SoFi Technologies, Inc. 10-Q

sofi-20240630 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39606 SoFi Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 98-1547291 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 234 1st Street San Francisco , California 94105 (Address of principal executive offices) (Zip Code) ( 855 ) 456-7634 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.0001 par value per share SOFI The Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of shares of the registrant’s common stock, par value $0.0001 per share, outstanding as of July 31, 2024 was 1,065,944,831 shares. SOFI TECHNOLOGIES, INC. TABLE OF CONTENTS Page Glossary of Terms and Acronyms 2 Forward-Looking Statements 3 PART I – FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) 7 Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity 8 Condensed Consolidated Statements of Cash Flows 10 Notes to Condensed Consolidated Financial Statements 12 Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards 12 Note 2. Business Combinations 14 Note 3. Revenue 15 Note 4. Loans 16 Note 5. Allowance for Credit Losses 23 Note 6. Investment Securities 25 Note 7. Securitization and Variable Interest Entities 27 Note 8. Deposits 28 Note 9. Debt 29 Note 10. Equity 32 Note 11. Derivative Financial Instruments 35 Note 12. Fair Value Measurements 36 Note 13. Share-Based Compensation 45 Note 14. Income Taxes 47 Note 15. Commitments, Guarantees, Concentrations and Contingencies 47 Note 16. Earnings (Loss) Per Share 49 Note 17. Business Segment Information 51 Note 18. Subsequent Events 54 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 Item 3. Quantitative and Qualitative Disclosures About Market Risk 94 Item 4. Controls and Procedures 96 PART II – OTHER INFORMATION Item 1. Legal Proceedings 97 Item 1A. Risk Factors 97 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 152 Item 3. Defaults Upon Senior Securities 152 Item 4. Mine Safety Disclosures 152 Item 5. Other Information 152 Item 6. Exhibits 153 Signatures 154 1 SoFi Technologies, Inc. TABLE OF CONTENTS Glossary of Terms and Acronyms ACH : Automated clearing house GAAP : U.S. Generally Accepted Accounting Principles AFS : Available-for-sale GLBA : Gramm-Leach-Bliley Act ALCO : Asset Liability Committee Golden Pacific : Golden Pacific Bancorp, Inc. AWS : Amazon Web Services GSE : Government-Sponsored Enterprise AOCI : Accumulated other comprehensive income (loss) HELOC : Home Equity Line of Credit ASU : Accounting Standards Update HFI : Held for investment ATDS : Automatic telephone dialing systems HFS : Held for sale BHCA : Bank Holding Company Act of 1956, as amended HMDA : Home Mortgage Disclosure Act BPS : Basis points IRLC : Interest rate lock commitment BSA : Bank Secrecy Act IRS : Internal Revenue Service CALM : Capital and Asset Liability Management policy LIBOR : London Inter-Bank Offered Rate CARES Act : Coronavirus Aid, Relief, and Economic Security Act MLA : Military Lending Act CCPA : California Consumer Privacy Act MOHELA : Missouri Higher Education Loan Authority CD : Community Development MSB : Money services business CET1 : Common Equity Tier 1 MSRB : Municipal Securities Rulemaking Board CFP : Certified financial planners NACHA : National Automated Clearinghouse Association CFPA : Consumer Financial Protection Act Nasdaq : The Nasdaq Global Select Market CFPB : Consumer Financial Protection Bureau OCC : Office of the Comptroller of the Currency CFTC : Commodity Futures Trading Commission OFAC : Office of Foreign Assets Control CISO : Chief Information Security Officer PCD : Purchased credit deteriorated CODM : Chief Operating Decision Maker PFOF : Payment for order flow CPA : Colorado Privacy Act PSU : Performance stock units CPPA : California Privacy Protection Act QIA : Qatar Investment Authority CPRA : California Privacy Rights Act RESPA : Real Estate Settlement Procedures Act CRA : Community Reinvestment Act ROU : Right-of-use DACA : Deferred Access for Childhood Arrival RSU : Restricted stock units DCF : Discounted cash flow SCH : Social Capital Hedosophia Holdings Corp. V DE&I : Diversity, Equity and Inclusion SCRA : Servicemembers’ Civil Relief Act DEP : Digital engagement practices SEC : U.S. Securities and Exchange Commission Dodd-Frank Act : Dodd-Frank Wall Street Reform and Consumer SPAC : Special purpose acquisition company Protection Act of 2010 Social Finance : Social Finance, LLC (formerly Social Finance, Inc.) DSU : Deferred stock units SoFi Bank : SoFi Bank, National Association EC : European Commission SoFi Capital Advisors : SoFi Capital Advisors, LLC ECOA : Equal Credit Opportunity Act SoFi Securities : SoFi Securities LLC EFTA : Electronic Fund Transfer Act SoFi Stadium : The LA Stadium and Entertainment District at Hollywood EPS : Earnings (loss) per share of common stock Park in Inglewood, California ESG : Environmental, social and corporate governance SoFi Wealth : SoFi Wealth LLC ESIGN : Electronic Signatures in Global and National Commerce Act SOFR : Secured Overnight Financing Rate ETF : Exchange-Traded Funds SPE : Special purpose entity FCA : Financial Conduct Authority SRO : Self-regulatory organizations FCRA : Fair Credit Reporting Act TBA : To-be-announced security FDCPA : Fair Debt Collection Practices Act TCJA : Tax Cuts and Jobs Act FDIA : Federal Deposit Insurance Act TCPA : Federal Telephone Consumer Protection Act FDIC : Federal Deposit Insurance Corporation Technisys : Technisys S.A., a Luxembourg société anonyme Federal Reserve : Board of Governors of the Federal Reserve System TDR : Troubled debt restructuring FHA : Fair Housing Act TILA : Truth in Lending Act FHFA : Federal Housing Finance Agency UDAAP : Unfair, deceptive or abusive acts or practices FHLB : Federal Home Loan Bank UETA : Uniform Electronic Transactions Act FinCEN : Financial Crimes Enforcement Network URG : Underrepresented Group FINRA : Financial Industry Regulatory Authority VA : United Stated Department of Veterans Affairs FRB : Federal Reserve Bank of San Francisco VIE : Variable interest entity FTC : Federal Trade Commission Wyndham : Wyndham Capital Mortgage FTP : Fund transfer pricing 2 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “SoFi”, the “Company”, “we”, “us”, and “our”, and similar references refer to SoFi Technologies, Inc. and its wholly-owned subsidiaries following the Business Combination (as defined herein) and to Social Finance, Inc. prior to the Business Combination. Social Finance entered into a merger agreement (the “Agreement”) with SCH on January 7, 2021. The transactions contemplated by the terms of the Agreement were completed on May 28, 2021 (the “Closing”), in conjunction with which SCH changed its name to SoFi Technologies, Inc. (hereafter referred to, collectively with its subsidiaries, as “SoFi”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the “Business Combination”. In February 2022, we acquired Golden Pacific, a bank holding company, and its wholly-owned subsidiary, Golden Pacific Bank, National Association, a national bank (the “Bank Merger”), after which we became a bank holding company and renamed Golden Pacific Bank as SoFi Bank. In March 2022, we acquired Technisys, a Luxembourg société anonyme and a cloud-native digital multi-product core banking platform (the “Technisys Merger”). In April 2023, we acquired Wyndham, a fintech mortgage lender. See Note 2. Business Combinations to the Notes to Condensed Consolidated Financial Statements within Part I, Item 1. for information on our business combinations. Refer to Glossary of Terms and Acronyms for the definitions of certain terms, acronyms and abbreviations used in this document. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for our future operations; anticipated trends and prospects in the industries in which our business operates; new products, services and related strategies; anticipated actions by governmental authorities; and macroeconomic conditions. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “aim”, “allow”, “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “if”, “intend”, “likely”, “may”, “might”, “opportunity”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “will”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors described in Part II, Item 1A. “ Risk Factors ” and elsewhere in this Quarterly Report on Form 10-Q and our other filings with the SEC and include, among other things: • our ability to achieve and maintain profitability in the future; • the impact on our business of the regulatory environment and complexities with compliance; • the effect and impact of evolving laws, rules, regulations and government enforcement policies, including any federal or state loan forgiveness programs; • the impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, which could cause economic and market volatility, and regulatory responses thereto; • our ability to manage our growth effectively and our expectations regarding the development and expansion of our business; • our ability to continue to originate and sell loans to third parties, and the impact of the performance of loans held on our balance sheet; • our ability to access sources of capital on favorable terms, if at all, including debt financing, deposits and other sources of capital to finance operations and growth; • the impact of and our ability to respond to general economic conditions and other macroeconomic and geopolitical factors, such as elevated and fluctuating interest rates, inflationary pressures, counterparty risk, changing customer demand, capital markets volatility, instability in the financial services industry, a potential U.S. government shutdown, 3 SoFi Technologies, Inc. TABLE OF CONTENTS the upcoming U.S. presidential elections, the possibility of a recession, and domestic or international conflicts or disputes; • the success of our marketing efforts and our ability to expand our member base; • our ability to grow market share in existing markets or any new markets we may enter; • our ability to develop new products, features and functionality that are competitive and meet market needs; • our ability to diversify our business and broaden our suite of financial services offerings; • our ability to realize the benefits of our strategy, including what we refer to as our Financial Services Productivity Loop, and achieve scale in our Financial Services segment; • our ability to successfully operate as a bank holding company, and to operate SoFi Bank; • our ability to make accurate credit and pricing decisions or effectively forecast our loss rates; • our ability to establish and maintain an effective system of internal controls over financial reporting; • our ability to maintain the listing of our securities on the Nasdaq; • our ability to realize the anticipated benefits of the Bank Merger, the Technisys Merger, our acquisition of Wyndham, and any other acquisitions we undertake, including our expectations with regards to such acquisitions; • our ability to successfully expand our operations into foreign jurisdictions, including compliance with a variety of foreign laws; and • the outcome of any legal or governmental proceedings that may be instituted against us. Forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and reflect current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. TRADEMARKS This document contains references to trademarks, service marks and trade names owned by us or belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this document may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor will not assert, to the fullest extent under applicable law, our or its rights to these trademarks, service marks and trade names. SoFi Technologies does not intend its use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of it by, any other companies. All trademarks, service marks and trade names included in this document are the property of their respective owners. 4 SoFi Technologies, Inc. TABLE OF CONTENTS PART I – FINANCIAL INFORMATION Item 1. Financial Statements SoFi Technologies, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In Thousands, Except for Share Data) June 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 2,334,589 $ 3,085,020 Restricted cash and restricted cash equivalents 397,043 530,558 Investment securities (includes available-for-sale securities of $ 1,444,223 and $ 595,187 at fair value with associated amortized cost of $ 1,443,344 and $ 596,757 , as of June 30, 2024 and December 31, 2023, respectively) 1,566,087 701,935 Loans held for sale, at fair value 15,893,565 15,396,771 Loans held for investment, at fair value 7,194,762 6,725,484 Loans held for investment, at amortized cost (less allowance for credit losses of $ 51,908 and $ 54,695 , as of June 30, 2024 and December 31, 2023, respectively) 2,172,528 836,159 Servicing rights 291,329 180,469 Property, equipment and software 246,286 216,908 Goodwill 1,393,505 1,393,505 Intangible assets 331,446 364,048 Operating lease right-of-use assets 83,352 89,635 Other assets (less allowance for credit losses of $ 1,509 and $ 1,837 , as of June 30, 2024 and December 31, 2023, respectively) 737,487 554,366 Total assets $ 32,641,979 $ 30,074,858 Liabilities, temporary equity and permanent equity Liabilities: Deposits: Interest-bearing deposits $ 22,945,652 $ 18,568,993 Noninterest-bearing deposits 51,311 51,670 Total deposits 22,996,963 18,620,663 Accounts payable, accruals and other liabilities 535,372 549,748 Operating lease liabilities 100,797 108,649 Debt 3,106,629 5,233,416 Residual interests classified as debt 724 7,396 Total liabilities 26,740,485 24,519,872 Commitments, guarantees, concentrations and contingencies (Note 15) Temporary equity (1) : Redeemable preferred stock, $ 0.00 par value: 100,000,000 and 100,000,000 shares authorized; — and 3,234,000 shares outstanding, as of June 30, 2024 and December 31, 2023, respectively — 320,374 Permanent equity: Common stock, $ 0.00 par value: 3,100,000,000 and 3,100,000,000 shares authorized; 1,065,112,270 and 975,861,793 shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively (2) 106 97 Additional paid-in capital 7,601,687 7,039,987 Accumulated other comprehensive loss ( 1,483 ) ( 1,209 ) Accumulated deficit ( 1,698,816 ) ( 1,804,263 ) Total permanent equity 5,901,494 5,234,612 Total liabilities, temporary equity and permanent equity $ 32,641,979 $ 30,074,858 ______________ (1) Redemption amount was $ 323,400 as of December 31, 2023. See Note 10. Equity for additional information. (2) Includes 100,000,000 non-voting common shares authorized and no non-voting common shares issued and outstanding as of June 30, 2024 and December 31, 2023. See Note 10. Equity for additional information. The accompanying notes are an integral part of these condensed consolidated financial statements. 5 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Balance Sheets (Continued) (Unaudited) (In Thousands, Except for Share Data) The following table presents the assets and liabilities of consolidated VIEs which are included in our condensed consolidated balance sheets. The assets in the below table may only be used to settle obligations of consolidated VIEs and are in excess of those obligations as of the dates presented. Additionally, the assets and liabilities in the table below exclude intercompany balances, which eliminate upon consolidation. June 30, 2024 December 31, 2023 Assets Restricted cash and restricted cash equivalents $ 32,135 $ 50,547 Loans held for sale, at fair value 299,186 502,757 Loans held for investment, at fair value 88,468 221,461 Total assets $ 419,789 $ 774,765 Liabilities Accounts payable, accruals and other liabilities $ 250 $ 1,773 Debt 134,021 420,974 Residual interests classified as debt 724 7,396 Total liabilities $ 134,995 $ 430,143 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (In Thousands, Except for Share and Per Share Data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Interest income Loans and securitizations $ 621,061 $ 444,846 $ 1,241,289 $ 805,242 Other 53,534 25,150 99,217 36,318 Total interest income 674,595 469,996 1,340,506 841,560 Interest expense Securitizations and warehouses 17,362 63,060 58,283 117,384 Deposits 231,815 106,529 443,266 179,645 Corporate borrowings 12,725 9,167 23,436 17,167 Other 109 114 219 228 Total interest expense 262,011 178,870 525,204 314,424 Net interest income 412,584 291,126 815,302 527,136 Noninterest income Loan origination, sales, and securitizations 54,872 90,164 111,872 213,498 Servicing 6,659 9,052 13,633 21,794 Technology products and solutions 85,866 82,289 171,538 155,090 Other 38,637 25,387 131,268 52,658 Total noninterest income 186,034 206,892 428,311 443,040 Total net revenue 598,618 498,018 1,243,613 970,176 Noninterest expense Technology and product development 132,167 126,845 263,087 243,904 Sales and marketing 184,762 182,822 352,128 357,976 Cost of operations 109,703 93,885 209,764 177,793 General and administrative 145,006 131,180 290,246 254,869 Provision for credit losses 11,640 12,615 18,822 21,022 Total noninterest expense 583,278 547,347 1,134,047 1,055,564 Income (loss) before income taxes 15,340 ( 49,329 ) 109,566 ( 85,388 ) Income tax (expense) benefit 2,064 1,780 ( 4,119 ) 3,417 Net income (loss) $ 17,404 $ ( 47,549 ) $ 105,447 $ ( 81,971 ) Other comprehensive income (loss) Unrealized gains on available-for-sale securities, net 741 830 41 3,078 Foreign currency translation adjustments, net ( 136 ) 392 ( 315 ) 99 Total other comprehensive income (loss) 605 1,222 ( 274 ) 3,177 Comprehensive income (loss) $ 18,009 $ ( 46,327 ) $ 105,173 $ ( 78,794 ) Earnings (loss) per share (Note 16) Earnings (loss) per share – basic $ 0.01 $ ( 0.06 ) $ 0.08 $ ( 0.11 ) Earnings (loss) per share – diluted $ 0.01 $ ( 0.06 ) $ 0.03 $ ( 0.11 ) Weighted average common stock outstanding – basic 1,058,591,943 936,569,420 1,020,604,718 932,926,222 Weighted average common stock outstanding – diluted 1,065,171,357 936,569,420 1,042,403,113 932,926,222 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Unaudited) (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at March 31, 2024 1,056,491,365 $ 105 $ 7,543,808 $ ( 2,088 ) $ ( 1,716,220 ) $ 5,825,605 3,234,000 $ 320,374 Share-based compensation expense — — 71,162 — — 71,162 — — Vesting of RSUs 9,169,435 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 624,128 ) — ( 3,998 ) — — ( 3,998 ) — — Exercise of common stock options 75,598 — 166 — — 166 — — Redeemable preferred stock dividends — — ( 6,424 ) — — ( 6,424 ) — — Preferred stock redemption — — ( 3,026 ) — — ( 3,026 ) ( 3,234,000 ) ( 320,374 ) Net income — — — — 17,404 17,404 — — Other comprehensive income, net of taxes — — — 605 — 605 — — Balance at June 30, 2024 1,065,112,270 $ 106 $ 7,601,687 $ ( 1,483 ) $ ( 1,698,816 ) $ 5,901,494 — $ — Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at January 1, 2024 975,861,793 $ 97 $ 7,039,987 $ ( 1,209 ) $ ( 1,804,263 ) $ 5,234,612 3,234,000 $ 320,374 Share-based compensation expense — — 134,550 — — 134,550 — — Vesting of RSUs 17,530,410 2 ( 2 ) — — — — — Stock withheld related to taxes on vested RSUs ( 1,148,965 ) — ( 7,758 ) — — ( 7,758 ) — — Exercise of common stock options 247,153 — 632 — — 632 — — Extinguishment of convertible notes by issuance of common stock 72,621,879 7 534,276 — — 534,283 — — Purchases of capped calls — — ( 90,649 ) — — ( 90,649 ) — — Unwind of capped calls — — 10,180 — — 10,180 — — Redeemable preferred stock dividends — — ( 16,503 ) — — ( 16,503 ) — — Preferred stock redemption — — ( 3,026 ) — — ( 3,026 ) ( 3,234,000 ) ( 320,374 ) Net income — — — — 105,447 105,447 — — Other comprehensive loss, net of taxes — — — ( 274 ) — ( 274 ) — — Balance at June 30, 2024 1,065,112,270 $ 106 $ 7,601,687 $ ( 1,483 ) $ ( 1,698,816 ) $ 5,901,494 — $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 8 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Continued) (Unaudited) (In Thousands, Except for Share Data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at March 31, 2023 940,338,835 $ 94 $ 6,778,262 $ ( 6,341 ) $ ( 1,537,943 ) $ 5,234,072 3,234,000 $ 320,374 Share-based compensation expense — — 84,208 — — 84,208 — — Vesting of RSUs 8,962,137 — — — — — — — Stock withheld related to taxes on vested RSUs ( 470,998 ) — ( 4,630 ) — — ( 4,630 ) — — Exercise of common stock options 91,080 — 417 — — 417 — — Common stock retired ( 8,293 ) — — — — — — — Redeemable preferred stock dividends — — ( 10,079 ) — — ( 10,079 ) — — Net loss — — — — ( 47,549 ) ( 47,549 ) — — Other comprehensive income, net of taxes — — — 1,222 — 1,222 — — Balance at June 30, 2023 948,912,761 $ 94 $ 6,848,178 $ ( 5,119 ) $ ( 1,585,492 ) $ 5,257,661 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at January 1, 2023 933,896,120 $ 93 $ 6,719,826 $ ( 8,296 ) $ ( 1,503,521 ) $ 5,208,102 3,234,000 $ 320,374 Share-based compensation expense — — 154,861 — — 154,861 — — Vesting of RSUs 15,699,311 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 926,688 ) — ( 7,046 ) — — ( 7,046 ) — — Exercise of common stock options 252,311 — 585 — — 585 — — Common stock retired ( 8,293 ) — — — — — — — Redeemable preferred stock dividends — — ( 20,047 ) — — ( 20,047 ) — — Net loss — — — — ( 81,971 ) ( 81,971 ) — — Other comprehensive income, net of taxes — — — 3,177 — 3,177 — — Balance at June 30, 2023 948,912,761 $ 94 $ 6,848,178 $ ( 5,119 ) $ ( 1,585,492 ) $ 5,257,661 3,234,000 $ 320,374 The accompanying notes are an integral part of these condensed consolidated financial statements. 9 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In Thousands) Six Months Ended June 30, 2024 2023 Operating activities Net income (loss) $ 105,447 $ ( 81,971 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Share-based compensation expense 116,139 140,104 Depreciation and amortization 98,162 95,451 Deferred debt issuance and discount expense 8,207 10,559 Gain on extinguishment of convertible debt ( 59,194 ) — Provision for credit losses 18,822 21,022 Deferred income taxes ( 3,110 ) ( 5,446 ) Fair value changes in loans held for investment ( 58,908 ) — Fair value changes in securitization investments ( 2,194 ) 1,537 Other ( 1,962 ) ( 3,749 ) Changes in operating assets and liabilities: Changes in loans held for sale, net ( 532,537 ) ( 4,535,374 ) Changes in loans previously classified as held for sale, net 787,345 — Servicing assets ( 110,860 ) 3,201 Other assets ( 97,207 ) 40,974 Accounts payable, accruals and other liabilities ( 14,273 ) 21,013 Net cash provided by (used in) operating activities $ 253,877 $ ( 4,292,679 ) Investing activities Purchases of property, equipment and software $ ( 68,696 ) $ ( 49,071 ) Capitalized software development costs ( 4,889 ) ( 5,060 ) Purchases of available-for-sale investments ( 1,308,629 ) ( 452,340 ) Proceeds from sales of available-for-sale investments — 265,634 Proceeds from maturities and paydowns of available-for-sale investments 471,007 52,337 Changes in loans held for investment, net ( 2,556,261 ) ( 62,043 ) Proceeds from securitization investments 22,693 29,020 Proceeds from non-securitization investments 2,515 2,720 Purchases of non-securitization investments ( 13,841 ) ( 16,722 ) Acquisition of businesses, net of cash acquired — ( 72,301 ) Net cash used in investing activities $ ( 3,456,101 ) $ ( 307,826 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 10 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) (In Thousands) Six Months Ended June 30, 2024 2023 Financing activities Net change in deposits $ 4,297,336 $ 5,392,521 Net change in debt facilities ( 2,093,205 ) 964,898 Proceeds from other debt issuances 845,250 339,995 Repayment of other debt ( 297,183 ) ( 407,715 ) Payment of debt issuance costs ( 5,845 ) ( 7,707 ) Purchase of capped calls ( 90,649 ) — Unwind of capped calls 10,180 — Taxes paid related to net share settlement of share-based awards ( 7,758 ) ( 7,046 ) Proceeds from stock option exercises 632 585 Payment of redeemable preferred stock dividends ( 16,503 ) ( 20,047 ) Redemption of Series 1 preferred stock ( 323,400 ) — Finance lease principal payments ( 262 ) ( 252 ) Net cash provided by financing activities $ 2,318,593 $ 6,255,232 Effect of exchange rates on cash and cash equivalents ( 315 ) 99 Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents $ ( 883,946 ) $ 1,654,826 Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 3,615,578 1,846,302 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 2,731,632 $ 3,501,128 Reconciliation to amounts on condensed consolidated balance sheets (as of period end) Cash and cash equivalents $ 2,334,589 $ 3,015,652 Restricted cash and restricted cash equivalents 397,043 485,476 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 2,731,632 $ 3,501,128 Supplemental non-cash investing and financing activities Extinguishment of convertible notes by issuance of common stock $ 593,910 $ — Deposits credited but not yet received in cash 78,964 53,353 Available-for-sale securities purchased but unpaid — 47,553 Deconsolidation of securitization and residual debt — 92,914 Share-based compensation capitalized related to internally-developed software 18,411 14,757 The accompanying notes are an integral part of these condensed consolidated financial statements. 11 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards Organization SoFi is a financial services platform that was founded in 2011 to offer an innovative approach to the private student loan market by providing student loan refinancing options. The Company conducts its business through three reportable segments: Lending, Technology Platform and Financial Services. Since its founding, SoFi has expanded its lending and financial services strategy to offer personal loans, home loans and credit cards. The Company has also developed additional financial products, such as money management and investment product offerings, and has also leveraged its financial services platform to empower other businesses. The Company has continued to expand its product offerings through strategic acquisitions. During 2020, the Company expanded its investment product offerings into Hong Kong through the acquisition of 8 Limited, and also began to operate as a platform as a service for a variety of financial service providers, providing the infrastructure to facilitate core client-facing and back-end capabilities, such as account setup, account funding, direct deposit, authorizations and processing, payments functionality and check account balance features through the acquisition of Galileo. During 2022, the Company became a bank holding company and began operating as SoFi Bank, National Association, through its acquisition of Golden Pacific Bancorp, Inc., and expanded its platform to include a cloud-native digital and core banking platform with customers in Latin America through its acquisition of Technisys, allowing the Company to expand its technology platform services to a broader international market. During 2023, the Company acquired Wyndham Capital Mortgage, a fintech mortgage lender. For additional information on our recent business combinations, see Note 2. Business Combinations . For additional information on our reportable segments, see Note 17. Business Segment Information . The Company has elected to be treated as a financial holding company pursuant to Section 4(l) of the BHC Act. As a financial holding company, the Company is authorized to engage in a broader set of financial activities than a bank holding company that has not elected to be treated as a financial holding company. Financial holding companies may also engage in activities that are determined by the Federal Reserve to be complementary to financial activities. Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries and certain consolidated VIEs. All intercompany accounts were eliminated in consolidation. The condensed consolidated financial statements were prepared in conformity with GAAP and in accordance with the rules and regulations of the SEC. We condensed or omitted certain notes and other financial information from the interim financial statements presented herein. These condensed consolidated financial statements should be read in conjunction with the consolidated statements included in our annual filing on Form 10-K filed with the SEC on February 27, 2024 (“Form 10-K”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the Company’s financial condition and results of operations and cash flows for the interim periods presented. The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. In our unaudited condensed consolidated statements of cash flows beginning in the first quarter of 2024, we reclassified amounts related to fair value changes in residual interests classified as debt into other within the adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities . The prior period amount was recast to conform to the current period presentation. There was no impact to net cash provided by (used in) operating activities . Use of Judgments, Assumptions and Estimates The preparation of our condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosures of contingent assets and liabilities. These estimates and assumptions are inherently subjective in nature; therefore, actual results may differ from our estimates and assumptions, and the differences could be material. Management bases its estimates on historical experience and on various other factors it believes to be reasonable 12 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) under the circumstances. These assumptions and estimates include, but are not limited to, the following: (i) fair value measurements, (ii) business combinations, and (iii) goodwill. Borrowings and Financing Costs Convertible Senior Notes In March 2024, we issued $ 862.5 million aggregate principal amount of convertible senior notes due 2029 (the “2029 convertible notes”). The 2029 convertible notes will mature on March 15, 2029, unless earlier repurchased, redeemed or converted. We will settle conversions by paying or delivering cash, and if applicable, shares of our common stock, based on the applicable conversion rate. The 2029 convertible notes will also be redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 15, 2027 through the 30 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the convertible notes to be redeemed, plus accrued and unpaid interest, if any, thereon to, but excluding, the redemption date, but only if certain liquidity conditions described in the indenture are satisfied and certain conditions are met with respect to the last reported sale price per share of our common stock prior to conversion. See Note 9. Debt for more detailed disclosure of the term and features of the 2029 convertible notes. We concluded that the conversion rights, optional redemption rights, and contingent repurchase rights did not require bifurcation as derivative instruments, which we reevaluate each reporting period. The additional interest and special interest that accrue on the notes in the event of our failure to comply with certain registration or reporting requirements are required to be bifurcated from the host contract, as the reporting requirement triggering event is not clearly and closely related to the host convertible debt contract. The value was determined to be immaterial; therefore, we accounted for the 2029 convertible notes wholly as debt, which was recognized on the settlement date. Accordingly, we allocated all debt issuance costs to the debt instrument. In connection with the pricing of the 2029 convertible notes, we entered into privately negotiated capped call transactions with certain financial institutions, as defined and further discussed below. Capped Call Transactions I n March 2024, we entered into privately negotiated capped call transactions (the “2029 capped call transactions”) with certain financial institutions (the “capped call counterparties”). The 2029 capped call transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that initially underlie the convertible notes. The capped call transactions are net purchased call options on our own common stock. The 2029 capped call transactions are separate transactions entered into by the Company with each of the capped call counterparties, are not part of the terms of the 2029 convertible notes, and do not affect any holder’s rights under the 2029 convertible notes. Holders of the 2029 convertible notes do not have any rights with respect to the 2029 capped call transactions. See Note 10. Equity for additional information. As the 2029 capped call transactions are legally detachable and separately exercisable from the 2029 convertible notes, they were evaluated as freestanding instruments. We concluded that the 2029 capped call transactions meet the scope exceptions for derivative instruments, and as such, the capped call transactions meet the criteria for classification in equity and are included as a reduction to additional paid-in capital . Servicing Rights We enter into servicing agreements in connection with transfers of our financial assets and referral fulfillment arrangements in which we are a sub-servicer for financial assets that we do not legally own, and on a standalone basis. At the inception of each servicing relationship, we determine whether we should record a servicing asset or servicing liability, measured at the fair value of the servicing right, which may be zero. We elected the fair value option to measure our servicing rights subsequent to initial recognition. We measure the initial and subsequent fair value of our servicing rights using a discounted cash flow methodology, while also considering market data as it becomes available. The significant assumptions used in the valuation model include our contractual servicing fee, ancillary income, prepayment rate assumptions, default rate assumptions, a discount rate commensurate with the risk of the servicing asset or liability being valued, and an assumed market cost of servicing, which is based on active quotes from third-party servicers. The value of the servicing rights are dependent on the performance of the underlying loans. For servicing rights retained in connection with loan transfers that do not meet the requirements for sale accounting treatment, there is no recognition of a servicing asset or liability. 13 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Servicing rights in connection with transfers of financial assets are initially measured at fair value and recognized as a component of the gain or loss from sales of loans and the initial capitalization is reported within noninterest income—loan origination, sales, and securitizations in the consolidated statements of operations and comprehensive loss. Servicing rights assumed from third parties for financial assets for which we are not the loan originator are initially measured at fair value and recognized within noninterest income—servicing in the consolidated statements of operations and comprehensive loss. Servicing rights are measured at fair value at each subsequent reporting date and changes in fair value are reported in earnings in the period in which they occur. Subsequent measurement changes for all servicing rights, including servicing fee payments and fair value changes, are included within noninterest income—servicing in the consolidated statements of operations and comprehensive loss. For servicing rights with adequate compensation resulting in an initial and subsequent value of zero, we recognize servicing fees received during the period within noninterest income—servicing . We elected the fair value option to measure our servicing rights to better align with the valuation of our transferred loans, which also tend to share a similar risk profile to the personal loan servicing we assume from third parties when we are not the loan originator. The loans are also impacted by similar factors, such as conditional prepayment rates and default rates. We consider the risk of the assets and the observability of inputs in determining the classes of servicing rights. We have three classes of servicing assets: personal loans, student loans and home loans. See Note 12. Fair Value Measurements for the key inputs used in the fair value measurements of our classes of servicing rights. Recent Accounting Standards Issued, But Not Yet Adopted Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures . The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The standard should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of this amendment on our consolidated financial statements. Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740) — Improvements to Income Tax Disclosures. The ASU improves income tax disclosures primarily related to enhancements of the rate reconciliation and income taxes paid information. The standard is effective for annual periods beginning after December 15, 2024. The standard should be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the impact of this amendment on our consolidated financial statements. Note 2. Business Combinations Acquisition of Wyndham Capital Mortgage On April 3, 2023, we acquired all of the outstanding equity interests in Wyndham for cash consideration. With the acquisition of Wyndham, a fintech mortgage lender, we broadened our suite of home loan products and now manage the technology for a digitized mortgage experience. The acquisition was accounted for as a business combination. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The excess of the total purchase consideration over the fair value of the net assets acquired is allocated to goodwill, which is deductible for tax purposes. No adjustments were made to the fair value of the net assets during the year subsequent to the acquisition. The acquisition was not determined to be a significant acquisition. Acquisition of Technisys S.A. There were 6,305,595 shares issued in the acquisition of Technisys that were held in escrow. During the year ended December 31, 2023, we released 6,259,736 of the escrow shares. The remaining 45,859 shares continue to be held in escrow pending resolution of outstanding indemnification claims by SoFi. 14 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Goodwill and Intangible Assets Goodwill as of both June 30, 2024 and December 31, 2023 was $ 1,393,505 . As of June 30, 2024, goodwill attributable to the Lending, Technology Platform and Financial Services reportable segments was $ 17,688 , $ 1,338,658 and $ 37,159 , respectively. Management does not believe that the goodwill in any of the reporting units is impaired as of June 30, 2024. Note 3. Revenue In each of our revenue arrangements, revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects our expected consideration in exchange for those goods or services. Our arrangements are discussed in our Annual Report on Form 10-K, with notable updates provided herein. Disaggregated Revenue The table below presents revenue from contracts with customers disaggregated by type of service, which best depicts how the revenue and cash flows are affected by economic factors, and by the reportable segment to which each revenue stream relates, as well as a reconciliation of total revenue from contracts with customers to total noninterest income . Revenue from contracts with customers is presented within noninterest income—technology products and solutions and noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Financial Services Referrals $ 13,618 $ 8,223 $ 26,354 $ 17,849 Interchange 14,457 8,663 26,459 15,932 Brokerage 5,960 5,225 9,994 10,103 Other (1) 654 348 1,581 835 Total financial services 34,689 22,459 64,388 44,719 Technology Platform (2) Technology services 85,469 80,328 170,119 152,457 Other (1) 624 1,906 1,884 2,999 Total technology platform 86,093 82,234 172,003 155,456 Total revenue from contracts with customers 120,782 104,693 236,391 200,175 Other Sources of Revenue Loan origination, sales, and securitizations 54,872 90,164 111,872 213,498 Servicing 6,659 9,052 13,633 21,794 Other 3,721 2,983 66,415 7,573 Total other sources of revenue 65,252 102,199 191,920 242,865 Total noninterest income $ 186,034 $ 206,892 $ 428,311 $ 443,040 _____________________ (1) Financial Services includes revenues from enterprise services and equity capital markets services. Technology Platform includes revenues from software licenses and associated services, and payment network fees for serving as a transaction card program manager for enterprise customers that are the program marketers for separate card programs. (2) Related to these technology platform services, we had deferred revenue of $ 7,078 and $ 5,718 as of June 30, 2024 and December 31, 2023, respectively, which are presented within accounts payable, accruals and other liabilities in the condensed consolidated balance sheets. We recognized revenue of $ 1,086 and $ 2,444 during the three months ended June 30, 2024 and 2023, respectively, and $ 2,386 and $ 4,784 during the six months ended June 30, 2024 and 2023, respectively, associated with deferred revenue within noninterest income—technology products and solutions in the condensed consolidated statements of operations and comprehensive income (loss). Contract Balances As of June 30, 2024 and December 31, 2023, accounts receivable, net associated with revenue from contracts with customers was $ 68,150 and $ 60,466 , respectively, reported within other assets in the condensed consolidated balance sheets. 