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Item 7. Management’s Discussion and Analysis

2024-02-27 compared with 2023-03-01 · 583 added, 435 removed, 861 unchanged (54% of the section changed)

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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.

In order to help achieve our mission, we offer personal loans, student loans and home loans and related servicing.

We also offer a variety of financial services products, such as SoFi Checking and Savings, SoFi Credit Card, SoFi Invest and SoFi Relay, that provide more daily interactions with our members, and we offer products and capabilities, such as SoFi At Work, that are designed to appeal to enterprises.

In order to help achieve our mission, we offer personal loans, student loans, home loans and related servicing, as well as senior secured loans.

We also offer a variety of financial services products, such as SoFi Money checking and savings, SoFi Credit Card, SoFi Invest, and SoFi Relay, that provide more daily interactions with our members, and we offer products and capabilities, such as SoFi At Work, that are designed to appeal to enterprises.

We continued to expand our platform capabilities for enterprises through:

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Business Highlights

We achieved record results for our company for the year ended December 31, 2022, including record total net revenue of $1.6 billion, representing an increase of 60% over total net revenue in 2021.

We achieved strong results for our company for the year ended December 31, 2023, including record total net revenue of $2.1 billion, representing an increase of 35% over total net revenue in 2022.

Record revenue at the company level was driven by record net revenue across all three of our business segments.

We realized strong momentum in member and product growth and cross-buy adds, reflecting the benefits of our broad product suite and Financial Services Productivity Loop strategy.

We added approximately 2.3 million new members during 2023, with over 7.5 million total members as of December 31, 2023, a 44% year over year increase.

We also added approximately 2.7 million new products, with nearly 7.9 million total products as of December 31, 2022, a 53% year-over-year increase.

We also added approximately 3.2 million new products, with over 11.1 million total products as of December 31, 2023, a 41% year over year increase.

Lending segment contribution profit of $823.3 million for the year ended December 31, 2023, at a margin of 60%, increased 24% over 2022, which had a contribution margin of 58%.

Additionally, average net interest margin of 5.40% in 2022 was higher compared to 3.95% in 2021.

Growth in net interest income was driven by an increase in both average interest-earning assets and average yields, slightly offset by an increase in the cost of interest-bearing liabilities.

Origination volume increased 3% year over year, primarily driven by demand for personal loans and despite continued headwinds in the student and home loan businesses.

Technology Platform segment contribution profit of $76.5 million for the year ended December 31, 2022 increased 19% over 2021, primarily driven by a 31% increase in total accounts at Galileo as well as contribution from the addition of Technisys, as discussed below.

Within Financial Services, larger contribution loss of $(199.4) million in 2022 compared to $(134.9) million in 2021 was primarily driven by continued growth in credit loss reserves related to SoFi Credit Card.

Financial Services segment total net revenue of $167.7 million for the year ended December 31, 2022 increased 189% over 2021, primarily driven by 60% year-

Total net revenue of $1.4 billion for the year ended December 31, 2023 increased 20% over 2022.

Additionally, average net interest margin of 5.88% in 2023 increased 48 basis points compared to 5.40% in 2022.

Growth in net interest income was driven by an increase in both average interest-earning assets and average yields, partially offset by an increase in the cost of interest-bearing liabilities.

Origination volume increased 34% year over year, primarily driven by demand for personal loans and despite continued macroeconomic headwinds in the student and home loan businesses.

Student loans saw some increasing demand in the third quarter of 2023 ahead of the resumption of principal and interest payments on federally-held student loans, and we expect that we may continue to see modest growth in student loan refinancing.

Our acquisition of Wyndham in the second quarter of 2023 provided increased capacity and capabilities for our home loans product, which contributed to a notable year over year increase in home loans, and which we expect to continue to provide benefits, while we expect overall home loans growth could be correlated with rate movements in 2024.

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over-year product growth.

We achieved strong growth in deposits, ending the year with $7.3 billion of deposits, allowing us to further diversify our sources of funding.

We closed our acquisitions of Golden Pacific (through which we obtained a national bank charter) and Technisys during 2022.

Our bank charter is enabling new flexibility that we expect to be even more valuable in light of the ongoing challenging macroeconomic environment.

Deposits had strong contribution from direct deposit members and a high quality median FICO score.

Our deposit funding also increases our flexibility to capture additional net interest margin and optimize returns.

Our Tier 1 capital ratio, as calculated under the Basel III Standardized Approach, was 20.3% as of December 31, 2022.

See Note 21 to the Notes to Consolidated Financial Statements for additional information.

Our acquisition of Technisys allows us to vertically integrate with Galileo and to expand our technology platform services to a broader international market.

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Technology Platform segment contribution profit of $94.8 million for the year ended December 31, 2023 increased 24% over 2022, and total net revenue of $352.3 million for the year ended December 31, 2023 increased 12% over 2022.

Growth was driven by continued strong organic growth of existing partners and new product adoption, as well as notable contributions from increasingly diversified clients which have launched within the second half of 2023.

Margin improvements were driven primarily by Galileo account growth and decreases in directly attributable expenses, as we begin to realize the benefits of earlier investments made to support Technology Platform product development and the integration of Galileo and Technisys.

The year over year comparison was also impacted by a partial period of contribution from Technisys in 2022 compared to a full period of contribution in 2023.

We continue to make significant strides in our strategy of leveraging our unique product suite to pursue diversified growth and expansion via new products and geographies, in addition to larger, more durable revenue opportunities.

We expect growth in segment revenue to continue to accelerate in 2024, as we are well positioned to capture opportunities from traditional financial institutions and nonfinancial categories.

Within Financial Services, contribution loss of $0.3 million for the year ended December 31, 2023 significantly improved compared to a contribution loss of $199.4 million in 2022, and reflected positive contribution profit during the third and fourth quarters of 2023.

Total net revenue of $436.5 million for the year ended December 31, 2023 increased 160% over 2022.

We achieved continued strong growth in deposits, ending the year with $18.6 billion of deposits as of December 31, 2023, allowing us to maintain diversified sources of funding and driving an increase in net interest income earned on our deposits.

In addition, we grew total Financial Services products by 45% year over year.

We continue to realize scale in our marketing spend and improvement in operating leverage in the segment.

We expect to continue to scale our products through increased brand awareness and network effects, and continue to improve contribution profit in the segment.

The strength of our results underscores our belief that our suite of differentiated products and services provides the foundation for a diversified business that can endure through market cycles as well as exogenous factors.

For instance, our access to multiple channels of funding, including deposit and loan warehouse funding, provides an advantage via increased optionality in sourcing liquidity through different environments and periods of capital markets volatility, as well as increases our flexibility to capture additional net interest margin and optimize returns, which typically provides more stable earnings in any macroeconomic environment but is particularly important during times of excess macroeconomic volatility.

During 2023, we continued to have strong deposit contribution from direct deposit members with a high quality median FICO score.

We expect that our funding mix will continue to move towards deposit funding, which has a lower borrowing cost of funds than our warehouse and securitization financing model.

We also provided our members with access to expanded FDIC insurance coverage through a network of participating banks in our Insured Deposit Program, further enhancing our benefits offering to our members.

Our total capital ratio, as calculated under applicable regulatory capital rules, was 15.3% as of December 31, 2023.

Regulatory Capital to the Notes to Consolidated Financial Statements for additional information.

Lending Segment

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 a funds transfer pricing (“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.

See Note 20 to the Notes to Consolidated Financial Statements for additional information on the FTP framework.

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.

Business Segment and Geographic Information to the Notes to Consolidated Financial Statements for additional information on the FTP framework.

Technology Platform Segment

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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.

We also earn subscription and service fees for providing software licenses and associated services, including implementation and maintenance.

Many of these contracts contain minimum monthly payments, which may result in credits if we do not meet the agreed upon monthly service levels.

We also earn subscription and service fees for providing software licenses and associated services, including implementation, maintenance and subsequent development work.

We charge a recurring subscription fee for the software license and related maintenance services.

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Certain arrangements for software and related services contain a provision for a fixed upfront payment.

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Financial Services Segment

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• Net interest income:

Net interest income is a key component of the profitability of our Financial Services segment as it relates to our SoFi Checking and Savings and SoFi Credit Card products.

Net interest income on SoFi Checking and Savings is based on interest income determined using our FTP framework, which was implemented in the first quarter of 2022, net of interest expense based on the interest rate offered to our members on their deposits.

Net interest income on SoFi Credit Card is based on the contractual interest included in credit card agreements, net of interest expense as determined using the FTP framework.

See Note 20 to the Notes to Consolidated Financial Statements for additional information on the FTP framework.

Net interest income is a key component of the profitability of our Financial Services segment as it relates primarily to our SoFi Money and credit card products.

Net interest income on SoFi Money is based on interest income determined using our FTP framework, net of interest expense based on the interest rate offered to our members on their deposits.

Net interest income on credit card is based on the contractual interest included in credit card agreements, net of interest expense as determined using the FTP framework.

Business Segment and Geographic Information to the Notes to Consolidated Financial Statements for additional information on the FTP framework.

• Referral fees:

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Referral fees are 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, 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.

We also earn referral fulfillment fees for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator.

Our referral fee is calculated as either a fixed price per successful referral or a percentage of the transaction volume between the enterprise partners and referred consumers.

• Brokerage fees:

We earn brokerage fees primarily from our share lending and payment for order flow arrangements related to our SoFi Invest product, 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.

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• Interchange fees:

We earn 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.

We earn interchange fees from our SoFi-branded debit cards and credit cards.

These fees are remitted by merchants and represent a percentage of the underlying transaction value processed through a payment 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.

We engage a card association and enter into contracts that establish the shared economics of SoFi-branded transaction cards.

• Brokerage fees:

We earn brokerage fees primarily from our share lending and payment for order flow arrangements related to our SoFi Invest product, in which 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.

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 .

Accordingly, we believe that these non-GAAP measures 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.

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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.

Total Net Revenue and Adjusted Net Revenue

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We reconcile adjusted net revenue to total net revenue, the most directly comparable GAAP measure, for the annual periods presented below:

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Total Net Revenue and Adjusted Net Revenue

The following table reconciles adjusted net revenue to total net revenue, the most directly comparable GAAP measure:

Year Ended December 31,

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425 6,608 22,802

Gain on extinguishment of debt (3)

Adjusted net revenue $ 2,073,940 $ 1,540,492 $ 1,010,325

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(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.

When third parties finance our consolidated securitization 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, for the quarterly periods presented below:

(3) Reflects gain on extinguishment of debt.

Gains and losses are recognized during the period of extinguishment for the difference between the net carrying amount of debt extinguished and the fair value of equity securities issued.

These non-cash charges are not indicative of our core operating performance, and as such 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.

The following table reconciles adjusted net revenue to total net revenue, the most directly comparable GAAP measure, for the quarterly periods presented:

Quarter Ended

($ in thousands) December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31,

2021 September 30,

2021 June 30,

2021 March 31,

($ in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022

Total net revenue $ 615,404 $ 537,209 $ 498,018 $ 472,158 $ 456,679 $ 423,985 $ 362,527 $ 330,344

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10 928 (602) 89 (470) 1,453 2,662 2,963

Gain on extinguishment of debt (3)

(14,574) — — — — — — —

Adjusted net revenue

$ 594,245 $ 530,717 $ 488,815 $ 460,163 $ 443,418 $ 419,256 $ 356,091 $ 321,727

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__________________

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(2) See footnote (2) to the table above.

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:

(3) See footnote (3) to the table above.

The following table reconciles adjusted net revenue for the Lending segment to total net revenue, the most directly comparable GAAP measure for the Lending segment:

Year Ended December 31,

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Adjusted EBITDA is defined as net income (loss), adjusted to exclude, as applicable:

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(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 effects of certain non-cash items and certain charges that are not indicative of our core operating performance or results of operations.

(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 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) restructuring charges (vi) impairment expense (inclusive of goodwill impairment and property, equipment and software abandonments), (vii) transaction-related expenses, (viii) foreign currency impacts related to operations in highly inflationary countries, (ix) fair value changes in warrant liabilities, (x) fair value changes in each of servicing rights and residual interests classified as debt due to valuation assumptions, (xi) gain on extinguishment of debt, and (xii) other charges, as appropriate, that are not expected to recur and are not indicative of our core operating performance.

We believe adjusted EBITDA provides a useful measure to investors for period-over-period comparisons of our business, as it removes the effects 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.

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Net Loss and Adjusted EBITDA

We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the annual periods presented below:

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The following table reconciles adjusted EBITDA to net loss, the most directly comparable GAAP measure:

Year Ended December 31,

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36,833 18,438 10,345

Income tax expense (benefit) (2)

Income tax (benefit) expense (2)

(416) 1,686 2,760

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Share-based expense 271,216 305,994 239,371

Restructuring charges (4)

Impairment expense (5)

Foreign currency impact of highly inflationary subsidiaries (6)

Transaction-related expense (7)

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Fair value changes in warrant liabilities (8)

— 107,328 20,525

Servicing rights – change in valuation inputs or assumptions (9)

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425 6,608 22,802

Gain on extinguishment of debt (11)

Total adjustments 732,479 463,753 514,158

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(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 2022 and 2021, the amortization of debt discount and debt issuance costs on our convertible notes, and (iii) for 2021 and 2020, interest on the seller note issued in connection with our acquisition of Galileo.

Revolving credit facility interest expense in 2022 increased due to higher interest rates relative to the prior years on identical outstanding debt.

