which case the market price of our common stock could decline, and you could lose part or all of your investment. Unless otherwise indicated, references in this section and elsewhere in this Quarterly Report on Form 10-Q to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue or our future prospects. The material and other risks and uncertainties summarized in this Quarterly Report on Form 10-Q and described below are not intended to be exhaustive and are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See the section titled “Cautionary Statement Regarding Forward-Looking Statements”. Summary Risk Factors Our business is subject to numerous risks and uncertainties, which illuminate challenges that we face in connection with the successful implementation of our strategy and the growth of our business. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. These risks are discussed more fully below and include, but are not limited to, risks related to: Business, Financial and Operational Risks • our ability to successfully identify and address the risks and uncertainties we face; • demands on our resources, intense and increasing competition, and success of our business model (including future profitability); • legislative and regulatory policies and related actions that apply or may apply to us, particularly in connection with student loans or as a result of our operating a bank and as a bank holding company; • loss of one or more significant purchasers of our loans; • impact of macroeconomic factors, including regulatory responses, increasing inflation, supply shortages, economic uncertainty and impacts from the COVID-19 pandemic; Risks Related to Market and Interest Rates • cost and availability of funding in the capital markets and fluctuations in interest rates; • higher than expected payment speeds of loans or longer holding periods of loans could negatively impact our returns as the holder of the residual interests in securitization trusts; • transition away from the London Inter-Bank Offered Rate (“LIBOR”) as a benchmark reference and financial risks that cannot be eliminated by our hedging activities, which carry their own risks; Risks Related to Strategic and New Products • potential and recent acquisitions that require significant attention, disrupt our business and adversely affect our financials; • failure to innovate or respond to evolving technological or other changes; • an increase in fraudulent activity; • failure of third party service providers or systems on which we rely; • increased business, economic and regulatory risks from continued expansion abroad; 108 SoFi Technologies, Inc. TABLE OF CONTENTS Credit Market Related Risks • worsening economic conditions, including general economic uncertainty, increasing inflation and interest rates, market volatility, the cyclical nature of our industry and ability to maintain expected levels of liquidity; • inability to make accurate credit and pricing decisions or effectively forecast our loss rates; • the discharge of student loans in certain circumstances; • failure of third-party service provider to perform various functions related to the origination and servicing of loans; • failure of third-party home loan fulfillment partner to provide fulfillment services for home loans we originate; Risks Related to Funding and Liquidity • ability to retain, increase or secure new or alternative financing, including through deposits; • termination of one or more of our warehouse facilities on which we are highly dependent; • increases in member loan default rates or possibility of being required to repurchase loans or indemnify the purchaser of our loans; • ability to finance the receivables that we originate or other assets that we hold; Regulatory, Tax and Other Legal Risks • exposure to evolving laws, rules, regulations and government enforcement policies, including further extensions of the student loan payment moratorium, federal or state loan forgiveness programs, such as the federal student loan forgiveness measures recently announced by President Biden, and potential enforcement actions, litigation, investigations, exams or inquiries or impairment of licenses; • ability to effectively mitigate risk exposure; • changes in business, economic or political conditions; • failure to comply with laws and regulations, including anti-corruption or privacy laws; • application of regulations and supervision under banking laws; • ability to efficiently protect our intellectual property rights; • failure to comply with open source licenses for open source software included in our or any of our subsidiaries’ platforms; • the risk that we are, or any of our subsidiaries is, determined to have been subject to registration as an investment company under the Investment Company Act; Personnel and Business Continuity Risks • loss of key management members or key employees, or an inability to hire key personnel; • increased business continuity and cyber risks due to our primarily remote workforce; • natural disasters, power outages, telecommunications failures, man-made problems and similar; • employee misconduct; Risk Management and Financial Reporting Risks • ability to establish and maintain proper and effective internal control over financial reporting and risk management processes and procedures; • adjustments to total number of members in the event a member is removed in accordance with our terms of service may not be reflected in the current period; • changes in accounting principles generally accepted in the United States; • as a result of our business combination with a special purpose acquisition company, regulatory obligations may impact us differently than other publicly traded companies; • incorrect estimates or assumptions by management in connection with the preparation of our financial statements; Information Technology and Data Risks • breach or violation of law by a third party on which we depend; • cyberattacks and other security breaches or disruptions of our systems or third-party systems on which we rely, including disruptions that may impact our ability to collect loan payments and maintain accurate accounts; • liabilities