15 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 4. Loans As of June 30, 2024, our loan portfolio consisted of (i) loans held for sale, including personal loans and home loans, which are measured at fair value under the fair value option, (ii) loans held for investment, including student loans, which are measured at fair value under the fair value option, and (iii) loans held for investment, including senior secured loans, credit cards, and commercial and consumer banking loans, which are measured at amortized cost. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable: June 30, 2024 December 31, 2023 Loans held for sale Personal loans (1) $ 15,797,428 $ 15,330,573 Home loans 96,137 66,198 Total loans held for sale, at fair value 15,893,565 15,396,771 Loans held for investment Student loans (2) 7,194,762 6,725,484 Total loans held for investment, at fair value 7,194,762 6,725,484 Senior secured loans 1,746,418 446,463 Credit card 274,233 272,628 Commercial and consumer banking: Commercial real estate 138,858 106,326 Commercial and industrial 5,251 6,075 Residential real estate and other consumer 7,768 4,667 Total commercial and consumer banking 151,877 117,068 Total loans held for investment, at amortized cost (3) 2,172,528 836,159 Total loans held for investment 9,367,290 7,561,643 Total loans $ 25,260,855 $ 22,958,414 _____________________ (1) Includes $ 299,186 and $ 502,757 of personal loans in consolidated VIEs as of June 30, 2024 and December 31, 2023, respectively. (2) Includes $ 2,241,516 and $ 2,459,103 of student loans covered by financial guarantee, and $ 88,468 and $ 221,461 of student loans in consolidated VIEs as of June 30, 2024 and December 31, 2023, respectively. (3) See Note 5. Allowance for Credit Losses for additional information on our loans at amortized cost as it pertains to the allowance for credit losses. 16 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loans Measured at Fair Value The following table summarizes the aggregate fair value of our loans, for which we elected the fair value option. See Note 12. Fair Value Measurements for the assumptions used in our fair value model. Personal Loans Student Loans Home Loans Total June 30, 2024 Unpaid principal $ 15,040,190 $ 6,915,550 $ 94,673 $ 22,050,413 Accumulated interest 111,308 29,957 71 141,336 Cumulative fair value adjustments 645,930 249,255 1,393 896,578 Total fair value of loans (1) $ 15,797,428 $ 7,194,762 $ 96,137 $ 23,088,327 December 31, 2023 Unpaid principal $ 14,498,629 $ 6,445,586 $ 67,406 $ 21,011,621 Accumulated interest 114,541 34,357 92 148,990 Cumulative fair value adjustments 717,403 245,541 ( 1,300 ) 961,644 Total fair value of loans (1) $ 15,330,573 $ 6,725,484 $ 66,198 $ 22,122,255 __________________ (1) Each component of the fair value of loans is impacted by charge-offs during the period. 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, 60 and 90 days past due. The following table summarizes the aggregate fair value of loans 90 days or more delinquent. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent. Personal Loans Student Loans Home Loans Total June 30, 2024 Unpaid principal balance $ 95,829 $ 8,571 $ — $ 104,400 Accumulated interest 4,452 140 — 4,592 Cumulative fair value adjustments (1) ( 79,035 ) ( 5,978 ) — ( 85,013 ) Fair value of loans 90 days or more delinquent (2) $ 21,246 $ 2,733 $ — $ 23,979 December 31, 2023 Unpaid principal balance $ 81,591 $ 8,446 $ 495 $ 90,532 Accumulated interest 4,023 187 6 4,216 Cumulative fair value adjustments (1) ( 70,191 ) ( 5,021 ) ( 248 ) ( 75,460 ) Fair value of loans 90 days or more delinquent (2) $ 15,423 $ 3,612 $ 253 $ 19,288 __________________ (1) 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, 60 and 90 days past due. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). As such, the $ 85.0 million fair value adjustment as of June 30, 2024 has been recorded in noninterest income—loan origination, sales, and securitizations in the respective periods in which 10, 30, 60, and 90 days of delinquency occurred. See our Annual Report on Form 10-K for further discussion of the policies for determining the fair value of our loan portfolios. (2) The fair value incorporates the expected price to be paid by buyers of these delinquent loans after charge-off occurs, implying that potential recoveries are expected to be in excess of these levels based on consistent demonstrated recoverability after a loan becomes delinquent and gets charged off. 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. When a transfer of financial assets qualifies as a sale, in many instances we have continuing involvement as the servicer of those financial assets. As we expect the benefits of servicing to be more than just adequate, we recognize a servicing asset. Further, in the case of securitization-related transfers that qualify as sales, we have additional continuing involvement as an investor, albeit at insignificant levels relative to the expected gains and losses of the securitization. In instances where a transfer is accounted for as a secured borrowing, we perform servicing (but we do not 17 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) recognize a servicing asset) and typically maintain a significant investment relative to the expected gains and losses of the securitization. In whole loan sales, we do not have a residual financial interest in the loans, nor do we have any other power over the loans that would constrain us from recognizing a sale. Additionally, we generally have no repurchase requirements related to transfers of personal loans, student loans and non-GSE home loans other than standard origination representations and warranties, for which we record a liability based on expected repurchase obligations. For GSE home loans, we have customary GSE repurchase requirements, which do not constrain sale treatment but result in a liability for the expected repurchase requirement. The following table summarizes our personal loan securitization transfers qualifying for sale accounting treatment during the six months ended June 30, 2024. There were no loan securitization transfers qualifying for sale accounting treatment during the three months ended June 30, 2024, as well as during the three and six months ended June 30, 2023. Six Months Ended June 30, 2024 Personal loans Fair value of consideration received: Cash $ 674,036 Securitization investments 35,616 Servicing assets recognized 27,523 Repurchase liabilities recognized ( 280 ) Total consideration 736,895 Aggregate unpaid principal balance and accrued interest of loans sold 701,601 Gain from loan sales $ 35,294 Deconsolidation of debt reflects the impacts of previously consolidated VIEs that became deconsolidated during the period because we no longer hold a significant financial interest in the underlying securitization entity, which can fluctuate from period to period. Gains and losses on deconsolidations are presented within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). During the three and six months ended June 30, 2024, we had deconsolidation of debt on student loans of $ 55.9 million and $ 98.0 million, respectively. The impact on earnings from deconsolidation was immaterial . During the three and six months ended June 30, 2023, we had deconsolidation of debt on student loans of $ 45.9 million. The impact on earnings from deconsolidation was immaterial. The following table summarizes our current whole loan sales: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Personal loans Fair value of consideration received: Cash $ 1,136,812 $ 51,473 $ 1,636,563 $ 51,473 Receivable — — 3,036 — Servicing assets recognized 70,472 888 104,021 888 Repurchase liabilities recognized ( 4,181 ) ( 360 ) ( 5,981 ) ( 360 ) Total consideration 1,203,103 52,001 1,737,639 52,001 Aggregate unpaid principal balance and accrued interest of loans sold 1,136,427 50,322 1,639,464 50,322 Realized gain $ 66,676 $ 1,679 $ 98,175 $ 1,679 18 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Student loans Fair value of consideration received: Cash $ — $ 98,624 $ 310,331 $ 98,624 Servicing assets recognized — 2,792 8,249 2,792 Repurchase liabilities recognized — ( 16 ) ( 46 ) ( 16 ) Total consideration — 101,400 318,534 101,400 Aggregate unpaid principal balance and accrued interest of loans sold — 99,916 303,578 99,916 Realized gain $ — $ 1,484 $ 14,956 $ 1,484 Home loans Fair value of consideration received: Cash $ 385,030 $ 267,052 $ 729,708 $ 344,871 Servicing assets recognized 3,390 2,803 6,222 3,757 Repurchase liabilities recognized ( 634 ) ( 751 ) ( 1,139 ) ( 847 ) Total consideration 387,786 269,104 734,791 347,781 Aggregate unpaid principal balance and accrued interest of loans sold 381,299 266,634 725,557 344,610 Realized gain $ 6,487 $ 2,470 $ 9,234 $ 3,171 The following table summarizes our delinquent whole loan sales during the three and six months ended June 30, 2024. There were no delinquent whole loan sales during the three and six months ended June 30, 2023. Three Months Ended June 30, Six Months Ended June 30, 2024 2024 Personal loans Fair value of consideration received: Cash $ 5,549 $ 10,549 Servicing assets recognized 4,884 8,284 Repurchase liabilities recognized ( 28 ) ( 53 ) Total consideration 10,405 18,780 Aggregate unpaid principal balance and accrued interest of loans sold (1) 73,450 139,861 Realized loss $ ( 63,045 ) $ ( 121,081 ) __________________ (1) During the three and six months ended June 30, 2024, includes $ 69.4 million and $ 131.9 million, respectively, of aggregate unpaid principal balance sold, related to late-stage delinquent loans for which we retained servicing and portions of recoveries. For the three and six months ended June 30, 2024, $ 47.1 million and $ 90.3 million, respectively, of unpaid principal balance was recorded in prior periods as a write down in noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). These loans were sold prior to charge-off during the three and six months ended June 30, 2024, respectively, and otherwise would have been charged off as of June 30, 2024 consistent with our policy. In our other charged off whole loan sales, we typically do not retain servicing or recoveries. 19 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) For certain transferred loans that qualified for sale accounting and are, therefore, off-balance sheet, we have continuing involvement through our servicing agreements. For such loans, our exposure to loss is generally limited to the extent we would be required to repurchase such a loan due to a breach of representations and warranties associated with the loan transfer or servicing contract. The following table presents information about the unpaid principal balances of loans originated by us and subsequently transferred, but with which we have continuing involvement: Personal Loans Student Loans Home Loans Total June 30, 2024 Loans in delinquency (30+ days past due) $ 62,804 $ 68,404 $ 31,175 $ 162,383 Total loans in delinquency 103,534 127,518 31,175 262,227 Total transferred loans serviced (1) 3,652,266 5,815,030 5,884,862 15,352,158 December 31, 2023 Loans in delinquency (30+ days past due) $ 52,813 $ 60,989 $ 24,193 $ 137,995 Total loans in delinquency 90,582 137,243 24,193 252,018 Total transferred loans serviced (1) 2,223,785 6,148,800 5,592,793 13,965,378 _____________________ (1) Total transferred loans serviced includes loans in delinquency, as well as loans in repayment, loans in-school/grace period/deferment (related to student loans), and loans in forbearance. The vast majority of total transferred loans serviced represent loans in repayment as of the dates indicated. The following table presents additional information about the servicing cash flows received and net charge-offs related to loans originated by us and subsequently transferred, but with which we have a continuing involvement: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Personal loans Servicing fees collected from transferred loans $ 16,670 $ 4,870 $ 26,115 $ 11,047 Charge-offs, net of recoveries, of transferred loans 87,840 41,411 173,173 87,526 Student loans Servicing fees collected from transferred loans 5,975 6,402 12,121 15,592 Charge-offs, net of recoveries, of transferred loans 11,123 10,005 21,976 19,158 Home loans Servicing fees collected from transferred loans 4,232 3,659 8,271 6,819 Total Servicing fees collected from transferred loans $ 26,877 $ 14,931 $ 46,507 $ 33,458 Charge-offs, net of recoveries, of transferred loans 98,963 51,416 195,149 106,684 20 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Loans Measured at Amortized Cost Loan Portfolio Composition and Aging The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status: Delinquent Loans Current 30–59 Days 60–89 Days ≥ 90 Days (1) Total Delinquent Loans Total Loans (2) June 30, 2024 Senior secured loans $ 1,744,601 $ — $ — $ — $ — $ 1,744,601 Credit card 301,165 4,030 3,666 10,157 17,853 319,018 Commercial and consumer banking: Commercial real estate 140,567 — — — — 140,567 Commercial and industrial 5,101 — 77 322 399 5,500 Residential real estate and other consumer (3) 7,772 — — — — 7,772 Total commercial and consumer banking 153,440 — 77 322 399 153,839 Total loans $ 2,199,206 $ 4,030 $ 3,743 $ 10,479 $ 18,252 $ 2,217,458 December 31, 2023 Senior secured loans $ 445,733 $ — $ — $ — $ — $ 445,733 Credit card 297,612 5,451 4,829 11,802 22,082 319,694 Commercial and consumer banking: Commercial real estate 107,757 — — — — 107,757 Commercial and industrial 6,108 1 — 439 440 6,548 Residential real estate and other consumer (3) 4,658 — — — — 4,658 Total commercial and consumer banking 118,523 1 — 439 440 118,963 Total loans $ 861,868 $ 5,452 $ 4,829 $ 12,241 $ 22,522 $ 884,390 ______________ (1) All of the credit cards ≥ 90 days past due continued to accrue interest. As of the dates indicated, there were no credit cards on nonaccrual status. As of the dates indicated, commercial and consumer banking loans on nonaccrual status were immaterial . (2) For credit card, the balance is presented before allowance for credit losses of $ 49,406 and $ 52,385 as of June 30, 2024 and December 31, 2023, respectively, and accrued interest of $ 4,485 and $ 5,288 , respectively. For senior secured loans, the balance is presented before accrued interest of $ 1,817 and $ 730 as of June 30, 2024 and December 31, 2023, respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $ 2,502 and $ 2,310 as of June 30, 2024 and December 31, 2023, respectively, and accrued interest of $ 540 and $ 415 , respectively. (3) Includes residential real estate loans originated by Golden Pacific for which we did not elect the fair value option. 21 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Credit Quality Indicators Credit Card The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) based on FICO scores, which are obtained at origination of the account and are refreshed monthly thereafter. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data. FICO June 30, 2024 December 31, 2023 ≥ 800 $ 33,723 $ 29,269 780 – 799 21,844 19,350 760 – 779 23,042 20,740 740 – 759 24,448 23,361 720 – 739 27,856 28,621 700 – 719 34,971 35,528 680 – 699 37,141 38,289 660 – 679 32,220 35,443 640 – 659 22,552 25,836 620 – 639 14,476 15,569 600 – 619 9,709 10,063 ≤ 599 37,036 37,625 Total credit card $ 319,018 $ 319,694 Commercial and Consumer Banking We analyze loans in our commercial and consumer banking portfolio by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard. • Pass — Loans that management believes will fully repay in accordance with the contractual loan terms. • Watch   —   Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring. • Special mention —   Loans with a potential weakness or weaknesses that deserves management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date. • Substandard   —   Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. 22 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator: Term Loans by Origination Year June 30, 2024 2024 2023 2022 2021 2020 Prior Total Term Loans Revolving Loans Commercial real estate Pass $ 34,140 $ 23,201 $ 30,627 $ 5,576 $ 4,499 $ 25,577 $ 123,620 $ 180 Watch 1,697 1,225 7,422 1,631 — 2,756 14,731 — Special mention — — — — — 519 519 — Substandard — — — — — 1,517 1,517 — Total commercial real estate 35,837 24,426 38,049 7,207 4,499 30,369 140,387 180 Commercial and industrial Pass — 49 — — 55 3,945 4,049 868 Watch 78 41 — — — 15 134 — Substandard — — — — — 449 449 — Total commercial and industrial 78 90 — — 55 4,409 4,632 868 Residential real estate and other consumer Pass 2,978 1,181 — — — 3,483 7,642 91 Watch — — — — — 39 39 — Total residential real estate and other consumer 2,978 1,181 — — — 3,522 7,681 91 Total commercial and consumer banking $ 38,893 $ 25,697 $ 38,049 $ 7,207 $ 4,554 $ 38,300 $ 152,700 $ 1,139 Note 5. Allowance for Credit Losses Our allowance for credit losses represents our current estimate of expected credit losses over the remaining contractual life of certain financial assets, including credit cards as well as commercial and consumer banking loans acquired in the Bank Merger, which relate to our Financial Services segment, and accounts receivables primarily related to our Technology Platform segment. Given our methods of collecting funds on servicing receivables, our historical experience of infrequent write offs, and that we have not observed meaningful changes in our counterparties’ abilities to pay, we determined that the future exposure to credit losses on servicing related receivables was immaterial. See our Annual Report on Form 10-K for further discussion of the methodology and policies for determining our allowance for credit losses for each of our loan portfolios. 23 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents changes in our allowance for credit losses: Credit Card (1) Commercial and Consumer Banking (1) Accounts Receivable (1) Three Months Ended June 30, 2024 Balance at March 31, 2024 $ 49,092 $ 2,221 $ 2,109 Provision for credit losses (2) 11,348 292 382 Net charge-offs ( 11,034 ) ( 11 ) ( 982 ) Balance at June 30, 2024 $ 49,406 $ 2,502 $ 1,509 Three Months Ended June 30, 2023 Balance at March 31, 2023 $ 37,089 $ 1,848 $ 1,645 Provision for credit losses (2) 12,600 15 1,096 Net (charge-offs) recoveries ( 10,328 ) 3 ( 804 ) Balance at June 30, 2023 $ 39,361 $ 1,866 $ 1,937 Six Months Ended June 30, 2024 Balance at December 31, 2023 $ 52,385 $ 2,310 $ 1,837 Provision for credit losses (2) 18,601 221 2,793 Net charge-offs ( 21,580 ) ( 29 ) ( 3,121 ) Balance at June 30, 2024 $ 49,406 $ 2,502 $ 1,509 Six Months Ended June 30, 2023 Balance at December 31, 2022 $ 39,110 $ 1,678 $ 2,785 Provision for credit losses (2) 20,837 185 242 Net (charge-offs) recoveries ( 20,586 ) 3 ( 1,090 ) Balance at June 30, 2023 $ 39,361 $ 1,866 $ 1,937 _____________________ (1) Credit cards and commercial and consumer banking loans measured at amortized cost, net of allowance for credit losses, are presented within loans held for investment, at amortized cost in the condensed consolidated balance sheets. Accounts receivable balances, net of allowance for credit losses, are presented within other assets in the condensed consolidated balance sheets. (2) The provision for credit losses on credit cards and commercial and consumer banking loans is presented within noninterest expense—provision for credit losses in the condensed consolidated statements of operations and comprehensive income (loss) . During the three and six months ended June 30, 2024, recoveries of amounts previously reserved related to credit cards were $ 1,136 and $ 2,219 , and immaterial during the three and six months ended June 30, 2023. There were immaterial recoveries of amounts previously reserved related to commercial and consumer banking loans during the three and six months ended June 30, 2024 and 2023. The provision for credit losses on accounts receivable is presented within noninterest expense—general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). During the three and six months ended June 30, 2024, recoveries of amounts previously reserved related to accounts receivable were $ 541 and $ 1,038 , respectively. During the three and six months ended June 30, 2023, recoveries of amounts previously reserved related to accounts receivable were $ 18 and $ 1,179 , respectively. Credit card : During the three and six months ended June 30, 2024, accrued interest receivables written off by reversing interest income were $ 2.4 million and $ 5.0 million, respectively. During the three and six months ended June 30, 2023, accrued interest receivables written off by reversing interest income were $ 2.2 million and $ 4.4 million, respectively. 24 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 6. Investment Securities Investments in AFS Debt Securities The following table presents our investments in AFS debt securities: Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses (1) Fair Value June 30, 2024 U.S. Treasury securities $ 206,022 $ 66 $ — $ ( 402 ) $ 205,686 Corporate bonds 18,594 127 — ( 663 ) 18,058 Agency mortgage-backed securities 1,214,366 2,837 3,440 ( 4,304 ) 1,216,339 Other asset-backed securities 3,418 1 — ( 53 ) 3,366 Other (2) 944 8 — ( 178 ) 774 Total investments in AFS debt securities $ 1,443,344 $ 3,039 $ 3,440 $ ( 5,600 ) $ 1,444,223 December 31, 2023 U.S. Treasury securities $ 518,673 $ 206 $ 978 $ ( 780 ) $ 519,077 Multinational securities (3) 8,548 103 — ( 17 ) 8,634 Corporate bonds 32,609 207 — ( 1,092 ) 31,724 Agency mortgage-backed securities 28,714 111 33 ( 1,016 ) 27,842 Other asset-backed securities 7,272 4 — ( 154 ) 7,122 Other (2) 941 8 — ( 161 ) 788 Total investments in AFS debt securities $ 596,757 $ 639 $ 1,011 $ ( 3,220 ) $ 595,187 _____________________ (1) As of June 30, 2024 and December 31, 2023, we concluded that there was no credit loss attributable to securities in unrealized loss positions, as (i) 98 % and 92 % of the amortized cost basis of our investments as of June 30, 2024 and December 31, 2023, respectively, was composed of U.S. Treasury securities and agency mortgage-backed securities, which are of high credit quality and have no risk of credit-related impairment due to the nature of the counterparties and history of no credit losses, and (ii) we have not identified factors indicating credit-related impairment for the remaining investments and expect that the contractual principal and interest payments will be received. Additionally, we do not intend to sell the securities in loss positions nor is it more likely than not that we will be required to sell the securities prior to recovery of the amortized cost basis. (2) Includes state municipal bond securities. (3) Includes supranational bonds. 25 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents information about our investments in AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2024 and December 31, 2023. Less than 12 Months 12 Months or Longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses June 30, 2024 U.S. Treasury securities $ 187,831 $ ( 74 ) $ 17,855 $ ( 327 ) $ 205,686 $ ( 401 ) Corporate bonds — — 15,981 ( 664 ) 15,981 ( 664 ) Agency mortgage-backed securities 721,611 ( 3,391 ) 6,419 ( 913 ) 728,030 ( 4,304 ) Other asset-backed securities — — 3,366 ( 53 ) 3,366 ( 53 ) Other — — 774 ( 178 ) 774 ( 178 ) Total investments in AFS debt securities $ 909,442 $ ( 3,465 ) $ 44,395 $ ( 2,135 ) $ 953,837 $ ( 5,600 ) December 31, 2023 U.S. Treasury securities $ 480,012 $ ( 58 ) $ 39,065 $ ( 722 ) $ 519,077 $ ( 780 ) Multinational securities — — 8,634 ( 17 ) 8,634 ( 17 ) Corporate bonds — — 31,724 ( 1,092 ) 31,724 ( 1,092 ) Agency mortgage-backed securities 20,930 ( 157 ) 6,912 ( 859 ) 27,842 ( 1,016 ) Other asset-backed securities — — 7,122 ( 154 ) 7,122 ( 154 ) Other — — 788 ( 161 ) 788 ( 161 ) Total investments in AFS debt securities $ 500,942 $ ( 215 ) $ 94,245 $ ( 3,005 ) $ 595,187 $ ( 3,220 ) The following table presents the amortized cost and fair value of our investments in AFS debt securities by contractual maturity: Due Within One Year Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years Total June 30, 2024 Investments in AFS debt securities—Amortized cost: U.S. Treasury securities $ 199,758 $ 6,264 $ — $ — $ 206,022 Corporate bonds 10,135 5,170 3,289 — 18,594 Agency mortgage-backed securities — 5,037 15,947 1,193,382 1,214,366 Other asset-backed securities 2,500 918 — — 3,418 Other — — — 944 944 Total investments in AFS debt securities $ 212,393 $ 17,389 $ 19,236 $ 1,194,326 $ 1,443,344 Weighted average yield for investments in AFS debt securities (1) 5.02 % 2.03 % 3.11 % 5.25 % 5.09 % Investments in AFS debt securities—Fair value (2) : U.S. Treasury securities $ 199,576 $ 6,044 $ — $ — $ 205,620 Corporate bonds 9,994 4,960 2,977 — 17,931 Agency mortgage-backed securities — 5,045 15,787 1,192,670 1,213,502 Other asset-backed securities 2,468 897 — — 3,365 Other — — — 766 766 Total investments in AFS debt securities $ 212,038 $ 16,946 $ 18,764 $ 1,193,436 $ 1,441,184 _____________________ (1) The weighted average yield represents the effective yield for the investment securities owned at the end of the period and is computed based on the amortized cost of each security. (2) Presentation of fair values of our investments in AFS debt securities by contractual maturity excludes total accrued interest of $ 3,039 as of June 30, 2024. 26 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Gross realized gains and losses on our investments in AFS debt securities were immaterial during the three and six months ended June 30, 2024. Gross realized gains and losses were $ 3,356 and $ 509 , respectively, during the six months ended June 30, 2023, and there were no realized gains and losses on our investments in AFS debt securities during the three months ended June 30, 2023. During the three and six months ended June 30, 2024 and 2023, there were no transfers between classifications of our investments in AFS debt securities. See Note 10. Equity for unrealized gains and losses on our investments in AFS debt securities and amounts reclassified out of AOCI. Securitization Investments The following table presents the aggregate outstanding value of asset-backed bonds and residual interests owned by the Company in nonconsolidated VIEs, which are presented within investment securities in the condensed consolidated balance sheets: June 30, 2024 December 31, 2023 Personal loans $ 50,332 $ 27,247 Student loans 71,532 79,501 Securitization investments $ 121,864 $ 106,748 Note 7. Securitization and Variable Interest Entities Consolidated VIEs We consolidate certain securitization trusts in which we have a variable interest and are deemed to be the primary beneficiary. The VIEs are SPEs with portfolio loans securing debt obligations. The SPEs were created and designed to transfer credit and interest rate risk associated with consumer loans through the issuance of collateralized notes and trust certificates. We make standard representations and warranties to repurchase or replace qualified portfolio loans. Aside from these representations, the holders of the asset-backed debt obligations have no recourse to the Company if the cash flows from the underlying portfolio loans securing such debt obligations are not sufficient to pay all principal and interest on the asset-backed debt obligations. We hold a significant interest in these financing transactions through our ownership of a portion of the residual interest in certain VIEs. In addition, in some cases, we invest in the debt obligations issued by the VIE. Our investments in consolidated VIEs eliminate in consolidation. The residual interest is the first VIE interest to absorb losses should the loans securing the debt obligations not provide adequate cash flows to satisfy more senior claims and is the interest that we expect to absorb the expected gains and losses of the VIE. Our exposure to credit risk in sponsoring SPEs is limited to our investment in the VIE. VIE creditors have no recourse against our general credit. As of June 30, 2024 and December 31, 2023, we had four and six consolidated VIEs, respectively, on our condensed consolidated balance sheets. During the six months ended June 30, 2024, we exercised a securitization clean up call related to two consolidated VIEs. The assets of consolidated VIEs that were included in our condensed consolidated balance sheets may only be used to settle obligations of consolidated VIEs and were in excess of those obligations as of June 30, 2024 and December 31, 2023. Intercompany balances are eliminated upon consolidation. Nonconsolidated VIEs We have created and designed personal loan and student loan trusts to transfer associated credit and interest rate risk associated with the loans through the issuance of collateralized notes and residual certificates. We have a variable interest in the nonconsolidated loan trusts, as we own collateralized notes and residual certificates in the loan trusts that absorb variability. We also have continuing, non-controlling involvement with the trusts as the servicer. As servicer, we may have the power to perform the activities which most impact the economic performance of the VIE, but since either we hold an insignificant financial interest in the trusts or rights held by other variable interest holders convey power, we are not the primary beneficiary. This financial interest represents the equity ownership interest in the loan trusts, wherein there is an obligation to absorb losses and the right to receive benefits from residual certificate ownership. The maximum exposure to loss as a result of our involvement with the nonconsolidated VIEs is limited to our investment. We did not provide financial support to any 27 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) nonconsolidated VIEs beyond our initial equity investment. There are no liquidity arrangements, guarantees or other commitments by third parties that may affect the fair value or risk of our variable interests in nonconsolidated VIEs. As of June 30, 2024 and December 31, 2023, we had investments in 24 and 22 nonconsolidated VIEs, respectively. During the six months ended June 30, 2024, we established two nonconsolidated trusts. Note 8. Deposits We offer deposit accounts (referred to as “checking and savings” accounts within SoFi Money) to our members through SoFi Bank, which include interest-bearing deposits and noninterest-bearing deposits. The following table presents detail of our deposits: June 30, 2024 December 31, 2023 Savings deposits $ 18,669,251 $ 12,902,033 Demand deposits (1) 2,397,002 2,663,335 Time deposits (1)(2) 1,879,399 3,003,625 Total interest-bearing deposits 22,945,652 18,568,993 Noninterest-bearing deposits 51,311 51,670 Total deposits $ 22,996,963 $ 18,620,663 _____________________ (1) As of June 30, 2024, includes brokered deposits of $ 1,838,936 consisting of time deposits. As of December 31, 2023, includes brokered deposits of $ 3,160,414 , of which $ 2,971,462 and $ 188,952 are time deposits and demand deposits, respectively. (2) As of June 30, 2024 and December 31, 2023, the amount of time deposits that exceeded the insured limit (referred to as “uninsured deposits”) totaled $ 21,634 and $ 21,268 , respectively. As of June 30, 2024, future maturities of our total time deposits were as follows: Remainder of 2024 $ 1,289,077 2025 587,975 2026 2,074 2027 — 2028 158 Thereafter 115 Total $ 1,879,399 28 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 9. Debt The following table summarizes the components of our debt: June 30, 2024 December 31, 2023 Borrowing Description Total Collateral (1) Stated Interest Rate (2) Termination/Maturity (3) Total Capacity Total Outstanding (4) Total Outstanding Debt Facilities Personal loan warehouse facilities $ 376,834 5.46 % – 7.27 % January 2025 – October 2026 $ 3,900,000 $ 325,309 $ 1,077,444 Student loan warehouse facilities 979,295 6.08 % – 7.08 % April 2025 – January 2027 3,580,000 763,599 2,095,046 Risk retention warehouse facilities (5) 57,112 6.83 % – 8.70 % November 2024 – October 2027 100,000 57,415 67,038 Revolving credit facility (6) 6.94 % April 2028 645,000 486,000 486,000 Other Debt Convertible senior notes, due 2026 (7) — % October 2026 511,972 1,111,972 Convertible senior notes, due 2029 (8) 1.25 % March 2029 862,500 — Other financing (9) 417,740 427,702 — — Securitizations Personal loan securitizations 163,018 1.61 % – 5.81 % September 2030 – May 2031 62,402 239,340 Student loan securitizations 86,333 3.09 % – 3.73 % August 2048 71,709 182,744 Total, before unamortized debt issuance costs, premiums and discounts $ 3,140,906 $ 5,259,584 Less: unamortized debt issuance costs, premiums and discounts ( 34,277 ) ( 26,168 ) Total debt $ 3,106,629 $ 5,233,416 _________________ (1) As of June 30, 2024, represents the total of the unpaid principal balances within each debt category, with the exception of the risk retention warehouse facilities, which include securitization-related investments carried at fair value. In addition, certain securitization interests that eliminate in consolidation are pledged to risk retention warehouse facilities. Collateral balances relative to debt balances may vary period to period due to the timing of the next scheduled payment to the warehouse facility. (2) For variable-rate debt, the ranges of stated interest rates are based on the interest rates in effect as of June 30, 2024. The interest on our variable-rate debt is typically designed as a reference rate plus a spread. Reference rates as of June 30, 2024 included overnight SOFR, one-month SOFR and commercial paper rates determined by the facility lenders. As debt arrangements are renewed, the reference rate and/or spread are subject to change. Unused commitment fees ranging from 0 to 40 bps on our various warehouse facilities are recognized within noninterest expense—general and administrative in our condensed consolidated statements of operations and comprehensive income (loss). (3) For securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts. Our maturity date represents the legal maturity of the last class of maturing notes. Securitization debt matures as loan collateral payments are made. (4) There were $ 17.3 million of debt discounts issued during the six months ended June 30, 2024. (5) For risk retention warehouse facilities, we only state capacity amounts for facilities wherein we can pledge additional asset-backed bonds and residual investments as of the balance sheet date. (6) As of June 30, 2024, $ 13.1 million of the revolving credit facility total capacity was not available for general borrowing purposes because it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15. Commitments, Guarantees, Concentrations and Contingencies for more details. Additionally, the interest rate presented is the interest rate on standard withdrawals on our revolving credit facility, while same-day withdrawals incur interest based on the prime rate. (7) The original issue discount and debt issuance costs related to the convertible senior notes due 2026 are amortized into interest expense—corporate borrowings in the condensed consolidated statements of operations and comprehensive income (loss) using the effective interest method over the contractual term of the notes. For the three and six months ended June 30, 2024, total interest expense on the convertible notes was $ 0.5 million and $ 1.7 million, respectively. For the three and six months ended June 30, 2023, total interest expense on the convertible notes was $ 1.3 million and $ 2.5 million, respectively. For all periods, interest expense was related to amortization of debt discount and issuance costs. For the three and six months ended June 30, 2024, the effective interest rate was 0.43 % and 0.44 %, respectively. For both the three and six months ended June 30, 2023, the effective interest rate was 0.42 %. As of June 30, 2024 and December 31, 2023, unamortized debt discount and issuance costs were $ 5.0 million and $ 13.3 million, respectively, and the net carrying amount was $ 506.9 million and $ 1.1 billion, respectively. (8) The original issue discount and debt issuance costs related to the convertible senior notes due 2029 are amortized into interest expense—corporate borrowings in the condensed consolidated statements of operations and comprehensive income (loss) using the effective interest method over the contractual term of the notes. For the three and six months ended June 30, 2024, total interest expense on the convertible notes was $ 3.8 million and $ 4.8 million, respectively, and the effective interest rate was 1.75 % and 1.76 %, respectively. As of June 30, 2024, unamortized debt discount and issuance costs were $ 20.4 million, and the net carrying amount was $ 842.1 million. 