(2) Our income tax expense position in 2022 was primarily attributable to tax expense at SoFi Lending Corp and SoFi Bank due to profitability in state jurisdictions where separate filings are required and recognition of expense from Technisys in certain Latin American countries where separate returns are filed.

Corporate borrowing-based interest expense includes interest on our revolving credit facility and the amortization of debt discount and debt issuance costs on our convertible notes, and for 2021, interest on the seller note issued in connection with our acquisition of Galileo.

Revolving credit facility interest expense in 2023 and 2022 increased due to higher interest rates relative to the prior years on identical outstanding debt.

(2) Income taxes in 2023 were primarily attributable to income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to Technisys, offset by income tax expense associated with the profitability of SoFi Bank in state jurisdictions where separate filings are required, as well as federal taxes where our tax credits and loss carryforwards may be limited.

Income taxes in 2022 were primarily attributable to tax expense at SoFi Lending Corp and SoFi Bank due to profitability in state jurisdictions where separate filings are required and recognition of expense from Technisys in certain Latin American countries where separate returns are filed.

The expense was partially offset by deferred tax benefits from the amortization of intangible assets acquired in the Technisys Merger.

Our income tax expense position in 2021 was primarily attributable to SoFi Lending Corp.’s profitability in state jurisdictions where separate filings are required.

Our income tax benefit position in 2020 was primarily due to a partial release of our valuation allowance in the second quarter in connection with deferred tax

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liabilities resulting from intangible assets acquired from Galileo in May 2020.

See Note 17 to the Notes to Consolidated Financial Statements for additional information.

(3) Depreciation and amortization expense in 2022 increased compared to 2021 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 2021 period.

The increase in 2021 compared to 2020 was primarily in connection with our 2020 acquisitions, amortization of purchased and internally-developed software, and depreciation related to SoFi Stadium fixed assets, partially offset by a decrease related to the acceleration of core banking infrastructure amortization.

(4) Transaction-related expenses in 2022 primarily included financial advisory and professional services costs associated with our acquisition of Technisys and an exploratory process.

Income taxes in 2021 were primarily attributable to the profitability of SoFi Lending Corp.

profitability in state jurisdictions where separate filings are required.

Income Taxes to the Notes to Consolidated Financial Statements for additional information.

(3) Depreciation and amortization expense in 2023 increased compared to 2022 primarily in connection with acquisitions and growth in our internally-developed software balance.

The increase in 2022 compared to 2021 was primarily in connection with acquisitions and growth in our software balance, partially offset by the acceleration of core banking infrastructure amortization during the 2021 period.

(4) Restructuring charges in 2023 primarily included employee-related wages, benefits and severance associated with a small reduction in headcount in our Technology Platform segment in the first quarter of 2023 and expenses in the fourth quarter of 2023 related to a reduction in headcount across the Company, which do not reflect expected future operating expenses and are not indicative of our core operating performance.

(5) Impairment expense in 2023 includes $247,174 related to goodwill impairment, and $1,243 related to a sublease arrangement, which are not indicative of our core operating performance.

(6) Foreign currency charges reflect the impacts of highly inflationary accounting for our operations in Argentina, which are related to our Technology Platform segment and commenced in the first quarter of 2022 with the Technisys Merger.

For the year ended December 31, 2023, all amounts were reflected in the fourth quarter, as inter-quarter amounts were determined to be immaterial.

Amounts in 2022 were determined to be immaterial.

(7) Transaction-related expenses in 2023 and 2022 primarily included financial advisory and professional services costs associated with our acquisitions of Wyndham and Technisys, respectively.

Transaction-related expenses in 2021 included the special payment to the holders of Series 1 Redeemable Preferred Stock in conjunction with the Business Combination and financial advisory and professional costs associated with our then-pending acquisitions of Golden Pacific and Technisys.

During 2020, transaction-related expenses included financial advisory and professional services costs associated with our acquisitions of Galileo and 8 Limited.

(8) 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.

The amount in 2020, as well as a portion of 2021, related to changes in the fair value of Series H warrants issued by Social Finance in connection with certain redeemable preferred stock issuances.

The amount in 2021 related to changes in the fair value of Series H warrants issued by Social Finance 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.

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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.

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(10) Reflects changes in fair value inputs and assumptions, including conditional prepayment, default rates and discount rates.

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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.

We reconcile adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the quarterly periods presented below:

(11) Reflects gain on extinguishment of debt.

Gains and losses are recognized during the period of extinguishment for the difference between the net carrying amount of debt extinguished and the fair value of equity securities issued.

The following table reconciles adjusted EBITDA to net loss, the most directly comparable GAAP measure, for the quarterly periods presented:

Quarter Ended

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Interest expense – corporate borrowings 9,882 9,784 9,167 8,000 7,069 5,270 3,450 2,649

Income tax expense (benefit) 1,057 (242) 119 752 1,558 181 (78) 1,099

Income tax (benefit) expense

3,245 (244) (1,780) (1,637) 1,057 (242) 119 752

Depreciation and amortization 53,449 52,516 50,130 45,321 42,353 40,253 38,056 30,698

Share-based expense 69,107 62,005 75,878 64,226 70,976 77,855 80,142 77,021

Restructuring charges 7,796 — — 4,953 — — — —

Impairment expense — 247,174 — 1,243 — — — —

Foreign currency impact of highly inflationary subsidiaries

10,971 — — — — — — —

Transaction-related expense — (34) 176 — 1,872 100 808 16,538

Fair value changes in warrant liabilities — — — — 10,824 (64,405) 70,989 89,920

Servicing rights – change in valuation inputs or assumptions (6,595) (7,420) (8,601) (12,084) (12,791) (6,182) (9,098) (11,580)

Residual interests classified as debt – change in valuation inputs or assumptions 10 928 (602) 89 (470) 1,453 2,662 2,963

Gain on extinguishment of debt

(14,574) — — — — — — —

Total adjustments 133,291 364,709 124,368 110,111 110,066 118,507 116,139 119,041

Adjusted EBITDA $ 181,204 $ 98,025 $ 76,819 $ 75,689 $ 70,060 $ 44,298 $ 20,304 $ 8,684

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Key Business Metrics

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We define a member 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.

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.

Our members have continuous access to our 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

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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.

Once someone becomes a member, they are always considered a member unless they violate our terms of service.

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Since our inception through December 31, 2023, we have served approximately 7.5 million members who have used approximately 11.1 million products on the SoFi platform.

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Total Products

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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.

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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 (inclusive of checking and savings accounts held at SoFi Bank and cash management accounts), 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.

Checking and savings accounts are considered one account within our total products metric.

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.

Our members can select any one or combination of the types of SoFi Invest products.

Organization, Summary of Significant Accounting Policies and New Accounting Standards for additional information on the transfer of the crypto services.

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.

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In the event a member is removed in accordance with our terms of service, as discussed under “Members” above, the member’s associated products are also removed.

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Total lending products were composed of the following:

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Invest 2,380,641 2,158,864 1,595,143 221,777 10 % 563,721 35 %

Credit Card 171,425 91,216 6,445 80,209 88 % 84,771 n/m

Credit Card 245,385 171,425 91,216 73,960 43 % 80,209 88 %

Referred loans (2)

40,980 7,659 — 33,321 435 % 7,659 n/m

55,231 40,980 7,659 14,251 35 % 33,321 435 %

Relay 3,336,868 1,921,986 930,181 1,414,882 74 % 991,805 107 %

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9,479,470 6,554,039 4,094,245 2,925,431 45 % 2,459,794 60 %

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__________________

(1) Includes SoFi Checking and Savings accounts held at SoFi Bank in 2022, and cash management accounts.

(1) Includes checking and savings accounts held at SoFi Bank, and cash management accounts.

(2) Limited to loans wherein we provide third party fulfillment services.

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In our Technology Platform segment, total accounts refers to the number of open accounts at Galileo as of the reporting date.

We include intercompany 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 20 to the Notes to Consolidated Financial Statements, which includes intercompany revenue.

We include intercompany 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 20.

Business Segment and Geographic Information to the Notes to Consolidated Financial Statements, which includes intercompany revenue.

Intercompany revenue is eliminated in consolidation.

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We do not measure total accounts for the Technisys products and solutions, as the revenue model is not primarily dependent upon being a fully integrated, stand-ready service.

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% Change 2021 vs.

Technology Platform Accounts (1)(2)

___________________

(1) We include SoFi accounts on the Galileo platform as a service in Technology Platform total accounts to better align with the presentation of Technology Platform segment total net revenue.

(2) In 2023, Technology Platform total accounts reflects the previously disclosed migration by one of our clients of the majority of its processing volumes to a pure processor.

These accounts remained open for administrative purposes through the end of 2022, and were included in our total accounts in such period.

2022 2022 vs.

2023 2022 2021 % Change % Change

Total accounts 145,425,391 130,704,351 99,660,657 11 % 31 %

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.

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 clients, competition and industry trends, general economic conditions and our ability to optimize our national bank charter.

Origination Volum e

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See “ Industry Trends and General Economic Conditions ” for the impact of specific economic factors on origination volume.

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Member Growth and Activity

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We are dependent on growth in the number of accounts at Galileo, which is an indication of the amount of users that are dependent upon the technology platform for a variety of products and services, including virtual card products, virtual wallets, peer-to-peer and bank-to-bank transfers, early paychecks and relying on real-time authorizations, all of which generate revenue for Galileo.

Industry Trends and General Economic Conditions

Our results of operations have historically been relatively resilient to economic downturns but in the future may be impacted by the relative strength of the overall economy and its effect on unemployment, asset markets and consumer spending.

As general economic conditions improve or deteriorate, the amount of consumer disposable income tends to fluctuate, which in turn impacts consumer spending levels and the willingness of consumers to take out loans to finance purchases or invest in financial assets.

Specific economic factors, such as interest rate levels, changes in monetary and related policies, unemployment rates, market volatility, consumer confidence and changing expectations for inflation and deflation, also influence consumer spending, saving, investing and borrowing patterns.

The Federal Reserve increased the benchmark interest rate throughout 2022 (and has continued to do so to date in 2023), largely in response to increasing inflation, record low unemployment and strong consumer demand.

In a rising interest

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rate environment, and operating under a bank charter, we have been able to offer more competitive interest rates to our members on their deposits, which we believe has resulted in increased demand for our deposits.

However, rising interest rates have unfavorably impacted and could continue to 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 or macroeconomic conditions do not improve, it could have a negative impact on the overall economy and, resultantly, increase unemployment, which could adversely impact our results of operations.

In 2022, we saw elevated credit spreads across capital markets and changes in consumer credit, which may continue in 2023.

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

As a result of certain national measures taken to counteract the economic impact of the COVID-19 pandemic, such as the CARES Act passed during 2020 and subsequent extensions, principal and interest payments on federally-held student loans were suspended, which in turn lowered the propensity for borrowers to refinance into SoFi student loans relative to pre-COVID levels.

Additionally, in 2022, President Biden announced 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.

Legal challenges to the relief measures are undergoing a review by the U.S.

Supreme Court, with arguments recently heard on February 28, 2023 and a decision expected by mid-2023.

Borrowers will not receive any forgiveness nor can additional borrowers apply for forgiveness until a decision is issued.

In response, President Biden announced an additional extension of the federal student loan payment moratorium until 60 days after the litigation is fully resolved or 60 days after June 30, 2023, whichever happens first.

While the eventual number of applicants under President Biden’s program and the impact of legal challenges to the program remain unknown, we expect to have decreased demand for our student loan refinancing products until the litigation is resolved, which would likely have an adverse impact on our results of operations and overall business.

A key element of our long-term strategy has been to secure a national bank charter.

In February 2022, we closed the Bank Merger and began operating Golden Pacific Bank as SoFi Bank.

See Note 2 to the Notes to Consolidated Financial Statements for additional information on the Bank Merger.

In connection with operating a national bank, we have incurred and expect to continue to incur additional costs primarily associated with headcount, technology infrastructure, governance, compliance and risk management, marketing, and other general and administrative expenses.

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“ Risk Factors ” for discussion of certain potential risks related to being a bank holding company.

Industry Trends and General Economic Conditions

The Federal Reserve increased the benchmark interest rate throughout 2022 and several times in 2023, largely in response to high inflation, low unemployment and strong consumer demand, while balancing macroeconomic risks, such as increased market volatility.

We have continued to see strong demand for our deposits as a result of our competitive interest rate offering and access to expanded FDIC insurance coverage through a network of participating banks in our Insured Deposit Program.

However, rising interest rates have unfavorably impacted, and could continue to unfavorably impact, demand for refinancing loan products.

Economic and market volatility may continue to occur and could worsen, including if there is additional turmoil in the banking and financial services sectors, which could adversely impact our liquidity, results of operations and financial condition.

These market developments have negatively impacted customer confidence in the safety and soundness of certain banks.

As a result, although we have not observed a decline in our overall deposits to date, our members may choose to maintain deposits with other financial institutions or spread their deposit funds among multiple financial institutions.

In addition, if the Federal Reserve does not effectively curb inflation or interest rates further rise unexpectedly or too quickly or macroeconomic conditions deteriorate or do not improve, it could have a negative impact on the overall economy and result in increased unemployment, which could adversely impact our results of operations.

In 2023, we saw a continuation

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from 2022 of elevated credit spreads across capital markets and changes in consumer credit.

Our increased personal loan annualized charge-off rate year over year was reflective of our expectation of credit metrics to revert over time to more normalized levels, but remains healthy, while our higher credit card annualized charge-off rate was reflective of our maturing portfolio.

Negative changes to macroeconomic conditions may result in decreased demand for our products, increased operating costs and negatively impact our results of operations.

Fair Value of Loans

We measure our personal loans, student loans and home loans at fair value.

During the year ended December 31, 2023, we transferred home loans out of Level 3 and into Level 2 due to an update to pricing sources utilized by third-party valuation specialists, as part of the integration of Wyndham.

Other loans do not trade in an active market with readily observable prices and are classified as Level 3.

Our fair value adjustments on loans impact our consolidated results of operations and include adjustments related to loans originated during the period, loans held at the balance sheet date, as well as gains (losses) on loans sold or repurchased during the period.

Fair value adjustments made in each reporting period are impacted by factors such as, among others, interest rates, weighted average coupon, credit spreads, actual and estimated losses, prepayment speeds, duration and previous loan sale execution on similar loans.

In determining our fair value assumptions, we incorporate recent data impacting the capital markets, as well as factors specific to us.

Changes in these factors, either positive or negative, can have a material impact on our results of operations.

The following table summarizes the significant inputs to the fair value model for personal and student loans:

Personal Loans Student Loans

2023 September 30,

2023 December 31,

2023 September 30,

Weighted average coupon rate (1)

13.8 % 13.8 % 5.6 % 5.3 %

Weighted average annual default rate 4.8 4.6 0.6 0.5

Weighted average conditional prepayment rate 23.2 20.3 10.5 10.5

Weighted average discount rate 5.5 6.6 4.3 4.8

___________________

(1) Represents the average coupon rate on loans held on balance sheet, weighted by unpaid principal balance outstanding at the balance sheet date.

As of the fourth quarter of 2023 relative to the third quarter of 2023, we observed the following trends:

• The weighted average coupon rates on personal loans and student loans increased by 4 bps and 24 bps, respectively, which reflects rate increases passed on to borrowers related to benchmark interest rates increases during the fourth quarter.

• The weighted average discount rates on personal loans and student loans decreased by 103 bps and 57, respectively, as of December 31, 2023 compared to September 30, 2023.

For personal loans, our discount rate assumptions decreased in the fourth quarter due to benchmark rates declining by 90 bps, as well as spreads tightening by 13 bps.

For student loans, our discount rate assumptions decreased in the fourth quarter due to benchmark rates declining by 86 bps, as well as spreads widening by 29 bps.

Spread changes are indicated by asset-backed security and secondary bond markets.

• Annualized net charge-off rates on personal loans and student loans in the fourth quarter of 2023 were 3.98% and 0.59%, respectively, which remained lower than the assumed weighted average default rates in our fair value model of 4.76% and 0.61%, respectively.

Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30 days, 60 days and 90 days past due.

For instance, personal loans are marked down on average 70% when the loans are 30 days past due.

The combination of these and other factors resulted in fair value gains recognized on our personal loans and student loans portfolios during the fourth quarter of 2023.

Student Loan Relief

In June 2023, Congress passed the Fiscal Responsibility Act of 2023 which, among other things, ended the suspension of principal and interest payments on federally-held student loans pursuant to the CARES Act passed in 2020, which became effective 60 days after June 30, 2023, as well as prohibits the Secretary of Education from implementing any extension of any

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executive action or rule pursuant thereto.

Additionally, in August 2022, President Biden announced relief measures for federal student loan borrowers, including forgiveness of $10,000 of student loans (or up to $20,000 if student loans are Pell Grants) for anyone earning less than $125,000 annually and certain changes to income-driven repayment plans for student loans (the “Biden Forgiveness Program”).

Although the U.S.

Supreme Court subsequently struck down the Biden Forgiveness Program, President Biden indicated between October 1, 2023 and September 30, 2024, he would allow federal loan borrowers to not be considered delinquent if they miss a payment and that the U.S.

Department of Education will not refer borrowers who fail to pay their student loan bills to credit agencies.

In addition, on July 14, 2023, President Biden announced that $39 billion in federal student loan debt would be eliminated to remedy mistakes of loan servicers, and other student loan holders will have their loans adjusted.

On October 4, 2023, the Biden Administration approved an additional 125,000 borrowers for student loan debt relief, totaling an additional $9 billion in student debt forgiveness.

While we expect we may continue to see an increase in student loan refinancing volume following the end of the federal student loan payment moratorium after August 30, 2023, as borrowers may look to refinance at a lower rate or, given the high interest rate environment, may look to extend the loan term, the timing and impact to our student loan refinancing product will largely depend on expectations regarding the introduction or implementation of additional relief measures, the interest rate environment, how competitive our student loan refinancing products are compared to our competitors and macroeconomic factors.

Key Components of Results of Operations

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Net interest income is impacted by loan origination volume, the level of securitization activity, the amount of time we hold loans on our consolidated balance sheet and the volume of member deposits, as well as prevailing interest rates, which impact the rates we receive on our loans and securitization-related investments in bonds and residual interest positions, and the rates we incur from our funding sources including our warehouse facilities, securitization debt and member deposits at SoFi Bank.

We also incur interest expense related to our revolving credit facility, as well as on our convertible notes issued in October 2021 in the form of amortization of debt issuance costs and original issue discount.

We also incur interest expense related to our revolving credit facility, as well as on our convertible notes in the form of amortization of debt issuance costs and original issue discount.

Noninterest Income

Noninterest income primarily consists of:

(i) fair value changes in loans while we hold them on our consolidated balance sheet, inclusive of our hedging activities, (ii) gains on sales of loans transferred into the securitization or whole loan sale channels, (iii) the income we receive from our loan servicing activities, as well as the assumption of servicing rights from third parties, (iv) fair value changes related to our securitization activities, (v) revenue recognized from contracts with customers, which primarily relates to our technology products and solutions revenues and has grown due to our recent acquisitions and the growth and expansion of our financial services offerings, and (vi) gains and losses on non-securitization investments.

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(i) revenue recognized from contracts with customers, which primarily relates to our technology products and solutions revenues and has grown due to our recent acquisitions and the growth and expansion of our financial services offerings, (ii) fair value changes in loans while we hold them on our consolidated balance sheet and our securitization activities, inclusive of our hedging activities, (iii) gains on sales of loans transferred into the securitization or whole loan sale channels, (iv) loan origination fees, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, (v) the income we receive from our loan servicing activities, as well as the assumption of servicing rights from third parties, (vi) gains and losses on non-securitization investments, and (vii) gains and losses on extinguishment of debt.

Noninterest Expense

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We generally expect these expenses to increase in absolute dollars as our business continues to grow.

Lastly, noninterest expense includes the provision for credit losses , which primarily relates to our credit card product.

Noninterest expense also includes the provision for credit losses , which primarily relates to our credit card product, as well as goodwill impairment, related to the Galileo and Technisys reporting units.

Directly Attributable Expenses

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Directly attributable expenses also include loan origination and servicing expenses, professional services, product fulfillment and lead generation.

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.

Expenses are attributed to the reportable segments using either

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direct costs of the segment or labor costs that can be attributed based upon the allocation of employee time for individual products.

Consolidated Results of Operations

The following table sets forth selected consolidated statements of income data:

Year ended December 31, 2022 vs.

Year Ended December 31,

2022 2022 vs.

($ in thousands)

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Loss before income taxes (301,158) (318,721) (481,177) 17,563 (6) % 162,456 (34) %

Income tax (expense) benefit (1,686) (2,760) 104,468 1,074 (39) % (107,228) n/m

Income tax benefit (expense) 416 (1,686) (2,760) 2,102 n/m 1,074 (39) %

Net loss $ (300,742) $ (320,407) $ (483,937) $ 19,665 (6) % $ 163,530 (34) %

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Net Interest Income

The table below presents balance and interest information for each major category of interest-earning assets and interest-bearing liabilities, along with net interest income and net interest margin.

The tables below present average balance and interest information for each major category of interest-earning assets and interest-bearing liabilities, along with net interest income and net interest margin.

Average Balances and Net Interest Earnings Analysis

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($ in thousands) Average Balances (1)

Interest Income/Expense Average Rate Average Balances (1)

Interest Income/Expense Average Rate

Interest Income/Expense Average Yield/Rate Average Balances (1)

Interest Income/Expense Average Yield/Rate

Interest-earning assets:

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___________________

(1) Average balances were calculated on thirteen-month ending balances and include accrued interest.

(2) Interest income on loans measured at amortized cost includes amortization of deferred loan fees, net of deferred loan costs, which were not material for the years presented.

(3) Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and seller note, as applicable.

(1) Average balances were calculated on daily carrying balances for the 2023 period, and on thirteen-month ending carrying balances for the 2022 and 2021 periods, as the daily analysis in the prior periods would have involved undue burden.

Both average calculations are representative of our operations.

(2) Interest income on loans measured at amortized cost for the 2022 and 2021 periods includes amortization of deferred loan fees, net of deferred loan costs, which were not material.

(3) Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and seller note, which was repaid in early 2021.

(4) Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities.

(5) Net interest margin is calculated as net interest income divided by total average interest-earning assets.

Net interest income increased by $677.6 million, or 116%, during the year ended December 31, 2023 compared to the year ended December 31, 2022, and net interest margin increased by 48 basis points.

The increases were primarily driven by higher interest income from (i) personal loans, which was primarily a function of increases in the average balance and origination volume, as well as longer loan holding periods for both personal and student loans, and (ii) interest-

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bearing deposits with banks, which reflected our strong liquidity position in a rising interest rate environment.

Average interest-earning assets increased by 98%, and average yields increased by 242 basis points.

These increases were partially offset by higher interest expense on deposits attributable to a higher average balance and higher interest rates offered to our members, and higher interest expense on warehouse facilities attributable to a higher average balance and higher interest rates incurred on our facilities, all of which are reflective of the higher interest rate environment year over year.

Net interest income increased by $331.9 million, or 132%, during the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by higher interest income from non-securitization personal and student loans, which were primarily a function of increases in average balances, higher personal loan origination volume and longer loan holding periods.

This increase was partially offset by interest expense on deposits at SoFi Bank during 2022, and lower interest income from consolidated personal and student loan securitizations, which were impacted by decreases in average balances primarily attributable to payment activity and the absence of additions to our consolidated securitization loan balances.

Net interest margin increased by 145 basis points during the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by higher interest-earning assets at higher average yields, particularly related to non-securitization loans, partially offset by higher interest rates paid on warehouse facilities and interest-bearing deposits used to fund our loan originations.

Analysis of Changes in Net Interest Income

The following table presents year-over-year changes in net interest income and the extent to which the variance is attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities:

The following table presents year-over-year changes in net interest income and the extent to which the variances are attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities:

2022 2022 vs.

Increase (Decrease) Due to Change in (1) :

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Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates.

Net interest margin increased by 145 basis points during the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily driven by higher interest-earning assets at higher average yields, particularly related to non-securitization loans, partially offset by higher interest rates paid on warehouse facilities and interest-bearing deposits used to fund our loan originations.

Net interest income increased by $74.3 million, or 42%, during the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily driven by:

(i) lower interest expense associated with lower average securitization and warehouse debt balances, as well as lower reference rates and lower warehouse facility interest rate spreads, (ii) lower securitizations interest income, which was primarily attributable to decreases in residual investment interest income and asset-backed bonds due primarily to decreases in average securitization investment balances, (iii) lower interest income from consolidated personal and student loan securitizations, which were impacted by declines in average balances attributable to payment activity and deconsolidation activity in 2020.

This increase was partially offset by higher interest income on non-securitization personal and student loans, which were primarily a function of increases in average balances, higher personal loan origination volume and longer loan holding periods for student loans.

Net interest margin increased by 106 basis points during the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily driven by decreases in the average balances of warehouse facilities and securitization debt, lower reference rates and warehouse facility interest rate spreads in 2021 compared to 2020, as well as the impact of the seller note issued in 2020 in connection with the acquisition of Galileo and repaid in early 2021.

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Loan Maturity Schedule

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Personal loans

$ 229,827 $ 11,758,548 $ 2,510,254 $ — $ 14,498,629

Student loans

Home loans — — 5,729 71,976 77,705

10,153 988,168 3,984,745 1,462,520 6,445,586

— — — 67,406 67,406

Senior secured loans

— 445,733 — — 445,733

Credit card (2)

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Personal loans

$ 2,035 $ — $ — $ 2,035

Student loans

Home loans — — — —

18,906 80,526 9,769 109,201

Commercial and consumer banking 679 5,532 97,070 103,281

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Personal loans

$ 11,756,513 $ 2,510,254 $ — $ 14,266,767

Student loans

Home loans — 5,729 71,976 77,705

969,262 3,904,219 1,452,751 6,326,232

— — 67,406 67,406

Senior secured loans

445,733 — — 445,733

Commercial and consumer banking 1,768 7,177 5,172 14,117

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands)

2023 2022 2021 $ Change % Change $ Change % Change

Loan origination and sales $ 605,403 $ 497,626 $ 371,323 $ 107,777 22 % $ 126,303 34 %

Securitizations (40,031) (14,862) (70,251) (25,169) 169 % 55,389 (79) %

Loan origination, sales, and securitizations $ 371,812 $ 565,372 $ 482,764 $ (193,560) (34) % $ 82,608 17 %

Servicing 37,328 43,547 (2,281) (6,219) (14) 45,828 n/m

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$ 2,122,789 $ 1,573,535 $ 984,872 $ 549,254 35 % $ 588,663 60 %

Total noninterest income decreased by $128.4 million, or 13%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, which was primarily attributable to:

(i) higher personal loan write-offs in 2023, (ii) higher origination fees primarily related to a new product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, (iii) the net effect of higher income related to in period originations, loan sale execution and fair value adjustments on loans and securitization loans, which were primarily impacted by higher personal loan origination volume, lower student loan prepayment assumptions, and an increase in securitization loan fair market values primarily associated with a consolidated securitization transaction in the first quarter of 2023, partially offset by losses in 2023 compared to gains in 2022 on loan hedging and risk retention hedge activities due to smaller increases in interest rates during the 2023 period, (iv) growth in technology products and solutions fees largely driven

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by revenue contribution from Technisys for the full period in 2023, (v) increased interchange revenue, and (vi) gain on extinguishment of debt during 2023.