29 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (9) Includes $ 52.0 million of loans and $ 365.8 million of investment securities pledged as collateral to secure $ 377.7 million of available borrowing capacity with the FHLB, of which $ 27.2 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15. Commitments, Guarantees, Concentrations and Contingencies for more details. Also includes unsecured available borrowing capacity of $ 50.0 million with correspondent banks. Convertible Senior Notes Convertible Senior Notes, Due 2026 In October 2021, we issued $ 1.2 billion aggregate principal amount of convertible notes, pursuant to an indenture, dated October 4, 2021, between the Company and U.S. Bank National Association, as trustee (“2026 convertible notes”). The 2026 convertible notes are unsecured, unsubordinated obligations. The 2026 convertible notes do not bear regular interest. The 2026 convertible notes will mature on October 15, 2026, unless earlier repurchased, redeemed or converted. In December 2023, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 convertible notes to repurchase $ 88.0 million aggregate principal amount of the 2026 convertible notes, which were settled through the issuance of 9,490,000 shares of common stock. In March 2024, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 convertible notes to repurchase $ 600.0 million aggregate principal amount of the 2026 convertible notes, which were settled through the issuance of 72,621,879 shares of common stock. Following these repurchases, $ 512.0 million aggregate principal amount of the 2026 convertible notes remain outstanding. These transactions were determined to be an extinguishment of debt. The difference between the consideration used to repurchase the convertible notes and the carrying value of the convertible notes, less retirement of discount and issuance costs, resulted in a gain on extinguishment of $ 59.2 million recorded within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2024. We used a portion of the net proceeds from the October 2021 offering to fund the cost of entering into the 2026 capped call transactions. In connection with the March 2024 repurchase agreements, the Company entered into unwind agreements to terminate a portion of the 2026 capped call transactions. Refer to Note 10. Equity for additional detail . As of June 30, 2024, the 2026 convertible notes are potentially convertible into 22,841,631 shares of common stock. Convertible Senior Notes, Due 2029 In March 2024, we issued $ 862.5 million aggregate principal amount of convertible notes, pursuant to an indenture, dated March 8, 2024, between the Company and U.S. Bank National Association, as trustee (“2029 convertible notes”). The 2029 convertible notes are unsecured, unsubordinated obligations. The 2029 convertible notes will pay interest at a rate of 1.25 %, payable semi-annually beginning in September 2024. The 2029 convertible notes will mature on March 15, 2029, unless earlier repurchased, redeemed or converted. The net proceeds from the offering were $ 845.3 million, after deducting the 2 % initial purchasers’ discount of $ 17.3 million, and before the cost of the 2029 capped call transactions, as described below, and offering expenses payable by the Company. The debt issuance costs of $ 4.6 million included third-party legal and accounting fees. The original issue discount and debt issuance costs are amortized into interest expense—corporate borrowings in the condensed consolidated statements of operations and comprehensive income (loss) using the effective interest method over the contractual term of the 2029 convertible notes. We used a portion of the net proceeds from the March 2024 offering to fund the cost of entering into 2029 capped call transactions, as described in Note 10. Equity . The remainder of the net proceeds from the offering, together with cash on hand, were used (i) to pay expenses relating to this offering, (ii) to redeem Series 1 Preferred Stock and (iii) for general corporate purposes. Conversion The 2029 convertible notes are convertible by the noteholders prior to the close of business on the business day immediately preceding September 15, 2028 if certain conditions related to the Company’s share price are met, upon the occurrence of certain corporate events or distributions of the Company’s stock, or the Company calls the notes for redemption, 30 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) each as set forth in the indenture. On and after September 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2029 convertible notes are freely convertible by the noteholders. The conversion rate is 105.8089 shares of our common stock per $1,000 principal amount of 2029 convertible notes, which represents an initial conversion price of approximately $ 9.45 per share of our common stock. Settlement We will settle conversions of the 2029 convertible notes by paying or delivering, cash, and if applicable, shares of our common stock for the amount in excess of the cash redemption price, based on the applicable conversion rate. Consideration due upon conversion will be determined over an observation period consisting of 30 “VWAP Trading Days” (as defined in the indenture). The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. Redemption The 2029 convertible notes will also be redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 15, 2027 through the 30 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 convertible notes to be redeemed, plus accrued and unpaid interest, if any, thereon to, but excluding, the redemption date, but only if certain liquidity conditions described in the indenture are satisfied and certain conditions are met with respect to the last reported sale price per share of our common stock prior to conversion. In addition, calling any note for redemption will also constitute a Make-Whole Fundamental Change with respect to that 2029 convertible note, in which case the conversion rate applicable to the conversion of that 2029 convertible note will be increased in certain circumstances if it is converted after it is called for redemption. See Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards for our accounting policy as it relates to the convertible notes. Material Changes to Debt Arrangements During the six months ended June 30, 2024, we closed four warehouse facilities which had an aggregate maximum available capacity of $ 1.2 billion, and closed one risk retention warehouse facility. During the six months ended June 30, 2024, one warehouse facility matured and one risk retention warehouse facility matured. We did not open any warehouse facilities. Our warehouse and securitization debt is secured by a continuing lien and security interest in the loans financed by the proceeds. Within each of our debt facilities, we must comply with certain operating and financial covenants. These financial covenants include, but are not limited to, maintaining: (i) a certain minimum tangible net worth, (ii) minimum 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. Our debt covenants can lead to restricted cash classifications in our condensed consolidated balance sheets. Our subsidiaries are restricted in the amount that can be distributed to the parent company only to the extent that such distributions would cause the financial covenants to not be met. We were in compliance with all financial covenants. We act as a guarantor for our wholly-owned subsidiaries in several arrangements in the case of default. As of June 30, 2024, we have not identified any risks of nonpayment by our wholly-owned subsidiaries. 31 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Maturities of Borrowings Future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows: June 30, 2024 Remainder of 2024 $ — 2025 — 2026 511,972 2027 — 2028 486,000 Thereafter 862,500 Total $ 1,860,472 Note 10. Equity Temporary Equity Pursuant to SoFi Technologies’ Certificate of Incorporation dated May 28, 2021, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $ 0.0001 per share (“SoFi Technologies Preferred Stock”) and 100,000,000 shares of redeemable preferred stock having a par value of $ 0.0000025 per share (“SoFi Technologies Redeemable Preferred Stock”). The Company’s Board of Directors has the authority to issue SoFi Technologies Preferred Stock and SoFi Technologies Redeemable Preferred Stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of those shares. The authorized shares of SoFi Technologies Redeemable Preferred Stock is inclusive of 4,500,000 shares of Series 1 redeemable preferred stock (“Series 1 Redeemable Preferred Stock”), which reflect the conversion on a one -for-one basis of shares of Social Finance Series 1 preferred stock in conjunction with the Business Combination. Shares of SoFi Technologies Series 1 Redeemable Preferred Stock that are redeemed, purchased or otherwise acquired by the Company will be canceled and may not be reissued by the Company. In May 2024, the Company redeemed all of the 3,234,000 shares of Series 1 Redeemable Preferred Stock outstanding for a total redemption price of $ 339,903 or $ 105.1027 per share. The total redemption price included: (i) a reduction to redeemable preferred stock of $ 320,374 for the carrying value of redeemable preferred stock at the time of exercise, (ii) a reduction to additional paid-in capital of $ 3,026 for the amount paid upon redemption over the carrying value of the redeemable preferred stock, and (iii) payment for accrued but unpaid dividends at the time of redemption of $ 16,503 . As of June 30, 2024, the Company has no Series 1 Redeemable Preferred Stock outstanding. Dividends During the three and six months ended June 30, 2024, the Series 1 preferred stockholders were entitled to dividends of $ 6,424 and $ 16,503 , respectively. During the three and six months ended June 30, 2023, the Series 1 preferred stockholders were entitled to dividends of $ 10,079 and $ 20,047 , respectively. There were no dividends payable as of June 30, 2024 and December 31, 2023. Permanent Equity On June 1, 2021, the Company’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “SOFI”. Pursuant to SoFi Technologies’ Certificate of Incorporation, the Company is authorized to issue 3,000,000,000 shares of common stock, with a par value of $ 0.0001 per share, and 100,000,000 shares of non-voting common stock, with a par value of $ 0.0001 per share. As of June 30, 2024, the Company had 1,065,112,270 shares of common stock and no shares of non-voting common stock issued and outstanding. 32 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The Company reserved the following common stock for future issuance: June 30, 2024 December 31, 2023 Outstanding stock options, restricted stock units and performance stock units 98,273,896 99,016,409 Conversion of convertible notes (1) 22,841,631 49,610,631 Possible future issuance under stock plans 83,905,002 45,384,011 Outstanding common stock warrants (2) — 12,170,990 Total common stock reserved for future issuance 205,020,529 206,182,041 ____________________ (1) Represents the number of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the balance sheet date. As of June 30, 2024, the 2026 convertible notes are potentially convertible into 22,841,631 shares of common stock, and there are no shares of common stock expected to be issued relating to the 2029 convertible notes, as there was no amount in excess of the expected cash redemption price which would require share settlement. See Note 9. Debt for additional information. (2) All remaining unexercised common stock warrants expired in May 2024. As of June 30, 2024, the Company has no outstanding common stock warrants. Dividends Common stockholders and non-voting common stockholders are entitled to dividends when and if declared by the Board of Directors and subject to government regulation over banks and bank holding companies. There were no dividends declared or paid to common stockholders during the six months ended June 30, 2024 and 2023. Capped Call Transactions Capped Call Transactions, Due 2026 During 2021, we entered into privately negotiated capped call transactions (“2026 capped call transactions”) for a total cost of $ 113.8 million. In connection with the March 2024 repurchase agreements of a portion of 2026 convertible notes, the Company entered into unwind agreements to terminate a portion of the 2026 capped call transactions up to the notional amount corresponding to the amount of 2026 convertible notes exchanged of $ 600.0 million. The 2026 capped call transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that initially underlie the 2026 convertible notes. The 2026 capped call transactions are expected generally to reduce the potential dilutive effect on the common stock upon any conversion of 2026 convertible notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted 2026 convertible notes, as the case may be, with such reduction and/or offset subject to a cap, subject to certain adjustments under the terms of the 2026 capped call transactions. The 2026 capped call transactions allow the Company to purchase shares of our common stock at a strike price equal to the initial conversion price of approximately $ 22.41 per share, and are subject to a cap of $ 32.02 per share, subject to certain adjustments under the terms of the 2026 capped call transactions. 2026 capped call transactions are subject to automatic exercise if they are in-the-money as of certain expiration dates during September and October 2026. Settlement is subject to acceleration pursuant to the occurrence of certain corporate events, as well as postponement no later than January 12, 2027. Capped Call Transactions, Due 2029 During 2024, we entered into privately negotiated capped call transactions (“2029 capped call transactions”) for a total cost of $ 90.6 million. The 2029 capped call transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that initially underlie the 2029 convertible notes. The 2029 capped call transactions are expected generally to reduce the potential dilutive effect on the common stock upon any conversion of 2029 convertible notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted 2029 convertible notes, as the case may be, with such reduction and/or offset subject to a cap, subject to certain adjustments under the terms of the 2029 capped call transactions. The 2029 capped call transactions allow the Company to purchase shares of our common stock at a strike price equal to the initial conversion price of approximately $ 9.45 per share, and are subject to a cap of $ 14.54 per share, subject to certain adjustments under the terms of the 2029 capped call transactions. 2029 capped call transactions are subject to automatic exercise if they are in-the-money as of certain expiration dates during 2029. Settlement is 33 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) subject to acceleration pursuant to the occurrence of certain corporate events, as well as postponement no later than June 6, 2029. See Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards for our accounting policy as it relates to our capped call transactions. Accumulated Other Comprehensive Income (Loss) AOCI primarily consists of accumulated net unrealized gains or losses associated with our investments in AFS debt securities and foreign currency translation adjustments. The following table presents the rollforward of AOCI, inclusive of the changes in the components of other comprehensive income (loss): AFS Debt Securities Foreign Currency Translation Adjustments Total Three Months Ended June 30, 2024 AOCI, beginning balance $ ( 2,901 ) $ 813 $ ( 2,088 ) Other comprehensive income (loss) before reclassifications 741 ( 136 ) 605 Amounts reclassified from AOCI into earnings — — — Net current-period other comprehensive income (loss) (1)(2) 741 ( 136 ) 605 AOCI, ending balance $ ( 2,160 ) $ 677 $ ( 1,483 ) Three Months Ended June 30, 2023 AOCI, beginning balance $ ( 6,363 ) $ 22 $ ( 6,341 ) Other comprehensive income before reclassifications 830 392 1,222 Net current-period other comprehensive income (1)(2) 830 392 1,222 AOCI, ending balance $ ( 5,533 ) $ 414 $ ( 5,119 ) Six Months Ended June 30, 2024 AOCI, beginning balance $ ( 2,201 ) $ 992 $ ( 1,209 ) Other comprehensive income (loss) before reclassifications (1) 41 ( 315 ) ( 274 ) Amounts reclassified from AOCI into earnings — — — Net current-period other comprehensive income (loss) (2) 41 ( 315 ) ( 274 ) AOCI, ending balance $ ( 2,160 ) $ 677 $ ( 1,483 ) Six Months Ended June 30, 2023 AOCI, beginning balance $ ( 8,611 ) $ 315 $ ( 8,296 ) Other comprehensive income before reclassifications (1) 2,906 99 3,005 Amounts reclassified from AOCI into earnings 172 — 172 Net current-period other comprehensive income (2) 3,078 99 3,177 AOCI, ending balance $ ( 5,533 ) $ 414 $ ( 5,119 ) ____________________ (1) Gross realized gains and losses from sales of our investments in AFS debt securities that were reclassified from AOCI to earnings are recorded within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). There were no reclassifications related to foreign currency translation adjustments during the three and six months ended June 30, 2024 and 2023. (2) There were no material tax impacts during any of the periods presented due to reserves against deferred tax assets in jurisdictions where other comprehensive loss activity was generated. 34 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 11. Derivative Financial Instruments The following table presents the gains (losses) recognized on our derivative instruments: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Interest rate swaps (1) $ 67,376 $ 114,341 $ 268,661 $ 85,885 Interest rate caps (1) ( 980 ) 328 ( 3,263 ) ( 1,367 ) Home loan pipeline hedges (1) 1,223 2,061 2,079 984 Derivative contracts to manage future loan sale execution risk 67,619 116,730 267,477 85,502 Interest rate swaps (2) 1,487 3,292 7,550 2,184 IRLCs (1) ( 561 ) 355 ( 280 ) 773 Interest rate caps (1) 986 ( 290 ) 3,276 1,481 Purchase price earn-out (1)(3) — — — 9 Third party warrants (4) — 54 — 78 Total $ 69,531 $ 120,141 $ 278,023 $ 90,027 _____________________ (1) Recorded within noninterest income—loan origination. sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). (2) Represents derivative contracts to manage securitization investment interest rate risk, which are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). (3) In conjunction with a loan sale agreement, we are entitled to receive payments from the buyer of the loans underlying the agreement if the internal rate of return (as defined in the loan sale agreement) on such loans exceeds a specified hurdle, subject to a dollar cap. (4) Includes amounts recorded within noninterest income—other, noninterest expense—cost of operations and noninterest expense—general and administrative in the condensed consolidated statements of operations and comprehensive income (loss), the latter of which represents the amortization of a deferred liability recognized at the initial fair value of the third party warrants acquired, as we are also a customer of the third party. Certain derivative instruments are subject to enforceable master netting arrangements. Accordingly, we present our net asset or liability position by counterparty in the condensed consolidated balance sheets. Additionally, since our cash collateral balances do not approximate the fair value of the derivative position, we do not offset our right to reclaim cash collateral or obligation to return cash collateral against recognized derivative assets or liabilities. The following table presents information about derivative instruments subject to enforceable master netting arrangements: June 30, 2024 December 31, 2023 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Interest rate swaps $ 12,675 $ — $ 2,208 $ ( 1,347 ) Interest rate caps — — — ( 3,276 ) Home loan pipeline hedges 622 ( 56 ) 1 ( 1,328 ) Total, gross 13,297 ( 56 ) 2,209 ( 5,951 ) Derivative netting ( 56 ) 56 ( 1,347 ) 1,347 Total, net (1) $ 13,241 $ — $ 862 $ ( 4,604 ) _____________________ (1) We did not have a cash collateral requirement related to these instruments as of June 30, 2024 and December 31, 2023. 35 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the notional amount of derivative contracts outstanding: June 30, 2024 December 31, 2023 Derivative contracts to manage future loan sale execution risk: Interest rate swaps $ 12,296,600 $ 12,491,000 Interest rate caps — 405,000 Home loan pipeline hedges 284,000 226,000 Interest rate caps (1) — 405,000 Interest rate swaps (2) 68,400 84,000 IRLCs (3) 183,593 126,388 Total $ 12,832,593 $ 13,737,388 _____________________ (1) We sold an interest rate cap that was subject to master netting to offset an interest rate cap purchase made in conjunction with a contract to manage future loan sale execution risk. (2) Represents interest rate swaps utilized to manage interest rate risk associated with certain of our securitization investments. (3) Amounts correspond with home loan funding commitments subject to IRLC agreements. While the notional amounts of derivative instruments give an indication of the volume of our derivative activity, they do not necessarily represent amounts exchanged by parties and are not a direct measure of our financial exposure. See Note 12. Fair Value Measurements for additional information on our derivative assets and liabilities. Note 12. Fair Value Measurements Recurring Fair Value Measurements The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets: June 30, 2024 December 31, 2023 Fair Value Fair Value Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Investments in AFS debt securities (1)(2) $ 205,686 $ 1,238,537 $ — $ 1,444,223 $ 527,711 $ 67,476 $ — $ 595,187 Asset-backed bonds (2)(3) — 89,349 — 89,349 — 70,828 — 70,828 Residual investments (2)(3) — — 32,515 32,515 — — 35,920 35,920 Loans at fair value (4) — 96,137 22,992,190 23,088,327 — 66,198 22,056,057 22,122,255 Servicing rights — — 291,329 291,329 — — 180,469 180,469 Third party warrants (5)(6) — — 630 630 — — 630 630 Derivative assets (5)(7)(8) — 13,297 — 13,297 — 2,209 — 2,209 IRLCs (5)(9) — — 1,875 1,875 — — 2,155 2,155 Student loan commitments (5)(9) — — 569 569 — — 5,465 5,465 Interest rate caps (5)(8) — — — — — 3,269 — 3,269 Digital assets safeguarding asset (5)(10) — — — — — 9,292 — 9,292 Total assets $ 205,686 $ 1,437,320 $ 23,319,108 $ 24,962,114 $ 527,711 $ 219,272 $ 22,280,696 $ 23,027,679 Liabilities Debt (11) $ — $ 96,801 $ — $ 96,801 $ — $ 119,641 $ — $ 119,641 Residual interests classified as debt — — 724 724 — — 7,396 7,396 Derivative liabilities (5)(7)(8) — 56 — 56 — 5,951 — 5,951 Digital assets safeguarding liability (5)(10) — — — — — 9,292 — 9,292 Total liabilities $ — $ 96,857 $ 724 $ 97,581 $ — $ 134,884 $ 7,396 $ 142,280 _____________________ 36 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (1) The investments in AFS debt securities that were classified as Level 2 rely upon observable inputs other than quoted prices, dealer quotes in markets that are not active and implied pricing derived from new issuances of similar securities. See Note 6. Investment Securities for additional information. (2) These assets are presented within investment securities in the condensed consolidated balance sheets. (3) These assets represent the carrying value of our holdings in VIEs wherein we were not deemed the primary beneficiary. See Note 7. Securitization and Variable Interest Entities for additional information. We classify asset-backed bonds as Level 2 due to the use of quoted prices for similar assets in markets that are not active, as well as certain factors specific to us. The key inputs used to value the asset-backed bonds include the discount rate and conditional prepayment rate. The fair value of our asset-backed bonds was not materially impacted by default assumptions on the underlying securitization loans, as the subordinate residual interests are expected to absorb all estimated losses based on our default assumptions for the period. We classify the residual investments as Level 3 due to the reliance on significant unobservable valuation inputs. (4) Home loans are classified as Level 2 due to observable pricing sources utilized by management. Personal loans and student loans classified as Level 3 do not trade in an active market with readily observable prices. Personal loans and home loans are presented within loans held for sale, at fair value , and student loans are presented within loans held for investment, at fair value. (5) These assets and liabilities are presented within other assets and accounts payable, accruals and other liabilities , respectively, in the condensed consolidated balance sheets. (6) The key unobservable assumption used in the fair value measurement of the third party warrants was the price of the stock underlying the warrants. The fair value was measured as the difference between the stock price and the strike price of the warrants. As the strike price was insignificant, we concluded that the impact of time value on the fair value measure was immaterial. (7) For certain derivative instruments for which an enforceable master netting agreement exists, we elected to net derivative assets and derivative liabilities by counterparty. These instruments are presented on a gross basis herein. See Note 11. Derivative Financial Instruments for additional information. (8) Home loan pipeline hedges represent TBAs used as economic hedges of loan fair values and are classified as Level 2, as we rely on quoted market prices from similar loan pools that transact in the marketplace. Interest rate swaps and interest rate caps are classified as Level 2, because these financial instruments do not trade in active markets with observable prices, but rely on observable inputs other than quoted prices. As of June 30, 2024 and December 31, 2023, interest rate swaps and interest rate caps were valued using the overnight SOFR curve and the implied volatilities suggested by the SOFR rate curve. These were determined to be observable inputs from active markets. (9) IRLCs and student loan commitments are classified as Level 3 because of our reliance on assumed loan funding probabilities. The assumed probabilities are based on our internal historical experience with home loans and student loans similar to those in the funding pipelines on the measurement date. (10) The digital assets safeguarding liability and corresponding safeguarding asset are classified as Level 2, because they do not trade in active markets, and are valued using quoted prices on an active exchange that has been identified as the principal market for the underlying digital assets that were being held by our third-party custodians for the benefit of our members. In the fourth quarter of 2023, we transferred the crypto services provided by SoFi Digital Assets, LLC, and began closing existing digital assets accounts. This process was completed in the first quarter of 2024, subsequent to which we have no digital assets safeguarding liability and safeguarding asset. (11) The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. As of June 30, 2024 and December 31, 2023, the unpaid principal related to debt measured at fair value was $ 103,315 and $ 128,619 , respectively. For the three and six months ended June 30, 2024, losses from changes in fair value were $ 1,037 and $ 2,464 , respectively. The estimated amounts of gains (losses) included in earnings attributable to changes in instrument-specific credit risk, which were derived principally from observable changes in credit spread as observed in the bond market and default assumptions, were immaterial for the three and six months ended June 30, 2024 and June 30, 2023. 37 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Level 3 Recurring Fair Value Rollforward The following tables present the changes in our assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). We did not have any transfers into or out of Level 3 during the periods presented. Fair Value at Fair Value at March 31, 2024 Impact on Earnings Purchases Sales Issuances Settlements Other Changes June 30, 2024 Assets Personal loans $ 15,057,005 $ ( 142,269 ) $ 696 $ ( 1,199,368 ) $ 4,192,114 $ ( 2,110,044 ) $ ( 706 ) $ 15,797,428 Student loans 6,834,161 ( 8,592 ) 101 — 736,518 ( 368,964 ) 1,538 7,194,762 Loans at fair value (1) 21,891,166 ( 150,861 ) 797 ( 1,199,368 ) 4,928,632 ( 2,479,008 ) 832 22,992,190 Servicing rights (2) 240,752 1,654 1,227 — 78,745 ( 31,049 ) — 291,329 Residual investments (3) 35,853 213 — — — ( 3,551 ) — 32,515 IRLCs (4) 2,436 1,875 — — — ( 2,436 ) — 1,875 Student loan commitments (4) 314 569 — — — ( 314 ) — 569 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 4,129 ) ( 1 ) — — — 3,406 — ( 724 ) Net impact on earnings $ ( 146,551 ) Fair Value at Fair Value at January 1, 2024 Impact on Earnings Purchases Sales Issuances Settlements Other Changes June 30, 2024 Assets Personal loans $ 15,330,573 $ ( 411,695 ) $ 17,276 $ ( 2,462,222 ) $ 7,470,996 $ ( 4,145,741 ) $ ( 1,759 ) $ 15,797,428 Student loans 6,725,484 ( 25,709 ) 101 ( 294,187 ) 1,488,198 ( 704,901 ) 5,776 7,194,762 Loans at fair value (1) 22,056,057 ( 437,404 ) 17,377 ( 2,756,409 ) 8,959,194 ( 4,850,642 ) 4,017 22,992,190 Servicing rights (2) 180,469 6,880 2,207 ( 53 ) 154,299 ( 52,473 ) — 291,329 Residual investments (3) 35,920 945 2,553 — — ( 6,903 ) — 32,515 IRLCs (4) 2,155 4,311 — — — ( 4,591 ) — 1,875 Student loan commitments (4) 5,465 883 — — — ( 5,779 ) — 569 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 7,396 ) ( 74 ) — — — 6,746 — ( 724 ) Net impact on earnings $ ( 424,459 ) 38 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Fair Value at Fair Value at March 31, 2023 Impact on Earnings Purchases Sales Issuances Settlements Other Changes June 30, 2023 Assets Personal loans $ 10,536,999 $ ( 25,045 ) $ 290 $ ( 50,013 ) $ 3,740,981 $ ( 1,451,960 ) $ ( 89 ) $ 12,751,163 Student loans 5,240,059 ( 32,806 ) 111,923 ( 96,678 ) 395,367 ( 228,997 ) ( 4,947 ) 5,383,921 Home loans (6) 81,047 ( 990 ) 22,363 ( 266,413 ) 243,123 ( 927 ) 380 78,583 Loans at fair value (1) 15,858,105 ( 58,841 ) 134,576 ( 413,104 ) 4,379,471 ( 1,681,884 ) ( 4,656 ) 18,213,667 Servicing rights (2) 146,514 8,925 408 ( 990 ) 6,483 ( 15,677 ) — 145,663 Residual investments (3) 42,960 ( 298 ) — ( 501 ) — ( 3,772 ) — 38,389 IRLCs (4) 634 989 363 — — ( 634 ) — 1,352 Student loan commitments (4) 75 189 — — — ( 75 ) — 189 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 15,565 ) 602 ( 1,203 ) — — 4,834 — ( 11,332 ) Net impact on earnings $ ( 48,434 ) Fair Value at Fair Value at January 1, 2023 Impact on Earnings Purchases Sales Issuances Settlements Other Changes June 30, 2023 Assets Personal loans $ 8,610,434 $ 61,155 $ 40,329 $ ( 50,013 ) $ 6,692,339 $ ( 2,602,886 ) $ ( 195 ) $ 12,751,163 Student loans 4,877,177 31,893 111,923 ( 96,678 ) 920,740 ( 458,678 ) ( 2,456 ) 5,383,921 Home loans (6) 69,463 ( 1,484 ) 22,915 ( 344,293 ) 332,910 ( 1,308 ) 380 78,583 Loans at fair value (1) 13,557,074 91,564 175,167 ( 490,984 ) 7,945,989 ( 3,062,872 ) ( 2,271 ) 18,213,667 Servicing rights (2) 149,854 21,009 1,021 ( 1,125 ) 7,437 ( 32,533 ) — 145,663 Residual investments (3) 46,238 806 — ( 807 ) — ( 7,848 ) — 38,389 Purchase price earn out (7) 54 9 — — — ( 63 ) — — IRLCs (4) 216 1,623 363 — — ( 850 ) — 1,352 Student loan commitments (4) ( 236 ) 264 — — — 161 — 189 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 17,048 ) 513 ( 1,203 ) — — 6,406 — ( 11,332 ) Net impact on earnings $ 115,788 _____________________ (1) For loans at fair value, purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity included elective repurchases of $ 16.6 million during the six months ended June 30, 2024. There were no elective repurchases during the three months ended June 30, 2024 and 2023 periods . Purchase activity included securitization clean-up calls of $ 39.9 million during the six months ended June 30, 2023. There were no securitization clean-up calls during the three months ended June 30, 2023 and 2024 periods. The remaining purchases during the periods presented related to standard representations and warranties pursuant to our various loan sale agreements. Issuances represent the principal balance of loans originated during the period. Settlements represent principal payments made on loans during the period. Other changes represent fair value adjustments that impact the balance sheet primarily associated with whole loan strategic repurchases, clean up calls and consolidated securitizations. Impacts on earnings for loans at fair value are recorded within interest income—loans and securitizations , within noninterest income—loan origination, sales, and s ecuritizations , and within noninterest expense—general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). (2) For servicing rights, impacts on earnings are recorded within noninterest income—servicing in the condensed consolidated statements of operations and comprehensive income (loss). (3) For residual investments, sales include the derecognition of investments associated with securitization clean up calls. The estimated amounts of gains and losses for residual investments included in earnings attributable to changes in instrument-specific credit risk were immaterial during the periods presented. For residual investments and residual interests classified as debt, impacts on earnings are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss), a portion of which is subsequently reclassified to interest expense—securitizations and warehouses for residual interests classified as debt and to interest income—loans and securitizations for residual investments, but does not impact the liability or asset balance, respectively. (4) For IRLCs and student loan commitments, settlements reflect funded and unfunded adjustments representing the unpaid principal balance of funded and unfunded loans during the quarter multiplied by the IRLC or student loan commitment price in effect at the beginning of the quarter. Purchases of IRLCs during the three and six months ended June 30, 2023 were associated with our acquisition of Wyndham. For year-to-date periods, amounts represent the 39 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) summation of the per-quarter effects. For IRLCs and student loan commitments, impacts on earnings are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). (5) For third party warrants, impacts on earnings are recorded within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). (6) During the fourth quarter of 2023, we transferred home loans out of Level 3 into Level 2 relating to an update to observable pricing sources utilized by management, as part of the integration of Wyndham. (7) For purchase price earn out, impacts on earnings are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). Loans at Fair Value Gains and losses recognized in earnings include changes in accumulated interest and fair value adjustments on loans originated during the period and on loans held at the balance sheet date, as well as loan charge-offs. Changes in fair value are primarily impacted by valuation assumption changes as well as sales price execution. The estimated amount of gains (losses) included in earnings attributable to changes in instrument-specific credit risk were $ 17,390 and $ 58,214 during the three and six months ended June 30, 2024, respectively, and $ 2,741 and $( 47,788 ) during the three and six months ended June 30, 2023, respectively. The gains (losses) attributable to instrument-specific credit risk were estimated by incorporating our current default and loss severity assumptions for the loans. These assumptions are based on historical performance, market trends and performance expectations over the term of the underlying instrument. Level 3 Significant Inputs Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Level 3 fair value measurements include unobservable inputs for assets or liabilities for which there is little or no market data, which requires us to develop our own assumptions. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, or similar techniques, which incorporate management’s own estimates of assumptions that market participants would use in pricing the asset or liability. Loans The following key unobservable assumptions were used in the fair value measurement of our loans: June 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Personal loans Conditional prepayment rate 19.2 % – 32.0 % 26.1 % 17.5 % – 29.5 % 23.2 % Annual default rate 4.6 % – 58.4 % 4.8 % 4.5 % – 50.4 % 4.8 % Discount rate 5.7 % – 8.1 % 5.75 % 5.5 % – 8.1 % 5.52 % Student loans Conditional prepayment rate 8.6 % – 12.7 % 11.0 % 8.4 % – 12.6 % 10.5 % Annual default rate 0.6 % – 6.8 % 0.6 % 0.4 % – 6.4 % 0.6 % Discount rate 4.4 % – 8.0 % 4.44 % 4.1 % – 8.1 % 4.27 % The key assumptions are defined as follows: • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of borrowers who do not make loan payments on time. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the loans. The discount rate is primarily determined based on an underlying benchmark rate curve and spread(s), the latter of which is determined based on factors including, but not limited to, weighted average coupon 40 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) rate, prepayment rate, default rate and resulting expected duration of the assets. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. See Note 4. Loans for additional loan fair value disclosures. Servicing Rights Servicing rights for personal loans and student loans do not trade in an active market with readily observable prices. Similarly, home loan servicing rights infrequently trade in an active market. At the time of the underlying loan sale or the assumption of servicing rights, the fair value of servicing rights is determined using a discounted cash flow methodology based on observable and unobservable inputs. Management classifies servicing rights as Level 3 due to the use of significant unobservable inputs in the fair value measurement. The following key unobservable inputs were used in the fair value measurement of our classes of servicing rights: June 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Personal loans Market servicing costs 0.2 % – 1.0 % 0.2 % 0.1 % – 1.8 % 0.2 % Conditional prepayment rate 16.2 % – 40.1 % 24.1 % 17.9 % – 35.5 % 22.4 % Annual default rate 3.3 % – 16.0 % 4.1 % 3.3 % – 22.5 % 4.7 % Discount rate 8.8 % –  20.0 % 8.8 % 8.8 % –  8.8 % 8.8 % Student loans Market servicing costs 0.1 % – 0.2 % 0.1 % 0.1 % – 0.2 % 0.1 % Conditional prepayment rate 8.7 % – 15.3 % 12.5 % 10.9 % – 15.3 % 12.2 % Annual default rate 0.3 % – 3.6 % 0.9 % 0.3 % – 3.7 % 0.6 % Discount rate 8.8 % – 8.8 % 8.8 % 8.8 % – 8.8 % 8.8 % Home loans Market servicing costs 0.1 % –  0.3 % 0.1 % 0.1 % –  0.2 % 0.2 % Conditional prepayment rate 4.4 % – 22.1 % 9.2 % 5.6 % – 24.0 % 8.1 % Annual default rate 0.1 % – 0.1 % 0.1 % 0.1 % – 0.1 % 0.1 % Discount rate 9.2 % – 10.0 % 9.3 % 9.2 % – 10.0 % 9.3 % The key assumptions are defined as follows: • Market servicing costs  — The fee a willing market participant, which we validate through actual third-party bids for our servicing, would require for the servicing of personal loans, student loans and home loans with similar characteristics as those in our serviced portfolio. An increase in the market servicing cost, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of default within the total serviced loan balance. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the servicing rights. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 41 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table presents the estimated decrease to the fair value of our servicing rights if the key assumptions had each of the below adverse changes: June 30, 2024 December 31, 2023 Market servicing costs 2.5 basis points increase $ ( 6,202 ) $ ( 6,176 ) 5.0 basis points increase ( 12,455 ) ( 12,351 ) Conditional prepayment rate 10% increase $ ( 7,769 ) $ ( 5,189 ) 20% increase ( 15,195 ) ( 10,098 ) Annual default rate 10% increase $ ( 606 ) $ ( 480 ) 20% increase ( 1,258 ) ( 921 ) Discount rate 100 basis points increase $ ( 6,165 ) $ ( 4,674 ) 200 basis points increase ( 11,998 ) ( 9,054 ) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the effect of an adverse variation in a particular assumption on the fair value of our servicing rights is calculated while holding the other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Residual Investments and Residual Interests Classified as Debt Residual investments and residual interests classified as debt do not trade in active markets with readily observable prices, and there is limited observable market data for reference. The fair values of residual investments and residual interests classified as debt are determined using a discounted cash flow methodology. Management classifies residual investments and residual interests classified as debt as Level 3 due to the use of significant unobservable inputs in the fair value measurements. The following key unobservable inputs were used in the fair value measurements of our residual investments and residual interests classified as debt: June 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 12.7 % – 35.7 % 16.4 % 12.2 % – 28.3 % 14.8 % Annual default rate 0.5 % – 7.0 % 1.5 % 0.5 % – 6.9 % 1.4 % Discount rate 5.8 % – 13.5 % 8.7 % 5.8 % – 15.5 % 8.7 % Residual interests classified as debt Conditional prepayment rate 12.9 % – 12.9 % 12.9 % 12.3 % – 12.6 % 12.4 % Annual default rate 0.9 % – 0.9 % 0.9 % 0.7 % – 0.7 % 0.7 % Discount rate 10.3 % – 10.3 % 10.3 % 10.0 % – 10.3 % 10.0 % The key assumptions are defined as follows: • Conditional prepayment rate  — The monthly annualized proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period for the pool of loans in the securitization. An increase in the conditional prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. 42 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. Loan Commitments We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a plethora of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments: June 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 50.0 % – 89.0 % 85.6 % 71.9 % – 77.2 % 76.3 % Student loan commitments Loan funding probability (1) 95.0 % – 95.0 % 95.0 % 95.0 % – 95.0 % 95.0 % ___________________ (1) The aggregate amount of student loans we committed to fund was $ 27,707 as of June 30, 2024. See Note 11. Derivative Financial Instruments for the aggregate notional amount associated with IRLCs. The key assumption is defined as follows: • Loan funding probability  — Our expectation of the percentage of IRLCs or student loan commitments which will become funded loans. A significant difference between the actual funded rate and the assumed funded rate at the measurement date could result in a significantly higher or lower fair value measurement of our IRLCs and student loan commitments. An increase in the loan funding probabilities, in isolation, would result in an increase in a fair value measurement. The weighted average assumptions were weighted based on relative fair values. 