Total noninterest income increased by $256.8 million, or 35%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by loan hedging activities due to higher interest rates in 2022, partially offset by lower income related to in period originations, loan sale execution and fair value adjustments on loans, as well as higher loan write offs.

The increase was also attributable to growth in technology products and solutions fees driven by account growth and increased activity among our existing integrated technology solutions clients combined with revenue contribution from the Technisys Merger in 2022.

Total noninterest income increased by $345.0 million, or 89%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily driven by loan hedging activities and higher income related to in period originations, loan sale execution and fair value adjustments on loans.

The increase was also attributable to growth in

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technology products and solutions fees driven by increased activity among integrated technology solutions clients combined with a full year of revenue contribution from Galileo in 2021, which we acquired in May 2020.

Noninterest Expense

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands)

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General and administrative 511,011 501,618 498,534 9,393 2 3,084 1

Provision for credit losses 54,332 7,573 — 46,759 617 % 7,573 n/m

Goodwill impairment 247,174 — — 247,174 n/m — n/m

Provision for credit losses 54,945 54,332 7,573 613 1 46,759 617

Total noninterest expense

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Total noninterest expense increased by $531.7 million, or 28%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by:

(i) higher employee compensation and benefits (inclusive of an increase in share-based compensation expense), a portion of which was attributable to the Technisys Merger and the remainder of which was related to increased personnel to support our growth in 2022, (ii) increases in advertising expenditures and utilization of lead generation channels, (iii) an increase in the provision for credit losses, which reflected higher average credit card balances combined with elevated credit card loss rates during 2022, (iv) an increase in amortization of intangible assets due to acquired intangible assets in the Technisys Merger, and (v) an increase in purchased and internally-developed software amortization, reflective of continued investments in technology.

(i) goodwill impairment expense related to the Galileo and Technisys reporting units, further discussed within “ Critical Accounting Policies and Estimates—Goodwill ”, (ii) higher employee compensation and benefits, which was attributable to increases in headcount and salary and the inclusion of Technisys for the full 2023 period compared to a partial period in 2022, related to support of our growth and impacts of the inflationary environment, as well as restructuring charges during the first and fourth quarters of 2023 and partially offset by decreases in share-based compensation expense, (iii) increases in advertising and marketing expenditures, utilization of lead generation channels and direct member incentives, (iv) increased amortization of purchased and internally-developed software, and in tools and subscriptions costs, reflective of continued investments in technology, (v) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform, and (vi) increases in amortization of intangible assets primarily due to acquired intangible assets in the Technisys Merger and Wyndham acquisition.

These increases were partially offset by the absence of transaction expenses that were incurred in the 2022 period related to our acquisition of Technisys.

Total noninterest expense increased by $426.2 million, or 29%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by:

(i) higher employee compensation and benefits (inclusive of an increase in share-based compensation expense), which was related to increased personnel to support our growth, higher average compensation in 2021 and the effect of new awards at increased share prices, (ii) increases in advertising expenditures, direct customer promotional expenditures and utilization of lead generation channels, (iii) an increase in expenditures related to fair value changes in warrant liabilities, with the increase in fair value changes on Series H redeemable preferred stock exceeding the decrease related to the SoFi Technologies warrants assumed in the Business Combination, (iv) an increase related to the special payment made to the Series 1 preferred stockholders in 2021 associated with the Business Combination, (v) an increase in amortization expense on intangible assets, primarily associated with intangible assets acquired during the second quarter of 2020, (vi) an increase in software licenses, tools and subscriptions and other related fees, (vii) an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on our technology platform, and (viii) the establishment of the provision for credit losses on our credit card product.

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Provision for Credit Losses

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Allowance for Credit Losses Ratios

The following table presents the ratio of allowance for credit losses to total loans outstanding that are held for investment and measured at amortized cost:

The following table presents the ratio of allowance for credit losses to total loans outstanding that are measured at amortized cost:

($ in thousands) 2023 2022

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$ 54,695 $ 40,788

Total loans held for investment outstanding (1)

Total loans held for investment, at amortized cost outstanding (1)

$ 884,390 $ 344,106

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(1) Total loans outstanding excludes accrued interest.

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(2) The increase in the ratio was attributable to credit cards and was reflective of both an increase in the average balance and an increase in our estimate of expected future credit losses.

(2) The decrease in the ratio was primarily attributable to senior secured loans, for which we did not recognize an allowance for credit losses, partially offset by credit cards, which was primarily reflective of an increase in the average balance combined with elevated loss rates.

We omitted the credit ratios associated with nonaccrual loans, as the balance of nonaccrual loans was immaterial.

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Commercial and consumer banking 2,310 13 1,678 29

Senior secured loans (2)

Total $ 54,695 100 % $ 40,788 100 %

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(1) Loans outstanding balances used in the calculation exclude accrued interest.

(2) For the periods presented, we did not recognize an allowance for credit losses on senior secured loans, as we determined that our expected exposure to credit losses was immaterial.

Analysis of Charge-offs

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($ in thousands) Average Loans (1)

Net Charge-offs Ratio Average Loans (1)

Net Charge-offs Ratio

Net Charge-offs (2)

Ratio Average Loans (1)

Net Charge-offs (2)

Ratio Average Loans (1)

Net Charge-offs (2)

Personal loans

$ 12,638,807 $ 432,706 3.42 % $ 4,767,708 $ 88,511 1.86 % $ 1,968,297 $ 19,398 0.99 %

Student loans

Home loans 132,663 — — 197,452 — — 125,714 — —

5,641,787 25,048 0.44 4,059,001 12,677 0.31 2,964,404 9,399 0.32

78,554 — — 132,663 — — 197,452 — —

Senior secured loans

26,291 — — — — — — — —

Credit card (3)

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___________________

(1) Average balances were calculated on thirteen-month ending balances and include accrued interest.

(2) The increase in the net charge-off rate associated with credit card was primarily related to our maturing portfolio, as the product was launched in the second half of 2020 and balances charge off after 180 days of delinquency.

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Both average calculations are representative of our operations.

(2) Net charge-offs include both credit- and certain non-credit-related charge-offs.

(3) The increase in the net charge-off rate associated with credit card was primarily related to our maturing portfolio.

The provision for credit losses increased by $46.8 million, which primarily reflected higher average credit card balances combined with elevated credit card loss rates during 2022.

For the years ended December 31, 2022, 2021 and 2020, we recorded income tax (expense) benefit of $(1.7) million, $(2.8) million, and $104.5 million, respectively.

For the years ended December 31, 2023, 2022 and 2021, we recorded income tax benefit (expense) of $0.4 million, $(1.7) million, and $(2.8) million, respectively.

Our income tax benefit position in 2023 was primarily attributable to income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to Technisys.

These benefits were offset by income tax expense associated with the profitability of SoFi Bank in state jurisdictions where separate filings are required, as well as federal taxes where our tax credits and loss carryforwards may be limited.

Our income tax expense position in 2022 was primarily attributable to tax expense at SoFi Lending Corp.

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The expense was partially offset by deferred tax benefits from the amortization of intangible assets acquired in the Technisys Merger.

The significant change in our income tax positions for the years ended December 31, 2022 and 2021 relative to 2020 was primarily due to a partial release of our valuation allowance in the second quarter of 2020 in connection with deferred tax liabilities resulting from intangible assets acquired from Galileo in May 2020, which decreased the valuation allowance by $99.8 million.

Summary Results by Segment

Contribution profit (loss) is the primary measure of segment-level profit and loss that, along with our key business metrics, is used by management to evaluate our business, measure our performance, identify trends and make strategic decisions.

Contribution profit (loss) is defined as total net revenue for each reportable segment less expenses directly

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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.

Contribution profit (loss) 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 the sections entitled “Consolidated Results of Operations” , “Summary Results by Segment” and “Non-GAAP Financial Measures” for discussion and analysis of these key financial measures.

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December 31, 2023 vs.

2022 2022 vs.

2023 2022 2021 Change % Change Change % Change

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_________________

(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.

(1) Loans with a balance and average loan balance include loans on our balance sheet, as well as transferred loans and referred 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.

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See “ Key Business Metrics ” for further discussion of this measure as it relates to our Lending segment.

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Origination Volume

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During the year ended December 31, 2023, personal loan origination volume increased significantly relative to 2022, primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment.

Personal loan origination volume increased significantly during the year ended December 31, 2022 compared to 2021, primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment.

This was combined with a positive impact from increased loan application approval rates within our existing credit parameters that were implemented during the second half of 2021 and maintained through mid-2022, with slight credit tightening implemented in the second half of 2022.

Personal loan origination volume increased significantly during the year ended December 31, 2021 compared to 2020, primarily due to the improved economic outlook and consumer confidence levels throughout 2021, as there was lower consumer spending behavior during the earlier stages of the COVID-19 pandemic, which we believe decreased the overall demand for debt consolidation loans.

Origination volume in 2021 also benefited from the increased loan application approval rate implemented during the second half of 2021.

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Student Loans.

During the year ended December 31, 2022, student loan origination volume decreased significantly relative to 2021, as demand for student loan refinancing products continued to be unfavorably impacted by the ongoing suspension of principal and interest payments on federally-held student loans and the expectation of debt cancellation for certain federal student loan borrowers, combined with a rising interest rate environment in 2022.

See “Key Factors Affecting Operating Results—Student Loan Relief” for additional discussion of student loans.

Student loan origination volume decreased during the year ended December 31, 2021 compared to 2020, primarily due to the suspension of principal and interest payments on federally-held student loans.

During the year ended December 31, 2022, home loan origination volume decreased significantly relative to 2021 due to continued rising interest rates relative to 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.

During the year ended December 31, 2023, student loan origination volume increased relative to 2022, as demand for student loan refinancing products increased ahead of the resumption of principal and interest payments on federally-held student loans as borrowers looked to refinance at a lower rate or, given the high interest rate environment, to extend the loan term.

This was partially offset by the unfavorable impact of the suspension of principal and interest payments on federally-held student loans through August 30, 2023 and the expectation of debt cancellation for certain federal student loan borrowers which was struck down by the U.S.

Supreme Court in June 2023, combined with a continued rising interest rate environment in 2023.

Student loan origination volume decreased significantly during the year ended December 31, 2022 compared to 2021, as demand for student loan refinancing products continued to be unfavorably impacted by the ongoing suspension of principal and interest payments on federally-held student loans and the expectation of debt cancellation for certain federal student loan borrowers, combined with a rising interest rate environment in 2022.

During the year ended December 31, 2023, home loan origination volume remained relatively flat relative to 2022 due to continued rising interest rates, 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 historically represented a smaller percentage of our home loan originations, our mix during the 2023 period has shifted toward more purchase originations, which we would expect to continue under similar macroeconomic conditions.

Our home loan origination volume increased notably beginning in the second quarter of 2023, aided by the increased capacity and capabilities subsequent to our acquisition of Wyndham.

Home loan origination volume decreased significantly during the year ended December 31, 2022 compared to 2021 due to continued rising interest rates relative to 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 second half of 2022.

Home loan origination volume increased during the year ended December 31, 2021 compared to 2020 due to an increase in our loan application approval rate and operational efficiencies gained through scale of the platform, which were tempered by rising U.S.

Treasury rates relative to the 2020 levels.

Loans with a Balance and Average Loan Balance

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Average loan balance tends to fluctuate based on the pace of loan originations relative to loan repayments and the initial loan origination size.

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In the table below, we present additional information related to our lending products:

Year Ended December 31,

($ in thousands)

2023 2022 2021

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13.28 % 11.82 % 10.64 %

Interest income recognized ($ in thousands)

Interest income recognized

$ 1,600,527 $ 551,458 $ 202,706

Sales of loans ($ in thousands) $ 2,911,491 $ 4,290,424 $ 1,531,057

Sales of loans

$ 938,403 $ 2,911,491 $ 4,290,424

Student Loans

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5.13 % 4.27 % 4.44 %

Interest income recognized ($ in thousands)

Interest income recognized

$ 281,921 $ 170,550 $ 127,496

Sales of loans ($ in thousands) $ 877,920 $ 2,854,778 $ 4,534,286

Sales of loans

$ 96,678 $ 877,920 $ 2,854,778

Weighted average origination FICO 755 749 755

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5.76 % 3.42 % 1.96 %

Interest income recognized ($ in thousands)

Interest income recognized

$ 4,982 $ 4,714 $ 3,778

Sales of loans ($ in thousands) $ 1,094,981 $ 2,935,038 $ 2,102,101

Sales of loans

$ 1,029,214 $ 1,094,981 $ 2,935,038

(1) Weighted average interest rate earned represents annualized interest income recognized divided by the average of the thirteen-month unpaid principal balances of loans outstanding during the period, which are impacted by the timing and extent of loan sales and purchases.

__________________

(1) Weighted average interest rate earned represents annualized interest income recognized divided by the average of the unpaid principal balances of loans outstanding during the period, determined on a daily basis for the 2023 period and on a thirteen-month basis for the 2022 and 2021 periods, as the daily analysis in the prior period would have involved undue burden.

Both average calculations are representative of our operations.

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

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FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, as further discussed below.

Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands)

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(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 consolidated statements of operations and comprehensive income (loss) is unrealized during the period and, therefore, has no impact on our cash flows from operations.

This non-cash change, which is recorded within noninterest income in the consolidated statements of operations and comprehensive 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.

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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 consolidated statements of operations and comprehensive income (loss).

These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the consolidated statements of operations and comprehensive 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 years presented, see “ Directly attributable expenses ” below.

(3) Adjusted net revenue is a non-GAAP financial measure.

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Net interest income

Net interest income in our Lending segment increased by $429.3 million, or 81%, for the year ended December 31, 2023 compared to 2022, which was primarily attributable to increases in average personal and student loan unpaid principal balances of $7.0 billion, or 161%, and $1.7 billion, or 49%, respectively, combined with a higher weighted

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average interest rate.

The personal loan average balance increase was primarily attributable to higher origination volume and longer loan holding periods.

The student loan average balance increase was primarily attributable to longer loan holding periods.

Interest expense associated with funding our lending activities increased by $732.1 million, or 356%, primarily due to the sharp increases in benchmark rates which are reflective of the higher interest rate environment year over year, as well as higher average loan balances.

Net interest income in our Lending segment increased by $273.4 million, or 106%, for the year ended December 31, 2022 compared to 2021, which was primarily attributable to non-securitization loans.

Higher interest income on non-securitization personal loans and student loans was primarily a function of increases in aggregate average balances of $2.8 billion (185%) and $1.3 billion (62%), respectively.

Higher interest income on non-securitization personal loans and student loans was primarily a function of increases in aggregate average balances of $2.8 billion, or 185%, and $1.3 billion, or 62%, respectively.

The personal loan average balance increase was primarily attributable to higher origination volume and purchase activity combined with a higher weighted average interest rate earned on whole loans and longer loan holding periods.

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Interest expense associated with funding our lending activities, which was determined using an FTP framework in 2022 and was based on actual interest expense on our use of securitizations and warehouse facilities in 2021, increased by $115.6 million, or 128%, year over year, primarily due to the sharp increase in benchmark rates.

Net interest income in our Lending segment increased by $58.8 million, or 29%, for the year ended December 31, 2021 compared to 2020, which was primarily attributable to:

(i) lower interest expense associated with lower average securitization and warehouse debt balances of 50% and 9%, respectively, as well as lower reference rates and lower warehouse facility interest rate spreads, (ii) lower securitizations interest income, which was primarily attributable to decreases in residual investment interest income and asset-backed bonds due primarily to decreases in average securitization investment balances, (iii) lower interest income from consolidated personal and student loan securitizations, which were impacted by decreases in average balances of 60% and 39%, respectively, attributable to payment activity and deconsolidation activity in 2020, and (iv) partially offset by higher interest income on non-securitization personal and student loans, which were primarily a function of increases in aggregate average balances of 77% and 36%, respectively, higher personal loan origination volume and longer loan holding periods for student loans.

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Noninterest income

Changes in noninterest income in the Lending segment are primarily driven by loan origination and sales activity, servicing income and securitizations income.

Loan Origination and Sales

The following table presents the components of noninterest income—loan origination and sales :

Noninterest income in our Lending segment decreased by $198.7 million, or 33%, for the year ended December 31, 2023 compared to 2022, which was primarily driven by lower loan origination, sales, and securitizations income of $193.3 million.

Noninterest income in our Lending segment increased by $128.3 million, or 27%, for the year ended December 31, 2022 compared to 2021, which was primarily driven by higher loan origination, sales, and securitizations income of $82.4 million and higher servicing income of $45.6 million.

Loan Originations, Sales, and Securitizations

The following table presents the components of noninterest income—loan origination, sales, and securitizations :

Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

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7,560 (11,032) (2,742) 18,592 n/m (8,290) 302 %

Home loan origination fees 7,452 14,452 11,576 (7,000) (48) % 2,876 25 %

Loan origination fees

134,399 7,452 14,452 126,947 n/m (7,000) (48) %

Loan write-off expense – whole loans (3)

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Loan repurchase (expense) benefit (4)

4,460 (3,117) (342) 7,577 n/m (2,775) 811 %

(2,075) 4,460 (3,117) (6,535) n/m 7,577 n/m

Other 8,453 (10) 3,183 8,463 n/m (3,193) n/m

Loan origination and sales noninterest income

Loan origination, sales, and securitizations noninterest income

$ 371,841 $ 565,142 $ 482,764 $ (193,301) (34) % $ 82,378 17 %

___________________

(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.

(1) Includes fair value adjustments on loans originated during the period, fair value adjustments of loans and securitization bond and residual interest positions held at the balance sheet date, as well as gains (losses) on loans sold and consolidated securitization transactions during the period.

Fair value adjustments are impacted by interest rates, weighted average coupon, credit spreads and loss estimates, prepayment speeds, duration and previous loan sale execution on similar loans.

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(4) Represents the (expense) benefit associated with our estimated loan repurchase obligation.

See Note 18 to the Notes to Consolidated Financial Statements for additional information.

Commitments, Guarantees, Concentrations and Contingencies to the Notes to Consolidated Financial Statements for additional information.

The decrease in loan origination, sales, and securitizations income was primarily driven by:

(i) higher personal loan write-offs in the 2023 period, primarily driven by longer loan holding periods and elevated charge off rates, (ii) losses in 2023 compared to gains in 2022 on student loan, personal loan and risk retention interest rate swap positions primarily

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driven by smaller increases in interest rates during the 2023 period, and (iii) lower gains on home loan pipeline hedges primarily driven by larger increases in the underlying hedge price index during the 2023 period.

These decreases were partially offset by:

(i) higher fair value gains on personal loans and lower fair value losses on student loans in the 2023 period, which were primarily impacted by higher origination volume and lower prepayment assumptions, respectively, (ii) higher origination fees primarily related to a new product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, (iii) improvement in securitizations income primarily driven by an increase in securitization loan and residual interests in securitization trusts fair market values primarily associated with consolidated securitization transactions in the first and third quarters of 2023, and a positive variance in our securitization bond and residual interest position fair values, (iv) fair value gains on home loans (compared to losses in the 2022 period), which were primarily impacted by smaller decreases in benchmark rates, and (v) losses on home loan and student loan sale execution in the 2022 period, which were due to both volume and price factors.

The increase in loan origination, sales, and securitizations income was primarily driven by:

(i) gains on student loan, personal loan and risk retention interest rate swap positions primarily driven by higher interest rates in 2022, (ii) fair value gains on personal loan originations in the year, partially offset by fair value losses on student loan and home loan originations in the year, each correlated with origination volume, (iii) gains on home loan pipeline hedges due to decreases in the underlying hedge price index, and (iv) favorable changes in residual debt fair value adjustments.

This increase was partially offset by:

(i) lower fair value marks on loans held on balance sheet at period end (including in period originations) across all loan products, primarily driven by deterioration in general market conditions, (ii) lower execution prices on sales activity across all loan products, due to both volume and price factors, (iii) higher loan write offs, primarily driven by higher average personal loan balances and elevated charge off rates in 2022, (iv) a decrease in securitization loan fair market value changes, principally due to increases in market interest rates, and (v) a decline in securitization bond fair values that were impacted by the interest rate volatility during the 2022 period.

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.

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

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Home loans 6,705 9,898 26,619 (3,193) (32) % (16,721) (63) %

Noninterest income in our Lending segment increased by $128.3 million, or 27%, for the year ended December 31, 2022 compared to 2021, which was primarily driven by higher loan origination and sales income of $107.5 million and higher servicing income of $45.6 million, partially offset by lower securitizations income of $25.2 million.

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The increase in loan origination and sales income was primarily driven by:

(i) gains on student loan and personal loan interest rate swap positions primarily driven by higher interest rates in 2022, (ii) fair value gains on personal loan originations in the year, partially offset by fair value losses on student loan and home loan originations in the year, each correlated with origination volume, and (iii) gains on home loan pipeline hedges due to decreases in the underlying hedge price index.

This increase was partially offset by:

The increase in servicing income was primarily related to favorable changes in valuation inputs and assumptions for student loans, which was primarily attributable to decreased prepayment rate assumptions during 2022 compared to increased assumptions during 2021, partially offset by increased discount rate assumptions during 2022.

The decrease in securitizations income was primarily due to:

(i) a decrease in securitization loan fair market value changes, principally due to increases in market interest rates, and (ii) a decline in securitization bond fair values that were impacted by the interest rate volatility during the 2022 period.

The decrease was partially offset by gains in the 2022 period on our economic hedges of securitization investments and favorable changes in residual debt fair value adjustments.

Noninterest income in our Lending segment increased by $198.7 million, or 71%, for the year ended December 31, 2021 compared to 2020, which was primarily driven by higher loan origination and sales income of $126.3 million, improvement in securitizations income of $55.4 million and higher servicing income of $17.1 million.

The increase in loan origination and sales income was primarily driven by:

(i) gains on student loan and personal loan interest rate swap positions primarily driven by higher interest rates in 2021, (ii) gains on home loan pipeline hedges due to decreases in the underlying hedge price index, (iii) fair value gains on personal loan and home loan originations, partially offset by fair value losses on student loan originations, each correlated with origination volume, and (iv) higher execution prices on sales activity for personal loans, as volume factors exceeded lower prices.

The increase was partially offset by:

(i) lower execution prices on sales activity related to student loans and home loans, (ii) a decrease in home loan IRLCs, and (iii) the absence of a gain on a credit default swap that occurred in 2020.

The improvement in securitizations income was primarily due to:

(i) an increase in securitization loan fair market value changes, principally due to the significantly improved economic environment during 2021 relative to 2020, (ii) a reduction in securitization loan write-offs in 2021, which was correlated with the deconsolidation of securitizations in 2020, stronger securitization loan credit performance and lower average securitization loan balances during 2021, and (iii) the absence of losses from deconsolidations that occurred in 2020.

The improvement was partially offset by unfavorable changes in residual debt and securitization bond fair value adjustments.

The increase in servicing income was primarily related to favorable changes in valuation inputs and assumptions, primarily attributable to:

(i) a lower rate of increase in prepayment rate assumptions during 2021 compared to 2020, and (ii) a decreased discount rate assumption for home loans, as market trends demonstrated stronger demand for the home loan servicing asset class during 2021.

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Directly attributable expenses

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

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Professional services 9,592 6,649 5,663 2,943 44 % 986 17 %

Intercompany technology platform expenses 948 — — 948 n/m — n/m

37,753 24,786 32,590 12,967 52 % (7,804) (24) %

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Lending segment directly attributable expenses increased by $70.1 million, or 16%, for the year ended December 31, 2023 compared to 2022, primarily due to:

(i) an increase in personal loan lead generation channels during 2023, (ii) an increase in allocated compensation and related benefits, which reflected increases in average compensation and average headcount in 2023, (ii) an increase in direct advertising primarily related to direct mail advertising, and (iv) an increase in other expenses, primarily related to loan marketing expenses and third-party loan fraud.

Lending segment directly attributable expenses increased by $78.8 million, or 22%, for the year ended December 31, 2022 compared to 2021, primarily due to:

(i) an increase in direct advertising primarily related to direct mail, search engine and social network advertising, partially offset by declines in television advertisement;

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and (iv) a decrease in loan origination and servicing costs, which were largely attributable to decreases in home loan origination costs, partially offset by increases in personal loan origination costs, each of which was correlated with origination volumes.

Lending segment directly attributable expenses increased by $69.4 million, or 24%, for the year ended December 31, 2021 compared to 2020, primarily due to:

(i) increasing utilization of lead generation channels associated with increased personal loan origination volume in 2021, which was partially offset by lower student loan origination volume through lead generation channels;

(ii) an increase in direct advertising primarily related to search engine, television, social media and digital advertising expenditures, partially offset by a decline in direct mail marketing expenditures;

and (iii) an increase in loan origination and servicing costs, which supported our growth in origination volume, primarily in home loans.

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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 of the transfer.

The following table summarizes our whole loan sales:

Year Ended December 31,

2023 2022 2021

Personal loans

Fair value of consideration received:

Cash $ 567,904 $ 3,016,740 $ 3,373,655

Servicing assets recognized 30,168 21,925 21,811

Repurchase liabilities recognized (2,069) (7,351) (8,168)

Total consideration received 596,003 3,031,314 3,387,298

Aggregate unpaid principal balance and accrued interest of loans sold 567,003 2,924,567 3,253,645

Realized gain

$ 29,000 $ 106,747 $ 133,653

Sale execution (1)

105.5 % 103.9 % 104.4 %

Student loans

Fair value of consideration received:

Cash $ 98,624 $ 883,859 $ 1,676,892

Servicing assets recognized 2,792 9,275 15,526

Repurchase liabilities recognized (16) (134) (300)

Total consideration 101,400 893,000 1,692,118

Aggregate unpaid principal balance and accrued interest of loans sold 99,916 881,922 1,635,280

Realized gain

$ 1,484 $ 11,078 $ 56,838

Sale execution (1)

101.5 % 101.3 % 103.5 %

Fair value of consideration received:

Cash $ 1,022,600 $ 1,057,596 $ 2,989,813

Servicing assets recognized 10,184 13,926 31,294

Repurchase liabilities recognized (1,765) (1,158) (3,288)

Total consideration 1,031,019 1,070,364 3,017,819

Aggregate unpaid principal balance and accrued interest of loans sold 1,029,623 1,095,882 2,935,343

Realized gain (loss)

$ 1,396 $ (25,518) $ 82,476

Sale execution (1)

100.3 % 97.8 % 102.9 %

_____________________

(1) Sale execution represents the ratio of cash proceeds and servicing assets recognized to the aggregate unpaid principal balance and accrued interest of the loans sold.