43 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Financial Instruments Not Measured at Fair Value The following table summarizes the carrying values and estimated fair values, by level within the fair value hierarchy, of our assets and liabilities that are not measured at fair value on a recurring basis in the condensed consolidated balance sheets: Fair Value Carrying Value Level 1 Level 2 Level 3 Total June 30, 2024 Assets Cash and cash equivalents (1) $ 2,334,589 $ 2,334,589 $ — $ — $ 2,334,589 Restricted cash and restricted cash equivalents (1) 397,043 397,043 — — 397,043 Loans at amortized cost (2) 2,172,528 — — 2,203,705 2,203,705 Other investments (3) 95,577 — 95,577 — 95,577 Total assets $ 4,999,737 $ 2,731,632 $ 95,577 $ 2,203,705 $ 5,030,914 Liabilities Deposits (4) $ 22,996,963 $ — $ 22,996,269 $ — $ 22,996,269 Debt (5) 3,009,828 1,242,608 1,669,632 — 2,912,240 Total liabilities $ 26,006,791 $ 1,242,608 $ 24,665,901 $ — $ 25,908,509 December 31, 2023 Assets Cash and cash equivalents (1) $ 3,085,020 $ 3,085,020 $ — $ — $ 3,085,020 Restricted cash and restricted cash equivalents (1) 530,558 530,558 — — 530,558 Loans at amortized cost (2) 836,159 — — 864,312 864,312 Other investments (3) 83,551 — 83,551 — 83,551 Total assets $ 4,535,288 $ 3,615,578 $ 83,551 $ 864,312 $ 4,563,441 Liabilities Deposits (4) $ 18,620,663 $ — $ 18,612,822 $ — $ 18,612,822 Debt (5) 5,113,775 955,306 4,024,516 — 4,979,822 Total liabilities $ 23,734,438 $ 955,306 $ 22,637,338 $ — $ 23,592,644 ___________________ (1) The carrying amounts of our cash and cash equivalents and restricted cash and restricted cash equivalents approximate their fair values due to the short-term maturities and highly liquid nature of these accounts. (2) The fair value of our credit cards was determined using a discounted cash flow model with key inputs relating to weighted average lives, expected lifetime loss rates and discount rate. The fair value of our commercial and consumer banking and senior secured loans was determined using a discounted cash flow model with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults. (3) Other investments include FRB stock and FHLB stock, which are presented within other assets in the condensed consolidated balance sheets. (4) The fair values of our deposits without contractually defined maturities (such as demand and savings deposits) and our noninterest-bearing deposits approximate their carrying values. The fair value of our time-based deposits was determined using a discounted cash flow model based on rates currently offered for deposits of similar remaining maturities. (5) The carrying value of our debt is net of unamortized discounts and debt issuance costs. The fair value of our convertible notes was classified as Level 1, as it was based on an observable market quote. The fair values of our warehouse facility debt and revolving credit facility debt were classified as Level 2 based on market factors and credit factors specific to these financial instruments. The fair value of our securitization debt was classified as Level 2 and valued using a discounted cash flow model, with key inputs relating to the underlying contractual coupons, terms, discount rate and expectations for defaults and prepayments. Nonrecurring Fair Value Measurements Investments in equity securities of $ 23,125 and $ 22,920 as of June 30, 2024 and December 31, 2023, respectively, which are presented within other assets in the condensed consolidated balance sheets, include investments for which fair values are not readily determinable, which we elect to measure using the measurement alternative method of accounting. The fair value measurements are classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs in the fair value measurements. The balances were primarily composed of a $ 19,739 investment valued under the measurement alternative method during 2022 that was a former equity method investment. 44 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 13. Share-Based Compensation The 2021 Stock Option and Incentive Plan (the “2021 Plan”) allows for the issuance of stock options, stock appreciation rights, restricted stock, RSUs (including PSUs), dividend equivalents and other stock or cash based awards for issuance to its employees, non-employee directors and non-employee third parties. Shares associated with option exercises and RSU vesting are issued from the authorized pool. Effective January 1, 2023, we approved a plan to allow our non-employee directors to elect, on an annual basis, to defer their cash retainers into equity awards, and/or to defer their RSU grants, which vest in accordance with the grant terms (collectively referred to as DSUs). DSUs are equity awards that entitle the holder to shares of our common stock when the awards vest. Directors may choose to receive their deferred stock distributions in a lump sum or in installments over different time periods. DSUs are measured based on the fair value of our common stock on the date of grant. DSU activity is presented with RSUs in the disclosures below. Share-based compensation expense related to stock options, RSUs and PSUs is presented within the following line items in the condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Technology and product development $ 21,745 $ 24,391 $ 41,024 $ 42,619 Sales and marketing 5,372 7,353 10,334 13,940 Cost of operations 3,381 2,895 6,299 4,395 General and administrative 30,559 41,239 58,482 79,150 Total $ 61,057 $ 75,878 $ 116,139 $ 140,104 Total compensation and benefits, inclusive of share-based compensation expense, was $ 221,773 and $ 430,019 for the three and six months ended June 30, 2024, respectively, and $ 226,248 and $ 442,663 for the three and six months ended June 30, 2023, respectively. Compensation and benefits expenses are presented within the following categories of expenses within noninterest expense: (i) technology and product development , (ii) sales and marketing , (iii) cost of operations , and (iv) general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). Stock Options The following is a summary of stock option activity: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding as of January 1, 2024 17,896,732 $ 7.70 3.8 Exercised ( 247,153 ) 2.56 Expired ( 11,651 ) 6.00 Outstanding as of June 30, 2024 17,637,928 $ 7.77 3.3 Exercisable as of June 30, 2024 17,637,928 $ 7.77 3.3 As of June 30, 2024, there was no unrecognized compensation cost related to unvested stock options. Restricted Stock Units RSUs, inclusive of DSUs, are equity awards granted to employees that entitle the holder to shares of our common stock when the awards vest. RSUs are measured based on the fair value of our common stock on the date of grant. 45 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The following table summarizes RSU activity: Number of RSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2024 64,879,496 $ 7.95 Granted 28,942,223 7.39 Vested (1) ( 17,530,410 ) 8.19 Forfeited ( 9,982,438 ) 8.25 Outstanding as of June 30, 2024 66,308,871 $ 7.59 ________________________ (1) The total fair value, based on grant date fair value, of RSUs that vested during the six months ended June 30, 2024 was $ 143.6 million. As of June 30, 2024, there was $ 466.7 million of unrecognized compensation cost related to unvested RSUs, inclusive of DSUs, which will be recognized over a weighted average period of approximately 2.2 years. Performance Stock Units The following table summarizes PSU activity: Number of PSUs Weighted Average Grant Date Fair Value Outstanding as of January 1, 2024 16,240,181 $ 10.29 Granted 726,217 9.17 Forfeited ( 2,639,301 ) 7.51 Outstanding as of June 30, 2024 14,327,097 $ 10.74 Compensation cost associated with PSUs is recognized using the accelerated attribution method for each of the three vesting tranches over the respective derived service period. We determined the grant-date fair value of PSUs utilizing a Monte Carlo simulation model. During 2024, we granted PSUs that will vest, if at all, in January 2027, subject to the achievement of specified performance goals, such as growth in total book value and maintaining a minimum total risk weighted capital ratio during a three-year measurement period commencing January 2024. We determined the grant-date fair value of PSUs utilizing a Monte Carlo simulation model. The following table summarizes the inputs used for estimating the fair value of PSUs granted: Input Six Months Ended June 30, 2024 Risk-free interest rate 4.5 % Expected volatility 73.0 % Fair value of common stock $ 8.02 Dividend yield — % Our use of a Monte Carlo simulation model requires the use of subjective assumptions: • Risk-free interest rate — Based on the U.S. Treasury rate at the time of grant commensurate with the remaining term of the PSUs. • Expected volatility — Based on the implied volatility of our common stock from a set of comparable publicly-traded companies. • Fair value of common stock — Based on the closing stock price on the date of grant. • Dividend yield — We assumed no dividend yield because we have historically not paid out dividends to common stockholders. 46 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) As of June 30, 2024, there was $ 9.7 million of unrecognized compensation cost related to unvested PSUs, which will be recognized over a weighted average period of approximately 2.3 years. Note 14. Income Taxes For interim periods, we follow the general recognition approach whereby tax expense is recognized using an estimated annual effective tax rate, which is applied to the year-to-date operating results. Additionally, we recognize tax expense or benefit for any discrete items occurring within the interim period that were excluded from the estimated annual effective tax rate. Our effective tax rate may be subject to fluctuations during the year due to impacts from the following items: (i) changes in forecasted pre-tax and taxable income or loss, (ii) changes in statutory law or regulations in jurisdictions where we operate, (iii) audits or settlements with taxing authorities, (iv) the tax impact of expanded product offerings or business acquisitions, and (v) changes in valuation allowance assumptions. For the three and six months ended June 30, 2024, we recorded income tax (expense) benefit of $ 2,064 and $( 4,119 ), respectively. For the three and six months ended June 30, 2023, we recorded income tax benefit of $ 1,780 and $ 3,417 , respectively. Our income tax positions in both the 2024 and 2023 periods were impacted by income tax expenses 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 benefit position in the 2023 period was primarily attributable to income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to Technisys. There were no material changes to our unrecognized tax benefits d uring the six months ended June 30, 2024, and we do not expect any other significant increases or decreases to unrecognized tax benefits within the next twelve months. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination of whether a valuation allowance is necessary, the Company considers all available positive and negative evidence supporting the allowance (e.g., the results of recent operations and future forecasts). If the Company determines that it is able to realize its deferred tax assets in the future in excess of the net recorded amount, the Company decreases the deferred tax asset valuation allowance, which reduces the provision for income taxes. During the six months ended June 30, 2024, we maintained a full valuation allowance against our net deferred tax assets in applicable jurisdictions. In certain foreign and state jurisdictions where sufficient deferred tax liabilities exist, no valuation allowance is recognized. We will continue to recognize a full valuation allowance until there is sufficient positive evidence to support its release. Note 15. Commitments, Guarantees, Concentrations and Contingencies Leases and Occupancy Our leases consist of operating and finance leases, the latter of which expire in 2040. Operating Leases We primarily lease our office premises under multi-year, non-cancelable operating leases. Our operating leases have terms expiring from 2024 to 2040, exclusive of renewal option periods. Our office leases contain renewal option periods ranging from one to ten years from the expiration dates. These options were not recognized as part of our ROU assets and operating lease liabilities, as we did not conclude at the commencement date of the leases that we were reasonably certain to exercise these options. However, in our normal course of business, we expect our office leases to be renewed, amended or replaced by other leases. Associated with these leases, we obtained non-cash operating lease ROU assets in exchange for operating lease liabilities of $ 1,736 during the six months ended June 30, 2024. Occupancy Occupancy-related costs, which primarily relate to the operations of our leased office spaces, were $ 7,931 and $ 15,689 during the three and six months ended June 30, 2024, respectively, and $ 7,773 and $ 14,980 during the three and six months ended June 30, 2023, respectively. Occupancy-related expenses are presented within the following categories of expenses 47 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) within noninterest expense : (i) technology and product development , (ii) sales and marketing , (iii) cost of operations , and (iv) general and administrative in the condensed consolidated statements of operations and comprehensive income (loss). Concentrations Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash and restricted cash equivalents, residual investments and loans. We hold cash and cash equivalents and restricted cash and restricted cash equivalents in accounts at regulated domestic financial institutions in amounts that may exceed FDIC insured amounts. We believe these institutions are of high credit quality. We are dependent on third-party funding sources and deposit balances to originate loans. Additionally, we sell loans to various third parties. We have historically sold loans to a limited pool of third-party buyers. No individual third-party buyer accounted for 10% or more of consolidated total net revenues for the periods presented. Within our Technology Platform segment, we have a relatively smaller number of clients compared to our lending and financial services businesses. As such, the loss of one or a few of our top clients could be significant to that portion of our business. No individual client accounted for 10% or more of consolidated total net revenues for the periods presented. The Company is exposed to default risk on borrower loans originated and financed by us. There is no single borrower or group of borrowers that comprise a significant concentration of the Company’s loan portfolio. Likewise, the Company is not overly concentrated within a group of channel partners or other customers, with the exception of our distribution of personal loan residual interests in our sponsored personal loan securitizations, which we market to third parties, and the aforementioned whole loan buyers. Given we have a limited number of prospective buyers for our personal loan securitization residual interests, this might result in our utilization of a significant amount of deposits or our own capital to fund future residual interests in personal loan securitizations, or impact the execution of future securitizations if we are limited in our own ability to invest in the residual interest portion of future securitizations, or find willing buyers for securitization residual interests. Contingencies Legal Proceedings In the ordinary course of business, the Company may be subject to a variety of pending legal proceedings. While we are unable to predict the ultimate outcome of these actions, we believe that any ultimate liability arising from any of these actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, many of these matters are in various stages of proceedings and further developments could cause management to revise its assessment of these matters. Our assessments are based on our knowledge and historical experience, as well as the specific facts and circumstances asserted, but the ultimate outcome of any matter could require payment substantially in excess of the amount that we have accrued and/or disclosed. Regardless of the final outcome, defending lawsuits, claims, government and self-regulatory organization investigations, and proceedings in which we are involved is costly and can impose a significant burden on management and employees, and there can be no assurances that we will receive favorable final outcomes. Guarantees We have three types of repurchase obligations that we account for as financial guarantees, which are disclosed in our Annual Report on Form 10-K. In the event of a repurchase, we are typically required to pay the purchase price of the loans transferred. As of June 30, 2024 and December 31, 2023, we accrued liabilities within accounts payable, accruals and other liabilities in the condensed consolidated balance sheets of $ 10.1 million and $ 5.9 million, respectively, related to our estimated repurchase obligation. The corresponding charges for changes in the estimated obligation are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). As of June 30, 2024 and December 31, 2023, the amounts associated with loans sold that were subject to the terms and conditions of our repurchase obligations totaled $ 9.6 billion and $ 6.7 billion, respectively. As of June 30, 2024 and December 31, 2023, we had a total of $ 6.4 million in letters of credit outstanding with financial institutions, which were issued for the purpose of securing certain of our operating lease obligations. A portion of the 48 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) letters of credit was collateralized by $ 1.3 million of our cash as of June 30, 2024 and December 31, 2023, which is included within restricted cash and restricted cash equivalents in the condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023, we had a total of $ 27.2 million in letters of credit outstanding with the FHLB, which serve as collateral for public deposits and were collateralized by loans. Commitments As part of our community reinvestment initiatives, we have a commitment to fund a line of credit to be used to finance housing and stimulate economic development in low- to moderate-income communities. As of June 30, 2024, we funded $ 4.2 million of loans, which are presented within loans held for investment, at amortized cost in the condensed consolidated balance sheets, and had $ 15.8 million of the total $ 20.0 million commitment outstanding. Mortgage Banking Regulatory Mandates We are subject to certain state-imposed minimum net worth requirements for the states in which we are engaged in the business of a residential mortgage lender. Noncompliance with these requirements on an annual basis could result in potential fines or penalties imposed by the applicable state. Future events or changes in mandates may affect our ability to meet mortgage banking regulatory requirements. As of June 30, 2024 and December 31, 2023, we were in compliance with all minimum net worth requirements; therefore, we have not accrued any liabilities related to fines or penalties. Note 16. Earnings (Loss) Per Share Series 1 Redeemable Preferred Stock has preferential cumulative dividend rights. To calculate net income (loss) attributable to common stockholders for each period presented, we adjust the numerator for basic and diluted EPS for the impact of the contractual amount of dividends payable to holders of Series 1 Redeemable Preferred Stock and the impact of redemption activity, if applicable. In May 2024, the Company redeemed all Series 1 Redeemable Preferred Stock outstanding. See Note 10. Equity for additional information. Basic EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed by dividing net income (loss) attributable to common stockholders, as adjusted for activity related to convertible notes, net of tax, if dilutive and applicable, by the weighted average number of shares of common stock outstanding during the period plus the effect of dilutive potential common shares. These potential common shares relate to (i) contingently issuable shares including PSU awards which require future service as a condition of delivery of the underlying common stock as determined using contingently issuable share guidance, (ii) outstanding RSUs, options, and warrants as determined using the treasury stock method, and (iii) shares issuable upon conversion of convertible notes as determined using the if-converted method. The adjustment for convertible notes reflects the conversion price at the end of the reporting period. We excluded the effect of all potentially dilutive common stock elements from the denominator in the computation of diluted EPS in the periods where their inclusion would have been anti-dilutive. 49 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) The calculations of basic and diluted earnings (loss) per share were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 17,404 $ ( 47,549 ) $ 105,447 $ ( 81,971 ) Less: Redeemable preferred stock dividends ( 6,424 ) ( 10,079 ) ( 16,503 ) ( 20,047 ) Less: Redeemable preferred stock redemptions, net (1) ( 3,026 ) — ( 3,026 ) — Net income (loss) attributable to common stockholders – basic $ 7,954 $ ( 57,628 ) $ 85,918 $ ( 102,018 ) Plus: Dilutive effect of convertible notes, net (2) — — ( 55,829 ) — Net income (loss) attributable to common stockholders – diluted (2) $ 7,954 $ ( 57,628 ) $ 30,089 $ ( 102,018 ) Denominator: Weighted average common stock outstanding – basic 1,058,591,943 936,569,420 1,020,604,718 932,926,222 Effect of dilutive securities: Convertible notes — — 12,502,005 — Unvested RSUs 5,290,301 — 7,521,370 — Common stock options 1,289,113 — 1,775,020 — Weighted average common stock outstanding – diluted 1,065,171,357 936,569,420 1,042,403,113 932,926,222 Earnings (loss) per share – basic $ 0.01 $ ( 0.06 ) $ 0.08 $ ( 0.11 ) Earnings (loss) per share – diluted $ 0.01 $ ( 0.06 ) $ 0.03 $ ( 0.11 ) ________________________ (1) In May 2024, we redeemed all outstanding Series 1 Redeemable Preferred Stock. The premium of $ 3,026 for the excess of the amount paid upon redemption over the carrying value of redeemable preferred stock at the time of exercise is considered to be akin to a dividend, and as such is deducted from net income (loss) to determine the net income (loss) attributable to common stockholders. See Note 10. Equity for additional information. (2) For the six months ended June 30, 2024, diluted earnings per share of $ 0.03 and diluted net income attributable to common stockholders of $ 30,089 exclude gain on extinguishment of debt, net of tax, associated with convertible note activity during the period, as evaluated under the if-converted method. The following table presents the securities that were not included in the computation of diluted EPS as the effect would have been anti-dilutive. For the 2023 periods, all elements were excluded from our calculation of diluted EPS as there were no earnings attributable to common stockholders, and amounts reflect the number of instruments outstanding at the end of the period. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Unvested RSUs (1)(2) 25,114,921 80,246,551 21,162,730 80,246,551 Common stock options (2) 9,573,060 18,451,142 8,569,858 18,451,142 Convertible notes (3) 22,841,631 53,538,000 22,841,631 53,538,000 Unvested PSUs 14,327,097 17,901,963 14,327,097 17,901,963 Contingent common stock (4) 45,859 61,145 45,859 61,145 Common stock warrants (5) — 12,170,990 — 12,170,990 ________________________ (1) As of June 30, 2024, includes DSUs granted to non-employee directors. See Note 13. Share-Based Compensation for additional information. (2) Amounts reflect weighted average instruments outstanding for the 2024 periods. (3) Represents the shares of common stock issuable upon conversion of all convertible notes at the conversion rate in effect at the date indicated. As of June 30, 2024, the 2026 convertible notes are potentially convertible into 22,841,631 shares of common stock, and there are no shares of common stock expected to be issued relating to the 2029 convertible notes, as there was no amount in excess of the expected cash redemption price which would require share settlement. See Note 9. Debt for additional information. (4) Represents contingently returnable common stock in connection with the Technisys Merger, which consists of shares that continue to be held in escrow pending resolution of outstanding indemnification claims by SoFi. These shares were issued in 2022 and partially released in 2023. See Note 2. Business Combinations for additional information. (5) All remaining unexercised common stock warrants expired in May 2024. As of June 30, 2024, the Company has no outstanding common stock warrants. 50 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Note 17. Business Segment Information Segment Organization and Reporting Framework We have three reportable segments: Lending, Technology Platform and Financial Services. Each of our reportable segments is a strategic business unit that serves specific needs of our members based on the products and services provided. The segments are based on the manner in which management views the financial performance of the business. The reportable segments also reflect our organizational structure. Each segment has a segment manager who reports directly to the CODM. The CODM has ultimate authority and responsibility over resource allocation decisions and performance assessment. The operations of acquired businesses have been integrated into, or managed as part of, our existing reportable segments. Activities that are not part of a reportable segment, such as management of our corporate investment portfolio and asset/liability management by our centralized treasury function (as further discussed below), are included in the Corporate/Other non-reportable segment. Contribution profit (loss) is the primary measure of segment profit and loss reviewed by the CODM and is intended to measure the direct profitability of each segment in the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. Contribution profit (loss) is defined as total net revenue for each reportable segment less: • fair value changes in servicing rights and residual interests classified as debt that are attributable to assumption changes, which impact the contribution profit within the Lending segment. These fair value changes are non-cash in nature and are not realized in the period; therefore, they do not impact the amounts available to fund our operations; and • expenses directly attributable to the corresponding reportable segment. Directly attributable expenses primarily include compensation and benefits and sales and marketing, and vary based on the amount of activity within each segment. Directly attributable expenses also include loan origination and servicing expenses, professional services, product fulfillment, lead generation and occupancy-related costs. Expenses are attributed to the reportable segments using either direct costs of the segment or labor costs that can be attributed based upon the allocation of employee time for individual products. We apply an FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding. The primary objective of the FTP framework is to transfer interest rate risk from the business segments by providing matched duration of funding of assets and liabilities to allocate interest income and interest expense to each segment. Therefore, the financial impact, management and reporting of interest rate risk is centralized in Corporate/Other, where it is monitored and managed. The application of the FTP framework impacts the measure of net interest income and, thereby, total net revenue and contribution profit (loss) for our reportable segments, as well as the total net revenue of Corporate/Other, but has no impact on our consolidated results of operations. Assets are not allocated to reportable segments, as our CODM does not evaluate reportable segments using discrete asset information. Segment Information Lending. The Lending segment includes our personal loan, student loan and home loan products and the related servicing activities. Revenues in the Lending segment are driven by changes in the fair value of our whole loans and securitization interests (inclusive of our economic hedging activities), gains or losses recognized on transfers that meet the true sale requirements, and our servicing-related activities, which mainly consist of servicing fees and the changes in our servicing assets over time. In our Lending segment, we also earn the difference between interest income earned on our loans and interest expense, as determined using the FTP framework. Our CODM considers net interest income in addition to contribution profit in evaluating the performance of our Lending segment and making resource allocation decisions. Therefore, we present interest income net of interest expense. Technology Platform. The Technology Platform segment includes: (i) technology products and solutions revenue, which is primarily related to our platform as a service through Galileo, which provides the infrastructure to facilitate core client- 51 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) facing and back-end capabilities, such as account setup, account funding, direct deposit, authorizations and processing, payments functionality and check account balance features, (ii) beginning in March 2022, revenue earned by Technisys, which expanded our segment to include a cloud-native digital and core banking platform offering and which results in the sale of software licenses and the provision of related technology solutions, and (iii) beginning in the third quarter of 2023, interest income earned on segment cash balances, for which prior period amounts were determined to be immaterial. See Note 2. Business Combinations for additional information on the Technisys Merger. Financial Services. The Financial Services segment primarily includes our SoFi Money product (primarily inclusive of checking and savings accounts, as well as cash management accounts), SoFi Invest product, SoFi Credit Card product, our Loan Platform Business, SoFi Relay personal finance management product and other financial services, such as content for other financial services institutions and our members. Checking and savings provides members a digital banking experience that offers no account fees, 2-day early paycheck and a competitive annual percentage yield. SoFi Money cash management provides members a digital cash management experience. SoFi Invest provides investment features and financial planning services that we offer to our members. Revenues in the Financial Services segment include interest income earned and interest expense incurred under the FTP framework, interchange fees on our member debit and credit transactions, and fees related to pay for order flow and share lending arrangements in SoFi Invest. We also earn referral fees in connection with referral activity we facilitate through our platform. Our CODM considers net interest income in addition to contribution profit (loss) in evaluating the performance of our Financial Services segment and making resource allocation decisions. Under the FTP framework, the Financial Services segment earns interest income that is reflective of an FTP credit for deposits provided to the overall business, as well as incurs interest expense that is reflective of an FTP charge related to the use of funding for SoFi Credit Card. Corporate/Other. Non-segment operations are classified as Corporate/Other, which includes net revenues associated with corporate functions that are not directly related to a reportable segment. Net interest income (expense) within Corporate/Other reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. These non-segment net revenue (loss) also include interest income earned on corporate cash balances, nonrecurring income on certain investments from available cash on hand, such as our investments in AFS debt securities (which investments are not interconnected with our core business lines and, thereby, reportable segments), noninterest income related to gains and losses on extinguishment of corporate borrowings including our convertible notes, and interest expense on other corporate borrowings, such as our revolving credit facility and the amortization of debt issuance costs and original issue discount on our convertible notes. Segment Results The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment: Three Months Ended June 30, 2024 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 279,212 $ 555 $ 139,229 $ 418,996 $ ( 6,412 ) $ 412,584 Noninterest income (expense) (2) 61,493 94,883 36,903 193,279 ( 7,245 ) 186,034 Total net revenue (loss) $ 340,705 $ 95,438 $ 176,132 $ 612,275 $ ( 13,657 ) $ 598,618 Servicing rights – change in valuation inputs or assumptions (3) ( 1,654 ) — — ( 1,654 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 1 — — 1 Directly attributable expenses ( 141,114 ) ( 64,287 ) ( 120,912 ) ( 326,313 ) Contribution profit $ 197,938 $ 31,151 $ 55,220 $ 284,309 52 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) Three Months Ended June 30, 2023 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 231,885 $ — $ 74,637 $ 306,522 $ ( 15,396 ) $ 291,126 Noninterest income (expense) (2) 99,556 87,623 23,415 210,594 ( 3,702 ) 206,892 Total net revenue (loss) $ 331,441 $ 87,623 $ 98,052 $ 517,116 $ ( 19,098 ) $ 498,018 Servicing rights – change in valuation inputs or assumptions (3) ( 8,601 ) — — ( 8,601 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) ( 602 ) — — ( 602 ) Directly attributable expenses ( 138,929 ) ( 70,469 ) ( 102,399 ) ( 311,797 ) Contribution profit (loss) $ 183,309 $ 17,154 $ ( 4,347 ) $ 196,116 Six Months Ended June 30, 2024 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income $ 545,748 $ 1,056 $ 258,942 $ 805,746 $ 9,556 $ 815,302 Noninterest income (2) 125,433 188,748 67,741 381,922 46,389 428,311 Total net revenue $ 671,181 $ 189,804 $ 326,683 $ 1,187,668 $ 55,945 $ 1,243,613 Servicing rights – change in valuation inputs or assumptions (3) ( 6,880 ) — — ( 6,880 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 74 — — 74 Directly attributable expenses ( 258,718 ) ( 127,911 ) ( 234,289 ) ( 620,918 ) Contribution profit $ 405,657 $ 61,893 $ 92,394 $ 559,944 Six Months Ended June 30, 2023 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 432,932 $ — $ 132,674 $ 565,606 $ ( 38,470 ) $ 527,136 Noninterest income (expense) (2) 235,590 165,510 46,479 447,579 ( 4,539 ) 443,040 Total net revenue (loss) $ 668,522 $ 165,510 $ 179,153 $ 1,013,185 $ ( 43,009 ) $ 970,176 Servicing rights – change in valuation inputs or assumptions (3) ( 20,685 ) — — ( 20,685 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) ( 513 ) — — ( 513 ) Directly attributable expenses ( 254,117 ) ( 133,499 ) ( 207,735 ) ( 595,351 ) Contribution profit (loss) $ 393,207 $ 32,011 $ ( 28,582 ) $ 396,636 ____________________ (1) Within the Technology Platform segment, intercompany fees were $ 8,295 and $ 15,296 for the three and six months ended June 30, 2024, respectively, and $ 4,954 and $ 8,695 for the three and six months ended June 30, 2023, respectively. The equal and offsetting intercompany expenses are reflected within all three segments’ directly attributable expenses, as well as within expenses not allocated to segments. The intercompany revenues and expenses are eliminated in consolidation. The revenues are eliminated within Corporate/Other and the expenses are adjusted in our reconciliation of directly attributable expenses below. 53 SoFi Technologies, Inc. TABLE OF CONTENTS SoFi Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) (In Thousands, Unless Otherwise Stated and Except for Share and Per Share Data) (2) Refer to Note 3. Revenue for a reconciliation of revenue from contracts with customers to total noninterest income (expense). (3) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. These non-cash charges, which are recorded within noninterest income in the condensed consolidated statements of operations and comprehensive income (loss), are unrealized during the period and, therefore, have no impact on our cash flows from operations. As such, these positive and negative changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations and our overall performance. (4) 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 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 obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the condensed consolidated statements of operations and comprehensive income (loss). 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. The following table reconciles reportable segments total contribution profit to income (loss) before income taxes. Expenses not allocated to reportable segments represent items that are not considered by our CODM in evaluating segment performance or allocating resources. Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Reportable segments total contribution profit $ 284,309 $ 196,116 $ 559,944 $ 396,636 Corporate/Other total net income (loss) ( 13,657 ) ( 19,098 ) 55,945 ( 43,009 ) Intercompany expenses 8,295 4,954 15,296 8,695 Servicing rights – change in valuation inputs or assumptions 1,654 8,601 6,880 20,685 Residual interests classified as debt – change in valuation inputs or assumptions ( 1 ) 602 ( 74 ) 513 Expenses not allocated to segments: Share-based compensation expense ( 61,057 ) ( 75,878 ) ( 116,139 ) ( 140,104 ) Employee-related costs (1) ( 67,786 ) ( 55,605 ) ( 130,170 ) ( 117,419 ) Depreciation and amortization expense ( 49,623 ) ( 50,130 ) ( 98,162 ) ( 95,451 ) Other corporate and unallocated expenses (2) ( 86,794 ) ( 58,891 ) ( 183,954 ) ( 115,934 ) Income (loss) before income taxes $ 15,340 $ ( 49,329 ) $ 109,566 $ ( 85,388 ) __________________ (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 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, amortization of premiums on a credit default swap, corporate and FDIC insurance costs, foreign currency translation adjustments and transaction-related expenses. Note 18. Subsequent Events Management of the Company performed an evaluation of subsequent events that occurred after the balance sheet date through the date of this Quarterly Report on Form 10-Q, and determined that there were no subsequent events to report. 54 SoFi Technologies, Inc. TABLE OF CONTENTS Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as SoFi Technologies’ audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024 and subsequent filings with the SEC. Certain amounts may not foot or tie to other disclosures due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements. Page Business Overview 56 Business Highlights 60 Non-GAAP Financial Measures 61 Key Business Metrics 66 Key Factors Affecting Operating Results 69 Consolidated Results of Operations 71 Net Interest Income 72 Noninterest Income and Net Revenue 74 Noninterest Expense 75 Income Taxes 77 Summary Results by Segment 77 Lending Segment 78 Technology Platform Segment 84 Financial Services Segment 85 Corporate/Other Non-Reportable Segment 87 Liquidity and Capital Resources 87 Critical Accounting Policies and Estimates 93 Recent Accounting Standards Issued, But Not Yet Adopted 94 55 SoFi Technologies, Inc. TABLE OF CONTENTS Business Overview We are a member-centric, one-stop shop for financial services that, through our Lending and Financial Services products, allows members to borrow, save, spend, invest and protect their money. We refer to our customers as “members” and “clients”. Our mission is to help our members achieve financial independence in order to realize their ambitions. To us, financial independence does not mean being wealthy, but rather represents the ability of our members to have the financial means to achieve their personal objectives at each stage of life, such as owning a home, having a family, or having a career of their choice — more simply stated, to have enough money to do what they want. We were founded in 2011 and have developed a suite of financial products that offers the speed, selection, content and convenience that only an integrated digital platform can provide. In order for us to achieve our mission, we have to help people get their money right, which means providing them with the ability to borrow better, save better, spend better, invest better and protect better. Everything we do today is geared toward helping our members “Get Your Money Right” and we strive to innovate and build ways for our members to achieve this goal. In order to help achieve our mission, we offer personal loans, student loans, home loans and related servicing. We offer a variety of financial services products, such as SoFi Money, SoFi Credit Card, SoFi Invest and SoFi Relay, that provide more daily interactions with our members, as well as our Loan Platform Business which helps a broader range of borrowers to find lending solutions. We offer products and capabilities, such as SoFi At Work, that are designed to appeal to enterprises. We have also made strategic acquisitions to further expand our platform capabilities for enterprises, which we believe will deepen our participation in the entire technology ecosystem powering digital financial services. We have built a social area within our digital native application, which we refer to as the “member home feed”. The member home feed 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. Through the member home feed, there are significant opportunities to build frequent engagement and, to date, the member home feed has been an important driver of new product adoption. The member home feed is an important part of our strategy and our ability to use data as a competitive advantage. To complement these products and services, we believe in establishing partnerships with other enterprises to leverage our existing capabilities to reach a broader market and in building vertically-integrated technology platforms designed to manage and deliver our suite of products and technology solutions to our members and clients in a low-cost and differentiated manner. Our three reportable segments and their primary product offerings as of June 30, 2024 were as follows: _________________ (1) Loan Platform Business, formerly referred to as lending as a service, includes referred loans which are originated by a third-party partner to which we provide pre-qualified borrower referrals, certain loans which we originate in order to subsequently sell to a third-party partner, and certain loans associated with our Lantern Credit financial services marketplace platform. 56 SoFi Technologies, Inc. TABLE OF CONTENTS Members We have created an innovative financial services platform designed to offer best-in-class products to meet the broad objectives of our members and the lifecycle of their financial needs. Our platform offers our members (as defined under “ Key Business Metrics ”) a suite of financial products and services, enabling them to borrow, save, spend, invest and protect their finances across one integrated platform, as well as personal financial management tools and benefits to complement our products. Our aim is to create a best-in-class, integrated financial services platform that will generate a virtuous cycle whereby positive member experiences will lead to new product adoption by existing members and enhanced profitability for each additional product by lowering overall member acquisition costs and increasing the lifetime value of our members. We refer to this virtuous cycle as our “Financial Services Productivity Loop”. We believe that developing a relationship with our members and gaining their trust is central to our success as a financial services platform. Moreover, we believe that some of the current frictions faced by other financial institutions are caused by a disjointed and non-seamless product experience, a lack of digital customer acquisition, subpar mobile web products instead of digital native apps and incomplete product offerings to meet a customer’s holistic financial needs. Through our mobile technology and continuous effort to improve our financial services products, we are seeking to build a financial services platform that can support all of our members’ financial services needs throughout their lifetime. Enterprises In addition to benefiting our members, our products and capabilities are also designed to appeal to enterprises, such as financial services institutions that subscribe to our enterprise services, and have become interconnected with the SoFi platform. We have continued to expand our platform capabilities for enterprises through strategic acquisitions, including: (i) our acquisition of Galileo in 2020, which provides technology platform services to financial and non-financial institutions and which has allowed us to vertically integrate across more of our financial services, and (ii) the Technisys Merger in the first quarter of 2022, through which we added a cloud-native digital and core banking platform into our technology platform offerings and expanded our technology platform services to a broader international market. These expansions have deepened our participation in the entire technology ecosystem powering digital financial services, allowing us to not only reduce costs to operate our member-centric business, but also deliver increasing value to our enterprise customers. While our enterprises are not considered members, they are important contributors to the growth of the SoFi platform, and also have their own constituents who might benefit from our products in the future. SoFi Bank In February 2022, we closed the Bank Merger, pursuant to which we became a bank holding company and began operating as SoFi Bank. Golden Pacific’s community bank business continues to operate as a division of SoFi Bank. As a bank holding company, we offer checking and savings accounts and credit cards through SoFi Bank. We are originating all new loan applications within SoFi Bank, and we intend to continue to explore other products for SoFi Bank over time. The key current and expected financial benefits to us of operating a national bank include: (i) lowering our cost to fund loans, as we can utilize deposits held at SoFi Bank to fund loans, which have a lower borrowing cost of funds than our warehouse and securitization financing model, (ii) increasing our flexibility to hold loans on our balance sheet for longer periods, thereby enabling us to earn interest on these loans for a longer period, (iii) supporting origination volume growth by providing an alternative financing option, while also maintaining our warehouse capacity, and (iv) through deposits, providing us with meaningful member data that can allow us to better serve our members’ financial needs. See Part II, Item 1A. “ Risk Factors ” for a discussion of certain potential risks related to being a bank holding company. International Operations While we primarily operate in the United States, we also operate internationally in Latin America and Canada largely through our Technology Platform segment, as well as in Hong Kong through SoFi Holdings (Hong Kong) Limited (an investment business). Our Reportable Segments We conduct our business through three reportable segments: Lending, Technology Platform and Financial Services. Below is a discussion of our segments and their primary products and non-product offerings. 57 SoFi Technologies, Inc. TABLE OF CONTENTS Lending Segment We offer personal loans, student loans, home loans and related servicing. We believe that our market opportunity within each of these lending channels is significant. Our lending process primarily leverages an in-application, digital borrowing experience, which we believe serves as a competitive advantage as digital lending becomes increasingly ubiquitous. Furthermore, our platform supports the full transaction lifecycle, including credit application, underwriting, approval, funding and servicing. Through data derived at loan origination and throughout the servicing process, SoFi has life-of-loan performance data on each loan in our ecosystem that we originate and on which we retain servicing, which provides a meaningful data asset. 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. Personal Loans. We originate personal loans to help our members with a variety of financial needs, such as debt consolidation, home improvement projects, family planning, travel and weddings, to name a few. We offer fixed rate loans with flexible repayment terms. We generally offer loan sizes of $5,000 to $100,000, subject to legal and/or licensing requirements, with terms generally ranging from 2 to 7 years. We regularly update the annual percentage rates offered on our personal loans. Student Loans. We operate in the student loan refinance space, with a focus on prime and super-prime school loans, as well as the “in-school” lending space, which allows members to borrow funds while they attend school. We offer flexible loan sizes, repayment options and competitive rates. Within student loan refinancing, we generally offer loan sizes of $5,000 or higher, subject to legal and/or licensing requirements, with terms generally ranging from 5 to 20 years. Within in-school loans, we generally offer loan sizes of $1,000 or higher, subject to legal and/or licensing requirements, with terms generally ranging from 5 to 15 years. We regularly update the annual percentage rates offered on our fixed and variable-rate student loans. Home Loans. We offer agency, non-agency and certain government loans (e.g., VA and Federal Housing Administration loans) for members purchasing a home or refinancing an existing mortgage. During 2024, we began offering fixed rate home equity loans and HELOCs. For our home loan products, we offer competitive rates, flexible down payment options for as little as 3% (or 0% for VA loans), a close on time guarantee, and educational tools and calculators. For one-unit properties, we generally offer loan sizes of $75,000 to $766,550 in conforming normal cost areas (with exceptions for smaller loan sizes considered on a case-by-case basis), up to $1,149,825 in conforming high cost areas (GSE-eligible loans above the normal conforming limit, which is determined by county). For multi-unit properties, we offer loan sizes up to $2,211,600. In addition, we offer loan sizes up to $3,000,000 for jumbo loans (loans in the jumbo loan program), up to $1,500,000 for VA loans, and up to $472,030 for Federal Housing Administration loans in most areas. Our fixed rate home loans generally have terms of 10, 15, 20, 25 or 30 years. We offer adjustable rate mortgage products for conforming and jumbo loans, with a fixed rate for 5, 7 or 10 years followed by rate adjustments every six months for the remainder of the 30-year term, and for VA and Federal Housing Administration loans, with a fixed rate for 5 years followed by rate adjustments every year for the remainder of the 30-year term. We regularly update the annual percentage rates offered on our home loans. Lending Model We originate loans through our lending business, and have the option of pursuing a gain-on-sale origination model, whereby we seek to recognize a gain from these loans and sell them into either our whole loan or securitization channels, or holding loans on our balance sheet when advantageous. This enables us to maximize our return and balance our risk by earning interest on these loans for a longer period and to be selective in our sales arrangements. We expect to benefit from the continued mix towards deposit funding through operating SoFi Bank. We sell our whole loans primarily to large financial institutions, such as bank holding companies. In securitization transactions that do not qualify for sale accounting, the related assets remain on our balance sheet and cash proceeds received are reported as liabilities, with related interest expense recognized over the life of the related borrowing. In securitization transactions that qualify for sale accounting, we typically have insignificant continuing involvement as an investor. In the case of both whole loan sales and securitizations, and with the exception of certain of our home loans, we also continue to retain servicing rights to our originated loans following transfer. We directly service all of the personal loans that we originate. We act as master servicer for, and rely on sub-servicers to directly service, all of our student loans and GSE conforming home loans. We view servicing as an integral component of the Lending segment, as we believe our servicing function is an important asset because of the connection to the member it affords us throughout the life of the loan thereby enhancing the effectiveness of our Financial Services Productivity Loop by increasing member touchpoints and driving new product adoption by existing members. We rely upon deposits, warehouse financing and our own capital to enable us to continue to expand our origination capabilities. Our ability to utilize deposits held at SoFi Bank to fund our loans has lowered our overall cost of asset-backed financing relative to alternative sources of funding. 58 SoFi Technologies, Inc. TABLE OF CONTENTS Underwriting Process We have developed an extensive underwriting process across each lending product that is focused on willingness to pay (measured by credit attributes and risk scores), ability to pay (measured through free cash flow), and stability (measured by credit experience). A key element of our underwriting process is the ability to facilitate risk-based interest rates that we believe are appropriate for each loan using proprietary risk models. We believe the outcome of this process helps us determine a more data-driven, risk-adjusted interest rate that we can offer our members. Further, our data and monitoring tools enable us to implement risk mitigation strategies quickly and efficiently, including underwriting standard adjustments to adapt our operations to changing environments and expectations. Our personal loan and student loan underwriting models are typically based on credit reports, standard industry credit scores, custom credit assessment models, and debt capacity analysis, as indicated by borrower free cash flow. Our underwriting strategy utilizes an advanced risk model that provides refined risk separation. Home loans originated by SoFi that are agency-conforming loans are subject to credit, debt-to-income, and collateral eligibility established by GSEs. Government loans, such as VA and Federal Housing Administration loans, are subject to the underwriting requirements established by the appropriate government agency. In addition to these requirements, agency-conforming and government loans are subject to credit eligibility overlays imposed by SoFi as well as individual investor requirements. Other non-agency loans originated by us, such as jumbo loans, are subject to investor credit criteria, which typically includes a minimum tri-bureau credit score, established credit history requirements, income verification, as well as maximum limits on debt-to-income and caps on loan-to-value based on an accredited appraisal. We also leverage our data to provide existing members a streamlined application process through automation. Across our loan products, existing members generally experience a higher approval rate than new members, subject to the existing member being in good standing on their existing products. Technology Platform Segment We provide technology platform services through a diversified suite of offerings which include an event and authorization platform accessed via application programming interfaces, a cloud-native digital and core banking platform and services related to both platforms. Our customers include financial and non-financial institutions in North America and Latin America. We earn technology product and solutions revenue through the use of the platforms, either on a per use basis, or from overall license and maintenance fee service arrangements related to those respective platforms. We also offer additional add-on technology solutions to support our clients and drive engagement, such as a conversational AI engine for customers of banks and financial institutions, and a real-time payment risk platform which employs AI and machine learning technology to enhance payment fraud mitigation strategies for financial customers. We continue to leverage investments made to integrate Galileo and Technisys and position the Technology Platform segment for diversified durable growth. Financial Services Segment Our suite of financial services products, by nature, provides more daily interactions with our members and is, therefore, differentiated from our lending products, which inherently have less consistent touchpoints with our members. We offer a suite of financial services solutions, the most significant of which are discussed below. SoFi Money : Checking and savings accounts provide a digital banking experience which allows members to spend, save and earn interest and rewards in flexible ways. We believe SoFi Checking and Savings accounts held at SoFi Bank are attractive to our members and prospective members due to our differentiated offerings, including competitive interest rates, access to expanded FDIC insurance coverage of up to $2 million through our Insured Deposit Program and the convenience and benefits of being part of a cohesive, simplified financial ecosystem within our mobile platform. SoFi Invest : A mobile-first investment platform offering members access to trading and advisory solutions, such as active investing and robo-advisory. Our interactive investing experience fosters engagement by allowing members to view and monitor other investors’ activity on the platform. Our active investing service enables members to buy and sell stocks and ETFs, as well as alternative investment funds, mutual funds and money market funds beginning in January 2024, to engage in options trading, to participate in IPOs, to buy and sell fractional shares, to engage in margin investing and to access a retirement investment account. Our robo-advisory service offers managed portfolios of stocks, bonds and ETFs. Additionally, we provide introductory brokerage services to our members and have invested heavily to create an appealing mobile investing experience. Additional financial services solutions offered within our platform include: • SoFi Credit Card : Designed to help eligible members spend better with cash back rewards on every purchase and without limits. Our unlimited cash back credit card features no annual fee, no foreign transaction fees and flexible 59 SoFi Technologies, Inc. TABLE OF CONTENTS redemption options through statement credit or other SoFi products, with a 10% boost on cash back rewards earned for credit card members with direct deposit through SoFi Checking. • Lantern Credit: A financial services marketplace platform developed to help applicants that do not qualify for SoFi products, and small business owners, to seek alternative products from other providers, as well as to provide a product comparison experience. • Other Loan Platform Business : Includes referred loans which are originated by a third-party partner to which we provide pre-qualified borrower referrals, and certain loans which we originate in order to subsequently sell to third-party partners. • SoFi Relay: A personal finance management product that allows members to track all of their financial accounts in one place and gain meaningful insights into their financial health and habits, such as credit score monitoring and spending behaviors. SoFi Relay also provides us with unified intelligence about our members that offers information about what SoFi products and features may help our members best achieve their financial goals, allowing us to further personalize the SoFi experience for our members. We believe that the content and features we provide within our mobile application can spur more financial education, which leads to more ways for our members to actively engage in getting their money right and can ultimately demonstrate the effectiveness of our Financial Services Productivity Loop. We earn revenues in connection with our Financial Services segment primarily in the following ways: • Net interest income : 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. See Note 17. Business Segment Information to the Notes to Condensed Consolidated Financial Statements for additional information on the FTP framework. • Referral fees : Through strategic partnerships, we earn a specified referral fee in connection with referral activity we facilitate through our platform. Referral fees are paid to us by third-party partners that offer services to end users who do not use one of our product offerings, but who were referred to the partners through our platform. 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. • Interchange fees : 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 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. Business Highlights We achieved a number of key financial achievements in the three and six months ended June 30, 2024, including total net revenue of $598.6 million and $1.2 billion, respectively, representing increases of 20% and 28% over total net revenue in the same periods of 2023, respectively, as well as our third consecutive quarter of net income, achieving $17.4 million in the second quarter of 2024. This compares to a loss of $47.5 million in the same prior year period. Diluted earnings per share for the three and six months ended June 30, 2024 was $0.01 and $0.03, respectively, compared to a loss per share of $0.06 and $0.11, respectively, in the same periods of 2023. Diluted EPS for the six month 2024 period did not include a benefit from the convertible debt exchange in the first quarter of 2024. Continued growth in both total members and products, along with improving operating efficiency, reflects the benefits of our broad product suite and Financial Services Productivity Loop strategy. Total members reached over 8.7 million as of June 30, 2024, a 41% increase from the prior year period, while total products reached nearly 12.8 million as of June 30, 2024, a 36% year over year increase. 60 SoFi Technologies, Inc. TABLE OF CONTENTS Lending segment contribution profit of $197.9 million and $405.7 million for the three and six months ended June 30, 2024, respectively, at a margin of 58% and 60%, respectively, increased 8% and 3% over the respective 2023 periods, which had a contribution margin of 55% and 59%, respectively. Lending segment performance was driven by net interest income as a result of higher loan balances and yields. Average net interest margin of 5.83% and 5.87% in the three and six months ended June 30, 2024, respectively, an increase of 9 and 18 basis points, respectively, compared to 5.74% and 5.69% in the respective 2023 periods. Net interest margin expansion 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 22% for both the three and six months ended June 30, 2024, primarily driven by continued strong demand for personal loans and home loans and stable growth in the student loan business, despite continued macroeconomic headwinds. 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 we expect to continue to provide benefits. This contributed to a notable year over year increase in home loans alongside further diversification and expansion of our home loan product offerings in 2024, while we expect overall home loans growth could be correlated with rate movements in 2024. Technology Platform segment contribution profit of $31.2 million and $61.9 million for the three and six months ended June 30, 2024, respectively, increased 82% and 93% over the respective 2023 periods, and total net revenue of $95.4 million and $189.8 million for the three and six months ended June 30, 2024, respectively, increased 9% and 15% over the respective 2023 periods. Growth was driven by continued strong organic growth of existing clients and new product adoption, as well as notable contributions from increasingly diversified clients which have launched since the second half of 2023. Margin improvements were driven primarily by account growth, as we begin to realize the benefits of earlier investments made to support Technology Platform product development. 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 profit of $55.2 million and $92.4 million for the three and six months ended June 30, 2024, respectively, significantly improved compared to a contribution loss of $4.3 million and $28.6 million in the respective 2023 periods, and total net revenue of $176.1 million and $326.7 million for the three and six months ended June 30, 2024 increased 80% and 82% over the respective 2023 periods. We achieved continued strong growth in deposits, ending the period with $23.0 billion of deposits as of June 30, 2024, allowing us to maintain diversified sources of funding and driving an increase in net interest income earned on our deposits. Further, noninterest income increased primarily due to an increase in interchange fees related to credit card and debit card transactions, as well as growth in referrals from our Loan Platform Business. By continuously innovating with new and relevant offerings, features and rewards for members, we grew total Financial Services products by 39% year over year to 11.0 million at quarter-end. 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 2024, 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 continue to provide 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 16.8% as of June 30, 2024. 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. 61 SoFi Technologies, Inc. TABLE OF CONTENTS 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, as well as gains and losses on extinguishment of debt. We adjust total net revenue to exclude these items, as they are non-cash charges that are not realized during the period or not indicative of our core operating performance, and therefore positive or negative changes do not impact the cash available to fund our operations. This measure helps provide our management with an understanding of the net revenue available to finance our operations and helps management better decide on the proper expenses to authorize for each of our operating segments, to ultimately help achieve target contribution profit margins. Therefore, the measure of adjusted net revenue serves as both the starting point for how we think about the liquidity generated from our operations and also the starting point for our annual financial planning, the latter of which focuses on the cash we expect to generate from our operating segments to help fund the current year’s strategic objectives. Adjusted net revenue has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as total net revenue. The primary limitation of adjusted net revenue is its lack of comparability to other companies that do not utilize this measure or that use a similar measure that is defined in a different manner. Total Net Revenue and Adjusted Net Revenue In Thousands The following table reconciles adjusted net revenue to total net revenue, the most directly comparable GAAP measure: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Total net revenue $ 598,618 $ 498,018 $ 1,243,613 $ 970,176 Servicing rights – change in valuation inputs or assumptions (1) (1,654) (8,601) (6,880) (20,685) Residual interests classified as debt – change in valuation inputs or assumptions (2) 1 (602) 74 (513) Gain on extinguishment of debt (3) — — (59,194) — Adjusted net revenue $ 596,965 $ 488,815 $ 1,177,613 $ 948,978 ___________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. Moreover, these non-cash charges are unrealized during the period and, therefore, have no impact on our cash flows from operations. As such, these positive and negative changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations and our overall performance. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization 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 62 SoFi Technologies, Inc. TABLE OF CONTENTS 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. (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) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Total net revenue $ 598,618 $ 644,995 $ 615,404 $ 537,209 $ 498,018 Servicing rights – change in valuation inputs or assumptions (1) (1,654) (5,226) (6,595) (7,420) (8,601) Residual interests classified as debt – change in valuation inputs or assumptions (2) 1 73 10 928 (602) Gain on extinguishment of debt (3) — (59,194) (14,574) — — Adjusted net revenue $ 596,965 $ 580,648 $ 594,245 $ 530,717 $ 488,815 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. (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: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Total net revenue – Lending $ 340,705 $ 331,441 $ 671,181 $ 668,522 Servicing rights – change in valuation inputs or assumptions (1) (1,654) (8,601) (6,880) (20,685) Residual interests classified as debt – change in valuation inputs or assumptions (2) 1 (602) 74 (513) Adjusted net revenue – Lending $ 339,052 $ 322,238 $ 664,375 $ 647,324 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Adjusted EBITDA Adjusted EBITDA is defined as net income (loss), adjusted to exclude, as applicable: (i) corporate borrowing-based interest expense (our adjusted EBITDA measure is not adjusted for warehouse or securitization-based interest expense, nor deposit interest expense and finance lease liability interest expense, as these are 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. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income (loss). Some of the limitations of adjusted EBITDA include that it does not reflect the impact of working capital requirements or capital expenditures and it is not a universally consistent calculation among companies in our industry, which limits its usefulness as a comparative measure. 63 SoFi Technologies, Inc. TABLE OF CONTENTS Net Income (Loss) and Adjusted EBITDA In Thousands The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable GAAP measure: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Net income (loss) $ 17,404 $ (47,549) $ 105,447 $ (81,971) Non-GAAP adjustments: Interest expense – corporate borrowings (1) 12,725 9,167 23,436 17,167 Income tax expense (benefit) (2) (2,064) (1,780) 4,119 (3,417) Depreciation and amortization (3) 49,623 50,130 98,162 95,451 Share-based expense 61,057 75,878 116,139 140,104 Restructuring charges (4) — — — 4,953 Impairment expense (5) — — — 1,243 Foreign currency impact of highly inflationary subsidiaries (6) 194 — 368 — Transaction-related expense (7) 615 176 615 176 Servicing rights – change in valuation inputs or assumptions (8) (1,654) (8,601) (6,880) (20,685) Residual interests classified as debt – change in valuation inputs or assumptions (9) 1 (602) 74 (513) Gain on extinguishment of debt (10) — — (59,194) — Total adjustments 120,497 124,368 176,839 234,479 Adjusted EBITDA $ 137,901 $ 76,819 $ 282,286 $ 152,508 ___________________ (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 includes interest on our revolving credit facility, as well as interest expense and the amortization of debt discount and debt issuance costs on our convertible notes. Convertible note interest expense in the 2024 periods increased related to the issuance of interest-bearing convertible senior notes during the first quarter of 2024. (2) Our income tax positions in both the 2024 and 2023 periods were impacted by income tax expenses 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 benefit position in the 2023 period was primarily attributable to income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to Technisys. See Note 14. Income Taxes to the Notes to Condensed Consolidated Financial Statements for additional information. (3) Depreciation and amortization expense increased for the six months ended June 30, 2024 compared to the prior year period, primarily in connection with growth in our internally-developed software balance. (4) Restructuring charges in the six-month 2023 period primarily included employee-related wages, benefits and severance associated with a reduction in headcount in our Technology Platform segment in the first quarter of 2023, which do not reflect expected future operating expenses and are not indicative of our core operating performance. 64 SoFi Technologies, Inc. TABLE OF CONTENTS (5) Impairment expense in the six-month 2023 period relates to a sublease arrangement, which is 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. (7) Transaction-related expense in the 2023 and 2024 periods included financial advisory and professional services costs associated with our acquisition of Wyndham. (8) Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment, default rates and discount rates. This non-cash change is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, these positive and negative changes in fair value attributable to assumption changes are adjusted out of net income (loss) to provide management and financial users with better visibility into the earnings available to finance our operations. (9) Reflects changes in fair value inputs and assumptions, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, which has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to contractual securitization collateral cash flows), or the general operations of our business. As such, these positive and negative non-cash changes in fair value attributable to assumption changes are adjusted out of net income (loss) to provide management and financial users with better visibility into the earnings available to finance our operations. (10) 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 EBITDA to net income (loss), the most directly comparable GAAP measure, for the quarterly periods presented: Quarter Ended ($ in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Net income (loss) $ 17,404 $ 88,043 $ 47,913 $ (266,684) $ (47,549) Non-GAAP adjustments: Interest expense – corporate borrowings 12,725 10,711 9,882 9,784 9,167 Income tax (benefit) expense (2,064) 6,183 3,245 (244) (1,780) Depreciation and amortization 49,623 48,539 53,449 52,516 50,130 Share-based expense 61,057 55,082 69,107 62,005 75,878 Restructuring charges — — 7,796 — — Impairment expense — — — 247,174 — Foreign currency impact of highly inflationary subsidiaries 194 174 10,971 — — Transaction-related expense 615 — — (34) 176 Servicing rights – change in valuation inputs or assumptions (1,654) (5,226) (6,595) (7,420) (8,601) Residual interests classified as debt – change in valuation inputs or assumptions 1 73 10 928 (602) Gain on extinguishment of debt — (59,194) (14,574) — — Total adjustments 120,497 56,342 133,291 364,709 124,368 Adjusted EBITDA $ 137,901 $ 144,385 $ 181,204 $ 98,025 $ 76,819 65 SoFi Technologies, Inc. TABLE OF CONTENTS Key Business Metrics The table below presents the key business metrics that management uses to evaluate our business, measure our performance, identify trends and make strategic decisions: June 30, 2024 June 30, 2023 Variance % Change Members 8,774,236 6,240,091 2,534,145 41 % Total Products (1) 12,776,430 9,401,025 3,375,405 36 % Total Products — Lending segment 1,786,580 1,503,892 282,688 19 % Total Products — Financial Services segment (1) 10,989,850 7,897,133 3,092,717 39 % Total Accounts — Technology Platform segment 158,485,125 129,356,203 29,128,922 23 % ___________________ (1) In the fourth quarter of 2023, we transferred the crypto services provided by SoFi Digital Assets, LLC, and began closing existing digital assets accounts and removing the account from Invest products. This process was completed in the first quarter of 2024. As of June 30, 2023, SoFi Invest products included 435,076 digital assets accounts. Excluding these accounts (that were closed as part of the transfer of the crypto services), total products increased by 3,810,481, or 43%, and total financial services products increased by 3,527,793, or 47%, year over year. See “Summary Results by Segment” for additional metrics we review at the segment level. Members We refer to our customers as “members”. 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 CFPs, 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. Beginning in the first quarter of 2024, we aligned our methodology for calculating member and product metrics with our member and product definitions to include co-borrowers, co-signers, and joint- and co-account holders, as applicable. Quarterly amounts for prior periods were determined to be immaterial and were not recast. Once someone becomes a member, they are always considered a member unless they are removed in accordance with our terms of service, in which case, we adjust our total number of members. This could occur for a variety of reasons—including fraud or pursuant to certain legal processes—and, as our terms of service evolve together with our business practices, product offerings and applicable regulations, our grounds for removing members from our total member count could change. The determination that a member should be removed in accordance with our terms of service is subject to an evaluation process, following the completion, and based on the results, of which, relevant members and their associated products are removed from our total member count in the period in which such evaluation process concludes. However, depending on the length of the evaluation process, that removal may not take place in the same period in which the member was added to our member count or the same period in which the circumstances leading to their removal occurred. For this reason, our total member count may not yet reflect adjustments that may be made once ongoing evaluation processes, if any, conclude. We view members as an indication not only of the size and a measurement of growth of our business, but also as a measure of the significant value of the data we have collected over time. The data we collect from our members helps us to, among other things: (i) assess loan life performance data on each loan in our ecosystem, which can inform risk-based interest rates that we can offer our members, (ii) understand our members’ spending behavior to identify and suggest other products we offer that may align with the members’ financial needs, and (iii) enhance our opportunities to sell additional products to our members, as our members represent a vital source of marketing opportunities. When we provide additional products to members, it helps improve our unit economics per member, as we save on marketing costs that we would otherwise incur to attract new members. It also increases the lifetime value of an individual member. This in turn enhances our Financial Services Productivity Loop. Member growth is generally an indicator of future revenue, but is not directly correlated with revenues, since not all members who sign up for one of our products fully utilize or continue to use our products, and not all of our products (such as our complimentary product, SoFi Relay) provide direct sources of revenue. Since our inception through June 30, 2024, we have served approximately 8.8 million members who have used approximately 12.8 million products on the SoFi platform. 