Amounts included in repurchase liabilities are excluded from the calculation, as they typically would not materially differ from the fair value markdown on the loans over the repurchase period had they been held on balance sheet and entered delinquency.

Technology Platform Segment

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December 31, 2023 vs.

2022 2022 vs.

2023 2022 2021 $ Change % Change $ Change % Change

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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 20 in the Notes to Consolidated Financial Statements for further information regarding Technology Platform segment performance.

Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

Net interest expense $ — $ (29) $ (107) $ 29 (100) % $ 78 (73) %

Net interest income (expense)

$ 1,514 $ — $ (29) $ 1,514 n/m $ 29 (100) %

Noninterest income 350,826 315,133 194,915 35,693 11 % 120,218 62 %

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Contribution profit $ 94,786 $ 76,513 $ 64,447 $ 18,273 24 % $ 12,066 19 %

Net interest income

Net interest income in our Technology Platform segment in 2023 relates to interest income earned on segment cash balances, which we began recording within the Technology Platform segment in the third quarter of 2023.

Prior period amounts were determined to be immaterial, and presented within Corporate/Other.

Noninterest income

Noninterest income in our Technology Platform segment increased by $35.7 million, or 11%, for the year ended December 31, 2023 compared to 2022.

The increase was primarily attributable to growth in technology products and solutions fees driven by revenue contribution from Technisys for the full 2023 period compared to ten months of 2022.

Noninterest income also included $22.2 million and $7.6 million of intercompany revenue for the years ended December 31, 2023 and 2022, respectively.

The increase in intercompany revenue was primarily attributable to increased usage of technology platform services during the 2023 periods by our Financial Services segment, as well as within our Technology Platform segment, as we continue to leverage synergies to enhance our product offerings.

Noninterest income in our Technology Platform segment increased by $120.2 million, or 62%, for the year ended December 31, 2022 compared to 2021, of which $69.2 million was attributable to revenue contribution from the Technisys Merger in 2022.

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

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___________________

(1) Other expenses are primarily related to advertising and marketing, travel and occupancy-related costs, data center and capitalized software development costs.

(1) Other expenses are primarily related to travel and occupancy-related costs, advertising and marketing, and data center costs.

Technology Platform segment directly attributable expenses increased by $18.9 million, or 8%, for the year ended December 31, 2023 compared to 2022, primarily due to:

(i) an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform, (ii) an increase in compensation and benefits expense, primarily related to bonus adjustments in the second quarter of 2023 and the inclusion of Technisys in our results for the full 2023 period, partially offset by a decrease in average headcount in 2023 corresponding with restructuring during the first quarter of 2023, and (iii) an increase in tools and subscriptions costs related to internal technology initiatives to support the growth of the platform, along with the inclusion of Technisys in our results for the full 2023 period.

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Technology Platform segment directly attributable expenses increased by $108.2 million, or 83%, for the year ended December 31, 2022 compared to 2021, primarily due to:

(i) an increase in compensation and benefits expense, which was correlated with an increase in personnel to support segment growth and of which Technisys compensation and benefits contributed $53.0 million during 2022;

and (ii) an increase in tools and subscriptions costs related to headcount increases and internal technology initiatives to support the growth of the platform, along with the inclusion of Technisys in our 2022 results.

Technology Platform segment directly attributable expenses increased by $88.0 million, or 207%, for the year ended December 31, 2021 compared to 2020 (which were partially impacted by the timing of our acquisition of Galileo in the second quarter of 2020 compared to full results in 2021), primarily due to:

(i) an increase in compensation and benefits expense, which was correlated with an increase in personnel to support segment growth, as well as an increase in average compensation in 2021;

and (ii) an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform.

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Financial Services Segment

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December 31, 2023 vs.

2022 2022 vs.

2023 2022 2021 $ Change % Change $ Change % Change

Total products (number, as of period end) 6,554,039 4,094,245 1,605,910 2,459,794 60 % 2,488,335 155 %

Total products

9,479,470 6,554,039 4,094,245 2,925,431 45 % 2,459,794 60 %

Total products in our Financial Services segment is a subset of our total products metric.

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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.

Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands)

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__________________

(1) Net interest income and, thereby, total net revenue and contribution loss for our Financial Services segment reported for the year ended December 31, 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 related to credit cards.

For the comparative periods ended December 31, 2021 and 2020, 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 periods, the Financial Services segment net interest income would not have materially changed.

(1) Net interest income and, thereby, total net revenue and contribution loss for our Financial Services segment reported for the years ended December 31, 2023 and 2022 reflect 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 related to credit cards.

For the comparative period ended December 31, 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 period, 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 $242.3 million, or 262%, for the year ended December 31, 2023 compared to 2022, which was primarily attributable to net interest income earned on our deposits, which includes interest income based on our FTP framework (which eliminates in consolidation) and interest expense to members.

This net increase corresponds with the growth of deposits at SoFi Bank, as well as the impact of higher interest rates offered to members.

In addition, net interest income earned on our credit cards increased, which includes interest income earned on outstanding balances as well as interest expense incurred under the FTP framework, and was primarily attributable to growth in total credit cards.

Net interest income in our Financial Services segment increased by $88.8 million for the year ended December 31, 2022 compared to 2021, which was primarily attributable to net interest income earned on our deposits, 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 cards increased primarily due to growth in the average balance.

Uninsured Deposits

As of December 31, 2022, the amount of uninsured deposits totaled $615.9 million.

We did not have any deposits as of December 31, 2021.

The following table presents uninsured time deposits by remaining time to maturity:

($ in thousands) December 31, 2022

Uninsured Time Deposits

3 months or less $ 860

Over 3 months through 6 months 6,726

Over 6 months through 12 months 11,669

Over 12 months 1,587

Noninterest income

Noninterest income in our Financial Services segment increased by $20.8 million, or 38%, for the year ended December 31, 2022 compared to 2021, primarily due to growth in referral fulfillment activity, as we continue to drive volume to our partners and an increase in interchange fees, which coincided with increased credit card and debit card

Noninterest income in our Financial Services segment increased by $26.6 million, or 35%, for the year ended December 31, 2023 compared to 2022, primarily due to an increase in interchange fees, which coincided with increased credit card and debit card transactions, as well as brokerage-related fees, which were primarily attributable to increased trading volume on our platform during 2023.

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transactions.

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The increase was partially offset by a decrease in brokerage-related fees, which was primarily attributable to decreased digital assets trading volume on our platform during 2022.

Noninterest income in our Financial Services segment increased by $42.9 million, or 377%, for the year ended December 31, 2021 compared to 2020, primarily due to:

(i) an increase in brokerage-related fees, which coincided with higher digital assets trading volume on our platform during 2021;

(ii) an increase in referral fees, which was primarily attributable to growth in our partner relationships and related activity, as we continue to onboard new partners and help drive volume to these partners, as well as an increase associated with a referral fulfillment arrangement we entered in the third quarter of 2021;

and (iii) an increase in interchange fees, which coincided with increased credit card and debit card transactions.

Directly attributable expenses

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Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands) 2023 2022 2021 $ Change % Change $ Change % Change

Compensation and benefits $ 125,143 $ 110,288 $ 81,176 $ 14,855 13 % $ 29,112 36 %

Provision for credit losses 54,332 7,573 — 46,759 617 % 7,573 n/m

Provision for credit losses 54,945 54,332 7,573 613 1 % 46,759 617 %

Member incentives 54,616 45,923 19,544 8,693 19 % 26,379 135 %

Direct advertising 36,660 19,051 8,083 17,609 92 % 10,968 136 %

Product fulfillment 49,829 33,713 23,638 16,116 48 % 10,075 43 %

Direct advertising 44,347 36,660 19,051 7,687 21 % 17,609 92 %

Lead generation 36,447 30,418 10,308 6,029 20 % 20,110 195 %

Professional services 4,590 3,832 5,853 758 20 % (2,021) (35) %

Intercompany technology platform expenses 12,961 4,600 1,863 8,361 182 % 2,737 147 %

Professional services 12,719 4,590 3,832 8,129 177 % 758 20 %

45,770 46,578 26,011 (808) (2) % 20,567 79 %

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__________________

(1) Other expenses primarily include tools and subscriptions, operational product losses, third party fraud expense, travel and occupancy-related costs, and marketing expenses.

(1) Other expenses primarily include operational product losses, third party fraud expense, travel and occupancy-related costs, tools and subscriptions, and marketing expenses.

Financial Services directly attributable expenses increased by $69.7 million, or 19%, for the year ended December 31, 2023 compared to 2022, primarily due to:

(i) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product, (ii) an increase in compensation and benefits expense, which reflected growth in the Financial Services segment that required additional staffing, as well as increased average compensation in 2023, (iii) an increase in direct member incentives utilized to drive adoption and usage of our Financial Services products, the most significant of which was our SoFi Money product, (iv) an increase in direct advertising costs primarily driven by an increase in online and digital advertising largely related to the promotion of our SoFi Money product, and (v) an increase related to utilization of lead generation channels, primarily related to our credit card and Relay products.

Financial Services directly attributable expenses increased by $174.1 million, or 90%, for the year ended December 31, 2022 compared to 2021, primarily due to:

(i) an increase related to our provision for credit losses, which was primarily related to increases in the provision for credit cards due to higher average credit card balances combined with elevated credit card loss rates during 2022;

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and (v) an increase in direct advertising costs primarily driven by an increase in search engine and social network marketing primarily related to the continued promotion of SoFi Checking and Savings.

Financial Services directly attributable expenses increased by $49.0 million, or 34%, for the year ended December 31, 2021 compared to 2020, primarily due to:

(i) an increase in product fulfillment costs related to SoFi Invest and SoFi Money, which included such activities as operating our cash management sweep program, brokerage expenses and debit card fulfillment services, and is also inclusive of the impact of our 8 Limited acquisition on a full year of operations during 2021.

We also had additional costs related to credit card fulfillment in 2021;

(ii) an increase in direct advertising costs primarily driven by an increase in social media and search engine marketing related to the continued promotion of, and growth in, our Financial Services products;

(iii) an increase in direct member incentives utilized to drive adoption and usage of primarily SoFi Money and SoFi Invest;

(iv) an increase related to lead generation, primarily related to SoFi Invest;

and (v) an increase in our provision for credit losses on credit cards, which launched during the third quarter of 2020.

Corporate/Other Non-Reportable Segment

Non-segment operations are classified as Corporate/Other, which includes net revenues 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 year ended December 31, 2022, net interest expense within Corporate/Other also reflects the

Non-segment operations are classified as Corporate/Other, which includes net revenues 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 AFS debt securities, all of which are not directly related to a reportable segment.

For the years ended December 31, 2023 and 2022, net interest expense within Corporate/Other also reflects the financial impact of our capital management activities within the treasury function, which reflects the residual impact from FTP charges and FTP

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financial impact of our capital management activities within the treasury function, which reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework.

The following table presents the measure of total net revenue for Corporate/Other:

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credits allocated to our reportable segments under our FTP framework.

The following table presents the measure of total net loss for Corporate/Other:

Year Ended December 31, 2023 vs.

2022 2022 vs.

($ in thousands)

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Net interest expense $ (35,394) $ (39,958) $ (9,594) $ 4,564 (11) % $ (30,364) 316 %

Noninterest income (loss) (9,307) 3,179 (1,729) (12,486) n/m 4,908 n/m

Noninterest income (loss) (1,293) (9,307) 3,179 8,014 (86) % (12,486) n/m

Total net loss

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Reconciliation of Directly Attributable Expenses

The following table reconciles directly attributable expenses allocated to our reportable segments to total noninterest expense in the consolidated statements of operations and comprehensive income (loss):

The following table reconciles directly attributable expenses allocated to our reportable segments to total noninterest expense in the consolidated statements of operations and comprehensive loss:

Year Ended December 31,

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Depreciation and amortization expense (201,416) (151,360) (101,568)

Goodwill impairment (247,174) — —

Fair value changes in warrant liabilities — — (107,328)

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__________________

(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.

(1) Includes compensation, benefits, restructuring charges, 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 in the second quarter of 2021.

See Note 13 to the Notes to Consolidated Financial Statements for additional information.

(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.

Equity to the Notes to Consolidated Financial Statements for additional information.

Liquidity and Capital Resources

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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.

We maintain a CALM policy 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”).

Oversight of these activities is the responsibility of our 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.

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The following table summarizes our on-balance sheet liquidity:

($ in thousands) 2022 2021

Cash and cash equivalents $ 1,421,907 $ 494,711

Investments in available-for-sale debt securities 195,438 194,907

Available liquidity $ 1,617,345 $ 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.

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.

We commenced offering deposit accounts (SoFi Checking and Savings accounts) to our members through SoFi Bank in the first quarter of 2022.

We also source brokered and non-brokered wholesale deposits, which include certificates of deposit.

As of December 31, 2022, time deposit balances due in less than one year totaled $966.6 million.

We did not have any deposits as of December 31, 2021.