66 SoFi Technologies, Inc. TABLE OF CONTENTS Members In Thousands Total Products Total products refers to the aggregate number of lending and financial services products that our members have selected on our platform since our inception through the reporting date, whether or not the members are still registered for such products. Total products is a primary indicator of the size and reach of our Lending and Financial Services segments. Management relies on total products metrics to understand the effectiveness of our member acquisition efforts and to gauge the propensity for members to use more than one product. In our Lending segment, total products refers to the number of personal loans, student loans and home loans that have been originated through our platform through the reporting date, whether or not such loans have been paid off. If a member has multiple loan products of the same loan product type, such as two personal loans, that is counted as a single product. However, if a member has multiple loan products across loan product types, such as one personal loan and one home loan, that is counted as two products. The account of a co-borrower or co-signer is not considered a separate lending product. 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 the Company or 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 two products: active investing accounts and robo-advisory accounts. Our members can select any one or combination of the types of SoFi Invest products. If a member has multiple SoFi Invest products of the same account type, such as two active investing accounts, that is counted as a single product. However, if a member has multiple SoFi Invest products across account types, such as one active investing account and one robo-advisory account, those separate account types are considered separate products. The account of a joint- or co-account holder is considered a separate financial services product. 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. 67 SoFi Technologies, Inc. TABLE OF CONTENTS Products In Thousands Total lending products were composed of the following: Lending Products June 30, 2024 June 30, 2023 Variance % Change Personal loans 1,222,230 985,396 236,834 24 % Student loans 532,279 491,499 40,780 8 % Home loans 32,071 26,997 5,074 19 % Total lending products 1,786,580 1,503,892 282,688 19 % Total financial services products were composed of the following: Financial Services Products June 30, 2024 June 30, 2023 Variance % Change Money (1) 4,298,642 2,693,148 1,605,494 60 % Invest (2) 2,332,045 2,315,777 16,268 1 % Credit Card 260,585 213,395 47,190 22 % Referred loans (3) 65,308 47,439 17,869 38 % Relay 3,933,706 2,553,158 1,380,548 54 % At Work 99,564 74,216 25,348 34 % Total financial services products (2) 10,989,850 7,897,133 3,092,717 39 % ___________________ (1) Includes checking and savings accounts held at SoFi Bank, and cash management accounts. (2) In the fourth quarter of 2023, we transferred the crypto services provided by SoFi Digital Assets, LLC, and began closing existing digital assets accounts and removing the account from Invest products. This process was completed in the first quarter of 2024. As of June 30, 2023, SoFi Invest products included 435,076 digital assets accounts. Excluding these accounts (that were closed as part of the transfer of the crypto services), total Invest products increased by 451,344, or 24%, year over year, and total financial services products increased by 3,527,793, or 47%, year over year. (3) Limited to loans wherein we provide third party fulfillment services. Technology Platform Total Accounts In our Technology Platform segment, total accounts refers to the number of open accounts at Galileo as of the reporting date. 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 17. Business Segment Information to the Notes to Condensed Consolidated Financial Statements, which includes intercompany revenue. Intercompany revenue is eliminated in consolidation. Total accounts is a primary indicator of the accounts dependent upon our technology platform to use virtual card products, virtual wallets, make peer-to-peer and bank-to-bank transfers, receive early paychecks, separate savings from spending balances, make debit transactions and rely upon real-time authorizations, all of which result in revenues for the Technology Platform segment. We do not measure total accounts for the Technisys products and solutions, as the revenue model is not primarily dependent upon being a fully integrated, stand-ready service. 68 SoFi Technologies, Inc. TABLE OF CONTENTS Technology Platform Accounts In Millions June 30, 2024 June 30, 2023 Variance % Change Total accounts 158,485,125 129,356,203 29,128,922 23 % 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 clients, competition and industry trends, general economic conditions and our ability to optimize our national bank charter. The key factors affecting our operating results are discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, with notable updates provided herein. Industry Trends and General Economic Conditions The Federal Reserve increased the benchmark interest rate several times in 2022 and 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. Rate cuts are anticipated by the market over 2024 and 2025, but the timing of such cuts remains uncertain. High or rising interest rates have unfavorably impacted, and could continue to unfavorably impact, demand for refinancing loan products. In addition to benchmark interest rate considerations, economic and market volatility may adversely impact our liquidity, results of operations and financial condition. 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. 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 lower credit card annualized charge-off rate was reflective of improvement in credit card delinquency rates. 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. 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. 69 SoFi Technologies, Inc. TABLE OF CONTENTS The following table summarizes the significant inputs to the fair value model for personal and student loans: Personal Loans Student Loans June 30, 2024 March 31, 2024 June 30, 2024 March 31, 2024 Weighted average coupon rate (1) 13.6 % 13.8 % 5.7 % 5.6 % Weighted average annual default rate 4.8 4.8 0.6 0.6 Weighted average conditional prepayment rate 26.1 24.7 11.0 10.5 Weighted average discount rate 5.75 5.78 4.44 4.33 ___________________ (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 second quarter of 2024 relative to the first quarter of 2024, we observed the following trends: • The weighted average conditional prepayment rates on personal loans and student loans increased by 145 bps and 48 bps, respectively. Increases reflect the impacts of observed increases in prepayments during the second quarter. • The weighted average discount rates on personal loans and student loans decreased by 3 bps and increased by 11 bps, respectively. For personal loans, our discount rate assumptions decreased in the second quarter due to spreads tightening , partially offset by benchmark rates increasing by 3 bps. For student loans, our discount rate assumptions increased in the second quarter due to benchmark rates increasing by 6 bps, as well as spreads widening. Spread changes are indicated by asset-backed security and secondary bond markets. • Annualized net charge-off rates on personal loans in the second quarter of 2024 were 3.8%, which remained lower than the assumed weighted average default rates in our fair value model of 4.8%. Personal loan charge-offs during the first and second quarters of 2024 were impacted by delinquent loan sales of $62.5 million and $69.4 million, respectively, of aggregate unpaid principal balance, a portion of which we expect to recover in future periods. Annualized net charge-off rates on student loans in the second quarter of 2024 of 0.6% were consistent with the assumed weighted average default rates in our fair value model. 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. The combination of these and other factors resulted in fair value gains recognized on our personal and student loans portfolios, during the second quarter of 2024. 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, and prohibits the Secretary of Education from implementing any extension of any executive action or rule pursuant to the CARES Act. Following the end of the federal student loan payment moratorium on August 30, 2023, President Biden indicated that, 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. Additionally, President Biden has announced multiple relief measures for federal student loan borrowers, despite legal challenges at the Supreme Court to certain of President Biden’s student loan forgiveness proposals. For example, the Biden Administration announced on July 14, 2023 that $39 billion in federal student loan debt would be eliminated to remedy mistakes of loan servicers, and that other student loan holders will have their loans adjusted. In the fall and winter of 2023, the Biden Administration estimated that it would cancel more than $132 billion of student debt for more than three million borrowers and continue to pursue debt forgiveness strategies including through the Saving on a Valuable Education (“SAVE”) Plan which offers forgiveness after as few as 10 years of payments for borrowers who originally took out $12,000 or less for college. In February 2024, the Biden Administration announced that it will automatically discharge $1.2 billion in loans for nearly 153,000 eligible borrowers under the SAVE Plan. In March 2024 and July 2024, the Biden Administration announced the approval of a cumulative $7 billion in additional student loan debt relief for 112,700 borrowers made possible by the U.S. Department of Education’s Public Service Loan Forgiveness Program (“PSLF”). Recently, on April 17, 2024, the U.S. Department of Education issued a notice of proposed rulemaking to include targeted student loan debt forgiveness to certain borrowers, including provisions under the Higher Education Act of 1965, as amended, that would provide relief for eligible borrowers of runaway interest, forgiveness of outstanding debt related to loans which entered repayment at least 20 years ago, and additional provisions to facilitate relief related to income-driven repayment plans. 70 SoFi Technologies, Inc. TABLE OF CONTENTS While we expect we may continue to see an increase in student loan refinancing volume following the end of the federal student loan payment moratorium, which occurred on August 30, 2023, as borrowers may look to refinance at a lower rate or, given the high interest rate environment, may look to extend the loan term, the timing and impact to our student loan refinancing product will largely depend on expectations regarding the introduction or implementation of additional relief measures, the interest rate environment, how competitive our student loan refinancing products are compared to our competitors and macroeconomic factors. Consolidated Results of Operations The following table sets forth selected consolidated statements of income data: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 412,584 $ 291,126 $ 121,458 42 % $ 815,302 $ 527,136 $ 288,166 55 % Total noninterest income 186,034 206,892 (20,858) (10) % 428,311 443,040 (14,729) (3) % Total net revenue 598,618 498,018 100,600 20 % 1,243,613 970,176 273,437 28 % Total noninterest expense 583,278 547,347 35,931 7 % 1,134,047 1,055,564 78,483 7 % Income (loss) before income taxes 15,340 (49,329) 64,669 n/m 109,566 (85,388) 194,954 n/m Income tax (expense) benefit 2,064 1,780 284 16 % (4,119) 3,417 (7,536) n/m Net income (loss) $ 17,404 $ (47,549) $ 64,953 n/m $ 105,447 $ (81,971) $ 187,418 n/m 71 SoFi Technologies, Inc. TABLE OF CONTENTS Net Interest Income The table below presents 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 Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 ($ in thousands) Average Balances (1) Interest Income/Expense Average Yield/Rate Average Balances (1) Interest Income/Expense Average Yield/Rate Assets Interest-earning assets: Interest-bearing deposits with banks $ 2,809,405 $ 34,995 5.01 % $ 2,158,973 $ 24,127 4.48 % Investment securities 1,485,455 20,665 5.60 387,453 3,682 3.81 Loans 24,189,904 618,935 10.29 17,810,656 442,187 9.96 Total interest-earning assets 28,484,764 674,595 9.53 20,357,082 469,996 9.26 Total noninterest-earning assets 3,091,473 2,862,005 Total assets $ 31,576,237 $ 23,219,087 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 2,227,602 $ 12,619 2.28 % $ 2,071,639 $ 12,922 2.50 % Savings deposits 17,515,485 191,033 4.39 7,292,617 73,114 4.02 Time deposits 2,248,868 28,163 5.04 1,708,576 20,493 4.81 Total interest-bearing deposits 21,991,955 231,815 4.24 11,072,832 106,529 3.86 Warehouse facilities 827,113 13,098 6.37 3,204,559 48,080 6.02 Securitization debt 219,327 1,828 3.35 908,381 10,770 4.76 Other debt (2) 1,824,742 15,270 3.37 1,642,953 13,491 3.29 Total debt 2,871,182 30,196 4.23 5,755,893 72,341 5.04 Residual interests classified as debt 3,169 — — 13,015 — — Total interest-bearing liabilities 24,866,306 262,011 4.24 16,841,740 178,870 4.26 Total noninterest-bearing liabilities 707,439 786,175 Total liabilities 25,573,745 17,627,915 Total temporary equity 160,187 320,374 Total permanent equity 5,842,305 5,270,798 Total liabilities, temporary equity and permanent equity $ 31,576,237 $ 23,219,087 Net interest income (3) $ 412,584 $ 291,126 Net interest margin (4) 5.83 % 5.74 % __________________ (1) Average balances were calculated on daily carrying balances. (2) Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and convertible senior notes. (3) Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities. (4) Net interest margin is calculated as net interest income divided by total average interest-earning assets. 72 SoFi Technologies, Inc. TABLE OF CONTENTS Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 ($ in thousands) Average Balances (1) Interest Income/Expense Average Yield/Rate Average Balances (1) Interest Income/Expense Average Yield/Rate Assets Interest-earning assets: Interest-bearing deposits with banks $ 2,955,354 $ 72,263 4.92 % $ 1,784,179 $ 32,609 3.69 % Investment securities 1,123,775 30,867 5.52 475,190 9,421 4.00 Loans 23,870,538 1,237,376 10.42 16,432,315 799,529 9.81 Total interest-earning assets 27,949,667 1,340,506 9.64 18,691,684 841,559 9.08 Total noninterest-earning assets 3,046,070 2,992,932 Total assets $ 30,995,737 $ 21,684,616 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 2,160,572 $ 25,439 2.37 % $ 1,971,672 $ 25,774 2.64 % Savings deposits 16,130,130 352,056 4.39 6,388,356 121,274 3.83 Time deposits 2,611,862 65,771 5.06 1,425,530 32,597 4.61 Total interest-bearing deposits 20,902,564 443,266 4.26 9,785,558 179,645 3.70 Warehouse facilities 1,484,357 47,958 6.50 3,028,270 88,256 5.88 Securitization debt 276,576 5,486 3.99 879,521 21,196 4.86 Other debt (2) 1,789,076 28,494 3.20 1,644,173 25,185 3.09 Total debt 3,550,009 81,938 4.64 5,551,964 134,637 4.89 Residual interests classified as debt 4,080 — — 14,529 141 1.96 Total interest-bearing liabilities 24,456,653 525,204 4.32 15,352,051 314,423 4.13 Total noninterest-bearing liabilities 712,981 745,701 Total liabilities 25,169,634 16,097,752 Total temporary equity 228,838 320,374 Total permanent equity 5,597,265 5,266,490 Total liabilities, temporary equity and permanent equity $ 30,995,737 $ 21,684,616 Net interest income (3) $ 815,302 $ 527,136 Net interest margin (4) 5.87 % 5.69 % __________________ (1) Average balances were calculated on daily carrying balances. (2) Interest expense on other debt primarily includes debt issuance and discount expense, as well as interest expense on the revolving credit facility and convertible senior notes. (3) Net interest income is calculated as the excess of total interest income on interest-earning assets over total interest expense on interest-bearing liabilities. (4) Net interest margin is calculated as net interest income divided by total average interest-earning assets. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, net interest income increased by $121.5 million, or 42%, and net interest margin increased by 9 basis points. Average interest-earning assets increased by 40%, and average yields increased by 27 basis points. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, net interest income increased by $288.2 million, or 55%, and net interest margin increased by 18 basis points. Average interest-earning assets increased by 50%, and average yields increased by 56 basis points. The increases were primarily driven by (i) higher interest income from personal loans and student loans, which was primarily a function of increases in the average balance and origination volume, as well as longer loan holding periods, (ii) interest-bearing deposits with banks, which reflected our strong liquidity position in a rising interest rate environment, (iii) higher interest income from investment securities primarily attributable to higher average balances, and (iv) lower interest expense on warehouse facilities and securitizations primarily attributable to lower average balances, which is reflective of our continued funding mix towards deposit funding, and partially offset by higher interest rates incurred on our facilities which is reflective of the higher interest rate environment year over year. These items were partially offset by higher interest expense on deposits attributable to a higher average balance and higher interest rates offered to our members. 73 SoFi Technologies, Inc. TABLE OF CONTENTS Analysis of Changes in Net Interest Income The following table presents period-over-period changes in net interest income and the extent to which the variances are attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities: Three Months Ended June 30, Six Months Ended June 30, 2024 vs. 2023 2024 vs. 2023 Increase (Decrease) Due to Change in (1) : Increase (Decrease) Due to Change in (1) : ($ in thousands) Volume Rate Total Variance Volume Rate Total Variance Interest income: Interest-bearing deposits with banks $ 8,053 $ 2,815 $ 10,868 $ 28,703 $ 10,951 $ 39,654 Investment securities 15,266 1,717 16,983 17,837 3,609 21,446 Loans 162,115 14,633 176,748 387,540 50,307 437,847 Total interest income 185,434 19,165 204,599 434,080 64,867 498,947 Interest expense: Interest-bearing deposits 116,530 8,756 125,286 238,033 25,588 263,621 Debt (30,481) (11,664) (42,145) (45,882) (6,817) (52,699) Residual interests classified as debt — — — — (141) (141) Total interest expense 86,049 (2,908) 83,141 192,151 18,630 210,781 Net interest income $ 99,385 $ 22,073 $ 121,458 $ 241,929 $ 46,237 $ 288,166 ___________________ (1) We calculate the changes in interest income and interest expense separately for each item. Volume and rate changes have been allocated on a consistent basis using the respective percentage changes in average balances and average rates. Noninterest Income and Net Revenue The following table presents the components of our total noninterest income, as well as total net revenue: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Loan origination, sales, and securitizations $ 54,872 $ 90,164 $ (35,292) (39) % $ 111,872 $ 213,498 $ (101,626) (48) % Servicing 6,659 9,052 (2,393) (26) % 13,633 21,794 (8,161) (37) % Technology products and solutions 85,866 82,289 3,577 4 % 171,538 155,090 16,448 11 % Other 38,637 25,387 13,250 52 % 131,268 52,658 78,610 149 % Total noninterest income $ 186,034 $ 206,892 $ (20,858) (10) % $ 428,311 $ 443,040 $ (14,729) (3) % Total net revenue $ 598,618 $ 498,018 $ 100,600 20 % $ 1,243,613 $ 970,176 $ 273,437 28 % Three Months. Total noninterest income decreased by $20.9 million, or 10%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to: (i) higher loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates, and (ii) the net effect of lower gains in the 2024 period on student and personal loan interest rate swap positions due to smaller increases in interest rates during the 2024 period, lower fair value gains on personal loans in the 2024 period, which were primarily impacted by lower discount rate assumptions and higher prepayment rate assumptions, and fair value gains on student loans in the 2024 period compared to losses during the 2023 period, which were primarily impacted by higher student loan origination volume. These decreases were partially offset by: (i) higher origination fees primarily related to a product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, and (ii) an increase in interchange and referrals revenue. Six Months . Total noninterest income decreased by $14.7 million, or 3%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily attributable to: (i) higher loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates, and (ii) the net effect of fair value 74 SoFi Technologies, Inc. TABLE OF CONTENTS losses on personal loans in the 2024 period compared to gains during the 2023 period, which were primarily impacted by higher prepayment and default rate assumptions as well as higher unpaid principal balance, lower fair value gains on student loans in the 2024 period, which were primarily impacted by higher prepayment rate assumptions and higher unpaid principal balance, and higher gains in the 2024 period on student loan, personal loan and risk retention interest rate swap positions primarily driven by larger increases in interest rates during the 2024 period and increased derivative instruments outstanding, These decreases were partially offset by: (i) higher origination fees primarily related to a product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, (ii) gain on extinguishment of debt of $59.2 million during the 2024 period, (iii) growth in technology services fees driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth, and (iv) an increase in interchange and referrals revenue. Noninterest Expense The following table presents the components of our total noninterest expense: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Technology and product development $ 132,167 $ 126,845 $ 5,322 4 % $ 263,087 $ 243,904 $ 19,183 8 % Sales and marketing 184,762 182,822 1,940 1 % 352,128 357,976 (5,848) (2) % Cost of operations 109,703 93,885 15,818 17 % 209,764 177,793 31,971 18 % General and administrative 145,006 131,180 13,826 11 % 290,246 254,869 35,377 14 % Provision for credit losses 11,640 12,615 (975) (8) % 18,822 21,022 (2,200) (10) % Total noninterest expense $ 583,278 $ 547,347 $ 35,931 7 % $ 1,134,047 $ 1,055,564 $ 78,483 7 % Three Months . Total noninterest expense increased by $35.9 million, or 7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by: (i) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs, reflective of continued investments in technology, (ii) increases in professional services costs, (iii) 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, (iv) increases in direct member incentives, advertising and marketing expenditures, and (v) amortization of premiums on a credit default swap related to our student loans during the 2024 period. This increase was partially offset by decreased employee compensation and benefits, which was attributable to decreases in share-based compensation expense, partially offset by increases in headcount and salary related to support of our growth and impacts of the inflationary environment. Six Months . Total noninterest expense increased by $78.5 million, or 7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by: (i) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs, reflective of continued investments in technology, (ii) increases in professional services costs, (iii) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform, and (iv) amortization of premiums on a credit default swap related to our student loans during the 2024 period. This increase was partially offset by decreased employee compensation and benefits, which was attributable to decreases in share-based compensation expense and restructuring charges during the first quarter of 2023, partially offset by increases in headcount and salary related to support of our growth and impacts of the inflationary environment. 75 SoFi Technologies, Inc. TABLE OF CONTENTS Provision for Credit Losses Analysis of Allowance for Credit Losses Allowance for Credit Losses Ratios The following table presents the ratio of allowance for credit losses to total loans outstanding that are measured at amortized cost: ($ in thousands) June 30, 2024 June 30, 2023 Allowance for credit losses to total loans outstanding Allowance for credit losses $ 51,908 $ 41,227 Loans held for investment, at amortized cost (1) 2,217,458 383,668 Ratio (2) 2.34 % 10.75 % __________________ (1) Loans outstanding balance excludes accrued interest. (2) The decrease in the ratio was primarily attributable to senior secured loans, for which we did not recognize an allowance for credit losses as we determined that our expected exposure to credit losses was immaterial, partially offset by credit cards, which was primarily reflective of an increase in total balances and associated loss reserves. We omitted the credit ratios associated with nonaccrual loans, as the balance of nonaccrual loans was immaterial. Allocation of Allowance for Credit Losses The following table presents the allocation of the allowance for credit losses and the percentage of loans outstanding by category to total loans outstanding that are measured at amortized cost: June 30, 2024 June 30, 2023 ($ in thousands) Allowance for credit losses Percent of loans to total loans (1) Allowance for credit losses Percent of loans to total loans (1) Credit card $ 49,406 14 % $ 39,361 71 % Commercial and consumer banking 2,502 7 % 1,866 29 % Senior secured loans (2) — 79 % — — % Total $ 51,908 100 % $ 41,227 100 % __________________ (1) Loans outstanding balances 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 The following table presents information regarding average loans outstanding, net charge-offs and the annualized ratio of net charge-offs to average loans outstanding: Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 ($ in thousands) Average Loans (1) Net Charge-offs (2) Ratio Average Loans (1) Net Charge-offs (2) Ratio Personal loans $ 15,919,442 $ 151,834 3.84 % $ 11,896,106 $ 87,337 2.94 % Student loans 6,944,152 11,004 0.64 % 5,497,411 5,704 0.42 % Home loans 68,461 — — % 79,137 — — % Senior secured loans 839,159 — — % — — — % Credit card 275,943 11,034 16.08 % 228,171 10,328 18.16 % Commercial and consumer banking 142,747 11 0.03 % 109,831 (3) (0.01) % Total loans $ 24,189,904 $ 173,883 2.89 % $ 17,810,656 $ 103,366 2.33 % 76 SoFi Technologies, Inc. TABLE OF CONTENTS Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 ($ in thousands) Average Loans (1) Net Charge-offs (2) Ratio Average Loans (1) Net Charge-offs (2) Ratio Personal loans $ 15,799,621 $ 286,221 3.64 % $ 10,745,911 $ 158,406 2.97 % Student loans 6,961,939 21,421 0.62 % 5,285,245 10,000 0.38 % Home loans 59,021 — — % 72,042 — — % Senior secured loans 645,173 — — % — — — % Credit card 272,638 21,580 15.92 % 222,736 20,586 18.64 % Commercial and consumer banking 132,146 29 0.04 % 106,381 (3) (0.01) % Total loans $ 23,870,538 $ 329,251 2.77 % $ 16,432,315 $ 188,989 2.32 % ___________________ (1) Average balances were calculated on daily carrying balances. (2) Net charge-offs include both credit- and certain non-credit-related charge-offs. The provision for credit losses for the three and six months ended June 30, 2024 decreased by $1.0 million, or 8%, and $2.2 million, or 10%, respectively, compared to the same periods in 2023. The decreases during the three and six months ended June 30, 2024 were primarily related to improvement in credit card delinquency rates. Income Taxes For the three and six months ended June 30, 2024, we recorded income tax (expense) benefit of $2.1 million and $(4.1) million, respectively. For the three and six months ended June 30, 2023, we recorded income tax benefit of $1.8 million and $3.4 million, respectively. Our income tax positions in both the 2024 and 2023 periods were impacted by income tax expenses 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 benefit position in the 2023 period was primarily attributable to income tax benefits from foreign losses in jurisdictions with net deferred tax liabilities related to Technisys. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination of whether a valuation allowance is necessary, the Company considers all available positive and negative evidence supporting the allowance (e.g., the results of recent operations and future forecasts). If the Company determines that it is able to realize its deferred tax assets in the future in excess of the net recorded amount, the Company decreases the deferred tax asset valuation allowance, which reduces the provision for income taxes. Such a potential benefit has not been included in our guidance. 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 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. 77 SoFi Technologies, Inc. TABLE OF CONTENTS Lending Segment In the table below, we present certain metrics related to our Lending segment: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 Metric 2024 2023 Change % Change 2024 2023 Change % Change Total products (number, as of period end) 1,786,580 1,503,892 282,688 19 % 1,786,580 1,503,892 282,688 19 % Origination volume ($ in thousands, during period) Personal loans $ 4,192,114 $ 3,740,981 $ 451,133 12 % $ 7,470,996 $ 6,692,339 $ 778,657 12 % Student loans 736,518 395,367 341,151 86 % 1,488,198 920,740 567,458 62 % Home loans 416,936 243,123 173,813 71 % 753,084 332,910 420,174 126 % Total $ 5,345,568 $ 4,379,471 $ 966,097 22 % $ 9,712,278 $ 7,945,989 $ 1,766,289 22 % Loans with a balance (number, as of period end) (1) 1,087,758 901,045 186,713 21 % 1,087,758 901,045 186,713 21 % Average loan balance ($, as of period end) (1) Personal loans $ 24,649 $ 23,767 $ 882 4 % $ 24,649 $ 23,767 $ 882 4 % Student loans (2) 44,165 45,523 (1,358) (3) % 44,165 45,523 (1,358) (3) % Home loans 283,726 277,077 6,649 2 % 283,726 277,077 6,649 2 % __________________ (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. Total Products Total products in our Lending segment is a subset of our total products metric. See “ Key Business Metrics ” for further discussion of this measure as it relates to our Lending segment. Origination Volume We refer to the aggregate dollar amount of loans originated through our platform in a given period as origination volume. Origination volume is an indicator of the size and health of our Lending segment and an indicator (together with the relevant loan characteristics, such as interest rate and prepayment and default expectations) of revenues and profitability. Changes in origination volume are driven by the addition of new members and existing members, the latter of which at times will either refinance into a new SoFi loan or secure an additional, concurrent loan, as well as macroeconomic factors impacting consumer spending and borrowing behavior. Since the profitability of the Lending segment is largely correlated with origination volume, management relies on origination volume trends to assess the need for external financing to support the Financial Services segment and the expense budgets for unallocated expenses. Personal Loans. During the three and six months ended June 30, 2024, personal loan origination volume increased relative to the corresponding 2023 periods, primarily due to increased demand driven by expanded marketing efforts and increased demand for debt consolidation products in a rising interest rate environment during 2023 that has persisted into 2024. Student Loans. During the three and six months ended June 30, 2024, student loan origination volume increased relative to the corresponding 2023 periods, as demand for student loan refinancing products increased after 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. Demand for student loan refinancing products during the prior year was affected 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. Home Loans. During the three and six months ended June 30, 2024, home loan origination volume increased significantly relative to the corresponding 2023 periods. 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. This was partially offset by rising interest rates through 2023, 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 78 SoFi Technologies, Inc. TABLE OF CONTENTS originations historically represented a smaller percentage of our home loan originations, our mix has continued to shift toward more purchase originations, which we would expect to continue under similar macroeconomic conditions. Loans with a Balance and Average Loan Balance Loans with a balance refers to the number of loans that have a balance greater than zero dollars as of the reporting date. Loans with a balance allows management to better understand the unit economics of acquiring a loan in relation to the lifetime value of that loan. Average loan balance is defined as the total unpaid principal balance of the loans divided by loans with a balance within the respective loan product category as of the reporting date. Average loan balance tends to fluctuate based on the pace of loan originations relative to loan repayments and the initial loan origination size. In the table below, we present additional information related to our lending products: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Overall weighted average origination FICO 750 748 750 749 Personal Loans Weighted average origination FICO 747 745 747 746 Weighted average interest rate earned (1) 13.26 % 12.89 % 13.45 % 12.80 % Interest income recognized $ 500,352 $ 363,981 $ 1,004,831 $ 651,208 Sales of loans $ 1,199,368 $ 50,013 $ 2,462,222 $ 50,013 Student Loans Weighted average origination FICO 764 768 766 768 Weighted average interest rate earned (1) 5.62 % 4.93 % 5.64 % 4.86 % Interest income recognized $ 93,825 $ 65,769 $ 187,825 $ 124,429 Sales of loans $ — $ 96,678 $ 294,187 $ 96,678 Home Loans Weighted average origination FICO 754 756 754 757 Weighted average interest rate earned (1) 8.66 % 6.02 % 8.45 % 5.41 % Interest income recognized $ 1,453 $ 1,322 $ 2,462 $ 2,165 Sales of loans $ 381,202 $ 266,413 $ 725,439 $ 344,293 __________________ (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, which are impacted by loan holding periods as well as interest rates charged to borrowers. Weighted average interest rate earned was determined on a daily basis. 79 SoFi Technologies, Inc. TABLE OF CONTENTS Lending Segment Results of Operations The following table presents the measure of contribution profit for the Lending segment: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 279,212 $ 231,885 $ 47,327 20 % $ 545,748 $ 432,932 $ 112,816 26 % Noninterest income 61,493 99,556 (38,063) (38) % 125,433 235,590 (110,157) (47) % Total net revenue 340,705 331,441 9,264 3 % 671,181 668,522 2,659 — % Servicing rights – change in valuation inputs or assumptions (1) (1,654) (8,601) 6,947 (81) % (6,880) (20,685) 13,805 (67) % Residual interests classified as debt – change in valuation inputs or assumptions (2) 1 (602) 603 n/m 74 (513) 587 n/m Directly attributable expenses (141,114) (138,929) (2,185) 2 % (258,718) (254,117) (4,601) 2 % Contribution profit $ 197,938 $ 183,309 $ 14,629 8 % $ 405,657 $ 393,207 $ 12,450 3 % Adjusted net revenue (3) $ 339,052 $ 322,238 $ 16,814 5 % $ 664,375 $ 647,324 $ 17,051 3 % __________________ (1) Reflects changes in fair value inputs and assumptions on servicing rights, including conditional prepayment, default rates and discount rates. These assumptions are highly sensitive to market interest rate changes and are not indicative of our performance or results of operations. These non-cash charges, which are recorded within noninterest income in the condensed consolidated statements of operations and comprehensive income (loss), are unrealized during the period and, therefore, have no impact on our cash flows from operations. As such, these positive and negative changes are adjusted out of total net revenue to provide management and financial users with better visibility into the net revenue available to finance our operations and our overall performance. (2) Reflects changes in fair value inputs and assumptions on residual interests classified as debt, including conditional prepayment, default rates and discount rates. When third parties finance our consolidated securitization 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 obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the condensed consolidated statements of operations and comprehensive income (loss). 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. (3) Adjusted net revenue is a non-GAAP financial measure. For information regarding our use and definition of this measure and for a reconciliation to the most directly comparable U.S. GAAP measure, total net revenue, see “ Non-GAAP Financial Measures ” herein. Net interest income Net interest income in our Lending segment increased by $47.3 million, or 20%, and by $112.8 million, or 26%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, which was primarily attributable to increases in average personal loan unpaid principal balances of $4.4 billion (42%) and $5.2 billion (55%), respectively, and in average student loan unpaid principal balances of $1.5 billion (30%) and $1.7 billion (34%), respectively, combined with a higher weighted average interest rate. The personal and student loan average balance increases were primarily attributable to higher origination volume and longer loan holding periods. Interest expense associated with funding our lending activities increased by $128.3 million, or 64%, and $321.3 million, or 92%, for the three and six-month year over year periods, respectively, primarily due to higher average loan balances as well as the sharp increases in benchmark rates which are reflective of the higher interest rate environment during 2023. Noninterest income Noninterest income in our Lending segment decreased by $38.1 million, or 38%, and by $110.2 million, or 47%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, which was primarily driven by lower loan origination, sales, and securitizations income of $35.3 million and $101.6 million, respectively. 80 SoFi Technologies, Inc. TABLE OF CONTENTS Loan Origination, Sales, and Securitizations The following table presents the components of noninterest income—loan origination, sales, and securitizations : Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change In period originations, loan sale execution and fair value adjustments (1) $ 56,098 $ 47,312 $ 8,786 19 % $ (15,942) $ 269,663 $ (285,605) n/m Economic derivative hedges of loan fair values 69,106 120,022 (50,916) (42) % 275,027 87,686 187,341 214 % Other derivative instruments (2) 425 65 360 554 % 2,996 2,263 733 32 % Loan origination fees 98,043 16,121 81,922 508 % 171,785 17,183 154,602 900 % Loan write-off expense (3) (162,833) (93,041) (69,792) 75 % (307,577) (165,848) (141,729) 85 % Loan repurchase (expense) benefit (4) (3,182) (153) (3,029) n/m (4,447) 272 (4,719) n/m Other (2,774) (146) (2,628) n/m (9,959) 2,298 (12,257) n/m Loan origination, sales, and securitizations noninterest income $ 54,883 $ 90,180 $ (35,297) (39) % $ 111,883 $ 213,517 $ (101,634) (48) % ___________________ (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. (2) Includes IRLCs and interest rate caps, as well as purchase price earn-out during the 2023 period. (3) For the three months ended June 30, 2024 and 2023, includes gross write-offs of $187.5 million and $110.5 million, respectively. Total recoveries were $24.7 million and $17.5 million, respectively, of which $18.8 million and $11.4 million, respectively, were captured via loan sales to a third-party collection agency. For the six months ended June 30, 2024 and 2023, includes gross write-offs of $363.0 million and $197.2 million, respectively. Total recoveries were $55.5 million and $31.3 million, respectively, of which $43.8 million and $18.3 million, respectively, were captured via loan sales to a third-party collection agency. (4) Represents the (expense) benefit associated with our estimated loan repurchase obligation. See Note 15. Commitments, Guarantees, Concentrations and Contingencies to the Notes to Condensed Consolidated Financial Statements for additional information. Three Months . The decrease in loan origination, sales, and securitizations income was primarily driven by: (i) higher personal loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates, (ii) lower gains in the 2024 period on student and personal loan interest rate swap positions due to smaller increases in interest rates during the 2024 period, and (iii) lower fair value gains on personal loans in the 2024 period, which were primarily impacted by higher prepayment rate assumptions as well as higher unpaid principal balance. These decreases were partially offset by (i) higher origination fees primarily related to a product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate, and (ii) fair value gains on student loans in the 2024 period compared to losses during the 2023 period, which were primarily impacted by higher student loan origination volume. Six Months . The decrease in loan origination, sales, and securitizations income was primarily driven by: (i) fair value losses on personal loans in the 2024 period compared to gains during the 2023 period, which were primarily impacted by higher prepayment and default rate assumptions as well as higher unpaid principal balance, and lower fair value gains on student loans in the 2024 period, which were primarily impacted by higher prepayment rate assumptions and higher unpaid principal balance, and (ii) higher personal loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates. These decreases were partially offset by: (i) higher gains in the 2024 period on student loan, personal loan and risk retention interest rate swap positions primarily driven by larger increases in interest rates during the 2024 period and increased derivative instruments outstanding, and (ii) higher origination fees primarily related to a product feature offered on personal loans, whereby a borrower may optionally elect to pay origination fees to qualify for a lower annual percentage rate. Servicing We own the master servicing on all of the servicing rights that we retain and, in each case, recognize the gross servicing rate applicable to each serviced loan. Sub-servicers are utilized for all serviced student loans and home loans, which represents a cost to SoFi, but these arrangements do not impact our calculation of the weighted average basis points earned for each loan type serviced. Further, there is no impact on servicing income due to forbearance and moratoriums on certain debt 81 SoFi Technologies, Inc. TABLE OF CONTENTS collection activities, and there are no waivers of late fees. The table below presents information related to our loan servicing activities: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Servicing income recognized Personal loans $ 20,726 $ 5,649 $ 15,077 267 % $ 32,545 $ 12,186 $ 20,359 167 % Student loans 6,075 6,301 (226) (4) % 11,600 13,016 (1,416) (11) % Home loans 4,248 3,727 521 14 % 8,328 7,331 997 14 % Servicing rights fair value change Personal loans $ 47,498 $ (1,366) $ 48,864 n/m $ 101,600 $ (7,945) $ 109,545 n/m Student loans (4,889) (1,298) (3,591) 277 % (876) 2,550 (3,426) n/m Home loans 7,968 1,813 6,155 339 % 10,136 1,204 8,932 742 % Directly attributable expenses The directly attributable expenses allocated to the Lending segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Direct advertising $ 55,826 $ 47,592 $ 8,234 17 % $ 100,595 $ 93,366 $ 7,229 8 % Compensation and benefits 30,625 30,420 205 1 % 58,879 56,106 2,773 5 % Lead generation 32,194 33,453 (1,259) (4) % 57,009 55,074 1,935 4 % Loan origination and servicing costs 12,181 13,019 (838) (6) % 22,611 23,369 (758) (3) % Professional services 2,777 2,767 10 — % 5,155 4,960 195 4 % Intercompany technology platform expenses 436 212 224 106 % 880 212 668 315 Other (1) 7,075 11,466 (4,391) (38) % 13,589 21,030 (7,441) (35) % Directly attributable expenses $ 141,114 $ 138,929 $ 2,185 2 % $ 258,718 $ 254,117 $ 4,601 2 % ___________________ (1) Other expenses primarily include loan marketing expenses, member promotional expenses, tools and subscriptions, travel and occupancy-related costs and third-party loan fraud (net of related insurance recoveries). Lending segment directly attributable expenses for the three and six months ended June 30, 2024 increased by $2.2 million, or 2%, and $4.6 million, or 2%, respectively, compared to the same periods in 2023, primarily due to: (i) an increase in direct advertising primarily related to online and digital advertising, (ii) an increase in allocated compensation and related benefits, which reflected increases in average compensation in 2024, (iii) an increase in student loan lead generation channels, as well as a decrease in personal loan student loan lead generation channels during the three month period, and (iv) a decline in other expenses, primarily related to third-party loan fraud and tools and subscriptions. 82 SoFi Technologies, Inc. TABLE OF CONTENTS 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 current whole loan sales: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Personal loans Fair value of consideration received: Cash $ 1,136,812 $ 51,473 $ 1,636,563 $ 51,473 Receivable — — 3,036 — Servicing assets recognized 70,472 888 104,021 888 Repurchase liabilities recognized (4,181) (360) (5,981) (360) Total consideration 1,203,103 52,001 1,737,639 52,001 Aggregate unpaid principal balance and accrued interest of loans sold 1,136,427 50,322 1,639,464 50,322 Realized gain $ 66,676 $ 1,679 $ 98,175 $ 1,679 Sale execution (1) 106.2 % 104.1 % 106.4 % 104.1 % Student loans Fair value of consideration received: Cash $ — $ 98,624 $ 310,331 $ 98,624 Servicing assets recognized — 2,792 8,249 2,792 Repurchase liabilities recognized — (16) (46) (16) Total consideration — 101,400 318,534 101,400 Aggregate unpaid principal balance and accrued interest of loans sold — 99,916 303,578 99,916 Realized gain $ — $ 1,484 $ 14,956 $ 1,484 Sale execution (1) — % 101.5 % 104.9 % 101.5 % Home loans Fair value of consideration received: Cash $ 385,030 $ 267,052 $ 729,708 $ 344,871 Servicing assets recognized 3,390 2,803 6,222 3,757 Repurchase liabilities recognized (634) (751) (1,139) (847) Total consideration 387,786 269,104 734,791 347,781 Aggregate unpaid principal balance and accrued interest of loans sold 381,299 266,634 725,557 344,610 Realized gain $ 6,487 $ 2,470 $ 9,234 $ 3,171 Sale execution (1) 101.9 % 101.2 % 101.4 % 101.2 % _____________________ (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. 83 SoFi Technologies, Inc. TABLE OF CONTENTS The following table summarizes our delinquent whole loan sales during the three and six months ended June 30, 2024. There were no delinquent whole loan sales during the three and six months ended June 30, 2023. Three Months Ended June 30, Six Months Ended June 30, 2024 2024 Personal loans Fair value of consideration received: Cash $ 5,549 $ 10,549 Servicing assets recognized 4,884 8,284 Repurchase liabilities recognized (28) (53) Total consideration 10,405 18,780 Aggregate unpaid principal balance and accrued interest of loans sold (1) 73,450 139,861 Realized loss $ (63,045) $ (121,081) Sale execution (2) 14.2 % 13.5 % _____________________ (1) During the three and six months ended June 30, 2024, includes $69.4 million and $131.9 million, respectively, of aggregate unpaid principal balance sold, related to late-stage delinquent loans for which we retained servicing and portions of recoveries. For the three and six months ended June 30, 2024, $47.1 million and $90.3 million, respectively, of unpaid principal balance was recorded in prior periods as a write down in noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). These loans were sold prior to charge-off during the three and six months ended June 30, 2024, and otherwise would have been charged off as of June 30, 2024 consistent with our policy. In our other charged off whole loan sales, we typically do not retain servicing or recoveries. (2) Sale execution represents the ratio of cash proceeds and servicing assets recognized to the aggregate unpaid principal balance and accrued interest of the loans sold. Amounts included in repurchase liabilities are excluded from the calculation, as they typically would not materially differ from the fair value markdown on the loans over the repurchase period had they been held on balance sheet and entered delinquency. Technology Platform Segment In the table below, we present the total accounts metric related to Galileo within our Technology Platform segment: 2024 vs 2023 June 30, 2024 June 30, 2023 Change % Change Total accounts 158,485,125 129,356,203 29,128,922 23 % See “ Key Business Metrics ” for further discussion of this measure as it relates to our Technology Platform segment. Technology Platform Segment Results of Operations The following table presents the measure of contribution profit for the Technology Platform segment: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 555 $ — $ 555 n/m $ 1,056 $ — $ 1,056 n/m Noninterest income 94,883 87,623 7,260 8 % 188,748 165,510 23,238 14 % Total net revenue 95,438 87,623 7,815 9 % 189,804 165,510 24,294 15 % Directly attributable expenses (64,287) (70,469) 6,182 (9) % (127,911) (133,499) 5,588 (4) % Contribution profit $ 31,151 $ 17,154 $ 13,997 82 % $ 61,893 $ 32,011 $ 29,882 93 % Net interest income Net interest income in our Technology Platform segment of $0.6 million and $1.1 million for the three and six months ended June 30, 2024, respectively, 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. 84 SoFi Technologies, Inc. TABLE OF CONTENTS Noninterest income Noninterest income in our Technology Platform segment increased by $7.3 million, or 8%, and $23.2 million, or 14%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase was primarily attributable to growth in technology services fees driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth. Noninterest income also included $8.3 million and $15.3 million of intercompany revenue for the three and six months ended June 30, 2024, respectively, compared to $5.0 million and $8.7 million for the three and six months ended June 30, 2023, respectively. The increase in intercompany revenue was primarily attributable to increased usage of technology platform services during the 2024 period by our Financial Services segment as we continue to leverage synergies to enhance our product offerings. Directly attributable expenses The directly attributable expenses allocated to the Technology Platform segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Compensation and benefits $ 35,389 $ 39,342 $ (3,953) (10) % $ 71,687 $ 78,046 $ (6,359) (8) % Product fulfillment 14,929 12,325 2,604 21 % 28,576 22,548 6,028 27 % Tools and subscriptions 6,247 7,333 (1,086) (15) % 12,982 13,846 (864) (6) % Professional services 3,226 3,243 (17) (1) % 5,922 7,177 (1,255) (17) % Other (1) 4,496 8,226 (3,730) (45) % 8,744 11,882 (3,138) (26) % Directly attributable expenses $ 64,287 $ 70,469 $ (6,182) (9) % $ 127,911 $ 133,499 $ (5,588) (4) % ___________________ (1) Other expenses are primarily related to travel and occupancy-related costs, advertising and marketing, data center costs and accounts receivable write offs. Technology Platform segment directly attributable expenses decreased by $6.2 million, or 9%, and $5.6 million, or 4%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily due to a decrease in compensation and benefits expense, which reflected a decrease in average headcount year over year, and partially offset by an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform. Financial Services Segment In the table below, we present the total products metric related to our Financial Services segment: 2024 vs. 2023 June 30, 2024 June 30, 2023 Change % Change Total products 10,989,850 7,897,133 3,092,717 39 % Total products in our Financial Services segment is a subset of our total products metric. See “ Key Business Metrics ” for a further discussion of this measure as it relates to our Financial Services segment. 85 SoFi Technologies, Inc. TABLE OF CONTENTS Financial Services Segment Results of Operations The following table presents the measure of contribution profit (loss) for the Financial Services segment: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 139,229 $ 74,637 $ 64,592 87 % $ 258,942 $ 132,674 $ 126,268 95 % Noninterest income 36,903 23,415 13,488 58 % 67,741 46,479 21,262 46 % Total net revenue 176,132 98,052 78,080 80 % 326,683 179,153 147,530 82 % Directly attributable expenses (120,912) (102,399) (18,513) 18 % (234,289) (207,735) (26,554) 13 % Contribution profit (loss) $ 55,220 $ (4,347) $ 59,567 n/m $ 92,394 $ (28,582) $ 120,976 n/m Net interest income Net interest income in our Financial Services segment increased by $64.6 million, or 87%, and $126.3 million, or 95%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, 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. Noninterest income Noninterest income in our Financial Services segment increased by $13.5 million, or 58%, and $21.3 million, or 46%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily due to an increase in interchange fees, which coincided with increased credit card and debit card transactions, as well as growth in referral fulfillment activity, as we continue to drive volume to our partners. The directly attributable expenses allocated to the Financial Services segment that were used in the determination of the segment's contribution profit (loss) were as follows: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Compensation and benefits $ 32,309 $ 30,692 $ 1,617 5 % $ 64,814 $ 61,167 $ 3,647 6 % Member incentives 22,285 11,862 10,423 88 % 41,669 23,317 18,352 79 % Product fulfillment 17,221 11,261 5,960 53 % 33,797 21,870 11,927 55 % Provision for credit losses 11,634 12,615 (981) (8) % 18,799 21,022 (2,223) (11) % Direct advertising 6,190 15,566 (9,376) (60) % 15,187 28,641 (13,454) (47) % Lead generation 7,452 6,427 1,025 16 % 13,871 23,480 (9,609) (41) % Intercompany technology platform expenses 5,533 2,641 2,892 110 % 10,484 4,738 5,746 121 % Professional services 4,489 2,533 1,956 77 % 9,266 4,140 5,126 124 % Other (1) 13,799 8,802 4,997 57 % 26,402 19,360 7,042 36 % Directly attributable expenses $ 120,912 $ 102,399 $ 18,513 18 % $ 234,289 $ 207,735 $ 26,554 13 % ___________________ (1) Other expenses primarily include operational product losses, third-party fraud expense, network servicing fees, travel and occupancy-related costs, tools and subscriptions, and marketing expenses. Financial Services directly attributable expenses increased by $18.5 million, or 18%, and $26.6 million, or 13%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily due to: (i) an increase in direct member incentives utilized to drive adoption and usage of our Financial Services products, the most significant of which was our SoFi Money product, (ii) an increase in product fulfillment costs, which included debit card 86 SoFi Technologies, Inc. TABLE OF CONTENTS fulfillment services, primarily related to our SoFi Money product, (iii) an increase in intercompany expenses attributable to increased usage of technology platform services during the 2024 period, as well as (iv) net decreases in direct advertising and lead generation costs driven by efficient partnerships as we continue to drive expansion of our SoFi Money product. Corporate/Other Non-Reportable Segment Non-segment operations are classified as Corporate/Other, which includes net revenues associated with corporate functions, non-recurring gains and losses from non-securitization investment activities and interest income and realized gains and losses associated with investments in AFS debt securities, all of which are not directly related to a reportable segment. Net interest expense within Corporate/Other also reflects the financial impact of our capital management activities within the treasury function, which reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. The following table presents the measure of total net income (loss) for Corporate/Other: Three Months Ended June 30, 2024 vs 2023 Six Months Ended June 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income (expense) $ (6,412) $ (15,396) $ 8,984 (58) % $ 9,556 $ (38,470) $ 48,026 n/m Noninterest income (loss) (7,245) (3,702) (3,543) 96 % 46,389 (4,539) 50,928 n/m Total net income (loss) $ (13,657) $ (19,098) $ 5,441 (28) % $ 55,945 $ (43,009) $ 98,954 n/m Reconciliation of Directly Attributable Expenses The following table reconciles directly attributable expenses allocated to our reportable segments to total noninterest expense in the condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2024 2023 2024 2023 Reportable segments directly attributable expenses $ (326,313) $ (311,797) $ (620,918) $ (595,351) Intercompany expenses 8,295 4,954 15,296 8,695 Expenses not allocated to segments: Share-based compensation expense (61,057) (75,878) (116,139) (140,104) Employee-related costs (1) (67,786) (55,605) (130,170) (117,419) Depreciation and amortization expense (49,623) (50,130) (98,162) (95,451) Other corporate and unallocated expenses (2) (86,794) (58,891) (183,954) (115,934) Total noninterest expense $ (583,278) $ (547,347) $ (1,134,047) $ (1,055,564) ___________________ (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 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, amortization of premiums on a credit default swap, corporate and FDIC insurance costs, foreign currency translation adjustments and transaction-related expenses. Liquidity and Capital Resources Liquidity We strive to maintain access to diverse funding sources and ample liquidity to fund our operating requirements, to pursue strategic growth initiatives and to meet our legal and regulatory requirements. Our principal sources of liquidity are our cash and cash equivalents, including cash from operations, and investments in other highly liquid assets. We maintain a 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 ALCO. The ALCO is comprised of a cross-functional leadership team that is responsible 87 SoFi Technologies, Inc. TABLE OF CONTENTS 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, mitigating risks where appropriate, and facilitating timely responses to changes in the macroeconomic environment and liquidity events to ensure the Company has the ability to meet its obligations. The following table summarizes our total liquidity reserves: June 30, 2024 Amount Available Amount Borrowed / Utilized Remaining Available Capacity Cash and cash equivalents $ 2,334,589 n/a $ 2,334,589 Investments in AFS debt securities (1) 1,078,456 n/a 1,078,456 Warehouse facilities (2) 7,580,000 1,146,323 6,433,677 Revolving credit facility (3) 645,000 499,100 145,900 FHLB advances (4) 377,702 27,200 350,502 Other lines of credit (5) 50,000 — 50,000 Total liquidity $ 12,065,747 $ 1,672,623 $ 10,393,124 ___________________ (1) Excludes investments in AFS debt securities which are pledged as collateral to the FHLB. (2) Includes personal loan, student loan 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 June 30, 2024, warehouse facility maturity dates ranged from November 2024 through October 2027. See Note 9. Debt to the Notes to Condensed Consolidated Financial Statements for additional information. (3) As of June 30, 2024, the amount utilized under the revolving credit facility includes $13.1 million utilized to secure letters of credit. See Note 9. Debt to the Notes to Condensed Consolidated Financial Statements for additional information. (4) As of June 30, 2024, we had $365.8 million of investments in AFS debt securities and $52.0 million of loans pledged as collateral to the FHLB to secure undrawn borrowing capacity of $377.7 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 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 equity capital, convertible debt, corporate revolving credit facility, securitizations, and other financings. 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 June 30, 2024 and December 31, 2023, time deposit balances due in less than one year totaled $1.7 billion and $2.6 billion, respectively. As of June 30, 2024 and December 31, 2023, the amount of uninsured deposits totaled $465.5 million and $348.1 million, respectively. As of June 30, 2024, approximately 98% of our total deposits were insured. Uses of Funding Our primary uses of funds include loan originations, investments in our business, such as technology and product investments, as well as sales and marketing initiatives. In addition, our Financial Services segment has historically generated losses, and achieved contribution profit for the first time during the third quarter of 2023. 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 June 30, 2024, we had debt obligations and common stock outstanding. Borrowings 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 88 SoFi Technologies, Inc. TABLE OF CONTENTS our origination volume, sales volume, the amount of time we strategically hold loans on our balance sheet, and the amount of loans being funded with our cash or member deposits. Refer to Note 9. Debt to the Notes to Condensed Consolidated Financial Statements in this Form 10-Q and to Note 12. Debt to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for additional information on our borrowing arrangements and the capped call transactions entered into in connection with the issuance of our convertible notes. Covenants We have various affirmative and negative financial covenants, as well as non-financial covenants, related to our warehouse debt and revolving credit facility. 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 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. See Note 9. Debt to the Notes to Condensed 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. We were in compliance with all covenants as of June 30, 2024. Capital Management SoFi Technologies, a bank holding company, and SoFi Bank, a nationally chartered association, are required to comply with regulatory capital rules issued by the Federal Reserve and other U.S. banking regulators, including the OCC and FDIC. 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. Basel III). 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. The Federal Reserve and the OCC have authority to prohibit bank holding companies and banks, respectively, from paying dividends if, in their opinion, the payment of dividends would constitute an unsafe or unsound practice. Under the National Bank Act, SoFi Bank generally may, without prior approval of the OCC, declare a dividend so long as the total amount of all dividends (common and preferred), including the proposed dividend, in the current year do not exceed net income for the current year to date plus retained net income for the prior two years. However, taking into account a wide range of factors, the OCC may object and therefore prevent SoFi Bank from paying dividends to the Company. As such, as of June 30, 2024, the Bank would not have any funds free of restrictions that are available for dividend payments. Restrictions on the ability of SoFi Bank to pay dividends to the parent company could also impact the Company’s ability to pay dividends to common stockholders. Additionally, under the Federal Reserve’s capital rules, our bank holding company’s ability to pay dividends is restricted if we do not maintain capital above the capital conservation buffer, as discussed below. Further, a policy statement of the Federal Reserve provides that, among other things, a bank holding company generally should not pay dividends on regulatory capital instruments if its net income for the past year is not sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the company’s capital needs, asset quality, and overall financial condition. Based on this Federal Reserve policy, as of June 30, 2024, the Company generally would not have any funds free of restrictions available for dividend payments on regulatory capital instruments. 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; and define what qualifies as capital for purposes of meeting the capital requirements. Additionally, regulatory capital rules include a capital conservation buffer of 2.5% that is added on top of each of the minimum risk-based capital ratios in order to avoid restrictions on capital distributions and discretionary bonuses. In addition, the Federal Reserve and the OCC have authority to require banking organizations subject to their supervision to hold additional amounts of capital in excess of the minimum risk-based capital ratios. 89 SoFi Technologies, Inc. TABLE OF CONTENTS The risk- and leverage-based capital ratios and amounts are presented below: June 30, 2024 December 31, 2023 ($ in thousands) Amount Ratio Amount Ratio Required Minimum (1) Well-Capitalized Minimum (2) SoFi Bank CET1 risk-based capital $ 3,649,976 17.0 % $ 3,331,616 17.3 % 7.0 % 6.5 % Tier 1 risk-based capital 3,649,976 17.0 3,331,616 17.3 8.5 8.0 Total risk-based capital 3,701,585 17.2 3,386,105 17.6 10.5 10.0 Tier 1 leverage 3,649,976 14.0 3,331,616 15.0 4.0 5.0 Risk-weighted assets 21,517,216 19,244,841 Quarterly adjusted average assets 26,130,750 22,273,285 SoFi Technologies CET1 risk-based capital $ 4,045,783 16.6 % $ 3,439,969 15.0 % 7.0 % n/a Tier 1 risk-based capital 4,045,783 16.6 3,439,969 15.0 8.5 n/a Total risk-based capital 4,097,392 16.8 3,494,458 15.3 10.5 n/a Tier 1 leverage 4,045,783 13.6 3,439,969 12.8 4.0 n/a Risk-weighted assets 24,423,088 22,883,185 Quarterly adjusted average assets 29,719,043 26,782,318 ____________________ (1) Required minimums presented for risk-based capital ratios include the required capital conservation buffer. (2) The well-capitalized minimum measure is applicable at the bank level only. As of June 30, 2024 and 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. There have been no events or conditions since June 30, 2024 that management believes would change the categorization. Commitments In addition to our warehouse facility borrowings, revolving credit facility borrowings and convertible notes, our material commitments requiring, or potentially requiring, the use of cash in future periods primarily include commitments related to sponsorship, advertising, and cloud computing agreements under which we are required to make payments over the life of the agreements. Additional material commitments include operating lease obligations primarily associated with office premises and finance lease obligations which expire in 2040. Guarantees We may require liquidity resources associated with our guarantee arrangements. As a component of our loan sale agreements, we make certain representations to third parties that purchased our previously held loans. We have a three-year obligation to GSEs on loans that we sell to GSEs, to repurchase any originated loans that do not meet certain GSE guidelines, and we are required to pay the full initial purchase price back to the GSEs. In addition, we make standard representations and warranties related to 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 15. Commitments, Guarantees, Concentrations and Contingencies to the Notes to Condensed Consolidated Financial Statements for further information on these and other guarantee obligations. We believe we have adequate liquidity to meet these expected obligations. Factors Affecting Liquidity We are currently dependent on the success of our lending business. The primary drivers of operating cash flows related to our Lending segment are origination volume, the holding period of our loans, loan sale execution and the timing of loan repayments. Our ability to access whole loan buyers, to sell our loans on favorable terms, to maintain adequate warehouse capacity at favorable terms, to access new 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. In 2023, we began to provide our members with access to expanded FDIC insurance 90 SoFi Technologies, Inc. TABLE OF CONTENTS coverage through a network of participating banks in our Insured Deposit Program. We continued to have strong deposit contribution through the second quarter of 2024. 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. 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 market disruptions, should be considered when assessing our future liquidity and solvency prospects. In the future, our loan origination volume and our resulting loan balances, and any positive cash flows thereof, could also be lower based on strategic decisions to tighten our credit standards. In addition to our ability to pledge unencumbered loans against available warehouse capacity, we have relationships with whole loan buyers who have historically demonstrated strong demand for our loans. Securitization markets can also generate additional liquidity; however, financing through the securitization market could result in worse execution as compared to whole loans sales depending on market conditions and, in certain cases, we are required to maintain a minimum investment due to securitization risk retention rules. Additionally, our securitization transactions require us to maintain a continuing financial interest in the form of securitization investments when we deconsolidate the SPE or in consolidation of the SPE when we have a significant financial interest. In either instance, the continuing financial interest requires us to maintain capital in the SPE that would otherwise be available to us if we had sold loans through a different channel. As it relates to our securitization debt, the maturity of the notes issued by the various trusts occurs upon either the maturity of the loan collateral or full payment of the loan collateral held in the trusts, the timing of which cannot be reasonably estimated. Our own liquidity resources are not required to make any contractual payments on our securitization borrowings. Our 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. The FDIA and FDIC regulations generally limit the ability of an insured depository institution to accept, renew or roll over any brokered deposit unless the institution’s capital category is “well capitalized” or, with the FDIC’s approval, “adequately capitalized.” As of June 30, 2024, 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. Cash Flow and Liquidity Analysis The following table provides a summary of cash flow data: Six Months Ended June 30, ($ in thousands) 2024 2023 Net cash provided by (used in) operating activities $ 253,877 $ (4,292,679) Net cash used in investing activities (3,456,101) (307,826) Net cash provided by financing activities 2,318,593 6,255,232 Cash Flows from Operating Activities For the six months ended June 30, 2024, net cash provided by operating activities of $253.9 million stemmed from net income of $105.4 million, a favorable change in our operating assets net of operating liabilities of $32.5 million, and a positive adjustment for non-cash items of $116.0 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 $8.2 billion during the period and also purchased loans 91 SoFi Technologies, Inc. TABLE OF CONTENTS of $19.1 million. These cash uses were partially offset by principal payments on loans of $4.7 billion and proceeds from loan sales of $3.4 billion. For the six months ended June 30, 2023, net cash used in operating activities of $4.3 billion stemmed from a net loss of $82.0 million and an unfavorable change in our operating assets net of operating liabilities of $4.5 billion, partially offset by a positive adjustment for non-cash items of $259.5 million. The change in operating assets net of operating liabilities was primarily a result of our loan origination and sales activities. We originated loans of $7.9 billion during the period and also purchased loans of $175.2 million. These cash uses were partially offset by principal payments on loans of $3.1 billion and proceeds from loan sales of $491.0 million Cash Flows from Investing Activities For the six months ended June 30, 2024, net cash used in investing activities of $3.5 billion was primarily attributable to $2.6 billion related to loan activities. Changes in loans held for investment was primarily a result of loan originations during the period of $3.0 billion, partially offset by principal payments on loans of $300.8 million and proceeds from loan sales of $122.7 million, as well as net outflows related to credit cards of $25.1 million. Other cash uses included net purchases of $837.6 million related to our investments in AFS debt securities, $68.7 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and $13.8 million related to purchases of non-securitization investments, primarily FRB stock and FHLB stock. These uses were partially offset by proceeds of $22.7 million from our securitization investments. For the six months ended June 30, 2023, net cash used in investing activities of $307.8 million was primarily attributable to net purchases of $134.4 million related to our investments in AFS debt securities, $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, $62.0 million related to loan activities, primarily driven by credit cards, $49.1 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and $16.7 million related to purchases of non-securitization investments, primarily FRB stock and FHLB stock. These uses were partially offset by proceeds of $29.0 million from our securitization investments. Cash Flows from Financing Activities For the six months ended June 30, 2024, net cash provided by financing activities of $2.3 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $4.3 billion and proceeds from the issuance of our 2029 convertible notes of $845.3 million. This was partially offset by our net change in debt facilities of $2.1 billion related to our warehouses, and debt repayments of $297.2 million. 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. In addition, we had an outflow of $323.4 million related to the redemption of our Series 1 preferred stock. For the six months ended June 30, 2023, net cash provided by financing activities of $6.3 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $5.4 billion. Additionally, our proceeds from debt financing activity of $1.3 billion exceeded our debt repayments of $407.7 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. Other Arrangements We enter into arrangements in which we originate loans, establish an SPE and transfer loans to the SPE, which has historically served as an important source of liquidity. We also retain the servicing rights of the underlying loans and hold additional interests in the SPE. When an SPE is determined not to be a VIE or when an SPE is determined to be a VIE but we are not the primary beneficiary, the SPE is not consolidated. In addition, a significant change to the pertinent rights of other parties or our pertinent rights, or a significant change to the ranges of possible financial performance outcomes used in our assessment of the variability of cash flows due to us, could impact the determination of whether or not a VIE is consolidated. VIE consolidation and deconsolidation may lead to increased volatility in our financial results and impact period-over-period comparability. Historically, we have established personal loan trusts and student loan trusts that were created and designed to transfer credit and interest rate risk associated with the underlying loans through the issuance of collateralized notes and residual certificates. We hold a variable interest in the trusts through our ownership of collateralized notes in the form of asset-backed 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. 92 SoFi Technologies, Inc. TABLE OF CONTENTS We are also the servicer for all trusts in which we hold a financial interest. Although we have the power as servicer to perform the activities that most impact the economic performance of the VIE, we do not hold a significant financial interest in the trusts and, therefore, we are not the primary beneficiary. Further, we do not provide financial support beyond our initial equity investment, and our maximum exposure to loss as a result of our involvement with nonconsolidated VIEs is limited to our investment. For a more detailed discussion of nonconsolidated VIEs, including related activity during the period, see Note 7. Securitization and Variable Interest Entities to the Notes to Condensed Consolidated Financial Statements. Financial Condition Summary Changes in the composition and balance of our assets and liabilities as of June 30, 2024 compared to December 31, 2023 were principally attributed to the following: • a decrease of $883.9 million in cash and cash equivalents and restricted cash and restricted cash equivalents. See “ Cash Flow and Liquidity Analysis ” for further discussion of our cash flow activity; • an increase in loans held for investment of $1.8 billion, primarily related to senior secured loans and longer loan holding periods on student loans; • an increase in loans held for sale of $496.8 million, which was primarily related to personal loan originations; • an increase in investments in AFS debt securities portfolio of $849.0 million. Our portfolio primarily consists of U.S. Treasury and agency mortgage-backed securities of high credit quality, utilized in our ongoing asset-liability management activities; • an increase in deposits of $4.4 billion, which was primarily related to increased savings deposits from members; and • a decrease of $2.1 billion in gross warehouse and risk retention facility debt as we continue to use our consumer deposit growth to replace higher cost of funding sources. 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. The results involve judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly evaluate our estimates, assumptions and judgments, particularly those that include the most difficult, subjective or complex judgments and which are often about matters that are inherently uncertain. We evaluate our critical accounting policies and estimates on an ongoing basis and update them as necessary based on changes in market conditions or factors specific to us. There have been no material changes in our significant accounting policies or critical accounting estimates during 2024. For a complete discussion of our significant accounting policies and critical accounting estimates, refer to our Annual Report on Form 10-K for the year ended December 31, 2023 within Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Consolidated Financial Statements and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates ”. Goodwill We assess goodwill for impairment at the reporting unit level on an annual basis with a testing date of October 1 or whenever indicators of impairment exist. Goodwill impairment assessments require a significant amount of management judgment, and meaningful change in one or more of the underlying forecasts, estimates, or assumptions used in testing goodwill for impairment could result in a material impact on the Company’s results of operations and financial position. In interim periods, we perform a qualitative assessment for our reporting units to which goodwill is allocated to determine if, for any reporting unit, it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In addition to the factors noted in our Annual Report on Form 10-K for the year ended December 31, 2023 for performing such an assessment, management also considers actual results for the current period and updated internal forecasts as compared to prior internal forecasts and other assumptions used in the quantitative annual assessment. Based on this assessment, while management does not believe that the goodwill in any of the reporting units is impaired as of June 30, 2024, management has determined that it is more likely than not that the fair values of the Galileo and 93 SoFi Technologies, Inc. TABLE OF CONTENTS Technisys reporting units within the Technology Platform segment, with goodwill of $1.34 billion, are not substantially in excess of their carrying amounts. 