Borrowing Capacity

The following table summarizes our available capacity on our borrowings:

December 31, 2022 December 31, 2021

($ in thousands) Available Capacity Maturity Available Capacity Maturity

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The following table summarizes our total liquidity reserves:

December 31, 2023

Amount Available Amount Borrowed / Utilized Remaining Available Capacity

Cash and cash equivalents $ 3,085,020 n/a $ 3,085,020

Investments in AFS debt securities (1)

463,448 n/a 463,448

Warehouse facilities (2)

$ 5,341,025 January 2023 - January 2032 $ 5,627,623 January 2022 - January 2030

Revolving credit facility 74,000 September 2023 74,000 September 2023

Total available capacity $ 5,415,025 $ 5,701,623

9,170,000 3,239,528 5,930,472

Revolving credit facility (3)

645,000 499,100 145,900

FHLB advances (4)

166,525 27,200 139,325

Other lines of credit (5)

50,000 — 50,000

Total liquidity $ 13,579,993 $ 3,765,828 $ 9,814,165

___________________

(1) Excludes investments in AFS debt securities which are pledged as collateral to the FHLB.

(2) Includes personal loan, student loan, credit card and risk retention warehouse facilities.

For risk retention facilities, we only include capacity amounts wherein we can pledge additional asset-backed bonds and residual investments as of the date indicated.

As of December 31, 2023, warehouse facility maturity dates ranged from January 2024 through January 2032.

Debt to the Notes to Consolidated Financial Statements for additional information.

(3) As of December 31, 2023, the amount utilized under the revolving credit facility includes $13.1 million utilized to secure letters of credit.

Debt to the Notes to Consolidated Financial Statements for additional information.

(4) As of December 31, 2023, we had $131.7 million of investments in AFS debt securities and $54.8 million of loans pledged as collateral to the FHLB to secure undrawn borrowing capacity of $166.5 million, of which $27.2 million was utilized to secure letters of credit.

(5) Borrowing capacity with correspondent banks is unsecured.

We believe our existing 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.

Sources of Funding

We offer deposit accounts (checking and savings accounts) to our members through SoFi Bank.

We also source brokered and non-brokered wholesale deposits, which include certificates of deposit.

As of December 31, 2023 and December 31, 2022, time deposit balances due in less than one year totaled $2.6 billion and $1.0 billion, respectively.

As of December 31, 2023 and December 31, 2022, the amount of uninsured deposits totaled $348.1 million and $615.9 million, respectively.

In 2023, we began to provide our members with access to expanded FDIC insurance coverage through a network of participating banks in our Insured Deposit Program, which contributed to the decrease in uninsured deposits relative to year end.

As of December 31, 2023, approximately 98% of our total deposits were insured.

The following table presents uninsured time deposits as of December 31, 2023 by remaining time to maturity:

($ in thousands) December 31, 2023

3 months or less $ 4,843

Over 3 months through 6 months 4,286

Over 6 months through 12 months 11,939

Over 12 months 200

Total uninsured time deposits

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 primary uses of funds include loan originations, investments in our business, such as technology and product investments and sales and marketing initiatives, as well as the losses generated by our Financial Services segment on a year-to-date basis.

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 December 31, 2023, 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, as defined below.

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Our borrowings primarily included our loan and risk retention warehouse facilities, asset-backed securitization debt, revolving credit facility and convertible notes.

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 loan characteristics of the loans securing the financings.

Each of our loan warehouse facilities allows the lender providing the funds to evaluate the market value of the loans that are serving as collateral for the borrowings or advances being made.

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.

In October 2021, we closed on the issuance of $1.2 billion aggregate principal amount of convertible senior notes (the “convertible notes”), which do not bear regular interest, will mature in October 2026 (unless earlier repurchased, redeemed or converted) and will be convertible by the noteholders beginning in April 2026 under certain circumstances.

In December 2023, the Company entered into agreements to repurchase $88.0 million aggregate principal amount of the convertible notes, for which the Company issued 9,490,000 shares of common stock to settle.

Following these repurchases, $1.1 billion aggregate principal amount of the convertible notes remain outstanding.

Redemption events and conversion events (to the extent we elect to cash settle) could require a material use of cash at the time of the event.

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Note 12 to the Notes to Consolidated Financial Statements for additional information on the conversion, settlement and redemption terms of the Convertible Notes.

Debt to the Notes to Consolidated Financial Statements for additional information on the conversion, settlement and redemption terms of the convertible notes.

Additionally, if special interest or additional interest is incurred on the convertible notes, it could require an additional use of cash.

In connection with the issuance of the convertible notes, we entered into privately negotiated Capped Call Transactions with certain financial institutions, 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.

Refer to Note 13 for additional information on the Capped Call Transactions.

The net proceeds from the convertible debt issuance were $1.176 billion.

Refer to Note 13.

Equity for additional information on the Capped Call Transactions.

All of these transactions are expected to remain in effect notwithstanding the December 2023 repurchases.

The net proceeds from the October 2021 convertible debt issuance were $1.2 billion.

We used $113.8 million of the net proceeds to fund the cost of entering into the Capped Call Transactions.

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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.

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 governing such convertible notes.

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.

(i) a certain minimum tangible net worth, (ii) minimum unrestricted cash and cash equivalents, (iii) a maximum leverage ratio of total debt to tangible net worth, and (iv) minimum risk-based capital and leverage ratios.

A breach of these covenants can result in an event of default under these facilities and allows the lenders to pursue certain remedies.

Debt to the Notes to Consolidated Financial Statements for additional information.

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.

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We were in compliance with all covenants as of December 31, 2023.

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Capital Management

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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.

From time to time, we may contribute capital to SoFi Bank.

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.

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.

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;

If the Federal Reserve finds that we are not “well-capitalized” or “well-managed”, we would be required to take remedial action, which may contain additional limitations or conditions relating to our activities.

These requirements establish required minimum ratios for 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;

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There have been no events or conditions since December 31, 2023 that management believes would change the categorization.

See Note 21 to the Notes to Consolidated Financial Statements for the risk- and leverage-based capital ratios and amounts for SoFi Bank and SoFi Technologies.

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Regulatory Capital to the Notes to Consolidated Financial Statements for the risk- and leverage-based capital ratios and amounts for SoFi Bank and SoFi Technologies.

Cash Requirements from Known Contractual Obligations and Other Commitments

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Operating lease obligations 133,479 24,536 44,663 30,984 33,296

Finance lease obligations 18,083 964 2,006 2,121 12,992

LA Stadium Complex naming rights (4)

547,185 26,943 52,894 59,505 407,843

Purchase commitment (5)

Sponsorship, advertising, and cloud computing agreements (4)

670,329 85,807 104,610 90,082 389,830

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As such, only principal commitments and the aforementioned accrued interest are included herein.

See Note 12 to the Notes to Consolidated Financial Statements for additional information on our warehouse debt.

Debt to the Notes to Consolidated Financial Statements for additional information on our warehouse debt.

(2) Includes principal balance and variable interest on our revolving credit facility.

The estimated interest payments assume that our borrowings under the revolving credit facility (i) remain unchanged, (ii) are held to maturity, and (iii) incur interest at the rate for standard withdrawals in effect as of December 31, 2023 through its maturity.

See Note 12 to the Notes to Consolidated Financial Statements for additional information on our revolving credit facility.

Debt to the Notes to Consolidated Financial Statements for additional information on our revolving credit facility.

(3) The convertible notes will mature on October 15, 2026, unless earlier repurchased, redeemed or converted.

See “ Borrowings ” for additional information on these provisions.

(4) The contractual obligations associated with the operating lease and finance lease components of the Naming and Sponsorship Agreement with the LA Stadium and Entertainment District are reported in the corresponding lines and are, therefore, excluded from amounts reported in this line.

As of December 31, 2022, all payments associated with the planned retail district, which is currently expected to commence during 2023, are attributed to non-lease components.

We do not expect the agreement to contain a material lease component, although the evaluation remains ongoing.

See Note 9 to the Notes to Consolidated Financial Statements for additional information on our leases.

(5) Relates to a four-year purchase commitment entered into during 2021 for cloud computing services with a total of $80 million to be incurred through the term, of which $20.5 million was incurred through December 31, 2022.

See Note 18 to the Notes to Consolidated Financial Statements for additional information.

(4) See Note 18.

Commitments, Guarantees, Concentrations and Contingencies to the Notes to Consolidated Financial Statements for additional information on these financial commitments.

(5) Contractual obligations exclude residual interests classified as debt that result from transfers of assets that are accounted for as secured financings.

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Our maturity date represents the legal maturity of the last class of maturing notes.

See Note 18 to the Notes to Consolidated Financial Statements for further discussion of our guarantees.

Commitments, Guarantees, Concentrations and Contingencies to the Notes to Consolidated Financial Statements for further discussion of our guarantees.

Finally, contractual obligations exclude the impact of uncertain tax positions, as we are not able to reasonably estimate the timing of such future cash flows.

See Note 17 to the Notes to Consolidated Financial Statements for additional information on income taxes and unrecognized tax benefits.

Income Taxes to the Notes to Consolidated Financial Statements for additional information on income taxes and unrecognized tax benefits.

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.

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,

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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 personal, student 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 18 to the Notes to Consolidated Financial Statements for further information on these and other guarantee obligations.

Commitments, Guarantees, Concentrations and Contingencies to the Notes to Consolidated Financial Statements for further information on these and other guarantee obligations.

We believe we have adequate liquidity to meet these expected obligations.

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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

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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.

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 deposits and grow existing 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 liquidity to fund our balance sheet.

Our ability to attract and maintain deposits can be impacted by, among other things, general economic conditions, the condition of the banking sector (such as bank failures or exposure to credit, market, operational, legal and reputational risks), competition from other financial services firms, idiosyncratic events and the interest rates we offer, which can impact our liquidity from deposits.

Through 2023, we continued to have strong deposit contribution.

During 2023, we also provided our members with access to expanded FDIC insurance coverage through a network of participating banks in our Insured Deposit Program.

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.

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 or continued turmoil in the banking and financial services sectors, 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.

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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.

Our cash flows from operations have also historically been impacted by material net losses.

While we achieved net income profitability for the first time during the fourth quarter of 2023, changing business, macroeconomic or other conditions could potentially lead us, in the future, to raise additional capital in the form of equity or debt, which may not be at favorable terms when compared to previous financing transactions.

Our long-term liquidity strategy includes continuing to grow our 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.

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As of December 31, 2023, 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.

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.

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Cash Flow and Liquidity Analysis

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Cash Flows from Operating Activities

For the year ended December 31, 2022, net cash used in operating activities of $7.3 billion stemmed from a net loss of $320.4 million and an unfavorable change in our operating assets net of operating liabilities of $7.5 billion, partially offset by a

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positive adjustment for non-cash items of $560.1 million.

For the year ended December 31, 2023, net cash used in operating activities of $7.2 billion stemmed from a net loss of $300.7 million and an unfavorable change in our operating assets net of operating liabilities of $7.6 billion, partially offset by a positive adjustment for non-cash items of $706.8 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 $17.4 billion during the year and also purchased loans of $198.7 million.

These cash uses were partially offset by principal payments on loans of $7.2 billion and proceeds from loan sales of $2.1 billion.

The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities.

We originated loans of $13.0 billion during the year and also purchased loans of $2.5 billion.

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These cash uses were offset by principal payments on loans of $2.2 billion and proceeds from loan sales of $10.0 billion.

For the year ended December 31, 2020, net cash used in operating activities was $479.3 million, which stemmed from a net loss of $224.1 million and an unfavorable change in our operating assets net of operating liabilities of $397.3 million, partially offset by a positive adjustment for non-cash items of $142.0 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 $9.7 billion during the year and also purchased loans of $690.2 million.

These cash uses were largely offset by principal payments on loans of $1.9 billion and proceeds from loan sales of $8.0 billion.

Cash Flows from Investing Activities

For the year ended December 31, 2023, net cash used in investing activities of $1.9 billion was primarily attributable to $1.4 billion related to loan activities, primarily driven by student loans, senior secured loans and credit cards, net purchases of $381.0 million related to our investments in AFS debt securities, $111.4 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, $72.3 million related to business combinations, net of cash acquired, which includes our acquisition of Wyndham and settlements of vested employee performance awards associated with the Technisys Merger, and $66.6 million related to purchases of non-securitization investments, primarily FRB stock and FHLB stock.

These uses were partially offset by proceeds of $108.3 million from our securitization investments.

For the year ended December 31, 2022, net cash used in investing activities of $106.3 million was primarily attributable to proceeds of $118.8 million from our securitization investments and the aggregate net cash acquired from the Technisys Merger and Bank Merger of $58.5 million.

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Lastly, we used cash of $52.3 million for purchases of property, equipment and software, which primarily included internally-developed software, purchased software, and furniture and fixtures.

For the year ended December 31, 2020, net cash provided by investing activities of $258.9 million was primarily attributable to proceeds from our securitization investments of $322.7 million, partially offset by our acquisition activities during the year, which resulted in a net use of cash of $32.4 million.

Moreover, we extended additional financing to Apex during the year, which required a use of cash of $7.6 million.

Lastly, we used $24.5 million for purchases of property, equipment and software.

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Cash Flows from Financing Activities

For the year ended December 31, 2023, net cash provided by financing activities of $10.9 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $11.2 billion.

Additionally, our proceeds from debt financing activities of $0.4 billion exceeded our debt repayments of $0.5 billion, which were primarily related to our warehouse facilities.