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 II, Item 1A of this Quarterly Report. Further persistence of the aforementioned conditions and these other factors could result in additional impairment charges in future periods. Recent Accounting Standards Issued, But Not Yet Adopted See Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Condensed Consolidated Financial Statements herein and Note 1. Organization, Summary of Significant Accounting Policies and New Accounting Standards to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Item 3. Quantitative and Qualitative Disclosures About Market Risk In the normal course of business, we are subject to a variety of market-related risks that can affect our operations and profitability. We broadly define these areas of risk as interest rate risk, credit risk, counterparty risk and operational risk. Historically, substantially all of our revenue and operating expenses were denominated in United States dollars. We may in the future be subject to increasing foreign currency exchange rate risk with our acquisition of a foreign company. Foreign currency exchange rate risk is the risk that our financial position or results of operations could be positively or negatively impacted by fluctuations in exchange rates. Exchange rate risk was not a material risk for the Company during the periods presented. For additional information on our market risks, see Part II, Item 7A “ Quantitative and Qualitative Disclosures About Market Risk ” in our Annual Report on Form 10-K for the year ended December 31, 2023. Interest Rate Risk We are exposed to the risk of loss to future earnings, values or future cash flows that may result from changes in market discount rates or overall market conditions, such as instability in the banking and financial services sectors. We are subject to interest rate risk associated with our loans, securitization investments (including residual investments and asset-backed bonds), servicing rights and investments in AFS debt securities, which are measured at fair value on a recurring basis using a discounted cash flow methodology in which the discount rate represents an estimate of the required rate of return by market participants. Our loans with variable interest rates are exposed to interest rate volatility, which impacts the amount of recognized interest income. Our securitization residual investments are carried at fair value, which is subject to changes in market value by virtue of the impact of interest rates on the market yield of the residual investments. The value and earnings of our asset-backed bonds, which are associated with our personal loans and student loans, have a converse relationship to the movement of interest rates. That is, as interest rates rise, bond values and earnings fall and vice versa. Additionally, we are subject to interest rate risk on our variable-rate warehouse facilities and our revolving credit facility. Market interest rates may also drive the interest we offer to members on their deposits. Future funding activities may increase our exposure to interest rate risk, as the interest rates payable on such funding may be tied to SOFR or another representative alternative reference rate. We are also exposed to market risk through our investments in equity securities, which are either measured at fair value using the net asset value practical expedient or which may have positive or negative adjustments that impact our results of operations resulting from observable price changes based on current market conditions. Interest rate risk also occurs in periods where changes in short-term interest rates result in loans being originated with terms that provide a smaller interest rate spread above the financing terms of our warehouse facilities or above the interest rate we offer on deposits, which can negatively impact our realized net interest income. We utilize simulations to evaluate changes in net interest income under multiple interest rate scenarios relative to the baseline forecast. The sensitivity is defined as the changes in net interest income relative to the baseline forecast. The following table summarizes the potential effect on net interest income and fair value of interest rate sensitive financial assets and liabilities recorded on our consolidated balance sheet as of June 30, 2024, based upon a sensitivity analysis performed by management assuming a hypothetical, immediate and parallel increase and decrease in market interest rates of 100 basis points. The net interest income sensitivities are applied to our 12 month forecast, which incorporates market expectations of interest rates, contractual cash flows, repricing characteristics, and our projected business activity, including deposit forecasts as a key assumption. Our consolidated balance sheet is liability sensitive, given liabilities reprice faster than assets, resulting in higher net interest income in decreasing interest rate scenarios. The fair value sensitivities are applied only to 94 SoFi Technologies, Inc. TABLE OF CONTENTS interest rate sensitive financial assets that existed at the balance sheet date, which included loans, securitization investments, servicing rights and investments in AFS debt securities as of June 30, 2024. Impact if Interest Rates: ($ in thousands) Increase 100 Basis Points Decrease 100 Basis Points Fair value $ (467,361) $ 492,364 Net interest income (expense) (44,718) 65,385 Credit Risk We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required loan payments or declines in home loan collateral values. Generally, all loans sold into the secondary market are sold without recourse. For such loans, our credit risk is generally limited to repurchase obligations due to fraud or origination defects. For loans that were repurchased or not sold in the secondary market, we are subject to credit risk to the extent a borrower defaults and we are not able to fully recover the principal balance. We believe that this risk is mitigated through the implementation of stringent underwriting standards, strong fraud detection tools and technology designed to comply with applicable laws and our standards. In addition, we believe that this risk is mitigated through the quality of our loan portfolio. The following table summarizes the potential effect on earnings over the next 12 months and the potential effect on the fair values of our loans for which we elected the fair value option and residual investments recorded on our consolidated balance sheet as of June 30, 2024 based on upon a sensitivity analysis performed by management assuming an immediate hypothetical change in credit loss rates by a rate of 10%. The fair value and earnings sensitivities are applied only to financial assets that existed at the balance sheet date, which included loans, investments in AFS debt securities (which had an immaterial impact from credit risk) and residual investments as of June 30, 2024. Asset-backed bonds are excluded because they are not expected to absorb the losses of the VIE based on the extent of overcollateralization and expected credit losses of the VIE. Alternatively, residual investments are subject to credit exposure, and by design this is the portion of the SPE that is expected to absorb the losses of the VIE. Impact if Credit Loss Rates: ($ in thousands) Increase 10 Percent Decrease 10 Percent Fair value $ (110,022) $ 110,022 Carrying value (5,191) 5,191 Income (loss) before income taxes (115,213) 115,213 Counterparty Risk We are subject to risk that arises from our debt warehouse facilities, economic hedging activities, third-party custodians, and capped call options on our common stock. These activities generally involve an exchange of obligations with unaffiliated lenders or other individuals or entities, referred to in such transactions as “counterparties”. If a counterparty was to default, we could potentially be exposed to reputational damage and financial loss if such counterparty was unable to meet its obligations to us. We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among multiple such counterparties, placing contractual limits on the amount of dependence on any single counterparty, and entering into netting agreements with the counterparties, as appropriate. In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association trading agreements with all material trading partners. Each such agreement provides for an exchange of margin money should either party’s exposure exceed a predetermined contractual limit. Such margin requirements limit our overall counterparty exposure. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent our maximum counterparty credit risk. We incurred no losses due to nonperformance by any of our counterparties during the six months ended June 30, 2024. As of June 30, 2024, gross derivative asset and liability positions subject to master netting arrangements were $13.3 million and $0.1 million, respectively. In the case of our loan warehouse facilities, we are subject to risk if the counterparty chooses not to renew a borrowing agreement and we are unable to obtain financing to originate loans. With our loan warehouse facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our 95 SoFi Technologies, Inc. TABLE OF CONTENTS funding needs. As of June 30, 2024, we had total borrowing capacity under loan warehouse facilities of $7.6 billion, of which $1.1 billion was utilized. Refer to Note 9. Debt to the Notes to Condensed Consolidated Financial Statements for additional information regarding our loan warehouse facilities. In the case of our call options on our common stock, if the capped call counterparties, which are financial institutions and initial purchasers of our convertible notes, are unable to meet their obligations under the contract, we may not be able to mitigate the dilutive effect on our common stock upon conversions of our convertible notes or offset any potential cash payments we may be required to make in excess of the principal amount of converted convertible notes. Refer to Note 10. Equity to the Notes to Condensed Consolidated Financial Statements for additional information on our capped call transactions. Operational Risk Operational risk is the risk of loss arising from inadequate or failed internal processes, controls, people (e.g., human error or misconduct) or systems (e.g., technology problems), business continuity or external events (e.g., natural disasters), compliance, reputational, regulatory, cybersecurity or legal matters and includes those risks as they relate directly to us, fraud losses attributed to applications and any associated fines and monetary penalties as a result, transaction processing, or employees, as well as to third parties with whom we contract or otherwise do business. We rely on third-party computer systems and third-party providers to support and carry out certain functions on our platform, which are themselves susceptible to operational risk or which may rely on subcontractors to provide services to us that face similar risks. Any interruption in services or deterioration in the quality of the service or performance of such third-party systems or providers could be disruptive to our business and adversely affect our results of operations and the perception of the reliability of our networks and services and the quality of our brand. In addition, we may be subjected to member complaints, fines, subpoenas, civil investigative demands, litigation, disputes, regulatory investigations and other similar actions. We strive to manage operational risk, including operational risk associated with our reliance on third-party systems, through contractual provisions, our system design, and a robust third-party risk management process, which includes establishing policies and procedures to accomplish timely and efficient processing, obtaining periodic internal control attestations from management, conducting internal process Risk Control Self-Assessments and audit reviews to evaluate the effectiveness of internal controls. With respect to cybersecurity risk, which can also translate to financial and reputational risk, our technology and cybersecurity teams rely on a layered system of preventive and detective technologies, controls, and policies to detect, mitigate, and contain cybersecurity threats. In addition, our cybersecurity team, and the third-party consultants they engage, regularly assess our cybersecurity risks and mitigation efforts. Our operational risk, and the amount we invest in risk management, may increase as we introduce new products and product features, and as new threat actors and evolving threat vectors, such as account takeover tactics, increase and become more sophisticated. In order to be effective, among other things, our enterprise risk management capabilities must adapt and align to support any new product or loan features, capability, strategic development, or external change. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q and designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 96 SoFi Technologies, Inc. TABLE OF CONTENTS PART II – OTHER INFORMATION Item 1. Legal Proceedings The information required by Item 103 of Regulation S-K is included in Note 15. Commitments, Guarantees, Concentrations and Contingencies to the Notes to Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q. Item 1A. Risk Factors In evaluating our company and our business, y ou should carefully consider the risks and uncertainties described below, together with the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations or future prospects, in which case the market price of our common stock could decline, and you could lose part or all of your investment. Unless otherwise indicated, references in this section and elsewhere in this Quarterly Report on Form 10-Q to our business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, our business, reputation, financial condition, results of operations, revenue or our future prospects. The material and other risks and uncertainties summarized in this Quarterly Report on Form 10-Q and described below are not intended to be exhaustive and are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See the section titled “Cautionary Statement Regarding Forward-Looking Statements”. Summary Risk Factors Our business is subject to numerous risks and uncertainties, which illuminate challenges that we face in connection with the successful implementation of our strategy and the growth of our business. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. These risks are discussed more fully below and include, but are not limited to: Business, Financial and Operational Risks • our ability to successfully identify and address the risks and uncertainties we face, particularly with respect to certain rapidly evolving industries; • demands on our resources, intense and increasing competition, and the success of our business model (including continuing profitability); • legislative and regulatory policies and related actions that apply or may apply to us, particularly as a result of our operating a bank and as a bank holding company, in connection with student loans, given our brokerage and investment advisory activity, or related to services provided by our technology platform; • loss of one or more significant purchasers of our loans or one or more significant technology platform clients; • adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties; • impact of macroeconomic factors, including regulatory responses, elevated and fluctuating inflation, increased delinquency rates on consumer debt, reduced consumer discretionary spending and economic uncertainty; • failure of third-party service providers or systems on which we rely or, in the event we move certain services or systems in-house, our ability to successfully perform those services or implement and operate those systems; Risks Related to Market and Interest Rates • cost and availability of funding in the capital markets and fluctuations in interest rates could impact our ability to operate our business; • higher than expected payment rates of loans our returns as the holder of the residual interests in securitization trusts; 97 SoFi Technologies, Inc. TABLE OF CONTENTS • decreased demand for certain lending products in the face of high interest rates, such as student loans and home loans, could negatively impact our results of operations; • an inability to maintain a competitive annual percentage yield on deposits could cause members to transfer checking and savings account balances to our competitors; Risks Related to Strategic and New Products • potential and past acquisitions that require significant attention could disrupt our business and adversely affect our financials; • we may fail to innovate or respond to evolving technological or other changes; • we may experience an increase in fraudulent activity, particularly in connection with our personal loans product, credit card and SoFi Money; • we are subject to increased business, economic and regulatory risks from continued expansion abroad, given our brokerage and investment advisory activity, or related to services provided by our technology platform; Credit Market Related Risks • we could be adversely impacted by worsening economic conditions, including general economic uncertainty, elevated and fluctuating inflation and interest rates, market volatility, the cyclical nature of our industry, and our ability to maintain expected levels of liquidity; • our inability to make accurate credit and pricing decisions or effectively forecast our loss rates; • the discharge of qualified student loans in bankruptcy in certain circumstances; • the failure of our third-party service providers to perform various functions related to the origination and servicing of loans; • financial issues or liquidity issues experienced by our technology platform clients could result in termination of, or inability to pay for, their services; Risks Related to Funding and Liquidity • our ability to retain, increase or secure new or alternative financing, including through deposits, to finance our business and the receivables that we originate or other assets that we hold; • termination of one or more of our warehouse facilities on which we are highly dependent; • our ability to sell the loans we originate to third parties; • increases in member loan default rates or the possibility of being required to retain or repurchase loans or indemnify the purchasers of our loans; Regulatory, Tax and Other Legal Risks • our exposure to evolving laws, rules, regulations and government enforcement policies, federal or state loan forgiveness programs, expansion of the federal student loan income-driven repayment plan, and potential enforcement actions, litigation, investigations, exams or inquiries or impairment of licenses; • our ability to effectively mitigate risk exposure; • changes in business, economic or political conditions; • failure to comply with laws and regulations, including related to banks and bank holding companies, consumer financial protection, anti-money laundering, anti-corruption or privacy, information security and data protection; • increased regulatory scrutiny of the services provided by our technology platform; • application of regulations and supervision under banking and securities laws and regulations; • our ability to efficiently protect our intellectual property rights; • failure to comply with open source licenses for open source software included in our or any of our subsidiaries’ platforms; • the risk that we are, or any of our subsidiaries is, determined to have been subject to registration as an investment company under the Investment Company Act; 98 SoFi Technologies, Inc. TABLE OF CONTENTS Personnel and Business Continuity Risks • the loss of key management members or key employees, or an inability to hire key personnel; • increased business continuity and cyber risks due to our hybrid workforce; • natural disasters, power outages, telecommunications failures, man-made problems and similar events; • employee misconduct; Risk Management and Financial Reporting Risks • our ability to establish and maintain proper and effective internal control over financial reporting and risk management processes and procedures; • adjustments to our key business metrics, including adjustments to the total number of members or products in the event a member is removed in accordance with our terms of service which may not be reflected in the current period; • changes in accounting principles generally accepted in the United States; • regulatory obligations as a result of our business combination with a special purpose acquisition company that may impact us differently than other publicly traded companies; • incorrect estimates or assumptions by management in connection with the preparation of our financial statements; Information Technology and Data Risks • breach or violation of law by a third party on which we depend; • cyberattacks and other security breaches or disruptions of our systems or third-party systems on which we rely, including our cloud computing services arrangement, disruptions that may impact our ability to collect loan payments and maintain accurate accounts, or our ability to provide services to our technology platform clients; • liabilities related to the collection, processing, use, storage and transmission of personal data; • liabilities related to the data, models, and use of artificial intelligence in products or business processes; Risks Related to Ownership of Our Securities • volatility in the price of our common stock, changes in analyst ratings or expectations, and future dilution of our stockholders; • possibility of securities litigation, which is expensive and time consuming; and • failure to comply with Nasdaq continued listing standards. Business, Financial and Operational Risks We operate in rapidly evolving industries, and have limited experience in parts of our Financial Services and Technology Platform segments, which may make it difficult for us to successfully identify and address the risks and uncertainties we face. We operate in rapidly evolving industries which may make it difficult to successfully identify risks to our business and evaluate our future prospects. In addition, in recent years, we have rapidly expanded our operations to include or expand, among other things, deposit accounts, credit cards, investment services, technology solutions, home loan originations, small business financing solutions, loan platform business solutions, and international operations, and we have limited experience in these areas. In the first quarter of 2022, we acquired a bank charter and face risks as a result of our lack of experience operating a bank and as a bank holding company. We also acquired Technisys in the first quarter of 2022, which furthered our international expansion into Latin America and introduced new risks due to our limited history of operations in certain Latin American countries. In 2023, we acquired Wyndham, a fintech mortgage lender, which expanded our home loan business. In addition to the events above, we face numerous challenges to our success, including our ability to: • increase or maintain the number, volume and types of, and add new features to, the loans we extend to our members as the market for loans evolves and as we face new and increasing competitive threats; 99 SoFi Technologies, Inc. TABLE OF CONTENTS • successfully integrate our past and future acquisitions, including continuing to develop Wyndham’s technology, performing functions in home loans origination, such as home loans processing and underwriting, and managing the origination of new home loan types; • increase the number of members utilizing our non-lending products, including our direct deposit feature, and maintain and build on the loyalty of existing members by increasing their use of new or additional products; • successfully maintain and enhance our diversified funding strategy, including through deposits, securitization financing from consolidated and nonconsolidated VIEs, whole loan sales, and debt warehouse facilities; • further establish, diversify and refine our checking and savings, investment and brokerage offerings to meet evolving consumer needs and preferences; • offer an attractive annual percentage yield on our deposits compared to our competitors and manage deposit costs; • diversify our revenue streams across our products and services; • favorably compete with other companies and banks, including traditional and alternative technology-enabled lenders, financial service providers, broker-dealers, and technology platform as a service providers; • continue to realize the benefits of operating a bank; • introduce new products or other offerings, as well as new or improved technologies, to meet the needs of our existing and prospective members or to keep pace with competitive lending, checking and savings, investment, technology and other developments; • maintain or increase the effectiveness of our direct marketing and other sales and marketing efforts, and maintain our brand; • successfully design, develop, integrate, operate and maintain technology systems at scale and with a high degree of reliability that support our member growth and product adoption; • successfully navigate economic conditions and fluctuations in the credit markets, including elevated and fluctuating inflation, interest rates that are higher than those in the recent past, recessionary pressures and economic uncertainty; • continue to add new clients and new products to existing clients in our technology platform as a service business; • successfully identify financial issues or liquidity issues experienced by our technology platform clients that could result in termination of, or their inability to pay for, our technology platform services; • successfully diversify our technology platform clients into new industry verticals and new geographies; • successfully identify a slowdown or acceleration in the business growth of our technology platform clients to ensure aligned costs and capabilities; • successfully navigate the evolving regulatory environment for technology platform as a service providers; • establish fraud prevention strategies that proactively identify threat vectors and mitigate losses; • defend our platform from information security vulnerabilities, cyberattacks or malicious attacks; • effectively manage the growth of our business; • effectively manage our expenses; • obtain debt or equity capital on attractive terms or at all; • successfully continue to expand internationally; • adequately respond to macroeconomic and other exogenous challenges, including continued government efforts to curb inflation, which may impact the overall economy and affect demand for our products and services, market volatility, particularly in the financial services industry, changes in consumer confidence, consumer discretionary spending and loan delinquency rates, pandemics or other health-related crises, escalating conflict in the Middle East, and the ongoing war in Ukraine, and the upcoming presidential election in the United States; • maintain successful relationships with our governmental regulatory agencies and law enforcement authorities, as well as self-regulatory agencies; and • anticipate and react to changes in an evolving regulatory and political environment. We may not be able to successfully address the risks and uncertainties we face, which could negatively impact our business, financial condition, results of operations, cash flows and future prospects. 100 SoFi Technologies, Inc. TABLE OF CONTENTS We have a history of losses, and may experience net losses in the future and there is no assurance that our revenue and business model will be successful. We have a history of net losses prior to the fourth quarter of 2023. We may incur net losses in the future, and such losses may fluctuate significantly from quarter to quarter. We will need to continue to generate and sustain significant revenues for our business generally, and achieve greater scale and generate greater operating cash flows from our Financial Services segment, in particular, in future periods, as well as successfully navigate the macroeconomic environment, in order to maintain or increase our level of profitability. We intend to continue to invest in sales and marketing, technology, and products and services in order to enhance our brand, our brand recognition and our value proposition to our members, prospective members and clients in our technology platform business, and these additional costs will create further challenges to maintaining or increasing near-term profitability. Our general and administrative expenses have in the past and may in the future increase to meet the increased compliance and other requirements associated with operating as a public company and a bank holding company, operating a bank, and evolving regulatory requirements. See “ Regulatory, Tax and Other Legal Risks — As a bank holding company, we are subject to extensive supervision and regulation, and changes in laws and regulations applicable to bank holding companies could limit or restrict our activities and could have a material adverse effect on our operations ”. We are continuously refining our revenue and business model, which is premised on creating a virtuous cycle for our members to engage with more products across our platform, a strategy we refer to as the Financial Services Productivity Loop, and, with respect to our Technology Platform segment, adoption by clients of additional platform as a service offerings. There is no assurance that our revenue and business model, or any changes to our revenue and business model to better position us with respect to our competitors, will be successful. Our efforts to continue to grow our business may be more costly than we expect, and we may not be able to maintain or increase our revenue sufficiently to offset our higher operating expenses. We may incur future losses and we may be unable to maintain profitability, for a number of reasons, including the risks described in this Quarterly Report on Form 10-Q, unforeseen expenses, difficulties, complications and delays, differences between our assumptions and estimates and results, the effects of macroeconomic conditions and other unknown events. We have experienced rapid growth in recent years, including through the addition of new products and lines of business and entry into new geographies, which may place significant demands on our operational, risk management, sales and marketing, technology, compliance, and finance and accounting resources. Our rapid growth in certain areas of our business in recent years, primarily within our Financial Services and Technology Platform segments, as well as operating a bank and as a bank holding company, has placed significant demands on our operational, risk management, sales and marketing, technology, compliance, and finance and accounting infrastructure, and has resulted in increased expenses, a trend that we expect to continue as our business grows. In addition, we are required to continuously develop and adapt our systems and infrastructure in response to the increasing sophistication of the consumer financial services market, changing technologies, evolving fraud, privacy and information security landscape, and regulatory developments, both domestically and internationally, relating to our existing and projected business activities. Our future growth will depend on, among other things, our ability to maintain an operating platform and management system able to address such growth, our ability to grow and optimize deposit balances, and our ongoing ability to demonstrate to our regulators that our risk management and compliance practices are growing and evolving in a commensurate fashion, all of which has required, and we expect will continue to require, us to incur significant additional expenses, expand our workforce and commit additional time from senior management and operational resources. We may not be able to manage supporting and expanding our operations effectively, and any failure to do so would adversely affect our ability to increase the scale of our business, generate projected revenue and control expenses. Our results of operations and future prospects depend on our ability to retain existing members and attract new members. We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed. We operate in a rapidly changing and highly competitive industry, and our results of operations and future prospects depend on, among others: • the continued growth and engagement of our member base; • our ability to further monetize our member base, including through the use of additional products by our existing members; • our ability to acquire members at a lower cost; and • our ability to increase the overall value to us of each of our members while they remain on our platform (which we refer to as a member’s lifetime value). 101 SoFi Technologies, Inc. TABLE OF CONTENTS We expect our competition to continue to increase, as there are no substantial barriers to entry to certain of the markets we serve. Some of our current and potential competitors have longer operating histories, particularly with respect to our financial services products, significantly greater financial, technical, marketing and other resources, and a larger customer base than we do. This allows them to potentially offer more competitive pricing or other terms or features, a broader range of financial products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies and changes in member preferences. In addition to established enterprises, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are. Our existing or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services. This could attract current or potential members away from our services and reduce our market share in the future. Additionally, when new competitors seek to enter our markets, or when existing market participants seek to increase their market share, these competitors sometimes undercut, or otherwise exert pressure on, the pricing terms prevalent in that market, which could adversely affect our market share and/or our ability to capitalize on market opportunities. We currently compete at multiple levels with a variety of competitors, including: • other personal loan, student loan refinancing, in-school student loan and home loan lenders, including other banks and other financial institutions, as well as credit card issuers, that can offer more competitive interest rates or terms; • banks and other financial institutions, with respect to our checking and savings accounts; • rewards credit cards provided by other financial institutions, with respect to our SoFi Credit Card; • other brokerage firms, including online or mobile platforms, and other companies for our SoFi Invest accounts; • other mortgage lenders, including fintech-focused lenders, and other companies for our home loans; • other technology platforms with respect to the enterprise services we provide, such as technology products and solutions via Galileo and Technisys; • other content providers for subscribers to our financial services content, including content from alternative providers available to our subscribers through our Lantern Credit service, which is a financial services aggregator providing marketplace lending products, and various enterprise partnerships; and • other financial services firms offering employers a comprehensive platform for employees to build financial well-being through student loan and 529 educational plan contributions, educational tools, and financial resources, all of which we provide through SoFi At Work. We believe that our ability to compete depends upon many factors both within and beyond our control, including, among others, the following: • the size, diversity and lifetime value of our member base and technology platform clients; • our ability to introduce successful new products and services, as well as new or improved technologies, or to iterate and innovate on existing products or services to satisfy evolving member and technology platform client preferences or to keep pace with market trends; • our ability to diversify our revenue streams across our products and services, and cost effectively acquire new members and technology platform clients; • the timing and market acceptance of our products and services, including developments and enhancements to those products and services, offered by us and our competitors; • member and technology platform client service and support efforts; • selling, marketing and promotional efforts; • our ability to compete on price, particularly with respect to SoFi Invest and the Technology Platform where demand for our products and services may be affected if we are unable to compete with other brokerages or technology-as-a-service providers on price; • our ability to offer competitive interest rates on deposit accounts; • the ease of use, performance, price and reliability of solutions developed either by us or our competitors; • our ability to attract and retain talent; • changes in economic conditions, and regulatory and policy developments; • our ability to successfully operate a national bank, grow deposits and realize the potential benefits to our members; 102 SoFi Technologies, Inc. TABLE OF CONTENTS • our ability to successfully scale our products and services and execute on our Financial Services Productivity Loop strategy and our other business plans, including successfully integrating our acquisitions and diversifying our technology platform clients into new industry verticals and new geographies; • general market conditions and their impact on our liquidity and ability to access funding; • the impact of macroeconomic conditions, including the impacts from current efforts to curb inflation, stock market volatility, changes in consumer confidence, consumer discretionary spending, and any changes in loan default rates, and related developments on the lending and financial services markets we serve; and • our brand strength relative to our competitors. Our current and future business prospects demand that we act to meet these competitive challenges but, in doing so, our revenues and results of operations could be adversely affected if we, for example, increase marketing or other expenditures or make new expenditures in other areas. Competitive pressures could also result in us reducing the annual percentage rate on the loans we originate, increasing the annual percentage rate we pay on the checking and savings product, charging fees for services we currently provide for free, incurring higher member or technology platform client acquisition costs, or make it more difficult for us to grow our loan originations in both number of loans and volume for new as well as existing members or expand the adoption of additional products by our current, or acquire new, technology platform clients. All of the foregoing factors and events could adversely affect our business, financial condition, results of operations, cash flows and future prospects. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations. Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems and adversely affect our financial condition and results of operations. For example, Silicon Valley Bank and Signature Bank were put into FDIC receivership in March 2023 and First Republic Bank was put into FDIC receivership in May 2023. 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 deposits to date, our members may choose to maintain deposits with other financial institutions or spread their deposit funds among multiple financial institutions. The closure of financial institutions, even if such financial institutions are unrelated to our business, may result in a deterioration of consumer confidence in banks and the banking system more broadly as well as declines in the price of our stock or reluctance of our members to use our products and services. Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. On March 12, 2023, the Federal Reserve announced the creation of the Bank Term Funding Program, a new emergency lending program for FDIC-insured banks, as well as certain U.S. branches and agencies of foreign banks. Under the Bank Term Funding Program, the Treasury Department provided $25 billion of credit protection to the Federal Reserve Banks, in order to provide loans with terms up to one year secured by certain government securities held by eligible financial institution borrowers. The program was established to reduce the need for eligible borrowers to sell the securities in times of stress, thus, mitigating the risk of potential losses on the sale of such securities. On January 24, 2024, the Federal Reserve announced that the program would cease making new loans, as scheduled, on March 11, 2024. There is no guarantee that