This was partially offset by debt repayments of $799.9 million which exceeded our proceeds from debt financing activity of $520.5 million, which were primarily 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.

For the year ended December 31, 2022, net cash provided by financing activities of $8.4 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $7.2 billion.

Additionally, our proceeds from debt financing activities of $1.9 billion exceeded our debt repayments of $516.4 million, which were primarily related to our warehouse facilities.

Finally, we paid redeemable preferred stock dividends of $40.4 million and taxes related to RSU vesting of $9.0 million.

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We also received proceeds from warrant exercises of $95.0 million.

We paid taxes related to RSU vesting of

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$42.6 million, as well as redeemable preferred stock dividends of $40.4 million.

We paid taxes related to RSU vesting of $42.6 million, as well as redeemable preferred stock dividends of $40.4 million.

We also received $25.2 million of proceeds from common stock option exercises.

Finally, we paid $282.9 million to repurchase redeemable common and preferred stock.

For the year ended December 31, 2020, net cash provided by financing activities was $853.8 million.

We received $0.5 billion of proceeds from debt financing activities, which were primarily attributable to our lending activities and included a $325.0 million draw on our revolving credit facility.

These debt proceeds were partially offset by $1.1 billion of debt repayments, $8.6 billion of which 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.

We also generated cash of $369.8 million from a common stock issuance in the fourth quarter of 2020.

We paid Series 1 redeemable preferred stock dividends of $40.5 million and taxes related to RSU vesting of $31.3 million.

These uses were offset by principal repayments of $43.5 million related to our stockholder note receivable, which was fully paid off as of December 31, 2020.

Other Arrangements

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VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability.

See Note 1 to the Notes to Consolidated Financial Statements for our VIE consolidation policy.

Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Consolidated Financial Statements for our VIE consolidation policy.

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 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 hold a variable interest in the trusts through our ownership of collateralized notes in the form of asset-backed bonds and residual certificates.

The residual certificates absorb variability and represent the equity ownership interest in the equity portion of the personal loan and student loan trusts.

We are also the servicer for all trusts in which we hold a financial interest.

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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 related activity during the year, see Note 7 to the Notes to Consolidated Financial Statements.

For a more detailed discussion of nonconsolidated VIEs, including related activity during the year, see Note 7.

Securitization and Variable Interest Entities to the Notes to Consolidated Financial Statements.

Financial Condition Summary

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See “Cash Flow and Liquidity Analysis” for further discussion of our cash flow activity;

• an increase in loans held for sale of $7.6 billion, which was primarily related to personal loans;

• an increase in goodwill of $724.5 million and an increase in intangible assets of $157.6 million, which were attributable to our two acquisitions during the first quarter of 2022.

See Note 2 and Note 8 to the Notes to Consolidated Financial Statements for additional information;

• a decrease in securitization investments of $173.4 million, of which $118.8 million was related to cash receipts.

There were no securitization investments made during 2022;

• an increase in deposits of $7.3 billion, which was attributable to our launch of SoFi Bank during the first quarter of 2022 and primarily included savings and demand deposits;

• an increase of $1.4 billion in gross warehouse and risk retention facility debt to support our originations during the current period, which reflected the net impact of $10.7 billion of cash borrowings and $9.3 billion of cash repayments.

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

• an increase in loans of $9.1 billion, which was primarily related to increased personal and student loan originations and longer loan holding periods;

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affect reported amounts of assets and liabilities, as well as revenues and expenses.

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• an increase in deposits of $11.3 billion, which was primarily related to increased savings deposits from members and increased broker deposits;

• an increase of $180.6 million in gross warehouse and risk retention facility debt to support our originations during the current period, which reflected the net impact of $12.3 billion of cash borrowings and $12.1 billion of cash repayments.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with GAAP.

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.

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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.

See Note 1 to the Notes to Consolidated Financial Statements for a summary of our significant accounting policies.

Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Consolidated Financial Statements for a summary of our significant accounting policies.

The most significant judgments, estimates and assumptions relate to the critical accounting policies, which are discussed in detail below.

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Our involvement with VIEs and origination of personal loans, student loans and home loans results in Level 2 and Level 3 assumptions having a material impact on our consolidated financial statements, as further discussed below.

A third-party valuation specialist performs a valuation of these Level 2 and Level 3 financial instruments on a monthly basis with quarterly oversight by a Valuation Working Group established by the Company that comprises leaders across finance, capital markets and accounting.

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.

Loans do not trade in an active market with readily observable prices.

We classify these loans as Level 3 because the valuations utilize significant unobservable inputs.

We determine the fair value of our loans using a discounted cash flow (“DCF”) calculation, which is a form of the income approach, while also considering market data as it becomes available.

We utilize third-party valuation specialists to perform a valuation of these Level 2 and Level 3 financial instruments on a monthly basis with quarterly oversight by a Valuation Working Group established by the Company that comprises leaders across finance, capital markets and accounting.

We elected the fair value option to measure our personal loans and student loans, as we believe that fair value best reflects the expected economic performance of the loans.

These loans do not trade in an active market with readily observable prices, and are classified as Level 3 because the valuations utilize significant unobservable inputs.

We determine the fair value of our loans using a DCF calculation, which is a form of the income approach, while also considering market data as it becomes available.

In applying the DCF methodology, we estimate the future cash flows of each loan portfolio using key loan metrics, such as term, vintage, coupon rate, coupon type and current balance, among others.

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The conditional prepayment rate represents the monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period.

The annual default rate represents the annualized rate of borrowers who do not make loan payments on time.

The annual default rate represents the annualized rate of borrowers who do

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not make loan payments on time.

The conditional prepayment and annual default rate assumptions are determined using company-specific historical loan performance curves.

The discount rate represents the weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans.

The discount rate is determined based on company-specific factors and market observations, including the federal funds rate, our weighted average coupon rate and expected duration of the assets, the last of which is also impacted by expected prepayment rates.

The discount rate is determined based on company-specific factors and market observations, including underlying benchmark rates, our weighted average coupon rate and expected duration of the assets, the last of which is also impacted by expected prepayment rates.

We also consider the volume and terms of recent whole loan sales and securitization market pricing factors, as applicable, as indicators of loan fair values.

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Securitizations

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The results of operations for each acquisition are included in our consolidated financial results beginning on the respective acquisition date.

During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the allocation of purchase consideration and to the fair values of assets acquired and liabilities assumed to the extent that additional information becomes available.

After this period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive income (loss).

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After this period, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive loss.

Goodwill represents the fair value of an acquired business in excess of the fair value of the identified net assets acquired.

As of December 31, 2023, we had goodwill of $1.4 billion, of which $17.7 million was recognized during the year in connection with business combinations.

Goodwill is tested for impairment at the reporting unit level annually or whenever indicators of impairment exist.

Goodwill is tested for impairment at the reporting unit level at least annually, with a recurring testing date of October 1, or whenever indicators of impairment exist.

Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value.

We may assess goodwill for impairment initially using a qualitative approach, referred to as “step zero”, to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If management concludes, based on its assessment of relevant events, facts and circumstances that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine if there is any impairment.

We may assess goodwill for impairment initially based on qualitative considerations, referred to as “step zero”, to determine whether conditions exist that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If management concludes, based on its assessment of relevant events, facts and circumstances that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis, referred to as step one, will be performed to determine if there is any impairment.

We may alternatively elect to initially perform a quantitative assessment and bypass the qualitative assessment.

Quantitative goodwill impairment assessments require a significant amount of management judgment, and a meaningful change in the forecasted future revenues and cash flows, the discount rate, and the determination of market multiples used in testing goodwill for impairment could result in a material impact on the Company’s results of operations and financial position.

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.

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Our reporting units for our goodwill impairment analysis represent components of our business at one level below our operating segments.

We performed the step zero assessment for two of our reporting units to which goodwill was allocated during the year in connection with business combinations.

In performing this assessment, we evaluated factors such as macroeconomic conditions, industry and market conditions, cost factors, the overall financial performance of the reporting unit, and events specific to the reporting unit.

Management concluded that, for each reporting unit, it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.

Therefore, we did not perform a quantitative assessment for these reporting units.

For each of our remaining reporting units, we performed a quantitative impairment assessment.

Determining the fair value of a reporting unit requires the use of estimates and the exercise of significant judgment, which is inherently subjective in nature.

For our quantitative goodwill impairment testing, we calculate the carrying amount of each reporting unit using a DCF calculation, which is a form of the income approach, or a combination of DCF and a market multiples calculation, which is a form of the market approach.

In applying the DCF methodology, we estimate the future cash flows of each reporting unit using a multi-year forecast, and a terminal value calculated using a long-term growth rate that was informed based on our industry, analyst reports of a public company peer set, current and expected future economic conditions, and management expectations.

The discount rates used to discount these future cash flows were determined using a capital asset pricing model based on the market value of equity of a public company peer set, adjusted for risk characteristics and expectations specific to the reporting unit.

The discount rates used for our reporting units in our 2022 impairment analysis ranged from 15% to 20%, and we applied a terminal year long-term growth rate of 3.5% to all reporting units.

In applying the market multiples methodology, we selected a company peer set based of competitors, publicly traded companies and reviews of analysts’ reports, public filings and industry research.

In selecting the revenue and EBITDA multiples and determining the fair value, we consider the size, growth, profitability and risk profile of the reporting unit relative to the peer set.

Based on our 2022 impairment analysis, the estimated fair values of each of our reporting units were in excess of their carrying amounts.

Therefore, we did not recognize any goodwill impairment during the year ended December 31, 2022.

Assumptions used in estimating the fair value of a reporting unit are highly judgmental and inherently uncertain.

A change in the economic conditions of a reporting unit, such as declines in business performance from industry or macroeconomic trends or from company-specific factors, such as changes in our strategy, adverse impacts to deposit growth trends, losses of significant customers, decreases in revenue, increases in expenses, deterioration of market conditions, declines in long-term growth expectations, adverse impacts of regulatory or legislative changes or increases in the estimated cost of capital, including if these conditions are merely forecasted to occur in future periods, could cause the estimated fair values of our reporting units to decline in the future, and increase the risk of a goodwill impairment in a future period.

See Note 8 to the Notes to Consolidated Financial Statements for additional disclosures related to goodwill.

Recent Accounting Standards Issued, But Not Yet Adopted

See Note 1 to the Notes to Consolidated Financial Statements.

An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.

During the third quarter of 2023, the Technology Platform segment continued to experience slower growth rates than expected at the time of acquisition due to:

(i) the uncertain macroeconomic environment, which has continued to impact customer spend volume, and (ii) continued longer sales cycles as a result of our shift in strategy to focus on diversified durable growth driven by potential new partners with scaled customer bases and interest in multiple Technology Platform products.

These factors constituted a triggering event for goodwill testing purposes.

As a result, we performed an interim quantitative test on the Galileo and Technisys reporting units to determine the existence and magnitude of potential goodwill impairment.

We determined it was not necessary to perform an interim goodwill impairment test for our other reporting units.

During the third quarter of 2023, management calculated the fair value amount of the Galileo and Technisys reporting units using a combination of a DCF calculation, which is a form of the income approach, and a market multiples calculation, which is a form of the market approach.

The discount rates used for the Galileo and Technisys reporting units in our interim quantitative assessment were 14.0% and 23.5%, respectively.

The higher discount rate at Technisys was primarily driven by macroeconomic factors in Latin America, specifically the highly inflationary economic environment in Argentina.

Additionally, management applied a terminal year long-term growth rate of 3.5% to both reporting units, consistent with previous quantitative assessments.

As a result of this assessment, the fair value of the Galileo and Technisys reporting units were determined to be below their carrying values by 9.9% and 14.8%, respectively, resulting in management recognizing non-cash goodwill impairment charges of $124.5 million and $122.7 million for the Galileo and Technisys reporting units, respectively.

If the discount rate applied to the estimated cash flows was increased or decreased by 50 basis points, the fair value of the Galileo and Technisys reporting units would decrease or increase by 6% and 4%, respectively.

Similarly, if the long-term growth rate was increased or decreased by 50 basis points, the fair value of the Galileo and Technisys reporting units would increase or decrease by approximately 3% and 1%, respectively.

In performing the qualitative assessments of each reporting unit as of October 1, 2023, the Company evaluated events and circumstances since the last quantitative goodwill assessments to determine if it was not more likely than not that our goodwill was not impaired as of our annual impairment testing date.

The factors evaluated included an assessment of macroeconomic conditions, industry and market conditions, key financial metrics, overall financial performance of the reporting unit, or any other specific events or changes.

After assessing the relevant events and circumstances, we concluded it is not more-likely-than-not that the fair value of the reporting unit is below its carrying value as of our annual impairment assessment date.

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We monitored events and circumstances during the fourth quarter of 2023, concluding that it was not more-likely-than-not that the fair value of a reporting unit is below its respective carrying value as of December 31, 2023.

Management cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the value of goodwill.

We continue to monitor the aforementioned conditions, general macroeconomic deterioration, including the interest rate environment, inflationary pressures, and the potential for a prolonged economic downturn or recession, as well as other factors, including those listed in " Cautionary Statement Regarding Forward-Looking Statements " and " Risk Factors " in Part I, Item 1A of this Annual Report.

Further persistence of the aforementioned conditions and these other factors could result in additional impairment charges in future periods.

Goodwill and Intangible Assets to the Notes to Consolidated Financial Statements for additional disclosures related to goodwill.

Recent Accounting Standards Issued, But Not Yet Adopted

Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Consolidated Financial Statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis