SoFi Technologies, Inc. 10-Q

sofi-20240930 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 October 31, 2024 was 1,085,146,875 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 15 Note 3. Revenue 15 Note 4. Loans 17 Note 5. Allowance for Credit Losses 24 Note 6. Investment Securities 26 Note 7. Securitization and Variable Interest Entities 28 Note 8. Deposits 29 Note 9. Debt 30 Note 10. Equity 33 Note 11. Derivative Financial Instruments 36 Note 12. Fair Value Measurements 38 Note 13. Share-Based Compensation 46 Note 14. Income Taxes 48 Note 15. Commitments, Guarantees, Concentrations and Contingencies 48 Note 16. Earnings (Loss) Per Share 50 Note 17. Business Segment Information 52 Note 18. Subsequent Events 56 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 57 Item 3. Quantitative and Qualitative Disclosures About Market Risk 100 Item 4. Controls and Procedures 104 PART II – OTHER INFORMATION Item 1. Legal Proceedings 105 Item 1A. Risk Factors 105 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 160 Item 3. Defaults Upon Senior Securities 161 Item 4. Mine Safety Disclosures 161 Item 5. Other Information 161 Item 6. Exhibits 161 Signatures 162 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 IRR : Interest rate risk CALM : Capital and Asset Liability Management policy IRS : Internal Revenue Service CARES Act : Coronavirus Aid, Relief, and Economic Security Act LIBOR : London Inter-Bank Offered Rate CCPA : California Consumer Privacy Act MLA : Military Lending Act CD : Community Development MOHELA : Missouri Higher Education Loan Authority CET1 : Common Equity Tier 1 MSB : Money services business CFP : Certified financial planners MSRB : Municipal Securities Rulemaking Board CFPA : Consumer Financial Protection Act NACHA : National Automated Clearinghouse Association CFPB : Consumer Financial Protection Bureau Nasdaq : The Nasdaq Global Select Market CFTC : Commodity Futures Trading Commission NII : Net Interest Income CISO : Chief Information Security Officer OCC : Office of the Comptroller of the Currency CODM : Chief Operating Decision Maker OFAC : Office of Foreign Assets Control CPA : Colorado Privacy Act PCD : Purchased credit deteriorated CPPA : California Privacy Protection Act PFOF : Payment for order flow CPRA : California Privacy Rights Act PSU : Performance stock units CRA : Community Reinvestment Act QIA : Qatar Investment Authority DACA : Deferred Access for Childhood Arrival RESPA : Real Estate Settlement Procedures Act DCF : Discounted cash flow ROU : Right-of-use DE&I : Diversity, Equity and Inclusion RSU : Restricted stock units DEP : Digital engagement practices SCH : Social Capital Hedosophia Holdings Corp. V Dodd-Frank Act : Dodd-Frank Wall Street Reform and Consumer SCRA : Servicemembers’ Civil Relief Act Protection Act of 2010 SEC : U.S. Securities and Exchange Commission DSU : Deferred stock units SPAC : Special purpose acquisition company EBRC : Enterprise Broad Risk Committee Social Finance : Social Finance, LLC (formerly Social Finance, Inc.) EC : European Commission SoFi Bank : SoFi Bank, National Association ECOA : Equal Credit Opportunity Act SoFi Capital Advisors : SoFi Capital Advisors, LLC EFTA : Electronic Fund Transfer Act SoFi Securities : SoFi Securities LLC EPS : Earnings (loss) per share of common stock SoFi Stadium : The LA Stadium and Entertainment District at Hollywood ESG : Environmental, social and corporate governance Park in Inglewood, California ESIGN : Electronic Signatures in Global and National Commerce Act SoFi Wealth : SoFi Wealth LLC ETF : Exchange-Traded Funds SOFR : Secured Overnight Financing Rate EVE : Economic value of equity 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”, “possibility”, “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 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 execute our strategy with respect to 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 and employment rates, capital markets volatility, instability in the financial services industry, a potential U.S. 3 SoFi Technologies, Inc. TABLE OF CONTENTS government shutdown, uncertainty stemming from changes to the U.S. presidential administration, 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 Nasdaq; • our ability to realize the anticipated benefits of any acquisitions we undertake; • 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) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 2,354,965 $ 3,085,020 Restricted cash and restricted cash equivalents 614,794 530,558 Investment securities (includes available-for-sale securities of $ 1,478,066 and $ 595,187 at fair value with associated amortized cost of $ 1,468,146 and $ 596,757 , as of September 30, 2024 and December 31, 2023, respectively) 1,554,285 701,935 Loans held for sale, at fair value 17,324,514 15,396,771 Loans held for investment, at fair value 7,876,667 6,725,484 Loans held for investment, at amortized cost (less allowance for credit losses of $ 48,419 and $ 54,695 , as of September 30, 2024 and December 31, 2023, respectively) 1,417,262 836,159 Servicing rights 296,127 180,469 Property, equipment and software 266,226 216,908 Goodwill 1,393,505 1,393,505 Intangible assets 314,959 364,048 Operating lease right-of-use assets 84,149 89,635 Other assets (less allowance for credit losses of $ 2,651 and $ 1,837 , as of September 30, 2024 and December 31, 2023, respectively) 882,723 554,366 Total assets $ 34,380,176 $ 30,074,858 Liabilities, temporary equity and permanent equity Liabilities: Deposits: Interest-bearing deposits $ 24,351,778 $ 18,568,993 Noninterest-bearing deposits 56,008 51,670 Total deposits 24,407,786 18,620,663 Accounts payable, accruals and other liabilities 569,018 549,748 Operating lease liabilities 101,028 108,649 Debt 3,180,205 5,233,416 Residual interests classified as debt 658 7,396 Total liabilities 28,258,695 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 September 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; 1,084,136,516 and 975,861,793 shares issued and outstanding, as of September 30, 2024 and December 31, 2023, respectively (2) 108 97 Additional paid-in capital 7,751,335 7,039,987 Accumulated other comprehensive income (loss) 8,109 ( 1,209 ) Accumulated deficit ( 1,638,071 ) ( 1,804,263 ) Total permanent equity 6,121,481 5,234,612 Total liabilities, temporary equity and permanent equity $ 34,380,176 $ 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 September 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. See Note 7. Securitization and Variable Interest Entities for additional information. September 30, 2024 December 31, 2023 Assets Restricted cash and restricted cash equivalents $ 27,281 $ 50,547 Loans held for sale, at fair value 229,072 502,757 Loans held for investment, at fair value 85,445 221,461 Total assets $ 341,798 $ 774,765 Liabilities Accounts payable, accruals and other liabilities $ 158 $ 1,773 Debt 94,163 420,974 Residual interests classified as debt 658 7,396 Total liabilities $ 94,979 $ 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Interest income Loans and securitizations $ 671,976 $ 539,927 $ 1,913,265 $ 1,345,169 Other 51,398 24,343 150,615 60,661 Total interest income 723,374 564,270 2,063,880 1,405,830 Interest expense Securitizations and warehouses 31,093 63,847 89,376 181,231 Deposits 248,292 145,563 691,558 325,208 Corporate borrowings 12,871 9,784 36,307 26,951 Other 108 113 327 341 Total interest expense 292,364 219,307 817,568 533,731 Net interest income 431,010 344,963 1,246,312 872,099 Noninterest income Loan origination, sales, and securitizations 70,085 75,385 181,957 288,883 Servicing 9,927 8,009 23,560 29,803 Technology products and solutions 90,896 81,856 262,434 236,946 Loan platform fees 55,641 9,066 78,373 24,261 Other 39,562 17,930 148,098 55,393 Total noninterest income 266,111 192,246 694,422 635,286 Total net revenue 697,121 537,209 1,940,734 1,507,385 Noninterest expense Technology and product development 139,714 125,698 402,801 369,602 Sales and marketing 214,904 186,719 567,032 544,695 Cost of operations 123,714 98,258 333,478 276,051 General and administrative 148,921 124,457 439,167 379,326 Goodwill impairment — 247,174 — 247,174 Provision for credit losses 6,013 21,831 24,835 42,853 Total noninterest expense 633,266 804,137 1,767,313 1,859,701 Income (loss) before income taxes 63,855 ( 266,928 ) 173,421 ( 352,316 ) Income tax (expense) benefit ( 3,110 ) 244 ( 7,229 ) 3,661 Net income (loss) $ 60,745 $ ( 266,684 ) $ 166,192 $ ( 348,655 ) Other comprehensive income (loss) Unrealized gains on available-for-sale securities, net 9,029 5,616 9,070 8,694 Foreign currency translation adjustments, net 563 103 248 202 Total other comprehensive income 9,592 5,719 9,318 8,896 Comprehensive income (loss) $ 70,337 $ ( 260,965 ) $ 175,510 $ ( 339,759 ) Earnings (loss) per share (Note 16) Earnings (loss) per share – basic $ 0.06 $ ( 0.29 ) $ 0.14 $ ( 0.40 ) Earnings (loss) per share – diluted $ 0.05 $ ( 0.29 ) $ 0.08 $ ( 0.40 ) Weighted average common stock outstanding – basic 1,071,159,746 951,183,107 1,037,579,399 939,070,185 Weighted average common stock outstanding – diluted 1,104,450,416 951,183,107 1,078,402,421 939,070,185 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 Income (Loss) Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount Balance at June 30, 2024 1,065,112,270 $ 106 $ 7,601,687 $ ( 1,483 ) $ ( 1,698,816 ) $ 5,901,494 — $ — Share-based compensation expense — — 74,532 — — 74,532 — — Vesting of RSUs 8,907,950 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 624,127 ) — ( 4,883 ) — — ( 4,883 ) — — Exercise of common stock options 148,628 — 138 — — 138 — — Extinguishment of convertible notes by issuance of common stock 10,591,795 1 79,862 — — 79,863 — — Net income — — — — 60,745 60,745 — — Other comprehensive income, net of taxes — — — 9,592 — 9,592 — — Balance at September 30, 2024 1,084,136,516 $ 108 $ 7,751,335 $ 8,109 $ ( 1,638,071 ) $ 6,121,481 — $ — Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (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 — — 209,082 — — 209,082 — — Vesting of RSUs 26,438,360 3 ( 3 ) — — — — — Stock withheld related to taxes on vested RSUs ( 1,773,092 ) — ( 12,641 ) — — ( 12,641 ) — — Exercise of common stock options 395,781 — 770 — — 770 — — Extinguishment of convertible notes by issuance of common stock 83,213,674 8 614,138 — — 614,146 — — 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 — — — — 166,192 166,192 — — Other comprehensive income, net of taxes — — — 9,318 — 9,318 — — Balance at September 30, 2024 1,084,136,516 $ 108 $ 7,751,335 $ 8,109 $ ( 1,638,071 ) $ 6,121,481 — $ — 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 Income (Loss) Accumulated Deficit Permanent Equity Temporary Equity Shares Amount Shares Amount 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 Share-based compensation expense — — 70,065 — — 70,065 — — Vesting of RSUs 8,921,924 1 ( 1 ) — — — — — Stock withheld related to taxes on vested RSUs ( 469,874 ) — ( 3,614 ) — — ( 3,614 ) — — Exercise of common stock options 495,619 — 430 — — 430 — — Redeemable preferred stock dividends — — ( 10,189 ) — — ( 10,189 ) — — Net loss — — — — ( 266,684 ) ( 266,684 ) — — Other comprehensive income, net of taxes — — — 5,719 — 5,719 — — Balance at September 30, 2023 957,860,430 $ 95 $ 6,904,869 $ 600 $ ( 1,852,176 ) $ 5,053,388 3,234,000 $ 320,374 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (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 — — 224,926 — — 224,926 — — Vesting of RSUs 24,621,235 2 ( 2 ) — — — — — Stock withheld related to taxes on vested RSUs ( 1,396,562 ) — ( 10,660 ) — — ( 10,660 ) — — Exercise of common stock options 747,930 — 1,015 — — 1,015 — — Common stock retired ( 8,293 ) — — — — — — — Redeemable preferred stock dividends — — ( 30,236 ) — — ( 30,236 ) — — Net loss — — — — ( 348,655 ) ( 348,655 ) — — Other comprehensive income, net of taxes — — — 8,896 — 8,896 — — Balance at September 30, 2023 957,860,430 $ 95 $ 6,904,869 $ 600 $ ( 1,852,176 ) $ 5,053,388 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) Nine Months Ended September 30, 2024 2023 Operating activities Net income (loss) $ 166,192 $ ( 348,655 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Share-based compensation expense 179,785 202,109 Depreciation and amortization 149,953 147,967 Goodwill impairment — 247,174 Deferred debt issuance and discount expense 10,821 15,049 Gain on extinguishment of convertible debt ( 62,517 ) — Provision for credit losses 24,835 42,853 Deferred income taxes ( 2,934 ) ( 6,333 ) Fair value changes in loans held for investment ( 149,474 ) — Fair value changes in securitization investments ( 3,311 ) 1,067 Other ( 262 ) ( 2,199 ) Changes in operating assets and liabilities: Changes in loans held for sale, net ( 1,974,214 ) ( 7,315,543 ) Changes in loans previously classified as held for sale, net 994,041 — Servicing assets ( 115,658 ) 6,210 Other assets ( 166,555 ) 15,052 Accounts payable, accruals and other liabilities 29,594 16,051 Net cash used in operating activities $ ( 919,704 ) $ ( 6,979,198 ) Investing activities Purchases of property, equipment and software $ ( 112,002 ) $ ( 77,115 ) Capitalized software development costs ( 7,384 ) ( 7,429 ) Purchases of available-for-sale investments ( 1,659,296 ) ( 634,020 ) Proceeds from sales of available-for-sale investments 164,623 265,634 Proceeds from maturities and paydowns of available-for-sale investments 616,451 87,463 Changes in loans held for investment, net ( 3,029,395 ) ( 97,105 ) Proceeds from sales of loans held for investment 434,483 — Proceeds from securitization investments 69,455 101,292 Proceeds from non-securitization investments 3,579 3,163 Purchases of non-securitization investments ( 20,620 ) ( 45,917 ) Acquisition of businesses, net of cash acquired — ( 72,301 ) Net cash used in investing activities $ ( 3,540,106 ) $ ( 476,335 ) 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) Nine Months Ended September 30, 2024 2023 Financing activities Net change in deposits $ 5,654,019 $ 8,296,657 Net change in debt facilities ( 1,906,888 ) 902,777 Proceeds from other debt issuances 845,250 339,995 Repayment of other debt ( 340,104 ) ( 595,233 ) Payment of debt issuance costs ( 5,895 ) ( 8,078 ) Purchase of capped calls ( 90,649 ) — Unwind of capped calls 10,180 — Taxes paid related to net share settlement of share-based awards ( 12,641 ) ( 10,660 ) Proceeds from stock option exercises 770 1,015 Payment of redeemable preferred stock dividends ( 16,503 ) ( 20,047 ) Redemption of Series 1 preferred stock ( 323,400 ) — Finance lease principal payments ( 396 ) ( 380 ) Net cash provided by financing activities $ 3,813,743 $ 8,906,046 Effect of exchange rates on cash and cash equivalents 248 202 Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents $ ( 645,819 ) $ 1,450,715 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 $ 2,969,759 $ 3,297,017 Reconciliation to amounts on condensed consolidated balance sheets (as of period end) Cash and cash equivalents $ 2,354,965 $ 2,813,876 Restricted cash and restricted cash equivalents 614,794 483,141 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 2,969,759 $ 3,297,017 Supplemental non-cash investing and financing activities Extinguishment of convertible notes by issuance of common stock $ 677,147 $ — Deposits credited but not yet received in cash 133,104 81,116 Deconsolidation of securitization and residual debt — 92,914 Share-based compensation capitalized related to internally-developed software 29,297 22,817 Available-for-sale securities sold but unpaid 21,266 — Securitization investments acquired via loan transfers 35,615 — 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 nine months ended September 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 financial statements, we made the following presentation changes in 2024: • in our unaudited condensed consolidated statements of cash flows beginning in the first quarter of 2024, 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 . There was no impact to net cash provided by (used in) operating activities ; and • in our unaudited condensed consolidated statements of operations and comprehensive income (loss) beginning in the third quarter of 2024, reclassified amounts related to our Loan Platform Business within the financial statement line item noninterest income—other to separate presentation in noninterest income—loan platform fees . See Note 3. Revenue for presentation of disaggregated revenue. 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) In all instances, the respective prior period amounts were recast to conform to the current period presentation. 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 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, 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) 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. 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 condensed consolidated statements of operations and comprehensive income (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 condensed consolidated statements of operations and comprehensive income (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 condensed consolidated statements of operations and comprehensive income (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 in the condensed consolidated statements of operations and comprehensive income (loss). 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. Loans Held For Sale, at Lower of Amortized Cost or Fair Value Personal loans originated on behalf of a third party as part of our Loan Platform Business are held for sale and carried at the lower of amortized cost or fair value. Direct origination fees and costs for these loans are deferred and included as part of the carrying value of the loans and, upon the sale of a loan, are recognized as part of the gain or loss included within noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss). Servicing rights recognized in connection with the sale of these loans 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 platform fees in the condensed consolidated statements of operations and comprehensive income (loss). Subsequent measurement changes for all servicing rights, including servicing fee payments and fair value changes, are included within noninterest income—servicing in the condensed consolidated statements of operations and comprehensive income (loss). Upon sale of these loans, we establish a loan repurchase liability, which is based on historical experience and any current developments which would make it probable that we would buy back loans previously sold to third parties at the historical sales price. The loan repurchase liability is presented within accounts payable, accruals and other liabilities in the consolidated balance sheets, with the corresponding charges recorded within noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss). Interest income on loans held for sale at the lower of amortized cost or fair value is accrued and recognized based on the contractual rate of interest within interest income—loans and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2024 and December 31, 2023, there were no personal loans held for sale, at lower of amortized cost or fair value. 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) 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 plan to adopt this standard for the reporting periods noted above. This ASU implements additional segment disclosure requirements, and is not expected to have an impact on the Company’s financial condition, results of operations or cash flows. 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. Goodwill and Intangible Assets Goodwill as of both September 30, 2024 and December 31, 2023 was $ 1,393,505 . As of September 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 September 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. 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) 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 . Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue from contracts with customers Financial Services Referrals, loan platform business (1) $ 13,283 $ 9,066 $ 35,865 $ 24,261 Referrals, other (2) 1,960 917 5,732 3,571 Interchange (2) 18,771 6,029 45,230 21,961 Brokerage (2) 5,651 6,084 15,645 16,187 Other (2)(3) 565 1,395 2,146 2,230 Total financial services 40,230 23,491 104,618 68,210 Technology Platform Technology services 89,432 81,419 259,551 233,876 Other (3) 1,563 34 3,447 3,033 Total technology platform (4) 90,995 81,453 262,998 236,909 Total revenue from contracts with customers 131,225 104,944 367,616 305,119 Other sources of revenue Loan origination, sales, and securitizations 70,085 75,385 181,957 288,883 Servicing 9,927 8,009 23,560 29,803 Loan platform business, other (1) 42,358 — 42,508 — Other 12,516 3,908 78,781 11,481 Total other sources of revenue 134,886 87,302 326,806 330,167 Total noninterest income $ 266,111 $ 192,246 $ 694,422 $ 635,286 _____________________ (1) Presented within noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss). (2) Presented within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). (3) 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. (4) 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). Related to these technology platform services, we had deferred revenue of $ 7,733 and $ 5,718 as of September 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 $ 1,924 and $ 1,778 during the three months ended September 30, 2024 and 2023, respectively, and $ 4,310 and $ 6,562 during the nine months ended September 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 September 30, 2024 and December 31, 2023, accounts receivable, net associated with revenue from contracts with customers was $ 65,158 and $ 60,466 , respectively, reported within other assets in the condensed consolidated balance sheets. 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) Note 4. Loans As of September 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 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: September 30, 2024 December 31, 2023 Loans held for sale Personal loans (1) $ 17,242,824 $ 15,330,573 Home loans 81,690 66,198 Total loans held for sale, at fair value 17,324,514 15,396,771 Loans held for investment Student loans (2) 7,876,667 6,725,484 Total loans held for investment, at fair value 7,876,667 6,725,484 Secured loans 995,598 446,463 Credit card 271,078 272,628 Commercial and consumer banking: Commercial real estate 137,354 106,326 Commercial and industrial 5,092 6,075 Residential real estate and other consumer 8,140 4,667 Total commercial and consumer banking 150,586 117,068 Total loans held for investment, at amortized cost (3) 1,417,262 836,159 Total loans held for investment 9,293,929 7,561,643 Total loans $ 26,618,443 $ 22,958,414 _____________________ (1) Includes $ 229,072 and $ 502,757 of personal loans in consolidated VIEs as of September 30, 2024 and December 31, 2023, respectively. (2) Includes $ 2,139,439 and $ 2,459,103 of student loans covered by financial guarantee, and $ 85,445 and $ 221,461 of student loans in consolidated VIEs as of September 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. 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) 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 September 30, 2024 Unpaid principal $ 16,199,604 $ 7,437,305 $ 80,115 $ 23,717,024 Accumulated interest 118,169 34,956 42 153,167 Cumulative fair value adjustments 925,051 404,406 1,533 1,330,990 Total fair value of loans (1) $ 17,242,824 $ 7,876,667 $ 81,690 $ 25,201,181 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 September 30, 2024 Unpaid principal balance $ 91,742 $ 9,243 $ — $ 100,985 Accumulated interest 4,470 148 — 4,618 Cumulative fair value adjustments (1) ( 75,303 ) ( 6,566 ) — ( 81,869 ) Fair value of loans 90 days or more delinquent (2) $ 20,909 $ 2,825 $ — $ 23,734 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 $ 81.9 million fair value adjustment as of September 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 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) 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 nine months ended September 30, 2024. There were no loan securitization transfers qualifying for sale accounting treatment during the three months ended September 30, 2024, as well as during the three and nine months ended September 30, 2023. Nine Months Ended September 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 nine months ended September 30, 2024 and September 30, 2023, we had deconsolidation of debt on student loans of $ 98.0 million and $ 45.9 million, respectively. The impact on earnings from deconsolidation was immaterial . We did not have any deconsolidation of debt during the three months ended September 30, 2024 and September 30, 2023. The following table summarizes our current whole loan sales: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Personal loans Fair value of consideration received: Cash $ 374,818 $ 15,098 $ 2,011,381 $ 66,571 Receivable 2,252 — 5,288 — Servicing assets recognized 22,290 767 126,311 1,655 Repurchase liabilities recognized ( 1,275 ) ( 45 ) ( 7,256 ) ( 405 ) Total consideration 398,085 15,820 2,135,724 67,821 Aggregate unpaid principal balance and accrued interest of loans sold 377,257 15,098 2,016,721 65,420 Realized gain $ 20,828 $ 722 $ 119,003 $ 2,401 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) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Student loans Fair value of consideration received: Cash $ — $ — $ 310,331 $ 98,624 Servicing assets recognized — — 8,249 2,792 Repurchase liabilities recognized — — ( 46 ) ( 16 ) Total consideration — — 318,534 101,400 Aggregate unpaid principal balance and accrued interest of loans sold — — 303,578 99,916 Realized gain $ — $ — $ 14,956 $ 1,484 Home loans Fair value of consideration received: Cash $ 513,487 $ 331,364 $ 1,243,195 $ 676,235 Servicing assets recognized 4,430 3,376 10,652 7,133 Repurchase liabilities recognized ( 890 ) ( 468 ) ( 2,029 ) ( 1,315 ) Total consideration 517,027 334,272 1,251,818 682,053 Aggregate unpaid principal balance and accrued interest of loans sold 504,694 333,951 1,230,251 678,561 Realized gain $ 12,333 $ 321 $ 21,567 $ 3,492 The following table summarizes our delinquent whole loan sales during the three and nine months ended September 30, 2024. There were no delinquent whole loan sales during the three and nine months ended September 30, 2023. Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 Personal loans Fair value of consideration received: Cash $ 6,481 $ 17,030 Servicing assets recognized 5,676 13,960 Repurchase liabilities recognized ( 24 ) ( 77 ) Total consideration 12,133 30,913 Aggregate unpaid principal balance and accrued interest of loans sold (1) 85,363 225,224 Realized loss $ ( 73,230 ) $ ( 194,311 ) __________________ (1) During the three and nine months ended September 30, 2024, includes $ 81.0 million and $ 212.9 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 nine months ended September 30, 2024, $ 50.3 million and $ 140.6 million, respectively, of unpaid principal balance was recorded in prior periods as a reduction in fair value 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 nine months ended September 30, 2024, respectively, and otherwise would have been charged off as of September 30, 2024 consistent with our policy. In our other charged off whole loan sales, we typically do not retain servicing or recoveries. 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) The following table summarizes loans originated and subsequently sold as part of our Loan Platform Business, which are loans that we originate on behalf of a third party for which we receive a fee. There were no sales related to our Loan Platform Business during the three and nine months ended September 30, 2023. Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 Personal loans Fair value of consideration received: Cash $ 1,021,906 $ 1,024,408 Servicing assets recognized 7,268 7,295 Repurchase liabilities recognized ( 405 ) ( 407 ) Total consideration 1,028,769 1,031,296 Aggregate carrying amount and accrued interest of loans sold (1) 986,411 988,788 Loan fees, net (2) 35,090 35,213 Servicing assets recognized 7,268 7,295 Loan platform fees recognized (3) $ 42,358 $ 42,508 _____________________ (1) Includes unpaid principal balance of $ 1.0 billion for the three and nine month periods ended September 30, 2024. (2) Represents loan platform fees earned less the repurchase liabilities recognized at the time of sale. (3) Recorded in noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss). In addition to the previously disclosed personal, student and home loan sale activity, the Company also sold a secured loan at par during the three and nine months ended September 30, 2024, which had an unpaid principal balance and accrued interest of $ 312.5 million. 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 September 30, 2024 Loans in delinquency (30+ days past due) $ 92,363 $ 60,052 $ 32,962 $ 185,377 Total loans in delinquency 142,171 123,114 32,962 298,247 Total transferred loans serviced (1) 4,423,494 5,521,966 6,079,295 16,024,755 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. 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) 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Personal loans Servicing fees collected from transferred loans $ 25,384 $ 4,033 $ 51,499 $ 15,080 Charge-offs, net of recoveries, of transferred loans 93,159 40,916 266,332 128,442 Student loans Servicing fees collected from transferred loans 5,862 5,375 17,983 20,967 Charge-offs, net of recoveries, of transferred loans 7,394 10,139 29,370 29,297 Home loans Servicing fees collected from transferred loans 4,411 3,662 12,682 10,481 Total Servicing fees collected from transferred loans $ 35,657 $ 13,070 $ 82,164 $ 46,528 Charge-offs, net of recoveries, of transferred loans 100,553 51,055 295,702 157,739 Loans Measured at Amortized Cost Loan Portfolio Composition and Aging The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status: Delinquent Loans Current 30–59 Days 60–89 Days ≥ 90 Days (1) Total Delinquent Loans Total Loans (2) September 30, 2024 Secured loans $ 991,966 $ — $ — $ — $ — $ 991,966 Credit card 296,247 3,932 3,354 9,183 16,469 312,716 Commercial and consumer banking: Commercial real estate 138,869 134 — — 134 139,003 Commercial and industrial 4,952 — 193 175 368 5,320 Residential real estate and other consumer (3) 7,925 195 — — 195 8,120 Total commercial and consumer banking 151,746 329 193 175 697 152,443 Total loans $ 1,439,959 $ 4,261 $ 3,547 $ 9,358 $ 17,166 $ 1,457,125 December 31, 2023 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 . 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) (2) For credit card, the balance is presented before allowance for credit losses of $ 46,051 and $ 52,385 as of September 30, 2024 and December 31, 2023, respectively, and accrued interest of $ 4,291 and $ 5,288 , respectively. For secured loans, the balance is presented before accrued interest of $ 3,632 and $ 730 as of September 30, 2024 and December 31, 2023, respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $ 2,368 and $ 2,310 as of September 30, 2024 and December 31, 2023, respectively, and accrued interest of $ 511 and $ 415 , respectively. (3) Includes residential real estate loans originated by Golden Pacific for which we did not elect the fair value option. 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 September 30, 2024 December 31, 2023 ≥ 800 $ 34,679 $ 29,269 780 – 799 22,318 19,350 760 – 779 22,772 20,740 740 – 759 24,424 23,361 720 – 739 27,198 28,621 700 – 719 33,491 35,528 680 – 699 35,977 38,289 660 – 679 31,223 35,443 640 – 659 21,520 25,836 620 – 639 14,045 15,569 600 – 619 9,678 10,063 ≤ 599 35,391 37,625 Total credit card $ 312,716 $ 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. 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 the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator: Term Loans by Origination Year September 30, 2024 2024 2023 2022 2021 2020 Prior Total Term Loans Revolving Loans Commercial real estate Pass $ 34,053 $ 23,106 $ 28,816 $ 5,545 $ 4,472 $ 25,374 $ 121,366 $ 177 Watch — 1,221 7,390 1,621 — 695 10,927 — Special mention 1,692 — 1,633 — — 1,320 4,645 — Substandard — — — — — 1,888 1,888 — Total commercial real estate 35,745 24,327 37,839 7,166 4,472 29,277 138,826 177 Commercial and industrial Pass — 46 — — 51 3,673 3,770 1,020 Watch — 39 — — — 13 52 — Special mention 72 — — — — — 72 — Substandard — — — — — 406 406 — Total commercial and industrial 72 85 — — 51 4,092 4,300 1,020 Residential real estate and other consumer Pass — — — — — 3,494 3,494 4,420 Watch — — — — — 38 38 168 Total residential real estate and other consumer — — — — — 3,532 3,532 4,588 Total commercial and consumer banking $ 35,817 $ 24,412 $ 37,839 $ 7,166 $ 4,523 $ 36,901 $ 146,658 $ 5,785 Secured Loans The amortized cost basis (excluding accrued interest) of our secured loans were $ 992.0 million and $ 445.7 million as of September 30, 2024 and December 31, 2023, respectively. Secured loans are term loan arrangements secured by underlying loans owned by the debtor, which were previously originated, sold and in most cases continue to be serviced by the Company. The borrowers of our secured loans are generally financial institutions, and the underlying collateral are personal loans originated by the Company. The duration of these secured loans align with the underlying collateral, the vast majority of which have a term of 5 years or less. Our secured loans were originated in 2023 and 2024 are all current and there have been no charge-offs since origination. 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. 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) 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 September 30, 2024 Balance at June 30, 2024 $ 49,406 $ 2,502 $ 1,509 Provision for credit losses (2) 6,126 ( 113 ) 1,057 Net (charge-offs) recoveries ( 9,481 ) ( 21 ) 85 Balance at September 30, 2024 $ 46,051 $ 2,368 $ 2,651 Three Months Ended September 30, 2023 Balance at June 30, 2023 $ 39,361 $ 1,866 $ 1,937 Provision for credit losses (2) 21,821 10 ( 148 ) Net charge-offs ( 11,127 ) ( 8 ) ( 208 ) Balance at September 30, 2023 $ 50,055 $ 1,868 $ 1,581 Nine Months Ended September 30, 2024 Balance at December 31, 2023 $ 52,385 $ 2,310 $ 1,837 Provision for credit losses (2) 24,727 108 3,850 Net charge-offs ( 31,061 ) ( 50 ) ( 3,036 ) Balance at September 30, 2024 $ 46,051 $ 2,368 $ 2,651 Nine Months Ended September 30, 2023 Balance at December 31, 2022 $ 39,110 $ 1,678 $ 2,785 Provision for credit losses (2) 42,658 195 94 Net charge-offs ( 31,713 ) ( 5 ) ( 1,298 ) Balance at September 30, 2023 $ 50,055 $ 1,868 $ 1,581 _____________________ (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 nine months ended September 30, 2024, recoveries of amounts previously reserved related to credit cards were $ 1,252 and $ 3,471 , and immaterial during the three and nine months ended September 30, 2023. There were immaterial recoveries of amounts previously reserved related to commercial and consumer banking loans during the three and nine months ended September 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 nine months ended September 30, 2024, recoveries of amounts previously reserved related to accounts receivable were $ 45 and $ 1,083 , respectively. During the three and nine months ended September 30, 2023, recoveries of amounts previously reserved related to accounts receivable were $ 45 and $ 1,224 , respectively. Credit card : During the three and nine months ended September 30, 2024, accrued interest receivables written off by reversing interest income were $ 2.2 million and $ 7.1 million, respectively. During the three and nine months ended September 30, 2023, accrued interest receivables written off by reversing interest income were $ 2.3 million and $ 6.6 million, respectively. 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) 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 September 30, 2024 U.S. Treasury securities $ 115,197 $ 124 $ 133 $ ( 138 ) $ 115,316 Corporate bonds 3,281 31 — ( 180 ) 3,132 Agency mortgage-backed securities 1,348,723 2,893 8,059 ( 871 ) 1,358,804 Other (2) 945 3 — ( 134 ) 814 Total investments in AFS debt securities $ 1,468,146 $ 3,051 $ 8,192 $ ( 1,323 ) $ 1,478,066 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 September 30, 2024 and December 31, 2023, we concluded that there was no credit loss attributable to securities in unrealized loss positions, as (i) approximately 100 % and 92 % of the amortized cost basis of our investments as of September 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. 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) The following table presents information about our investments in AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 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 September 30, 2024 U.S. Treasury securities $ — $ — $ 15,331 $ ( 138 ) $ 15,331 $ ( 138 ) Corporate bonds — — 3,132 ( 180 ) 3,132 ( 180 ) Agency mortgage-backed securities 170,654 ( 438 ) 3,505 ( 433 ) 174,159 ( 871 ) Other — — 814 ( 134 ) 814 ( 134 ) Total investments in AFS debt securities $ 170,654 $ ( 438 ) $ 22,782 $ ( 885 ) $ 193,436 $ ( 1,323 ) 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 September 30, 2024 Investments in AFS debt securities—Amortized cost: U.S. Treasury securities $ 108,947 $ 6,250 $ — $ — $ 115,197 Corporate bonds — — 3,281 — 3,281 Agency mortgage-backed securities — 5,017 15,907 1,327,799 1,348,723 Other — — 945 — 945 Total investments in AFS debt securities $ 108,947 $ 11,267 $ 20,133 $ 1,327,799 $ 1,468,146 Weighted average yield for investments in AFS debt securities (1) 5.10 % 3.05 % 3.60 % 5.74 % 5.60 % Investments in AFS debt securities—Fair value (2) : U.S. Treasury securities $ 109,051 $ 6,141 $ — $ — $ 115,192 Corporate bonds — — 3,101 — 3,101 Agency mortgage-backed securities — 5,181 16,336 1,334,394 1,355,911 Other — — 811 — 811 Total investments in AFS debt securities $ 109,051 $ 11,322 $ 20,248 $ 1,334,394 $ 1,475,015 _____________________ (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 $ 3,051 as of September 30, 2024. 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) Gross realized gains and losses on our investments in AFS debt securities were $ 4,205 and $ 643 , respectively, during the three months ended September 30, 2024, and $ 4,207 and $ 682 , respectively, during the nine months ended September 30, 2024. Gross realized gains and losses were $ 3,356 and $ 509 , respectively, during the nine months ended September 30, 2023, and there were no realized gains and losses on our investments in AFS debt securities during the three months ended September 30, 2023. During the three and nine months ended September 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. 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 September 30, 2024 and December 31, 2023, we had four and six consolidated VIEs, respectively, on our condensed consolidated balance sheets. During the nine months ended September 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 September 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, through our ownership of collateralized notes in the form of asset-backed bonds 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 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 September 30, 2024 and December 31, 2023, we had investments in 22 and 22 nonconsolidated VIEs, respectively. During the nine months ended September 30, 2024, we established two nonconsolidated trusts and sold two risk retention interests of nonconsolidated trusts. 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) 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. These risk retention interests represent the carrying value of our holdings in nonconsolidated VIEs, and the maximum exposure to a loss as a result of our involvement as of the dates presented. September 30, 2024 December 31, 2023 Personal loans $ 39,076 $ 27,247 Student loans 37,143 79,501 Securitization investments $ 76,219 $ 106,748 See Note 12. Fair Value Measurements for the key inputs used in the fair value measurements of these asset-backed bonds and residual interests. 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: September 30, 2024 December 31, 2023 Savings deposits $ 20,515,821 $ 12,902,033 Demand deposits (1) 2,402,196 2,663,335 Time deposits (1)(2) 1,433,761 3,003,625 Total interest-bearing deposits 24,351,778 18,568,993 Noninterest-bearing deposits 56,008 51,670 Total deposits $ 24,407,786 $ 18,620,663 _____________________ (1) As of September 30, 2024, includes brokered deposits of $ 1,393,530 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 September 30, 2024 and December 31, 2023, the amount of time deposits that exceeded the insured limit (referred to as “uninsured deposits”) totaled $ 21,590 and $ 21,268 , respectively. As of September 30, 2024, future maturities of our total time deposits were as follows: Remainder of 2024 $ 637,130 2025 794,187 2026 2,170 2027 — 2028 159 Thereafter 115 Total $ 1,433,761 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) Note 9. Debt The following table summarizes the components of our debt: September 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 $ 292,432 5.56 % – 6.85 % January 2025 – October 2026 $ 3,850,000 $ 252,769 $ 1,077,444 Student loan warehouse facilities 1,360,198 5.71 % – 6.71 % April 2025 – January 2027 3,580,000 1,071,956 2,095,046 Risk retention warehouse facilities (5) 19,650 6.46 % October 2027 100,000 7,915 67,038 Revolving credit facility (6) 6.45 % April 2028 645,000 486,000 486,000 Other Debt Convertible senior notes, due 2026 (7) — % October 2026 428,022 1,111,972 Convertible senior notes, due 2029 (8) 1.25 % March 2029 862,500 — Other financing (9) 211,330 235,594 — — Securitizations Personal loan securitizations 226,264 1.61 % – 5.81 % September 2030 – May 2031 23,648 239,340 Student loan securitizations 82,196 3.09 % – 3.73 % August 2048 70,515 182,744 Total, before unamortized debt issuance costs, premiums and discounts $ 3,203,325 $ 5,259,584 Less: unamortized debt issuance costs, premiums and discounts (10) ( 23,120 ) ( 26,168 ) Total debt $ 3,180,205 $ 5,233,416 _________________ (1) As of September 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 September 30, 2024. The interest on our variable-rate debt is typically designed as a reference rate plus a spread. Reference rates as of September 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 nine months ended September 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 September 30, 2024, $ 12.3 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 nine months ended September 30, 2024, total interest expense on the convertible notes was $ 0.5 million and $ 2.2 million, respectively. For the three and nine months ended September 30, 2023, total interest expense on the convertible notes was $ 1.3 million and $ 3.8 million, respectively. For all periods, interest expense was related to amortization of debt discount and issuance costs. For the three and nine months ended September 30, 2024, the effective interest rate was 0.43 % and 0.44 %, respectively. For both the three and nine months ended September 30, 2023, the effective interest rate was 0.42 %. As of September 30, 2024 and December 31, 2023, unamortized debt discount and issuance costs were $ 3.7 million and $ 13.3 million, respectively, and the net carrying amount was $ 424.3 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 nine months ended September 30, 2024, total interest expense on the convertible notes was $ 3.8 million and $ 8.5 million, respectively, and the effective interest rate was 1.74 % and 1.32 %, respectively. As of September 30, 2024, unamortized debt discount and issuance costs were $ 19.4 million, and the net carrying amount was $ 843.1 million. (9) Includes $ 51.6 million of loans and $ 159.7 million of investment securities pledged as collateral to secure $ 185.6 million of available borrowing capacity with the FHLB, of which $ 25.2 million was not available as it was utilized to secure letters of credit. Refer to our letter of credit disclosures in Note 15. 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) Commitments, Guarantees, Concentrations and Contingencies for more details. Also includes unsecured available borrowing capacity of $ 50.0 million with correspondent banks. (10) As of September 30, 2024, $ 1.6 million of unamortized debt issuance costs related to revolving debt are reported in other assets in the condensed consolidated balance sheets. As of December 31, 2023, both revolving and non-revolving unamortized debt issuance costs were presented as a reduction to debt in the condensed consolidated balance sheets. 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. In August 2024, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 convertible notes to repurchase $ 84.0 million aggregate principal amount of the 2026 convertible notes, which were settled through the issuance of 10,591,795 shares of common stock. Following these repurchases, $ 428.0 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 $ 3.3 million and $ 62.5 million recorded within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2024, respectively. 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 September 30, 2024, the 2026 convertible notes are potentially convertible into 19,096,202 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. 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) 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, 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 nine months ended September 30, 2024, we closed five warehouse facilities which had an aggregate maximum available capacity of $ 1.3 billion, and closed two risk retention warehouse facilities. During the nine months ended September 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 September 30, 2024, we have not identified any risks of nonpayment by our wholly-owned subsidiaries. 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) Maturities of Borrowings Future maturities of our outstanding debt with scheduled payments, which included our revolving credit facility and convertible notes, were as follows: September 30, 2024 Remainder of 2024 $ — 2025 — 2026 428,022 2027 — 2028 486,000 Thereafter 862,500 Total $ 1,776,522 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 September 30, 2024, the Company has no Series 1 Redeemable Preferred Stock outstanding. Dividends During the three and nine months ended September 30, 2024, the Series 1 preferred stockholders were entitled to dividends of $ — and $ 16,503 , respectively. During the three and nine months ended September 30, 2023, the Series 1 preferred stockholders were entitled to dividends of $ 10,189 and $ 30,236 , respectively. There were no dividends payable as of September 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 September 30, 2024, the Company had 1,084,136,516 shares of common stock and no shares of non-voting common stock issued and outstanding. 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) The Company reserved the following common stock for future issuance: September 30, 2024 December 31, 2023 Outstanding stock options, restricted stock units and performance stock units 97,705,212 99,016,409 Conversion of convertible notes (1) 19,096,202 49,610,631 Possible future issuance under stock plans 68,455,199 45,384,011 Outstanding common stock warrants (2) — 12,170,990 Total common stock reserved for future issuance 185,256,613 206,182,041 ____________________ (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 September 30, 2024, the 2026 convertible notes are potentially convertible into 19,096,202 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 September 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 nine months ended September 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 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) 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 September 30, 2024 AOCI, beginning balance $ ( 2,160 ) $ 677 $ ( 1,483 ) Other comprehensive income before reclassifications 8,864 563 9,427 Amounts reclassified from AOCI into earnings 165 — 165 Net current-period other comprehensive income (1)(2) 9,029 563 9,592 AOCI, ending balance $ 6,869 $ 1,240 $ 8,109 Three Months Ended September 30, 2023 AOCI, beginning balance $ ( 5,533 ) $ 414 $ ( 5,119 ) Other comprehensive income before reclassifications 5,616 103 5,719 Net current-period other comprehensive income (1)(2) 5,616 103 5,719 AOCI, ending balance $ 83 $ 517 $ 600 Nine Months Ended September 30, 2024 AOCI, beginning balance $ ( 2,201 ) $ 992 $ ( 1,209 ) Other comprehensive income before reclassifications (1) 8,905 248 9,153 Amounts reclassified from AOCI into earnings 165 — 165 Net current-period other comprehensive income (2) 9,070 248 9,318 AOCI, ending balance $ 6,869 $ 1,240 $ 8,109 Nine Months Ended September 30, 2023 AOCI, beginning balance $ ( 8,611 ) $ 315 $ ( 8,296 ) Other comprehensive income before reclassifications (1) 8,522 202 8,724 Amounts reclassified from AOCI into earnings 172 — 172 Net current-period other comprehensive income (2) 8,694 202 8,896 AOCI, ending balance $ 83 $ 517 $ 600 ____________________ (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 nine months ended September 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. 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) Note 11. Derivative Financial Instruments The following table presents the gains (losses) recognized on our derivative instruments: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Interest rate swaps (1) $ ( 258,976 ) $ 77,587 $ 9,685 $ 163,472 Interest rate caps (1) — ( 2,031 ) ( 3,263 ) ( 3,398 ) Home loan pipeline hedges (1) ( 3,776 ) 4,473 ( 1,697 ) 5,457 Derivative contracts to manage future loan sale execution risk ( 262,752 ) 80,029 4,725 165,531 Interest rate swaps (2) ( 4,979 ) 1,167 2,571 3,351 IRLCs (1) 1,353 193 1,073 966 Interest rate caps (1) — 1,987 3,276 3,468 Credit derivatives (4) ( 6,956 ) — ( 6,956 ) — Purchase price earn-out (1)(3) — — — 9 Third party warrants (5) 90 — 90 78 Total $ ( 273,244 ) $ 83,376 $ 4,779 $ 173,403 _____________________ (1) Recorded within noninterest income—loan origination. sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). (2) Represents gains (losses) on 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) Represents gains (losses) on derivative contracts to manage credit risk associated with consumer loans, which are recorded within noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). (5) 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: September 30, 2024 December 31, 2023 Gross Derivative Assets Gross Derivative Liabilities Gross Derivative Assets Gross Derivative Liabilities Interest rate swaps $ 6,316 $ ( 7,686 ) $ 2,208 $ ( 1,347 ) Interest rate caps — — — ( 3,276 ) Home loan pipeline hedges 278 ( 529 ) 1 ( 1,328 ) Credit derivatives — ( 39,627 ) — — Total, gross 6,594 ( 47,842 ) 2,209 ( 5,951 ) Derivative netting ( 6,594 ) 6,594 ( 1,347 ) 1,347 Total, net (1) $ — $ ( 41,248 ) $ 862 $ ( 4,604 ) _____________________ (1) As of September 30, 2024, we had a cash collateral requirement related to these instruments of $ 40,998 . We did not have a cash collateral requirement related to these instruments as of December 31, 2023. 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) The following table presents the notional amount of derivative contracts outstanding: September 30, 2024 December 31, 2023 Derivative contracts to manage future loan sale execution risk: Interest rate swaps $ 15,514,500 $ 12,491,000 Interest rate caps — 405,000 Home loan pipeline hedges 291,000 226,000 Interest rate caps (1) — 405,000 Interest rate swaps (2) 55,500 84,000 IRLCs (3) 354,227 126,388 Credit derivatives 500,000 — Total $ 16,715,227 $ 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. 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) 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: September 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) $ 115,316 $ 1,362,750 $ — $ 1,478,066 $ 527,711 $ 67,476 $ — $ 595,187 Asset-backed bonds (2)(3) — 48,977 — 48,977 — 70,828 — 70,828 Residual investments (2)(3) — — 27,242 27,242 — — 35,920 35,920 Loans at fair value (4) — 78,923 25,122,258 25,201,181 — 66,198 22,056,057 22,122,255 Servicing rights — — 296,127 296,127 — — 180,469 180,469 Third party warrants (5)(6) — — 540 540 — — 630 630 Derivative assets (5)(7)(8) — 6,594 — 6,594 — 2,209 — 2,209 IRLCs (5)(9) — — 3,228 3,228 — — 2,155 2,155 Student loan commitments (5)(9) — — 9,534 9,534 — — 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 $ 115,316 $ 1,497,244 $ 25,458,929 $ 27,071,489 $ 527,711 $ 219,272 $ 22,280,696 $ 23,027,679 Liabilities Debt (11) $ — $ 90,156 $ — $ 90,156 $ — $ 119,641 $ — $ 119,641 Residual interests classified as debt — — 658 658 — — 7,396 7,396 Derivative liabilities (5)(7)(8) — 47,842 — 47,842 — 5,951 — 5,951 Digital assets safeguarding liability (5)(10) — — — — — 9,292 — 9,292 Total liabilities $ — $ 137,998 $ 658 $ 138,656 $ — $ 134,884 $ 7,396 $ 142,280 _____________________ (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 classified as Level 2 have observable pricing sources utilized by management. Personal loans, student loans and home 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 September 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. Credit derivatives classified as Level 2 are valued using tradable credit default swap indices, which were determined to be observable inputs from active markets. 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) (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 September 30, 2024 and December 31, 2023, the unpaid principal related to debt measured at fair value was $ 93,771 and $ 128,619 , respectively. For the three and nine months ended September 30, 2024, losses from changes in fair value were $ 2,899 and $ 5,363 , 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 nine months ended September 30, 2024 and September 30, 2023. 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 June 30, 2024 Impact on Earnings Purchases Sales Issuances Settlements Other Changes September 30, 2024 Assets Personal loans $ 15,797,428 $ 115,244 $ 2,618 $ ( 456,006 ) $ 3,883,597 $ ( 2,102,086 ) $ 2,029 $ 17,242,824 Student loans 7,194,762 145,605 1,952 — 943,584 ( 409,896 ) 660 7,876,667 Home loans — — — — 2,689 — 78 2,767 Loans at fair value (1) 22,992,190 260,849 4,570 ( 456,006 ) 4,829,870 ( 2,511,982 ) 2,767 25,122,258 Servicing rights (2) 291,329 4,362 1,567 ( 50 ) 39,664 ( 40,745 ) — 296,127 Residual investments (3) 32,515 426 — — — ( 5,699 ) — 27,242 IRLCs (4) 1,875 3,228 — — — ( 1,875 ) — 3,228 Student loan commitments (4) 569 9,534 — — — ( 569 ) — 9,534 Third party warrants (5) 630 ( 90 ) — — — — — 540 Liabilities Residual interests classified as debt (3) ( 724 ) ( 9 ) — — — 75 — ( 658 ) Net impact on earnings $ 278,300 Fair Value at Fair Value at January 1, 2024 Impact on Earnings Purchases Sales Issuances Settlements Other Changes September 30, 2024 Assets Personal loans $ 15,330,573 $ ( 296,451 ) $ 19,894 $ ( 2,918,228 ) $ 11,354,593 $ ( 6,247,827 ) $ 270 $ 17,242,824 Student loans 6,725,484 119,896 2,053 ( 294,187 ) 2,431,782 ( 1,114,797 ) 6,436 7,876,667 Home loans — — — — 2,689 — 78 2,767 Loans at fair value (1) 22,056,057 ( 176,555 ) 21,947 ( 3,212,415 ) 13,789,064 ( 7,362,624 ) 6,784 25,122,258 Servicing rights (2) 180,469 11,242 3,774 ( 103 ) 193,963 ( 93,218 ) — 296,127 Residual investments (3) 35,920 1,371 2,553 — — ( 12,602 ) — 27,242 IRLCs (4) 2,155 7,539 — — — ( 6,466 ) — 3,228 Student loan commitments (4) 5,465 10,417 — — — ( 6,348 ) — 9,534 Third party warrants (5) 630 ( 90 ) — — — — — 540 Liabilities Residual interests classified as debt (3) ( 7,396 ) ( 83 ) — — — 6,821 — ( 658 ) Net impact on earnings $ ( 146,159 ) 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) Fair Value at Fair Value at June 30, 2023 Impact on Earnings Purchases Sales Issuances Settlements Other Changes September 30, 2023 Assets Personal loans $ 12,751,163 $ ( 45,072 ) $ 20,724 $ ( 15,006 ) $ 3,885,967 $ ( 1,746,760 ) $ ( 20 ) $ 14,850,996 Student loans 5,383,921 ( 14,615 ) — — 919,330 ( 247,751 ) 659 6,041,544 Home loans 78,583 362 1,593 ( 333,843 ) 355,698 ( 1,056 ) ( 41 ) 101,296 Loans at fair value (1) 18,213,667 ( 59,325 ) 22,317 ( 348,849 ) 5,160,995 ( 1,995,567 ) 598 20,993,836 Servicing rights (2) 145,663 7,419 549 ( 132 ) 4,143 ( 14,988 ) — 142,654 Residual investments (3) 38,389 434 — — — ( 3,367 ) — 35,456 IRLCs (4) 1,352 1,545 — — — ( 1,352 ) — 1,545 Student loan commitments (4) 189 1,751 — — — ( 189 ) — 1,751 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 11,332 ) ( 927 ) — — — 2,065 — ( 10,194 ) Net impact on earnings $ ( 49,103 ) Fair Value at Fair Value at January 1, 2023 Impact on Earnings Purchases Sales Issuances Settlements Other Changes September 30, 2023 Assets Personal loans $ 8,610,434 $ 16,083 $ 61,053 $ ( 65,019 ) $ 10,578,306 $ ( 4,349,646 ) $ ( 215 ) $ 14,850,996 Student loans 4,877,177 17,278 111,923 ( 96,678 ) 1,840,070 ( 706,429 ) ( 1,797 ) 6,041,544 Home loans 69,463 ( 1,122 ) 24,508 ( 678,136 ) 688,608 ( 2,364 ) 339 101,296 Loans at fair value (1) 13,557,074 32,239 197,484 ( 839,833 ) 13,106,984 ( 5,058,439 ) ( 1,673 ) 20,993,836 Servicing rights (2) 149,854 28,428 1,570 ( 1,257 ) 11,580 ( 47,521 ) — 142,654 Residual investments (3) 46,238 1,240 — ( 807 ) — ( 11,215 ) — 35,456 Purchase price earn out (6) 54 9 — — — ( 63 ) — — IRLCs (4) 216 3,168 363 — — ( 2,202 ) — 1,545 Student loan commitments (4) ( 236 ) 2,015 — — — ( 28 ) — 1,751 Third party warrants (5) 630 — — — — — — 630 Liabilities Residual interests classified as debt (3) ( 17,048 ) ( 414 ) ( 1,203 ) — — 8,471 — ( 10,194 ) Net impact on earnings $ 66,685 _____________________ (1) For loans at fair value, purchases reflect unpaid principal balance and relate to previously transferred loans. Purchase activity included elective repurchases of $ 2.0 million and $ 18.5 million during the three and nine months ended September 30, 2024, respectively. There were no elective repurchases during the three months ended September 30, 2023. Purchase activity included securitization clean-up calls of $ 39.9 million during the nine months ended September 30, 2023. There were no securitization clean-up calls during the three months ended September 30, 2024 and 2023. 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 nine months ended September 30, 2023 were associated with our acquisition of Wyndham. For year-to-date periods, amounts 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) represent the 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) 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 $ 27,271 and $ 85,485 during the three and nine months ended September 30, 2024, respectively, and $ 24,846 and $( 22,942 ) during the three and nine months ended September 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: September 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Personal loans Conditional prepayment rate 21.0 % – 35.6 % 26.1 % 17.5 % – 29.5 % 23.2 % Annual default rate 4.4 % – 46.2 % 4.5 % 4.5 % – 50.4 % 4.8 % Discount rate 4.8 % – 7.1 % 4.78 % 5.5 % – 8.1 % 5.52 % Student loans Conditional prepayment rate 8.1 % – 12.1 % 10.7 % 8.4 % – 12.6 % 10.5 % Annual default rate 0.7 % – 6.9 % 0.7 % 0.4 % – 6.4 % 0.6 % Discount rate 3.9 % – 8.0 % 3.99 % 4.1 % – 8.1 % 4.27 % Home loans (1) Conditional prepayment rate 6.9 % – 16.6 % 12.9 % n/m n/m Annual default rate 0.1 % – 0.8 % 0.4 % n/m n/m Discount rate 6.5 % – 7.6 % 6.90 % n/m n/m _____________________ (1) As of December 31, 2023, we had no Level 3 home loans. 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. 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) • 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 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: September 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Personal loans Market servicing costs 0.2 % – 1.4 % 0.2 % 0.1 % – 1.8 % 0.2 % Conditional prepayment rate 16.7 % – 38.2 % 24.2 % 17.9 % – 35.5 % 22.4 % Annual default rate 0.1 % – 20.1 % 4.3 % 3.3 % – 22.5 % 4.7 % Discount rate 8.5 % –  18.2 % 9.4 % 8.8 % –  8.8 % 8.8 % Student loans Market servicing costs 0.1 % – 0.3 % 0.1 % 0.1 % – 0.2 % 0.1 % Conditional prepayment rate 9.5 % – 17.2 % 12.1 % 10.9 % – 15.3 % 12.2 % Annual default rate 0.3 % – 3.7 % 0.8 % 0.3 % – 3.7 % 0.6 % Discount rate 8.5 % – 8.5 % 8.5 % 8.8 % – 8.8 % 8.8 % Home loans Market servicing costs 0.1 % –  0.2 % 0.2 % 0.1 % –  0.2 % 0.2 % Conditional prepayment rate 3.9 % – 21.7 % 6.6 % 5.6 % – 24.0 % 8.1 % Annual default rate 0.1 % – 0.1 % 0.1 % 0.1 % – 0.1 % 0.1 % Discount rate 9.3 % – 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. 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 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. The following table presents the estimated decrease to the fair value of our servicing rights if the key assumptions had each of the below adverse changes: September 30, 2024 December 31, 2023 Market servicing costs 2.5 basis points increase $ ( 6,410 ) $ ( 6,176 ) 5.0 basis points increase ( 12,863 ) ( 12,351 ) Conditional prepayment rate 10% increase $ ( 8,078 ) $ ( 5,189 ) 20% increase ( 15,737 ) ( 10,098 ) Annual default rate 10% increase $ ( 653 ) $ ( 480 ) 20% increase ( 1,302 ) ( 921 ) Discount rate 100 basis points increase $ ( 6,236 ) $ ( 4,674 ) 200 basis points increase ( 12,084 ) ( 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: September 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average Residual investments Conditional prepayment rate 11.1 % – 36.3 % 16.2 % 12.2 % – 28.3 % 14.8 % Annual default rate 0.5 % – 7.0 % 1.7 % 0.5 % – 6.9 % 1.4 % Discount rate 5.3 % – 13.5 % 8.3 % 5.8 % – 15.5 % 8.7 % Residual interests classified as debt Conditional prepayment rate 12.0 % – 12.0 % 12.0 % 12.3 % – 12.6 % 12.4 % Annual default rate 1.0 % – 1.0 % 1.0 % 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 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) prepayment rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Annual default rate  — The annualized rate of borrowers who fail to remain current on their loans for the pool of loans in the securitization. An increase in the annual default rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. • Discount rate  — The weighted average rate at which the expected cash flows are discounted to arrive at the net present value of the residual investments and residual interests classified as debt. An increase in the discount rate, in isolation, would result in a decrease in a fair value measurement. The weighted average assumption was weighted based on relative fair value. Loan Commitments We classify student loan commitments as Level 3 because the assets do not trade in an active market with readily observable prices and, as such, our valuations utilize significant unobservable inputs. Additionally, we classify IRLCs as Level 3, as our IRLCs are inherently uncertain and unobservable given that a home loan origination is contingent on a plethora of factors. The following key unobservable inputs were used in the fair value measurements of our IRLCs and student loan commitments: September 30, 2024 December 31, 2023 Range Weighted Average Range Weighted Average IRLCs Loan funding probability (1) 50.8 % – 77.6 % 72.4 % 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 $ 147,515 as of September 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. 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) 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 September 30, 2024 Assets Cash and cash equivalents (1) $ 2,354,965 $ 2,354,965 $ — $ — $ 2,354,965 Restricted cash and restricted cash equivalents (1) 614,794 614,794 — — 614,794 Loans at amortized cost (2) 1,417,262 — — 1,455,232 1,455,232 Other investments (3) 101,758 — 101,758 — 101,758 Total assets $ 4,488,779 $ 2,969,759 $ 101,758 $ 1,455,232 $ 4,526,749 Liabilities Deposits (4) $ 24,407,786 $ — $ 24,411,639 $ — $ 24,411,639 Debt (5) 3,090,049 1,308,674 1,822,647 — 3,131,321 Total liabilities $ 27,497,835 $ 1,308,674 $ 26,234,286 $ — $ 27,542,960 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 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 $ 30,303 and $ 22,920 as of September 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 $ 27,500 and $ 19,739 investment, as of 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) September 30, 2024 and December 31, 2023, respectively, valued under the measurement alternative method during 2022 that was a former equity method investment. 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Technology and product development $ 21,157 $ 23,725 $ 62,181 $ 66,344 Sales and marketing 5,746 6,330 16,080 20,270 Cost of operations 3,681 2,987 9,980 7,382 General and administrative 33,062 28,963 91,544 108,113 Total $ 63,646 $ 62,005 $ 179,785 $ 202,109 Total compensation and benefits, inclusive of share-based compensation expense, was $ 240,169 and $ 670,188 for the three and nine months ended September 30, 2024, respectively, and $ 213,820 and $ 656,483 for the three and nine months ended September 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 ( 395,781 ) 1.94 Expired ( 14,989 ) 6.09 Outstanding as of September 30, 2024 17,485,962 $ 7.83 3.1 Exercisable as of September 30, 2024 17,485,962 $ 7.84 3.1 As of September 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. 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) 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 39,197,948 7.40 Vested (1) ( 26,438,360 ) 8.16 Forfeited ( 11,502,551 ) 8.27 Outstanding as of September 30, 2024 66,136,533 $ 7.48 ________________________ (1) The total fair value, based on grant date fair value, of RSUs that vested during the nine months ended September 30, 2024 was $ 215.8 million. As of September 30, 2024, there was $ 456.8 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 ( 2,883,681 ) 7.51 Outstanding as of September 30, 2024 14,082,717 $ 10.80 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 Nine Months Ended September 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. 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) As of September 30, 2024, there was $ 8.0 million of unrecognized compensation cost related to unvested PSUs, which will be recognized over a weighted average period of approximately 2.2 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 nine months ended September 30, 2024, we recorded income tax expense of $ 3,110 and $ 7,229 , respectively. For the three and nine months ended September 30, 2023, we recorded income tax benefit of $ 244 and $ 3,661 , 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 in Latin America with net deferred tax liabilities. There were no material changes to our unrecognized tax benefits d uring the nine months ended September 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). As a result of our recent performance, there is a reasonable possibility that a portion of our valuation allowance is no longer needed in future periods. A release of the valuation allowance will result in a material tax benefit recognized in the quarter of the release. During the nine months ended September 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. 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 $ 6,817 during the nine months ended September 30, 2024. Occupancy Occupancy-related costs, which primarily relate to the operations of our leased office spaces, were $ 8,407 and $ 24,096 during the three and nine months ended September 30, 2024, respectively, and $ 8,878 and $ 23,858 during the three and nine months ended September 30, 2023, respectively. Occupancy-related 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). 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) 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 September 30, 2024 and December 31, 2023, we accrued liabilities within accounts payable, accruals and other liabilities in the condensed consolidated balance sheets of $ 7.4 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 September 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 $ 9.3 billion and $ 6.7 billion, respectively. As of September 30, 2024 and December 31, 2023, we had a total of $ 5.6 million and $ 6.4 million, respectively, 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 letters of credit was collateralized by $ 1.3 million of our cash as of September 30, 2024 and December 31, 2023, which is included within restricted cash and restricted cash equivalents in the condensed consolidated balance sheets. 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) As of September 30, 2024 and December 31, 2023, we had a total of $ 25.2 million and $ 27.2 million, respectively, 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 September 30, 2024, we funded $ 4.5 million of loans, which are presented within loans held for investment, at amortized cost in the condensed consolidated balance sheets, and had $ 20.5 million of the total $ 25.0 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 September 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. 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) The calculations of basic and diluted earnings (loss) per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 60,745 $ ( 266,684 ) $ 166,192 $ ( 348,655 ) Less: Redeemable preferred stock dividends — ( 10,189 ) ( 16,503 ) ( 30,236 ) Less: Redeemable preferred stock redemptions, net (1) — — ( 3,026 ) — Net income (loss) attributable to common stockholders – basic $ 60,745 $ ( 276,873 ) $ 146,663 $ ( 378,891 ) Plus: Dilutive effect of convertible notes, net (2) ( 2,686 ) — ( 57,735 ) — Net income (loss) attributable to common stockholders – diluted (2) $ 58,059 $ ( 276,873 ) $ 88,928 $ ( 378,891 ) Denominator: Weighted average common stock outstanding – basic 1,071,159,746 951,183,107 1,037,579,399 939,070,185 Effect of dilutive securities: Convertible notes 21,416,739 — 30,667,452 — Unvested RSUs 10,446,211 — 8,496,317 — Common stock options 1,427,720 — 1,659,253 — Weighted average common stock outstanding – diluted 1,104,450,416 951,183,107 1,078,402,421 939,070,185 Earnings (loss) per share – basic $ 0.06 $ ( 0.29 ) $ 0.14 $ ( 0.40 ) Earnings (loss) per share – diluted $ 0.05 $ ( 0.29 ) $ 0.08 $ ( 0.40 ) ________________________ (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 three and nine months ended September 30, 2024, diluted earnings per share of $ 0.05 and $ 0.08 , respectively, and diluted net income attributable to common stockholders of $ 58,059 and $ 88,928 , respectively, exclude gain on extinguishment of debt, net of tax, as well as interest expense incurred, 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Unvested RSUs (1) 16,377,256 72,644,790 19,567,572 72,644,790 Common stock options (1) 9,492,928 17,951,656 8,877,548 17,951,656 Convertible notes (2) — 53,538,000 — 53,538,000 Unvested PSUs 14,082,717 16,289,057 14,082,717 16,289,057 Contingent common stock (3) 45,859 61,145 45,859 61,145 Common stock warrants (4) — 12,170,990 — 12,170,990 ________________________ (1) Amounts reflect weighted average instruments outstanding for the 2024 periods. (2) As of September 30, 2024, the 2026 convertible notes are potentially convertible into 19,096,202 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. (3) 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. (4) All remaining unexercised common stock warrants expired in May 2024. As of September 30, 2024, the Company has no outstanding common stock warrants. 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) 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. We also provide servicing in support of our Loan Platform Business on loans originated on behalf of third-party partners and servicing rights assumed from third parties. 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. 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) 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-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 includes: (i) our SoFi Money product, primarily inclusive of checking and savings accounts which provide members a digital banking experience, as well as cash management accounts, (ii) SoFi Invest product which provides investment features and financial planning services, (iii) SoFi Credit Card products, (iv) our Loan Platform Business, through which we provide lending related services and includes activity through which third-party partners leverage our end-to-end origination and servicing platform to acquire loans within their credit specifications on a fee per loan basis, referred loans originated by a third-party partner to which we provide pre-qualified borrower referrals, and certain loans associated with our Lantern financial services marketplace program, developed to help applicants that do not qualify for SoFi products and small business owners to seek alternative products from other providers, (v) SoFi Relay personal finance management product and (vi) other financial services, such as a product comparison experience through Lantern and content for other financial services institutions, employers and 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 brokerage fees related to pay for order flow and share lending arrangements in SoFi Invest. We earn revenue on loans originated on behalf of third-party partners through our Loan Platform Business, for which we receive a specified fee upon sale which includes a fixed price per loan sold. We also earn referral fees in connection with referral activity we facilitate through our platform, inclusive of referral fees generated through our Loan Platform Business for providing pre-qualified borrower referrals to a third-party partner who separately contracts with a loan originator. Certain products, such as our complementary product SoFi Relay, do not provide direct sources of revenue. 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. 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) Segment Results The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment: Three Months Ended September 30, 2024 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 316,268 $ 629 $ 154,143 $ 471,040 $ ( 40,030 ) $ 431,010 Noninterest income (2) 79,977 101,910 84,165 266,052 59 266,111 Total net revenue (loss) $ 396,245 $ 102,539 $ 238,308 $ 737,092 $ ( 39,971 ) $ 697,121 Servicing rights – change in valuation inputs or assumptions (3) ( 4,362 ) — — ( 4,362 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 9 — — 9 Directly attributable expenses ( 152,964 ) ( 69,584 ) ( 138,550 ) ( 361,098 ) Contribution profit $ 238,928 $ 32,955 $ 99,758 $ 371,641 Three Months Ended September 30, 2023 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 265,215 $ 573 $ 93,101 $ 358,889 $ ( 13,926 ) $ 344,963 Noninterest income (expense) (2) 83,758 89,350 25,146 198,254 ( 6,008 ) 192,246 Total net revenue (loss) $ 348,973 $ 89,923 $ 118,247 $ 557,143 $ ( 19,934 ) $ 537,209 Servicing rights – change in valuation inputs or assumptions (3) ( 7,420 ) — — ( 7,420 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 928 — — 928 Directly attributable expenses ( 138,525 ) ( 57,732 ) ( 114,987 ) ( 311,244 ) Contribution profit $ 203,956 $ 32,191 $ 3,260 $ 239,407 Nine Months Ended September 30, 2024 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 862,016 $ 1,685 $ 413,085 $ 1,276,786 $ ( 30,474 ) $ 1,246,312 Noninterest income (2) 205,410 290,658 151,906 647,974 46,448 694,422 Total net revenue $ 1,067,426 $ 292,343 $ 564,991 $ 1,924,760 $ 15,974 $ 1,940,734 Servicing rights – change in valuation inputs or assumptions (3) ( 11,242 ) — — ( 11,242 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 83 — — 83 Directly attributable expenses ( 411,682 ) ( 197,495 ) ( 372,839 ) ( 982,016 ) Contribution profit $ 644,585 $ 94,848 $ 192,152 $ 931,585 54 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) Nine Months Ended September 30, 2023 Lending Technology Platform Financial Services Reportable Segments Total (1) Corporate/Other (1) Total Net revenue Net interest income (expense) $ 698,147 $ 573 $ 225,775 $ 924,495 $ ( 52,396 ) $ 872,099 Noninterest income (expense) (2) 319,348 254,860 71,625 645,833 ( 10,547 ) 635,286 Total net revenue (loss) $ 1,017,495 $ 255,433 $ 297,400 $ 1,570,328 $ ( 62,943 ) $ 1,507,385 Servicing rights – change in valuation inputs or assumptions (3) ( 28,105 ) — — ( 28,105 ) Residual interests classified as debt – change in valuation inputs or assumptions (4) 415 — — 415 Directly attributable expenses ( 392,642 ) ( 191,231 ) ( 322,722 ) ( 906,595 ) Contribution profit (loss) $ 597,163 $ 64,202 $ ( 25,322 ) $ 636,043 ____________________ (1) Within the Technology Platform segment, intercompany fees were $ 9,931 and $ 25,227 for the three and nine months ended September 30, 2024, respectively, and $ 6,950 and $ 15,645 for the three and nine months ended September 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. (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. (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. 55 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 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Reportable segments total contribution profit $ 371,641 $ 239,407 $ 931,585 $ 636,043 Corporate/Other total net income (loss) ( 39,971 ) ( 19,934 ) 15,974 ( 62,943 ) Intercompany expenses 9,931 6,950 25,227 15,645 Servicing rights – change in valuation inputs or assumptions 4,362 7,420 11,242 28,105 Residual interests classified as debt – change in valuation inputs or assumptions ( 9 ) ( 928 ) ( 83 ) ( 415 ) Expenses not allocated to segments: Share-based compensation expense ( 63,646 ) ( 62,005 ) ( 179,785 ) ( 202,109 ) Employee-related costs (1) ( 77,176 ) ( 63,728 ) ( 207,346 ) ( 181,147 ) Depreciation and amortization expense ( 51,791 ) ( 52,516 ) ( 149,953 ) ( 147,967 ) Goodwill impairment expense — ( 247,174 ) — ( 247,174 ) Other corporate and unallocated expenses (2) ( 89,486 ) ( 74,420 ) ( 273,440 ) ( 190,354 ) Income (loss) before income taxes $ 63,855 $ ( 266,928 ) $ 173,421 $ ( 352,316 ) __________________ (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. 56 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 58 Business Highlights 63 Non-GAAP Financial Measures 64 Key Business Metrics 70 Key Factors Affecting Operating Results 73 Consolidated Results of Operations 75 Net Interest Income 76 Noninterest Income and Net Revenue 78 Noninterest Expense 80 Income Taxes 83 Summary Results by Segment 84 Lending Segment 84 Technology Platform Segment 90 Financial Services Segment 91 Corporate/Other Non-Reportable Segment 93 Liquidity and Capital Resources 94 Critical Accounting Policies and Estimates 100 Recent Accounting Standards Issued, But Not Yet Adopted 100 57 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 products and capabilities, such as SoFi At Work, that are designed to appeal to enterprises. Lending related services offered through our Loan Platform Business help a broader range of borrowers to find lending solutions, through our relationships with members as well as third-party enterprise partners. 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 and service offerings as of September 30, 2024 were as follows: _________________ (1) Loan Platform Business, formerly referred to as lending as a service, includes activity related to (i) certain loans which we originate on behalf of third-party partners, (ii) referred loans which are originated by a third-party partner to which we provide pre-qualified borrower referrals, (iii) certain loans associated with our Lantern financial services marketplace platform, and (iv) servicing rights assumed from third parties. Refer to “ Financial Services Segment ” and “ Lending Segment ” for more information. 58 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 third-party partners in our Loan Platform Business, 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. 59 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 equity loans and HELOCs generally have a maximum loan size of $350,000. 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 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 also originate and sell loans in support of our Loan Platform Business, through which we provide lending related services to third-party partners. We maintain the same lending relationship with borrowers across all loans that we originate, inclusive of those originated on behalf of a third-party partner and as such, reflect these products within our Lending segment total products. This enables borrowers to gain access to all the benefits of becoming a SoFi member, and enhances our opportunities to sell additional products from across our platform to these members. See “ Financial Services Segment ” for more information. We directly service all of the personal loans that we originate through our lending business, as well as provide servicing in support of our Loan Platform Business on loans originated on behalf of third-party partners and servicing rights assumed from third parties. 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 60 SoFi Technologies, Inc. TABLE OF CONTENTS 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. We expect to benefit from the continued mix towards deposit funding through operating SoFi Bank. 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. 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 We offer a suite of financial services solutions, the most significant of which are discussed below. Our financial services products (as defined under “ Key Business Metrics ”) by nature provide more daily interactions with our members and are differentiated from our lending products, which inherently provide less consistent touchpoints with our members. We also offer financial services solutions which are designed to appeal to enterprises, including our At Work product and lending related services offered through our Loan Platform Business. Certain products, such as our complementary SoFi Relay product, do not provide direct sources of revenue. We believe that our suite of financial services offerings provide many ways for our members to actively engage in getting their money right as well as attractive enterprise solutions. This enables us to deliver positive experiences through various channels, building trust and durable relationships which can ultimately demonstrate the effectiveness of our Financial Services Productivity Loop virtuous cycle. 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, 61 SoFi Technologies, Inc. TABLE OF CONTENTS 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. Loan Platform Business : A platform through which we provide lending related services to a broader market. This includes (i) activity through which third-party partners leverage our end-to-end origination and servicing platform to acquire loans within their credit specifications on a fee per loan basis, (ii) referred loans originated by a third-party partner to which we provide pre-qualified borrower referrals, and (iii) activity related to certain loans associated with our Lantern financial services marketplace program. In addition, we offer loan servicing support through our lending business. See “ Lending Segment ” for more information. 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. We offer three different credit card products, all of which feature no annual fee, no foreign transaction fees and cash back rewards on trips booked through SoFi Travel. The SoFi Essential credit card offers a reliable credit line for those focused on building or improving their credit scores. Our SoFi Unlimited and Everyday Cash Rewards cash back credit cards also feature flexible options to redeem cash back rewards 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 and Savings. • 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. • Lantern : A financial services marketplace platform developed to help applicants that do not qualify for SoFi products to seek alternative products from other providers, as well as to provide a product comparison experience. 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. We earn revenues in connection with our Financial Services segment primarily in the ways listed below. See Note 17. Business Segment Information and Note 3. Revenue to the Notes to Condensed Consolidated Financial Statements for additional information on the FTP framework and Financial Services revenue from contracts with customers. Certain products, such as our complementary product SoFi Relay, do not provide direct sources of revenue. Revenue is driven primarily by variability in product utilization by members, as well as volume of transactions related to arrangements that we enter into with enterprise partners as outlined below. • 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. • Loan Platform Business, other fees : Through our Loan Platform Business, we originate loans on behalf of third-party partners, for which we receive a specified fee upon sale. The fee includes a fixed price per loan sold through the platform. These fees accounted for 28% of our total Financial Services noninterest income for the nine months ended September 30, 2024. • Referral fees : Through strategic partnerships, we earn a specified referral fee in connection with referral activity we facilitate through our platform, inclusive of referral fees generated through our Loan Platform Business for providing pre-qualified borrower referrals (referred loans) to a third-party partner who separately contracts with a loan originator. Referral fees are paid to us by third-party partners that offer services to end users who do not use one of our product 62 SoFi Technologies, Inc. TABLE OF CONTENTS offerings, but who were referred to the partners through our platform. Our referral fee is calculated as either a fixed price per successful referral, a percentage of the funded loan, or a percentage of the transaction volume between the enterprise partners and referred consumers. Total referral fees, inclusive of referral fees generated through our Loan Platform Business, accounted for 27% of our total Financial Services noninterest income for the nine months ended September 30, 2024. • 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. Interchange fees accounted for 30% of our total Financial Services noninterest income for the nine months ended September 30, 2024. • 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. Brokerage fees accounted for 10% of our total Financial Services noninterest income for the nine months ended September 30, 2024. Business Highlights We achieved a number of key financial achievements in the three and nine months ended September 30, 2024, including total net revenue of $697.1 million and $1.9 billion, respectively, representing increases of 30% and 29% over total net revenue in the same periods of 2023, respectively, as well as our fourth consecutive quarter of net income, achieving $60.7 million in the third quarter of 2024. This compares to a loss of $266.7 million in the same prior year period. Diluted earnings per share for the three and nine months ended September 30, 2024 was $0.05 and $0.08, respectively, compared to a loss per share of $0.29 and $0.40, respectively, in the same periods of 2023. Diluted EPS for the nine month 2024 period did not include a benefit from the gain on convertible debt exchanges in the first and third quarters 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 nearly 9.4 million as of September 30, 2024, a 35% increase from the prior year period, while total products reached nearly 13.7 million as of September 30, 2024, a 31% year over year increase. Lending segment contribution profit of $238.9 million and $644.6 million for the three and nine months ended September 30, 2024, respectively, at a segment contribution margin of 60% and 60%, respectively, increased 17% and 8% over the respective 2023 periods, which had a segment contribution margin of 58% and 59%, respectively. Lending segment performance was driven by net interest income primarily attributable to higher loan balances for both the three and nine months ending September 30, 2024, as well as lower cost of interest-bearing liabilities for the three month period and higher yields on interest earning assets for the nine month period. We recorded an average net interest margin of 5.57% and 5.76% in the three and nine months ended September 30, 2024, respectively, a decrease of 42 and 8 bps, respectively, compared to 5.99% and 5.84% in the respective 2023 periods. The decrease in net interest margin for the three month period was driven by a decrease in average yields on interest earning assets of 44 bps and increase in average interest-bearing liabilities of 39%, partially offset by a decrease in the average cost of interest-bearing liabilities of 17 bps and an increase in average interest-earning assets of 35%. The decrease in net interest margin for the nine month period was driven by an increase in average interest-bearing liabilities of 51% and cost of interest-bearing liabilities of 5 bps, partially offset by an increase in average interest-earning assets of 45% and average yields of 12 bps. Origination volume increased 23% and 22% for the three and nine months ended September 30, 2024, primarily driven by continued strong demand for personal loans and home loans and stable growth in the student loan business, despite operating in unpredictable macroeconomic headwinds. Student loans saw increasing demand in the later part of 2023 following the of the resumption of principal and interest payments on federally-held student loans and we have continued to experience increasing demand with interest rate reductions in 2024. We expect that we may continue to see modest growth in student loan refinancing as interest rates decline. 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 the remainder of 2024. Technology Platform segment contribution profit of $33.0 million and $94.8 million for the three and nine months ended September 30, 2024, respectively, increased 2% and 48% over the respective 2023 periods, and total net revenue of $102.5 million and $292.3 million for the three and nine months ended September 30, 2024, respectively, increased 14% and 14% over the respective 2023 periods. Growth was driven by strong contribution from new clients, as well as growth in Latin 63 SoFi Technologies, Inc. TABLE OF CONTENTS America, consumer brands in the United States and clients with innovative use cases like earned wage access and money movement. Technology Platform total enabled client accounts increased 17% year-over-year, to 160.2 million up from 136.7 million in the prior year period. Our pipeline of potential clients spans banks, brands, and fintech companies across consumer and B2B segments, which we believe offer larger and more durable revenue. We believe our pipeline of potential new clients is strong, and the investments we have made in this segment have expanded the market opportunity. We continue 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 for the remainder of 2024, as we believe we are well positioned to capture opportunities from traditional financial institutions and nonfinancial categories. Within Financial Services, contribution profit of $99.8 million and $192.2 million for the three and nine months ended September 30, 2024, respectively, significantly improved compared to a contribution profit of $3.3 million and loss of $25.3 million in the respective 2023 periods, and total net revenue of $238.3 million and $565.0 million for the three and nine months ended September 30, 2024 increased 102% and 90% over the respective 2023 periods. We achieved continued strong growth in member deposits, ending the period with $24.4 billion of total deposits as of September 30, 2024, allowing us to maintain diversified sources of funding and driving an increase in net interest income earned on our deposits. Member deposit funds grew nearly $2.4 billion during the quarter, which included $350 million of member funds swept off balance sheet as part of our Insured Deposit Program. Noninterest income grew 235% from the prior year period to $84.2 million in the quarter. This increase was driven by our Loan Platform Business, where we refer pre-qualified borrowers to origination partners and originate loans on behalf of third parties. In the quarter, the Loan Platform Business generated $55.6 million in loan platform fees, driven by $1.0 billion of personal loans originated on behalf of third parties, as well as referrals. In addition to our Loan Platform business, we continued to see growth in interchange fees driven by increased spend across Money and Credit Card. By continuously innovating with new and relevant offerings, features and rewards for members, we grew total Financial Services products by 33% year over year to 11.8 million at quarter-end. We continue to achieve scale in our marketing spend and improvement in operating leverage in the segment. We expect to continue to scale our Loan Platform Business services and increase our fee-based revenue 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 a 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 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 16.3% as of September 30, 2024. Non-GAAP Financial Measures This Quarterly Report on Form 10-Q presents information about certain non-GAAP financial measures provided as supplements to the results provided in accordance with accounting principles generally accepted in the United States (GAAP). Our management and Board of Directors use these non-GAAP measures, to evaluate our operating performance, formulate business plans, help better assess our overall liquidity position, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that 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. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures. Other companies may not use these non-GAAP measures or may use similar measures that are defined in a different manner. Therefore, our non-GAAP measures may not be directly comparable to similarly titled measures of other companies. 64 SoFi Technologies, Inc. TABLE OF CONTENTS 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. Management believes this measure is useful because it enables management and investors to assess our underlying operating performance and cash available to fund our operations. In addition, management uses this measure to better decide on the proper expenses to authorize for each of our operating segments, to ultimately help achieve target contribution profit margins. 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 September 30, Nine Months Ended September 30, ($ in thousands) 2024 2023 2024 2023 Total net revenue (GAAP) $ 697,121 $ 537,209 $ 1,940,734 $ 1,507,385 Servicing rights – change in valuation inputs or assumptions (1) (4,362) (7,420) (11,242) (28,105) Residual interests classified as debt – change in valuation inputs or assumptions (2) 9 928 83 415 Gain on extinguishment of debt (3) (3,323) — (62,517) — Adjusted net revenue (non-GAAP) $ 689,445 $ 530,717 $ 1,867,058 $ 1,479,695 ___________________ (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. (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. (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. 65 SoFi Technologies, Inc. TABLE OF CONTENTS 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) September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Total net revenue (GAAP) $ 697,121 $ 598,618 $ 644,995 $ 615,404 $ 537,209 Servicing rights – change in valuation inputs or assumptions (1) (4,362) (1,654) (5,226) (6,595) (7,420) Residual interests classified as debt – change in valuation inputs or assumptions (2) 9 1 73 10 928 Gain on extinguishment of debt (3) (3,323) — (59,194) (14,574) — Adjusted net revenue (non-GAAP) $ 689,445 $ 596,965 $ 580,648 $ 594,245 $ 530,717 ___________________ (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 September 30, Nine Months Ended September 30, ($ in thousands) 2024 2023 2024 2023 Total net revenue – Lending (GAAP) $ 396,245 $ 348,973 $ 1,067,426 $ 1,017,495 Servicing rights – change in valuation inputs or assumptions (1) (4,362) (7,420) (11,242) (28,105) Residual interests classified as debt – change in valuation inputs or assumptions (2) 9 928 83 415 Adjusted net revenue – Lending (non-GAAP) $ 391,892 $ 342,481 $ 1,056,267 $ 989,805 ___________________ (1) See footnote (1) to the table above. (2) See footnote (2) to the table above. Adjusted Contribution Margin and Incremental Adjusted Contribution Margin — Lending Adjusted contribution margin and incremental adjusted contribution margin are non-GAAP measures and relate only to our Lending segment. Adjusted contribution margin is defined as segment contribution profit (loss) for the Lending segment, divided by adjusted net revenue for the Lending segment, a non-GAAP measure. Incremental adjusted contribution margin is defined as the change in segment contribution profit (loss) for our Lending segment, divided by change in adjusted net revenue for the Lending segment. See ‘ Adjusted Net Revenue’ above for a reconciliation of Lending segment adjusted net revenue. Management believes adjusted contribution margin metrics are useful because they enable management and investors to assess the underlying operating performance of our Lending segment, by removing the impact of changes in volume over periods to present a comparable view of segment contribution profit (loss), which is a measure of the direct profitability of each of our reportable segments, as a percentage of segment adjusted net revenue for the Lending segment during each period. 66 SoFi Technologies, Inc. TABLE OF CONTENTS The following table presents a reconciliation of adjusted contribution margin and incremental adjusted contribution margin for our reportable Lending segment: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change 2024 2023 $ Change Lending Contribution profit – Lending (GAAP) $ 238,928 $ 203,956 $ 34,972 $ 644,585 $ 597,163 $ 47,422 Net revenue – Lending (GAAP) 396,245 348,973 47,272 1,067,426 1,017,495 49,931 Contribution margin – Lending (GAAP) (1) 60 % 58 % 60 % 59 % Incremental contribution margin – Lending (GAAP) (1) 74 % 95 % Adjusted net revenue – Lending (non-GAAP) (2) $ 391,892 $ 342,481 $ 49,411 $ 1,056,267 $ 989,805 $ 66,462 Adjusted contribution margin – Lending (non-GAAP) 61 % 60 % 61 % 60 % Incremental adjusted contribution margin – Lending (non-GAAP) 71 % 71 % ___________________ (1) Contribution margin is defined for each of our reportable segments as contribution profit (loss), divided by net revenue. Incremental contribution margin for each of our reportable segments is defined as the change in segment contribution profit (loss), divided by change in net revenue. (2) Refer to ‘ Adjusted Net Revenue ’ above for reconciliation of this non-GAAP measure. Adjusted EBITDA, Adjusted EBITDA Margin and Incremental Adjusted EBITDA Margin 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. Adjusted EBITDA margin is computed as adjusted EBITDA divided by adjusted net revenue. Incremental adjusted EBITDA margin is defined as the change in adjusted EBITDA, divided by change in adjusted net revenue. See ‘ Adjusted Net Revenue’ above for a reconciliation of this non-GAAP measure. Management believes adjusted EBITDA, adjusted EBITDA margin and incremental adjusted EBITDA margin are useful measures for period-over-period comparisons of our business. These measures enable management and investors to assess our core operating performance or results of operations by removing the effects of certain non-cash items and charges, as well as the impact of changes in volume over periods as applicable. In addition, management uses these measures to help evaluate cash flows generated from operations and the extent of additional capital, if any, required to invest in strategic initiatives. 67 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, and presents the computations of adjusted EBITDA margin and incremental adjusted EBITDA margin: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change 2024 2023 $ Change Net income (loss) (GAAP) $ 60,745 $ (266,684) $ 327,429 $ 166,192 $ (348,655) $ 514,847 Non-GAAP adjustments: Interest expense – corporate borrowings (1) 12,871 9,784 3,087 36,307 26,951 9,356 Income tax expense (benefit) (2) 3,110 (244) 3,354 7,229 (3,661) 10,890 Depreciation and amortization (3) 51,791 52,516 (725) 149,953 147,967 1,986 Share-based expense 63,646 62,005 1,641 179,785 202,109 (22,324) Restructuring charges (4) 1,275 — 1,275 1,275 4,953 (3,678) Impairment expense (5) — 247,174 (247,174) — 248,417 (248,417) Foreign currency impact of highly inflationary subsidiaries (6) 475 — 475 843 — 843 Transaction-related expense (7) — (34) 34 615 142 473 Servicing rights – change in valuation inputs or assumptions (8) (4,362) (7,420) 3,058 (11,242) (28,105) 16,863 Residual interests classified as debt – change in valuation inputs or assumptions (9) 9 928 (919) 83 415 (332) Gain on extinguishment of debt (10) (3,323) — (3,323) (62,517) — (62,517) Total adjustments 125,492 364,709 (239,217) 302,331 599,188 (296,857) Adjusted EBITDA (non-GAAP) $ 186,237 $ 98,025 $ 88,212 $ 468,523 $ 250,533 $ 217,990 Total net revenue (GAAP) $ 697,121 $ 537,209 $ 159,912 $ 1,940,734 $ 1,507,385 $ 433,349 Net income (loss) margin (GAAP) 9 % (23) % 9 % (50) % Incremental net income (loss) margin (GAAP) 205 % 119 % Adjusted net revenue (non-GAAP) (11) $ 689,445 $ 530,717 $ 158,728 $ 1,867,058 $ 1,479,695 $ 387,363 Adjusted EBITDA margin (non-GAAP) 27 % 18 % 25 % 17 % Incremental adjusted EBITDA margin (non-GAAP) 56 % 56 % ___________________ (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 68 SoFi Technologies, Inc. TABLE OF CONTENTS 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 in Latin America with net deferred tax liabilities. See Note 14. Income Taxes to the Notes to Condensed Consolidated Financial Statements for additional information. (3) Depreciation and amortization expense increased for the nine months ended September 30, 2024 compared to the prior year period, primarily in connection with growth in our internally-developed software balance. (4) Restructuring charges in the three and nine month 2024 periods relate to legal entity restructuring. Restructuring charges in the nine 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. (5) Impairment expense includes $247,174 related to goodwill impairment in the three and nine month 2023 periods, and $1,243 related to a sublease arrangement in the nine-month 2023 period, which are not indicative of our core operating performance. (6) Foreign currency charges reflect the impacts of highly inflationary accounting for our operations in Argentina, which are related to our Technology Platform segment and commenced in the first quarter of 2022 with the Technisys Merger. For the year ended December 31, 2023, all amounts were reflected in the fourth quarter, as inter-quarter amounts were determined to be immaterial. (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. (11) Refer to ‘ Adjusted Net Revenue ’ above for reconciliation of this non-GAAP measure. 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) September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Net income (loss) (GAAP) $ 60,745 $ 17,404 $ 88,043 $ 47,913 $ (266,684) Non-GAAP adjustments: Interest expense – corporate borrowings 12,871 12,725 10,711 9,882 9,784 Income tax (benefit) expense 3,110 (2,064) 6,183 3,245 (244) Depreciation and amortization 51,791 49,623 48,539 53,449 52,516 Share-based expense 63,646 61,057 55,082 69,107 62,005 Restructuring charges 1,275 — — 7,796 — Impairment expense — — — — 247,174 Foreign currency impact of highly inflationary subsidiaries 475 194 174 10,971 — Transaction-related expense — 615 — — (34) Servicing rights – change in valuation inputs or assumptions (4,362) (1,654) (5,226) (6,595) (7,420) Residual interests classified as debt – change in valuation inputs or assumptions 9 1 73 10 928 Gain on extinguishment of debt (3,323) — (59,194) (14,574) — Total adjustments 125,492 120,497 56,342 133,291 364,709 Adjusted EBITDA (non-GAAP) $ 186,237 $ 137,901 $ 144,385 $ 181,204 $ 98,025 Total net revenue (GAAP) $ 697,121 $ 598,618 $ 644,995 $ 615,404 $ 537,209 Net income (loss) margin (GAAP) 9 % 3 % 14 % 8 % (50) % Adjusted net revenue (non-GAAP) $ 689,445 $ 596,965 $ 580,648 $ 594,245 $ 530,717 Adjusted EBITDA margin (non-GAAP) 27 % 23 % 25 % 30 % 18 % 69 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: September 30, 2024 September 30, 2023 Variance % Change Members 9,372,615 6,957,187 2,415,428 35 % Total Products (1) 13,650,730 10,447,806 3,202,924 31 % Total Products — Lending segment 1,890,761 1,593,906 296,855 19 % Total Products — Financial Services segment (1) 11,759,969 8,853,900 2,906,069 33 % Total Accounts — Technology Platform segment 160,179,299 136,739,131 23,440,168 17 % ___________________ (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 September 30, 2023, SoFi Invest products included 463,121 digital assets accounts. Excluding these accounts (that were closed as part of the transfer of the crypto services), total products increased by 3,666,045, or 37%, and total financial services products increased by 3,369,190, or 40%, 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 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 September 30, 2024, we have served approximately 9.4 million members who have used approximately 13.7 million products on the SoFi platform. 70 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, inclusive of loans which we originate as part of our Loan Platform Business, 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 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. Product 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. Further, product growth may not directly correlate with expense growth as a result of the effects of the Financial Services Productivity Loop. See “ Consolidated Results of Operations ” and “ Summary Results by Segment ” for discussion and analysis of operating results. 71 SoFi Technologies, Inc. TABLE OF CONTENTS Products In Thousands Total lending products were composed of the following: Lending Products September 30, 2024 September 30, 2023 Variance % Change Personal loans (1) 1,305,246 1,057,995 247,251 23 % Student loans 551,838 507,567 44,271 9 % Home loans 33,677 28,344 5,333 19 % Total lending products 1,890,761 1,593,906 296,855 19 % ___________________ (1) Includes loans which we originate as part of our Loan Platform Business. Total financial services products were composed of the following: Financial Services Products September 30, 2024 September 30, 2023 Variance % Change Money (1) 4,720,305 3,063,778 1,656,527 54 % Invest (2) 2,394,367 2,465,072 (70,705) (3) % Credit Card 264,937 235,791 29,146 12 % Referred loans (3) 73,090 51,301 21,789 42 % Relay 4,199,602 2,958,497 1,241,105 42 % At Work 107,668 79,461 28,207 35 % Total financial services products (2) 11,759,969 8,853,900 2,906,069 33 % ___________________ (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 September 30, 2023, SoFi Invest products included 463,121 digital assets accounts. Excluding these accounts (that were closed as part of the transfer of the crypto services), total Invest products increased by 392,416, or 20%, year over year, and total financial services products increased by 3,369,190, or 40%, year over year. (3) Limited to loans wherein we provide third party fulfillment services as part of our Loan Platform Business. 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 72 SoFi Technologies, Inc. TABLE OF CONTENTS 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. Technology Platform Accounts In Millions September 30, 2024 September 30, 2023 Variance % Change Total accounts 160,179,299 136,739,131 23,440,168 17 % 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 decreased the benchmark interest rate in September and November 2024, and additional rate cuts are anticipated by the market through 2025, although the timing of such cuts remains uncertain. 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. High or rising interest rates have unfavorably impacted, and could continue to unfavorably impact, demand for refinancing loan products. In addition, if the Federal Reserve does not effectively curb inflation, interest rates were to rise unexpectedly or too quickly, or macroeconomic conditions deteriorate or do not improve, it could have a negative impact on the overall economy and result in increased unemployment, which could adversely impact our results of operations. In addition to benchmark interest rate considerations, economic and market volatility may adversely impact our liquidity, results of operations and financial condition. 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. 73 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 September 30, 2024 June 30, 2024 September 30, 2024 June 30, 2024 Weighted average coupon rate (1) 13.5 % 13.6 % 5.9 % 5.7 % Weighted average annual default rate 4.5 4.8 0.7 0.6 Weighted average conditional prepayment rate 26.1 26.1 10.7 11.0 Weighted average discount rate 4.78 5.75 3.99 4.44 ___________________ (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 third quarter of 2024 relative to the second quarter of 2024, we observed the following trends: • The weighted average conditional prepayment rates on personal loans and student loans decreased by 10 bps and 35 bps, respectively. Decreases reflect the impacts of observed decreases in prepayments during the third quarter. • The weighted average discount rates on personal loans and student loans decreased by 97 bps and 45 bps, respectively. For personal loans, our discount rate assumptions decreased in the third quarter due to benchmark rates declining by 113 bps, partially offset by spreads widening by 16 bps. For student loans, our discount rate assumptions decreased in the third quarter due to benchmark rates declining by 87 bps, partially offset by spreads widening by 42 bps. Spread changes are indicated by asset-backed security and secondary bond markets. • Annualized net charge-off rates on personal loans in the third quarter of 2024 were 3.5%, which remained lower than the assumed weighted average default rates in our fair value model of 4.5%. Personal loan charge-offs during the second and third quarters of 2024 were impacted by delinquent loan sales of $69.4 million and $81.0 million, respectively, of aggregate unpaid principal balance. Annualized net charge-off rates on student loans in the third quarter of 2024 of 0.7% 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 third 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, July, and October 2024, the Biden Administration announced the approval of a cumulative $11.5 billion in additional student loan debt relief through the U.S. Department of Education’s Public Service Loan Forgiveness program (“PSLF”). In April 2024, the U.S. Department of Education issued a notice of proposed rulemaking to include targeted student loan debt forgiveness to certain borrowers, including provisions under the Higher Education Act of 1965, as amended, that would provide relief for eligible borrowers of runaway interest, forgiveness of outstanding debt related to loans which entered repayment at least 20 years ago, and additional provisions to facilitate relief related to income-driven repayment plans. While we expect we may continue to see an increase in student loan refinancing volume as borrowers may look to refinance at a lower rate as interest rates decline or, given the high interest rate environment compared to recent historical periods, may look to extend the loan term, the timing and impact to our student loan refinancing product will largely depend on 74 SoFi Technologies, Inc. TABLE OF CONTENTS expectations regarding the impact of the change in the U.S. presidential administration, the interest rate environment, how competitive our student loan refinancing products are compared to our competitors and macroeconomic factors. Consolidated Results of Operations The following table sets forth selected consolidated statements of income data: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 431,010 $ 344,963 $ 86,047 25 % $ 1,246,312 $ 872,099 $ 374,213 43 % Total noninterest income 266,111 192,246 73,865 38 % 694,422 635,286 59,136 9 % Total net revenue 697,121 537,209 159,912 30 % 1,940,734 1,507,385 433,349 29 % Total noninterest expense 633,266 804,137 (170,871) (21) % 1,767,313 1,859,701 (92,388) (5) % Income (loss) before income taxes 63,855 (266,928) 330,783 n/m 173,421 (352,316) 525,737 n/m Income tax (expense) benefit (3,110) 244 (3,354) n/m (7,229) 3,661 (10,890) n/m Net income (loss) $ 60,745 $ (266,684) $ 327,429 n/m $ 166,192 $ (348,655) $ 514,847 n/m 75 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 September 30, 2024 Three Months Ended September 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 $ 2,593,113 $ 29,353 4.50 % $ 2,342,361 $ 24,485 4.15 % Investment securities 1,596,756 23,894 5.95 517,786 1,838 1.41 Loans 26,589,180 670,127 10.03 19,996,570 537,947 10.67 Total interest-earning assets 30,779,049 723,374 9.35 22,856,717 564,270 9.79 Total noninterest-earning assets 3,291,442 3,116,217 Total assets $ 34,070,491 $ 25,972,934 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 2,189,118 $ 11,489 2.09 % $ 2,355,243 $ 12,837 2.16 % Savings deposits 19,534,413 213,760 4.35 9,416,236 104,375 4.40 Time deposits 1,847,094 23,043 4.96 2,244,196 28,351 5.01 Total interest-bearing deposits 23,570,625 248,292 4.19 14,015,675 145,563 4.12 Warehouse facilities 1,789,921 28,773 6.40 3,223,333 51,257 6.31 Securitization debt 117,172 1,031 3.50 724,063 9,374 5.14 Other debt (2) 1,798,092 14,268 3.16 1,644,295 13,113 3.16 Total debt 3,705,185 44,072 4.73 5,591,691 73,744 5.23 Residual interests classified as debt 688 — — 10,744 — — Total interest-bearing liabilities 27,276,498 292,364 4.26 19,618,110 219,307 4.44 Total noninterest-bearing liabilities 794,151 783,925 Total liabilities 28,070,649 20,402,035 Total temporary equity — 320,374 Total permanent equity 5,999,842 5,250,525 Total liabilities, temporary equity and permanent equity $ 34,070,491 $ 25,972,934 Net interest income (3) $ 431,010 $ 344,963 Net interest margin (4) 5.57 % 5.99 % __________________ (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. 76 SoFi Technologies, Inc. TABLE OF CONTENTS Nine Months Ended September 30, 2024 Nine Months Ended September 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 $ 2,841,537 $ 101,616 4.78 % $ 1,973,892 $ 57,094 3.87 % Investment securities 1,281,815 54,761 5.71 486,931 11,259 3.09 Loans 24,803,612 1,907,503 10.27 17,520,517 1,337,476 10.21 Total interest-earning assets 28,926,964 2,063,880 9.53 19,981,340 1,405,829 9.41 Total noninterest-earning assets 3,110,508 3,140,883 Total assets $ 32,037,472 $ 23,122,223 Liabilities, Temporary Equity and Permanent Equity Interest-bearing liabilities: Demand deposits $ 2,166,523 $ 36,928 2.28 % $ 2,100,866 $ 38,611 2.46 % Savings deposits 17,267,554 565,816 4.38 7,409,745 225,649 4.07 Time deposits 2,355,079 88,814 5.04 1,701,417 60,948 4.79 Total interest-bearing deposits 21,789,156 691,558 4.24 11,212,028 325,208 3.88 Warehouse facilities 1,586,955 76,731 6.46 3,093,592 139,513 6.03 Securitization debt 223,034 6,517 3.90 823,457 30,570 4.96 Other debt (2) 1,792,464 42,762 3.19 1,644,427 38,298 3.11 Total debt 3,602,453 126,010 4.67 5,561,476 208,381 5.01 Residual interests classified as debt 3,059 — — 13,334 141 1.41 Total interest-bearing liabilities 25,394,668 817,568 4.30 16,786,838 533,730 4.25 Total noninterest-bearing liabilities 747,999 754,024 Total liabilities 26,142,667 17,540,862 Total temporary equity 160,187 320,374 Total permanent equity 5,734,618 5,260,987 Total liabilities, temporary equity and permanent equity $ 32,037,472 $ 23,122,223 Net interest income (3) $ 1,246,312 $ 872,099 Net interest margin (4) 5.76 % 5.84 % __________________ (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. Three Months. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, net interest income increased by $86.0 million, or 25%, and net interest margin decreased by 42 bps. Average interest-earning assets increased by 35%, and average yields decreased by 44 bps, while average interest-bearing liabilities increased by 39% and the average cost of interest-bearing liabilities decreased by 18 bps. The increases in net interest income were primarily driven by (i) higher interest income from personal loans and student loans of $105.0 million, 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 of $4.9 million, which reflected our strong liquidity position in a rising interest rate environment, (iii) higher interest income from investment securities of $22.1 million primarily attributable to higher average balances, and (iv) lower interest expense on warehouse facilities and securitizations of $30.8 million primarily attributable to lower average balances, which is reflective of our continued funding mix shift 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 of $102.7 million attributable to a higher average balance and higher interest rates offered to our members. Nine Months. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, net interest income increased by $374.2 million, or 43%, and net interest margin decreased by 8 bps. Average interest-bearing 77 SoFi Technologies, Inc. TABLE OF CONTENTS liabilities increased by 51% and the average cost of interest-bearing liabilities increased by 5 bps, while average interest-earning assets increased by 45% and average yields increased by 12 bps. The increases in net interest income were primarily driven by (i) higher interest income from personal loans and student loans of $522.0 million, 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 of $44.5 million, which reflected our strong liquidity position in a rising interest rate environment, (iii) higher interest income from investment securities of $43.5 million primarily attributable to higher average balances, and (iv) lower interest expense on warehouse facilities and securitizations of $86.8 million 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 of $366.4 million attributable to a higher average balance and higher interest rates offered to our members. Analysis of Changes in Net Interest Income The following table presents period-over-period changes in net interest income and the extent to which the variances are attributable to changes in the volume of our interest-earning assets and interest-bearing liabilities or changes in the interest rates related to these assets and liabilities: Three Months Ended September 30, Nine Months Ended September 30, 2024 vs. 2023 2024 vs. 2023 Increase (Decrease) Due to Change in (1) : Increase (Decrease) Due to Change in (1) : ($ in thousands) Volume Rate Total Variance Volume Rate Total Variance Interest income: Interest-bearing deposits with banks $ 2,800 $ 2,068 $ 4,868 $ 31,064 $ 13,458 $ 44,522 Investment securities 16,142 5,914 22,056 33,967 9,535 43,502 Loans 164,326 (32,146) 132,180 561,313 8,714 570,027 Total interest income 183,268 (24,164) 159,104 626,344 31,706 658,051 Interest expense: Interest-bearing deposits 100,263 2,466 102,729 335,978 30,372 366,350 Debt (22,592) (7,080) (29,672) (68,365) (14,006) (82,371) Residual interests classified as debt — — — — (141) (141) Total interest expense 77,671 (4,614) 73,057 267,613 16,225 283,838 Net interest income $ 105,597 $ (19,550) $ 86,047 $ 358,731 $ 15,481 $ 374,213 ___________________ (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 September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Loan origination, sales, and securitizations $ 70,085 $ 75,385 $ (5,300) (7) % $ 181,957 $ 288,883 $ (106,926) (37) % Servicing 9,927 8,009 1,918 24 % 23,560 29,803 (6,243) (21) % Technology products and solutions 90,896 81,856 9,040 11 % 262,434 236,946 25,488 11 % Loan platform fees 55,641 9,066 46,575 514 % 78,373 24,261 54,112 223 % Other 39,562 17,930 21,632 121 % 148,098 55,393 92,705 167 % Total noninterest income $ 266,111 $ 192,246 $ 73,865 38 % $ 694,422 $ 635,286 $ 59,136 9 % Total net revenue $ 697,121 $ 537,209 $ 159,912 30 % $ 1,940,734 $ 1,507,385 $ 433,349 29 % 78 SoFi Technologies, Inc. TABLE OF CONTENTS Loan Platform Business The following table presents the components of noninterest income associated with our Loan Platform Business: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Loan platform fees (1) $ 55,641 $ 9,066 $ 46,575 514 % $ 78,373 $ 24,261 $ 54,112 223 % Servicing (2) 5,517 549 4,968 905 % 12,206 1,570 10,636 677 % Loan platform fees and servicing, total noninterest income $ 61,158 $ 9,615 $ 51,543 536 % $ 90,579 $ 25,831 $ 64,748 251 % ___________________ (1) Recorded within noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss), and the Financial Services reportable segment. (2) Recorded within noninterest income—servicing in the condensed consolidated statements of operations and comprehensive income (loss), and the Lending reportable segment. Amounts reflect revenue from our servicing agreements on loans which we did not originate, excluding the impacts of changes in fair value inputs and assumptions on related servicing rights as they were immaterial for all periods presented. Total Noninterest Income Three Months. Total noninterest income increased by $73.9 million, or 38%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily attributable to: (i) growth in our Loan Platform Business of $51.5 million, composed of an increase of $46.6 million reported in loan platform fees related to revenue from loans that we originate on behalf of third parties for a fee ($42.4 million) and pre-qualified borrower referrals to third-party loan origination partners ($4.2 million), as well as a related increase in servicing income of $5.0 million; (ii) in loan origination, sales and securitizations , higher origination fees of $42.1 million, 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; (iii) in other , an increase in interchange fee revenue of $12.7 million on higher volume; and (iv) in technology products and solutions, an increase in technology services fee revenue of $8.0 million driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth. These increases were partially offset by lower revenue in loan origination, sales and securitizations reflecting: (i) higher personal and student loan net charge-offs of $34.1 million, primarily driven by growth in the portfolios and elevated charge off rates; and (ii) a net decrease of $13.8 million related to the following: losses in the 2024 period compared to gains in the 2023 period on student loan, personal loan and risk retention interest rate swap positions due to decreases in interest rates during the 2024 period compared to increases during the 2023 period (a decrease of $342.7 million); fair value gains on student loans in the 2024 period compared to losses during the 2023 period which were primarily impacted by higher aggregate average unpaid principal balance (an increase of $169.0 million); and higher fair value gains on personal loans which were primarily impacted by lower discount rate assumptions and higher aggregate average unpaid principal balance (an increase of $159.9 million). Nine Months . Total noninterest income increased by $59.1 million, or 9%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily attributable to: (i) in loan origination, sales and securitizations , higher origination fees of $196.7 million 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) growth in our Loan Platform Business of $64.7 million composed of an increase of $54.1 million reported in loan platform fees related to revenue from loans that we originate on behalf of third parties ($42.5 million) and pre-qualified borrower referrals to third-party loan origination partners ($11.6 million), as well as a related increase in servicing income of $10.6 million; (iii) in other , a gain on extinguishment of debt of $62.5 million and an increase in interchange fee revenue of $23.3 million on higher volume; and (iv) in technology products and solutions , an increase in technology services fee revenue of $25.7 million driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth. These increases were partially offset by lower revenue in loan origination, sales and securitizations reflecting: (i) higher personal and student loan net charge-offs of $175.8 million, primarily driven by growth in the portfolios and elevated charge off rates; and (ii) a net decrease of $114.5 million related to the following: lower gains on student loan, personal loan and risk retention interest rate swap positions primarily driven by larger increases in interest rates in the 2023 period compared to mixed rate movement during the 2024 period (a decrease of $154.6 million); lower fair value gains on personal loans, which were primarily impacted by higher prepayment rate assumptions (a decrease of $107.3 million); and higher fair value gains on student loans, which were primarily impacted by lower discount rate assumptions and higher aggregate average unpaid 79 SoFi Technologies, Inc. TABLE OF CONTENTS principal balance (an increase of $147.4 million). In addition, servicing income decreased $16.8 million primarily related to unfavorable changes in valuation inputs and assumptions for personal loans and student loans, which was primarily attributable to increased discount rate and prepayment rate assumptions, respectively, during 2024. Noninterest Expense The following table presents the components of our total noninterest expense: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Technology and product development $ 139,714 $ 125,698 $ 14,016 11 % $ 402,801 $ 369,602 $ 33,199 9 % Sales and marketing 214,904 186,719 28,185 15 % 567,032 544,695 22,337 4 % Cost of operations 123,714 98,258 25,456 26 % 333,478 276,051 57,427 21 % General and administrative 148,921 124,457 24,464 20 % 439,167 379,326 59,841 16 % Goodwill impairment — 247,174 (247,174) (100) % — 247,174 (247,174) (100) % Provision for credit losses 6,013 21,831 (15,818) (72) % 24,835 42,853 (18,018) (42) % Total noninterest expense $ 633,266 $ 804,137 $ (170,871) (21) % $ 1,767,313 $ 1,859,701 $ (92,388) (5) % Three Months . Total noninterest expense decreased by $170.9 million, or 21%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by: (i) goodwill impairment of $247.2 million in 2023 related to the Galileo and Technisys reporting units; and (ii) a decrease in provision for credit losses of $15.8 million primarily related to credit card, see “ Provision for Credit Losses” . These decreases were partially offset by: (i) in sales and marketing, increases in direct member incentives, advertising and marketing expenditures, and lead generation costs of $36.2 million primarily related to our Financial Services segment as we continue to drive expansion of our SoFi Money product and our Loan Platform Business; (ii) higher employee compensation and benefits of $26.3 million primarily reported in general and administrative and cost of operations , which was attributable to increases in headcount and salary to support our growth and impacts of the inflationary environment; (iii) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs of $15.5 million, primarily reported in technology and product development , reflective of continued investments in technology; (iv) increases in professional services costs of $9.0 million, primarily reported in cost of operations and general and administrative ; (v) in cost of operations, an increase in product fulfillment costs of $10.6 million, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform ; and (vi) in general and administrative , amortization of premiums on a credit default swap of $7.1 million related to our student loans during the 2024 period. Nine Months . Total noninterest expense decreased by $92.4 million, or 5%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by: (i) goodwill impairment of $247.2 million in 2023 related to the Galileo and Technisys reporting units; and (ii) decreases in provision for credit losses of $18.0 million primarily related to credit card, see “ Provision for Credit Losses” . These decreases were partially offset by: (i) in sales and marketing , increases in direct member incentives, advertising and marketing expenditures, and lead generation costs of $49.5 million primarily related to our Financial Services and Lending segments; (ii) increases in amortization of purchased and internally-developed software, and tools and subscriptions costs of $45.4 million, primarily reported in technology and product development, reflective of continued investments in technology; iii) increases in professional services costs of $35.2 million, primarily reported in general and administrative and cost of operations ; (iv) in general and administrative , amortization of premiums on a credit default swap of $23.2 million related to our student loans during the 2024 period; (v) primarily in cost of operations , an increase in product fulfillment costs of $29.1 million, which included debit card fulfillment services, primarily related to our SoFi Money product, as well as payment processing network association fees associated with increased activity on our technology platform; and (vi) higher employee compensation and benefits of $13.7 million, which was attributable to increases in headcount and salary related to support of our growth and impacts of the inflationary environment, partially offset by decreases in share-based compensation expense and restructuring charges during the first quarter of 2023. 80 SoFi Technologies, Inc. TABLE OF CONTENTS Provision for Credit Losses Analysis of Allowance for Credit Losses Allowance for Credit Losses Ratios The following table presents the ratio of allowance for credit losses to total loans outstanding that are measured at amortized cost: ($ in thousands) September 30, 2024 September 30, 2023 Allowance for credit losses to total loans outstanding Allowance for credit losses $ 48,419 $ 51,923 Loans held for investment, at amortized cost (1) 1,457,125 407,693 Ratio (2) 3.32 % 12.74 % __________________ (1) Loans outstanding balance excludes accrued interest. (2) The decrease in the ratio was primarily attributable to growth in secured loans, for which we did not recognize an allowance for credit losses, as well as a decrease in the allowance for credit losses related to credit card on improved delinquencies. 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: September 30, 2024 September 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 $ 46,051 22 % $ 50,055 72 % Commercial and consumer banking 2,368 10 % 1,868 28 % Secured loans (2) — 68 % — — % Total $ 48,419 100 % $ 51,923 100 % __________________ (1) Loans outstanding balances exclude accrued interest. (2) Secured loans are term loan arrangements secured by underlying loans (collateral) owned by the debtor. The underlying loans were previously originated by us and were subject to our underwriting process and risk models, prior to being sold to the debtor and in most instances these loans continue to be serviced by us. We evaluate the credit quality of our secured loan portfolio relative to the fair value of the underlying collateral, reassessing it quarterly based on relevant information, including funded loan rates and historical loss experience. An allowance for credit losses is required when there is an expected credit loss after considering the fair value of the collateral as well as any anticipated future changes in the underlying collateral. As of September 30, 2024, based on this evaluation we did not recognize an allowance for credit losses on our secured loan. 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 September 30, 2024 Three Months Ended September 30, 2023 ($ in thousands) Average Loans (1) Net Charge-offs (2)(3) Ratio (4) Average Loans (1) Net Charge-offs (2)(3) Ratio (4) Personal loans $ 16,680,744 $ 147,554 3.52 % $ 13,895,181 $ 120,372 3.44 % Student loans 7,508,433 12,963 0.69 % 5,662,842 5,432 0.38 % Home loans 78,320 — — % 80,614 — — % Secured loans 1,896,354 — — % — — — % Credit card 273,947 9,481 13.77 % 247,694 11,127 17.82 % Commercial and consumer banking 151,382 21 0.06 % 110,239 8 0.03 % Total loans $ 26,589,180 $ 170,019 2.54 % $ 19,996,570 $ 136,939 2.72 % 81 SoFi Technologies, Inc. TABLE OF CONTENTS Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 ($ in thousands) Average Loans (1) Net Charge-offs (2)(3) Ratio (4) Average Loans (1) Net Charge-offs (2)(3) Ratio (4) Personal loans $ 16,106,495 $ 433,775 3.60 % $ 11,731,420 $ 278,778 3.18 % Student loans 7,152,682 34,384 0.64 % 5,375,562 15,432 0.38 % Home loans 65,465 — — % 75,002 — — % Secured loans 1,065,438 — — % — — — % Credit card 273,103 31,061 15.19 % 230,849 31,713 18.37 % Commercial and consumer banking 140,429 50 0.05 % 107,684 5 0.01 % Total loans $ 24,803,612 $ 499,270 2.69 % $ 17,520,517 $ 325,928 2.49 % ___________________ (1) Average balances were calculated on daily carrying balances. (2) Net charge-offs include both credit- and certain non-credit-related charge-offs . Non-credit related charge-offs, which primarily relate to alleged or potential fraud, occur occasionally in our business and are impacted by factors different from our credit related charge-offs. Non-credit related charge-offs were immaterial for all periods presented. (3) Net charge-offs related to personal, student and home loans are generally recorded in noninterest income - Loan origination, sales, and securitizations as part of the respective loans total change in fair value. Net charge-offs related to credit card and commercial and consumer banking are considered as part of the allowance for credit losses and noninterest expense- provision for credit losses. (4) Net charge-off ratio is calculated as net charge-offs divided by average loans. For the three months ended September 30, 2024, the total net charge-off ratio was 2.54%, a decrease of 18 bps compared with the three months ended September 30, 2023. The decrease in the total net charge-off ratio was primarily due to a lower credit card net charge-off ratio reflective of improvement in delinquency rates (total credit card delinquency rate was 5.3%, down approximately 170 bps from the comparative period) as a result of tighter underwriting standards and risk mitigation actions, as well as secured loan originations ($992.0 million as of September 30, 2024 compared to none in the comparative period), partially offset by a higher student loan net charge-off ratio which was impacted by the end of the federal student loan payment moratorium on August 30, 2023. Total net charge-offs of $170.0 million increased $33.1 million from the comparable period primarily due to higher personal loans charge-offs of $27.2 million and student loans charge-offs of $7.5 million reflecting growth in the portfolios, seasoning of vintages and the impact of the end of the federal student loan payment moratorium. This increase in charge-offs was partially offset by lower credit card charge-offs of $1.6 million as a result of tighter underwriting standards and risk mitigation actions, despite growth in the credit card portfolio. For the nine months ended September 30, 2024, the total net charge-off ratio was 2.69%, an increase of 20 bps compared with the nine months ended September 30, 2023, and total net charge-offs were $499.3 million, an increase of $173.3 million from the comparable period. The increases to the net charge-off ratio and net charge-offs were primarily driven by higher personal loan amounts of $155.0 million and 42 bps, respectively, and higher student loan amounts of $19.0 million and 26 bps, respectively. These increases reflect growth in the portfolios, seasoning of vintages and credit normalization, along with the impact of the end of the student loan payment moratorium. These increases were partially offset by lower credit card net charge-offs and net charge-off ratio on improved delinquency rates as a result of tighter underwriting standards and risk mitigation actions, and secured loan originations. Provision for Credit Losses Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Credit Card $ 6,126 $ 21,821 $ (15,695) (72) % $ 24,727 $ 42,658 $ (17,931) (42) % Commercial and consumer banking (113) 10 (123) n/m 108 195 (87) (45) % Total $ 6,013 $ 21,831 $ (15,818) (72) % $ 24,835 $ 42,853 $ (18,018) (42) % The provision for credit losses was $6.0 million for the three months ended September 30, 2024, reflecting net charge-offs of $9.5 million and an allowance release of $3.5 million. Net charge-offs of $9.5 million decreased $1.6 million compared to the three months ended September 30, 2023, driven by lower credit card charge-offs primarily due to improved delinquency rate (total credit card delinquency rate was 5.3%, down approximately 170 bps from the comparative period) as a result of tighter underwriting standards and risk mitigation actions. The allowance release of $3.5 million was also primarily in credit card, reflectin g improved credit quality of the portfolio, including higher borrower FICO scores. Th e prior year provision was $21.8 million, reflecting net charge-offs of $11.1 million and an allowance increase of $10.7 million. 82 SoFi Technologies, Inc. TABLE OF CONTENTS The provision for credit losses was $24.8 million for the nine months ended September 30, 2024, reflecting net charge-offs of $31.1 million and an allowance release of $6.3 million. Net charge-offs of $31.1 million were down $0.7 million compared to the nine months ended September 30, 2023 driven by lower credit card charge-offs primarily due to improved delinquency rates. The net allowance release of $6.3 million was also primarily in credit card, reflecting improved credit quality of the portfolio. The prior year provision was $42.9 million, reflecting net charge-offs of $31.7 million and an allowance increase of $11.2 million. Income Taxes For the three and nine months ended September 30, 2024, we recorded income tax expense of $3.1 million and $7.2 million, respectively. For the three and nine months ended September 30, 2023, we recorded income tax benefit of $0.2 million and $3.7 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 in Latin America with net deferred tax liabilities. 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). As a result of our recent performance, there is a reasonable possibility that a portion of our valuation allowance is no longer needed in future periods. A release of the valuation allowance will result in a material tax benefit recognized in the quarter of the release. Such a potential benefit has not been included in our earnings guidance as furnished in our Form 8-K with the SEC on October 29, 2024. 83 SoFi Technologies, Inc. TABLE OF CONTENTS 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” and “Summary Results by Segment” for discussion and analysis of these key financial measures. Lending Segment In the table below, we present certain metrics and financial information related to our Lending segment: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 Metric 2024 2023 Change % Change 2024 2023 Change % Change Total products (number, as of period end) 1,890,761 1,593,906 296,855 19 % 1,890,761 1,593,906 296,855 19 % Origination volume ($ in thousands, during period) Personal loans (1) $ 4,892,040 $ 3,885,967 $ 1,006,073 26 % $ 12,363,036 $ 10,578,306 $ 1,784,730 17 % Student loans 943,584 919,330 24,254 3 % 2,431,782 1,840,070 591,712 32 % Home loans 489,767 355,698 134,069 38 % 1,242,851 688,608 554,243 80 % Total $ 6,325,391 $ 5,160,995 $ 1,164,396 23 % $ 16,037,669 $ 13,106,984 $ 2,930,685 22 % Loans with a balance (number, as of period end) (2) 1,170,999 967,851 203,148 21 % 1,170,999 967,851 203,148 21 % Average loan balance ($, as of period end) (2) Personal loans $ 25,063 $ 24,221 $ 842 3 % $ 25,063 $ 24,221 $ 842 3 % Student loans (3) 42,713 44,828 (2,115) (5) % 42,713 44,828 (2,115) (5) % Home loans 283,948 285,773 (1,825) (1) % 283,948 285,773 (1,825) (1) % __________________ (1) Inclusive of origination volume related to our Loan Platform Business. For the three and nine months ended September 30, 2024, we originated $1.0 billion of personal loans on behalf of third parties. We did not originate any loans on behalf of third parties during the 2023 periods presented. (2) 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. (3) 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 ” and “ Business Overview ” 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. We also originate and sell loans in support of our Loan Platform Business, through which we provide lending related services to third-party partners. We maintain the same lending relationship with borrowers across all loans that we originate, inclusive of those originated on behalf of a third-party partner and as such, reflect these products within our Lending segment total products. 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. 84 SoFi Technologies, Inc. TABLE OF CONTENTS Personal Loans. During the three and nine months ended September 30, 2024, total personal loan origination volume increased by 26% and 17%, respectively, relative to the corresponding 2023 periods, inclusive of a $1.0 billion increase related to personal loans originated on behalf of third parties during the third quarter of 2024 in support of our Loan Platform Business. Overall increases in origination volume were 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 remained elevated through the third quarter of 2024. Student Loans. During the three and nine months ended September 30, 2024, student loan origination volume increased by 3% and 32%, respectively, 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 nine months ended September 30, 2024, home loan origination volume increased by 38% and 80%, respectively, relative to the corresponding 2023 periods. Our home loan origination volume increased notably beginning in the second quarter of 2023 and throughout 2024, aided by the increased capacity and capabilities subsequent to our acquisition of Wyndham. In addition, interest rates began to decline in the third quarter of 2024, which tends to raise demand for home loans overall as well as shift demand towards refinance originations from purchase originations. 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 September 30, Nine Months Ended September 30, ($ in thousands) 2024 2023 2024 2023 Overall weighted average origination FICO 750 751 750 750 Personal Loans (1) Weighted average origination FICO 746 744 746 745 Weighted average interest rate earned (2) 13.28 % 13.57 % 13.39 % 13.20 % Interest income recognized $ 526,702 $ 452,771 $ 1,531,533 $ 1,103,979 Sales of loans $ 1,462,748 $ 15,006 $ 3,924,970 $ 65,019 Student Loans Weighted average origination FICO 765 781 766 775 Weighted average interest rate earned (2) 5.75 % 5.17 % 5.67 % 5.01 % Interest income recognized $ 103,160 $ 72,081 $ 290,985 $ 196,510 Sales of loans $ — $ — $ 294,187 $ 96,678 Home Loans Weighted average origination FICO 764 755 757 756 Weighted average interest rate earned (2) 8.82 % 5.67 % 8.60 % 5.51 % Interest income recognized $ 1,705 $ 1,276 $ 4,167 $ 3,441 Sales of loans $ 504,211 $ 333,843 $ 1,229,650 $ 678,136 __________________ (1) Inclusive of activity related to loans originated and subsequently sold as part of our Loan Platform Business. For the three and nine months ended September 30, 2024, included $1.0 billion related to loans originated on behalf of third parties. We did not originate any loans on behalf of third parties during the 2023 periods presented. (2) Weighted average interest rate earned represents annualized interest income recognized divided by the average of the unpaid principal balances of loans outstanding during the period, which are impacted by loan holding periods as well as interest rates charged to borrowers. Weighted average interest rate earned was determined on a daily basis. 85 SoFi Technologies, Inc. TABLE OF CONTENTS Lending Segment Results of Operations The following table presents the measure of contribution profit for the Lending segment: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 316,268 $ 265,215 $ 51,053 19 % $ 862,016 $ 698,147 $ 163,869 23 % Noninterest income 79,977 83,758 (3,781) (5) % 205,410 319,348 (113,938) (36) % Total net revenue 396,245 348,973 47,272 14 % 1,067,426 1,017,495 49,931 5 % Servicing rights – change in valuation inputs or assumptions (1) (4,362) (7,420) 3,058 (41) % (11,242) (28,105) 16,863 (60) % Residual interests classified as debt – change in valuation inputs or assumptions (2) 9 928 (919) (99) % 83 415 (332) (80) % Directly attributable expenses (152,964) (138,525) (14,439) 10 % (411,682) (392,642) (19,040) 5 % Contribution profit $ 238,928 $ 203,956 $ 34,972 17 % $ 644,585 $ 597,163 $ 47,422 8 % Adjusted net revenue – Lending (3) $ 391,892 $ 342,481 $ 49,411 14 % $ 1,056,267 $ 989,805 $ 66,462 7 % __________________ (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. (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. (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 $51.1 million, or 19%, and by $163.9 million, or 23%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. This was primarily attributable to (i) increases in aggregate average personal loan unpaid principal balances of $2.5 billion (19%) and $4.1 billion (37%), respectively, combined with higher weighted average interest rates for the nine month period, and partially offset by lower weighted average interest rates for the three month period, and (ii) increases in aggregate average student loan unpaid principal balances of $1.6 billion (29%) and $1.6 billion (31%), respectively, combined with a higher weighted average interest rate for both periods. 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 $81.0 million, or 31%, and $402.3 million, or 66%, for the three and nine-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 and persisting in 2024. Noninterest income Noninterest income in our Lending segment decreased by $3.8 million, or 5%, and decreased by $113.9 million, or 36%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. For the three and nine month periods, the decrease was primarily attributable to lower loan origination, sales, and securitizations income of $5.3 million and $106.9 million, respectively. 86 SoFi Technologies, Inc. TABLE OF CONTENTS Loan Origination, Sales, and Securitizations The following table presents the components of noninterest income—loan origination, sales, and securitizations : Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change In period originations, loan sale execution and fair value adjustments (1) $ 392,871 $ 60,096 $ 332,775 554 % $ 376,929 $ 329,759 $ 47,170 14 % Economic derivative hedges of loan fair values (267,731) 81,196 (348,927) n/m 7,296 168,882 (161,586) (96) % Other derivative instruments (2) (5,603) 2,180 (7,783) n/m (2,607) 4,443 (7,050) n/m Loan origination fees 98,501 56,394 42,107 75 % 270,286 73,577 196,709 267 % Loan write-off expense (3) (159,889) (125,804) (34,085) 27 % (467,466) (291,652) (175,814) 60 % Loan repurchase (expense) benefit (4) 2,537 (515) 3,052 n/m (1,910) (243) (1,667) 686 % Other 9,403 1,845 7,558 410 % (556) 4,143 (4,699) n/m Loan origination, sales, and securitizations noninterest income $ 70,089 $ 75,392 $ (5,303) (7) % $ 181,972 $ 288,909 $ (106,937) (37) % ___________________ (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 gains (losses) on IRLCs and interest rate caps. Also includes gains (losses) related to credit derivatives for the 2024 periods, as well as gains (losses) on purchase price earn-out during the nine month 2023 period. (3) For the three months ended September 30, 2024 and 2023, includes gross write-offs of $182.8 million and $145.7 million, respectively. Total recoveries were $22.9 million and $19.9 million, respectively, of which $17.1 million and $14.1 million, respectively, were captured via loan sales to a third-party collection agency. For the nine months ended September 30, 2024 and 2023, includes gross write-offs of $545.9 million and $342.9 million, respectively. Total recoveries were $78.4 million and $51.2 million, respectively, of which $60.9 million and $32.5 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 of $5.3 million was primarily driven by: (i) losses in the 2024 period compared to gains in the 2023 period on student loan, personal loan and risk retention interest rate swap positions due to decreases in interest rates during the 2024 period compared to increases during the 2023 period ($342.7 million); and (ii) higher personal and student loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates ($34.1 million). These decreases were partially offset by: (i) fair value gains on student loans in the 2024 period compared to losses during the 2023 period which were primarily impacted by higher aggregate average unpaid principal balance ($169.0 million); (ii) higher fair value gains on personal loans which were primarily impacted by lower discount rate assumptions as well as higher aggregate average unpaid principal balance ($159.9 million); and (iii) 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 ($42.1 million). Nine Months . The decrease in loan origination, sales, and securitizations income of $106.9 million was primarily driven by: (i) higher personal loan as well as student loan write-offs in the 2024 period, primarily driven by longer loan holding periods and elevated charge off rates ($175.8 million); (ii) lower gains on student loan, personal loan and risk retention interest rate swap positions primarily driven by larger increases in interest rates in the 2023 period compared to mixed rate movement during the 2024 period ($154.6 million); and (iii) lower fair value gains on personal loans, which were primarily impacted by higher prepayment rate assumptions ($107.3 million). 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 ($196.7 million); and (ii) higher fair value gains on student loans, which were primarily impacted by lower discount rate assumptions and higher aggregate average unpaid principal balance ($147.4 million). Servicing We own the master servicing on all of the servicing rights that we retain and, in each case, recognize the gross servicing rate applicable to each serviced loan. Sub-servicers are utilized for all serviced student loans and home loans, which 87 SoFi Technologies, Inc. TABLE OF CONTENTS represents a cost to SoFi, but these arrangements do not impact our calculation of the weighted average basis points earned for each loan type serviced. Further, there is no impact on servicing income due to forbearance and moratoriums on certain debt collection activities, and there are no waivers of late fees. The table below presents information related to our loan servicing activities: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Servicing income recognized Personal loans (1) $ 30,575 $ 5,048 $ 25,527 506 % $ 63,120 $ 17,234 $ 45,886 266 % Student loans 5,711 6,219 (508) (8) % 17,311 19,235 (1,924) (10) % Home loans 4,459 3,721 738 20 % 12,787 11,052 1,735 16 % Servicing rights fair value change Personal loans (1) $ 7,388 $ (1,998) $ 9,386 n/m $ 108,988 $ (9,943) $ 118,931 n/m Student loans (4,254) (4,788) 534 (11) % (5,130) (2,238) (2,892) 129 % Home loans 1,664 3,777 (2,113) (56) % 11,800 4,981 6,819 137 % ___________________ (1) Increases during the 2024 periods were primarily attributable to higher loan sales. Directly attributable expenses The directly attributable expenses allocated to the Lending segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Direct advertising $ 51,587 $ 49,477 $ 2,110 4 % $ 152,182 $ 142,843 $ 9,339 7 % Lead generation 40,376 35,229 5,147 15 % 97,385 90,303 7,082 8 % Compensation and benefits 34,162 31,136 3,026 10 % 93,041 87,242 5,799 7 % Loan origination and servicing costs 14,464 12,307 2,157 18 % 37,075 35,676 1,399 4 % Professional services 3,776 1,650 2,126 129 % 8,931 6,610 2,321 35 % Intercompany technology platform expenses 1,342 300 1,042 347 % 2,222 512 1,710 334 % Other (1) 7,257 8,426 (1,169) (14) % 20,846 29,456 (8,610) (29) % Directly attributable expenses $ 152,964 $ 138,525 $ 14,439 10 % $ 411,682 $ 392,642 $ 19,040 5 % ___________________ (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 nine months ended September 30, 2024 increased by $14.4 million, or 10%, and $19.0 million, or 5%, respectively, compared to the same periods in 2023, primarily due to: (i) an increase in direct advertising primarily related to online and digital advertising, partially offset by decreases in direct mail advertising, (ii) an increase in student and personal loan lead generation channels, (iii) an increase in allocated compensation and related benefits, which reflected increases in average compensation in 2024, and (iv) a decline in other expenses, primarily related to third-party loan fraud and tools and subscriptions. 88 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Personal loans Fair value of consideration received: Cash $ 374,818 $ 15,098 $ 2,011,381 $ 66,571 Receivable 2,252 — 5,288 — Servicing assets recognized 22,290 767 126,311 1,655 Repurchase liabilities recognized (1,275) (45) (7,256) (405) Total consideration 398,085 15,820 2,135,724 67,821 Aggregate unpaid principal balance and accrued interest of loans sold 377,257 15,098 2,016,721 65,420 Realized gain $ 20,828 $ 722 $ 119,003 $ 2,401 Sale execution (1)(2) 105.9 % 105.1 % 106.3 % 104.3 % Student loans Fair value of consideration received: Cash $ — $ — $ 310,331 $ 98,624 Servicing assets recognized — — 8,249 2,792 Repurchase liabilities recognized — — (46) (16) Total consideration — — 318,534 101,400 Aggregate unpaid principal balance and accrued interest of loans sold — — 303,578 99,916 Realized gain $ — $ — $ 14,956 $ 1,484 Sale execution (1) — % — % 104.9 % 101.5 % Home loans Fair value of consideration received: Cash $ 513,487 $ 331,364 $ 1,243,195 $ 676,235 Servicing assets recognized 4,430 3,376 10,652 7,133 Repurchase liabilities recognized (890) (468) (2,029) (1,315) Total consideration 517,027 334,272 1,251,818 682,053 Aggregate unpaid principal balance and accrued interest of loans sold 504,694 333,951 1,230,251 678,561 Realized gain $ 12,333 $ 321 $ 21,567 $ 3,492 Sale execution (1) 102.6 % 100.2 % 101.9 % 100.7 % _____________________ (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. (2) Sales execution excludes net origination fees (costs), which are recognized in earnings at the time of origination. Personal loans sold during the three and nine months of 2024 had related net origination fees (costs) of $8.7 million and $26.8 million, respectively. Sales execution, for the respective periods, including these net origination fees (costs) would be 108.2% and 107.6%. Personal loans sold during the three and nine months of 2023 had related origination (costs) of $(0.02) million and $(0.09) million, respectively, and no origination fees for either period. Sales execution, for the respective periods, including these origination (costs) would be 104.9% and 104.1%, respectively. 89 SoFi Technologies, Inc. TABLE OF CONTENTS The following table summarizes our delinquent whole loan sales during the three and nine months ended September 30, 2024. There were no delinquent whole loan sales during the three and nine months ended September 30, 2023. Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 Personal loans Fair value of consideration received: Cash $ 6,481 $ 17,030 Servicing assets recognized 5,676 13,960 Repurchase liabilities recognized (24) (77) Total consideration 12,133 30,913 Aggregate unpaid principal balance and accrued interest of loans sold (1) 85,363 225,224 Realized loss $ (73,230) $ (194,311) Sale execution (2) 14.2 % 13.8 % _____________________ (1) During the three and nine months ended September 30, 2024, includes $81.0 million and $212.9 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 nine months ended September 30, 2024, $50.3 million and $140.6 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 nine months ended September 30, 2024, and otherwise would have been charged off as of September 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. In addition to the previously disclosed personal, student and home loan sale activity, we also sold a secured loan at par during the three and nine months ended September 30, 2024, which had an aggregate unpaid principal balance and accrued interest of $312.5 million. Technology Platform Segment In the table below, we present the total accounts metric related to Galileo within our Technology Platform segment: 2024 vs 2023 September 30, 2024 September 30, 2023 Change % Change Total accounts 160,179,299 136,739,131 23,440,168 17 % See “ Key Business Metrics ” and “ Business Overview ” for further discussion of this measure as it relates to our Technology Platform segment. Technology Platform Segment Results of Operations The following table presents the measure of contribution profit for the Technology Platform segment: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 629 $ 573 $ 56 10 % $ 1,685 $ 573 $ 1,112 194 % Noninterest income 101,910 89,350 12,560 14 % 290,658 254,860 35,798 14 % Total net revenue 102,539 89,923 12,616 14 % 292,343 255,433 36,910 14 % Directly attributable expenses (69,584) (57,732) (11,852) 21 % (197,495) (191,231) (6,264) 3 % Contribution profit $ 32,955 $ 32,191 $ 764 2 % $ 94,848 $ 64,202 $ 30,646 48 % 90 SoFi Technologies, Inc. TABLE OF CONTENTS Net interest income Net interest income in our Technology Platform segment of $0.6 million and $1.7 million for the three and nine months ended September 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. Noninterest income Noninterest income in our Technology Platform segment increased by $12.6 million, or 14%, and $35.8 million, or 14%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. The increase was primarily attributable to growth in technology services fees of $8.0 million and $25.7 million for the three and nine month year over year periods, respectively, driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth. Noninterest income also included $9.9 million and $25.2 million of intercompany revenue for the three and nine months ended September 30, 2024, respectively, compared to $7.0 million and $15.6 million for the three and nine months ended September 30, 2023, respectively. The increase in intercompany revenue was primarily attributable to increased usage of technology platform services during the 2024 period by our Financial Services segment as we continue to leverage synergies to enhance our product offerings. Directly attributable expenses The directly attributable expenses allocated to the Technology Platform segment that were used in the determination of the segment's contribution profit were as follows: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Compensation and benefits $ 38,127 $ 34,155 $ 3,972 12 % $ 109,814 $ 112,201 $ (2,387) (2) % Product fulfillment 15,501 11,784 3,717 32 % 44,077 34,332 9,745 28 % Tools and subscriptions 7,757 6,085 1,672 27 % 20,739 19,931 808 4 % Professional services 3,663 3,664 (1) — % 9,585 10,841 (1,256) (12) % Other (1) 4,536 2,044 2,492 122 % 13,280 13,926 (646) (5) % Directly attributable expenses $ 69,584 $ 57,732 $ 11,852 21 % $ 197,495 $ 191,231 $ 6,264 3 % ___________________ (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 increased by $11.9 million, or 21%, and $6.3 million, or 3%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. For the three month period, the increase was primarily attributable to an increase in compensation and benefits expense, which reflected an increase in average compensation in the 2024 period, and an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform. For the nine month period, the increase was primarily attributable to an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform, partially offset by a decrease in compensation and benefits expense which reflected a decrease in average headcount year over year. Financial Services Segment In the table below, we present the total products metric related to our Financial Services segment: 2024 vs. 2023 September 30, 2024 September 30, 2023 Change % Change Total products 11,759,969 8,853,900 2,906,069 33 % Total products in our Financial Services segment is a subset of our total products metric. See “ Key Business Metrics ” and “ Business Overview ” for a further discussion of this measure as it relates to our Financial Services segment. 91 SoFi Technologies, Inc. TABLE OF CONTENTS Financial Services Segment Results of Operations The following table presents the measure of contribution profit (loss) for the Financial Services segment: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income $ 154,143 $ 93,101 $ 61,042 66 % $ 413,085 $ 225,775 $ 187,310 83 % Noninterest income 84,165 25,146 59,019 235 % 151,906 71,625 80,281 112 % Total net revenue 238,308 118,247 120,061 102 % 564,991 297,400 267,591 90 % Directly attributable expenses (138,550) (114,987) (23,563) 20 % (372,839) (322,722) (50,117) 16 % Contribution profit (loss) $ 99,758 $ 3,260 $ 96,498 n/m $ 192,152 $ (25,322) $ 217,474 n/m Net interest income Net interest income in our Financial Services segment increased by $61.0 million, or 66%, and $187.3 million, or 83%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, which was primarily attributable to an increase of $62.4 million and $192.2 million, respectively, in 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 our SoFi Money product and related deposits at SoFi Bank, as well as the impact of higher interest rates offered to members. Noninterest income The table below presents revenue from contracts with customers disaggregated by type of service, as well as a reconciliation of total revenue from contracts with customers to total noninterest income for the Financial Services segment. Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 2024 2023 $ Change % Change 2024 2023 $ Change % Change Referrals, loan platform business (1) $ 13,283 $ 9,066 $ 4,217 47 % $ 35,865 $ 24,261 $ 11,604 48 % Referrals, other (2) 1,960 917 1,043 114 % 5,732 3,571 2,161 61 % Interchange (2) 18,771 6,029 12,742 211 % 45,230 21,961 23,269 106 % Brokerage (2) 5,651 6,084 (433) (7) % 15,645 16,187 (542) (3) % Other (2)(3) 565 1,395 (830) (59) % 2,146 2,230 (84) (4) % Total revenue from contracts with customers (4) 40,230 23,491 16,739 71 % 104,618 68,210 36,408 53 % Loan platform business, other (1) 42,358 — 42,358 n/m 42,508 — 42,508 n/m Other sources of revenue (5) 1,577 1,655 (78) (5) % 4,780 3,415 1,365 40 % Total Financial Services noninterest income $ 84,165 $ 25,146 $ 59,019 235 % $ 151,906 $ 71,625 $ 80,281 112 % _____________________ (1) Presented within noninterest income—loan platform fees in the condensed consolidated statements of operations and comprehensive income (loss). (2) Presented within noninterest income—other in the condensed consolidated statements of operations and comprehensive income (loss). (3) Includes revenues from enterprise services and equity capital markets services. (4) See Note 3. Revenue to the Notes to Condensed Consolidated Financial Statements for additional information. (5) Presented within noninterest income—other, noninterest income—servicing and noninterest income—loan origination, sales, and securitizations in the condensed consolidated statements of operations and comprehensive income (loss). Noninterest income in our Financial Services segment increased by $59.0 million, or 235%, and $80.3 million, or 112%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, primarily due to: (i) growth in our Loan Platform Business of $46.6 million and $54.1 million, respectively, which includes increases in loan platform fees related to revenue from loans which we originate on behalf of third parties in order to subsequently sell as well as pre-qualified borrower referrals to third-party loan origination partners as we continue to drive volume to our partners; 92 SoFi Technologies, Inc. TABLE OF CONTENTS and (ii) an increase in interchange fees of $12.7 million and $23.3 million, respectively , which coincided with increased credit card and debit card transactions. The directly attributable expenses allocated to the Financial Services segment that were used in the determination of the segment's contribution profit (loss) were as follows: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Compensation and benefits $ 32,596 $ 29,530 $ 3,066 10 % $ 97,410 $ 90,697 $ 6,713 7 % Member incentives 19,986 15,767 4,219 27 % 61,655 39,084 22,571 58 % Product fulfillment 19,258 12,909 6,349 49 % 53,055 34,779 18,276 53 % Lead generation 20,164 6,220 13,944 224 % 34,035 29,700 4,335 15 % Direct advertising 15,049 8,026 7,023 88 % 30,236 36,667 (6,431) (18) % Provision for credit losses 6,008 21,831 (15,823) (72) % 24,807 42,853 (18,046) (42) % Professional services 6,494 3,401 3,093 91 % 15,760 7,541 8,219 109 % Intercompany technology platform expenses 5,140 3,794 1,346 35 % 15,624 8,532 7,092 83 % Other (1) 13,855 13,509 346 3 % 40,257 32,869 7,388 22 % Directly attributable expenses $ 138,550 $ 114,987 $ 23,563 20 % $ 372,839 $ 322,722 $ 50,117 16 % ___________________ (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 $23.6 million, or 20%, and $50.1 million, or 16%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, primarily due to: (i) an increase in direct member incentives utilized to drive adoption and usage of our Financial Services products, the most significant of which was our SoFi Money product; (ii) an increase in product fulfillment costs, which included debit card fulfillment services, primarily related to our SoFi Money product; (iii) a net increase in direct advertising and lead generation costs for the three month period to expand our Loan Platform Business, and a net decrease for the nine month period related to efficient partnerships as we continue to drive expansion of our SoFi Money product, partially offset by increased costs related to our Loan Platform Business; (iv) a decrease in provision for credit losses primarily related to improvement in credit card delinquency rates, as well as (v) an increase in intercompany expenses attributable to increased usage of technology platform services during the 2024 periods. Corporate/Other Non-Reportable Segment Non-segment operations are classified as Corporate/Other, which includes net revenues associated with corporate functions, non-recurring gains and losses from non-securitization investment activities, interest income and realized gains and losses associated with investments in AFS debt securities, and gains or losses on extinguishment of convertible debt, all of which are not directly related to a reportable segment. Net interest expense within Corporate/Other also reflects the financial impact of our capital management activities within the treasury function, which reflects the residual impact from FTP charges and FTP credits allocated to our reportable segments under our FTP framework. The following table presents the measure of total net income (loss) for Corporate/Other: Three Months Ended September 30, 2024 vs 2023 Nine Months Ended September 30, 2024 vs 2023 ($ in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change Net interest income (expense) $ (40,030) $ (13,926) $ (26,104) 187 % $ (30,474) $ (52,396) $ 21,922 (42) % Noninterest income (loss) 59 (6,008) 6,067 n/m 46,448 (10,547) 56,995 n/m Total net income (loss) $ (39,971) $ (19,934) $ (20,037) 101 % $ 15,974 $ (62,943) $ 78,917 n/m 93 SoFi Technologies, Inc. TABLE OF CONTENTS 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 September 30, Nine Months Ended September 30, ($ in thousands) 2024 2023 2024 2023 Reportable segments directly attributable expenses $ (361,098) $ (311,244) $ (982,016) $ (906,595) Intercompany expenses 9,931 6,950 25,227 15,645 Expenses not allocated to segments: Share-based compensation expense (63,646) (62,005) (179,785) (202,109) Employee-related costs (1) (77,176) (63,728) (207,346) (181,147) Depreciation and amortization expense (51,791) (52,516) (149,953) (147,967) Goodwill impairment expense — (247,174) — (247,174) Other corporate and unallocated expenses (2) (89,486) (74,420) (273,440) (190,354) Total noninterest expense $ (633,266) $ (804,137) $ (1,767,313) $ (1,859,701) ___________________ (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 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 work to ensure the Company has the ability to meet its obligations. The following table summarizes our total liquidity reserves: September 30, 2024 Amount Available Amount Borrowed / Utilized Remaining Available Capacity Cash and cash equivalents $ 2,354,965 n/a $ 2,354,965 Investments in AFS debt securities (1) 1,318,330 n/a 1,318,330 Warehouse facilities (2) 7,530,000 1,332,640 6,197,360 Revolving credit facility (3) 645,000 498,300 146,700 FHLB advances (4) 185,594 25,200 160,394 Other lines of credit (5) 50,000 — 50,000 Total liquidity $ 12,083,889 $ 1,856,140 $ 10,227,749 ___________________ (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 September 30, 2024, warehouse facility maturity dates 94 SoFi Technologies, Inc. TABLE OF CONTENTS ranged from January 2025 through October 2027. See Note 9. Debt to the Notes to Condensed Consolidated Financial Statements for additional information. (3) As of September 30, 2024, the amount utilized under the revolving credit facility includes $12.3 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 September 30, 2024, we had $159.7 million of investments in AFS debt securities and $51.6 million of loans pledged as collateral to the FHLB to secure undrawn borrowing capacity of $185.6 million, of which $25.2 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 September 30, 2024 and December 31, 2023, time deposit balances due in less than one year totaled $1.4 billion and $2.6 billion, respectively. As of September 30, 2024 and December 31, 2023, the amount of uninsured deposits totaled $557.0 million and $348.1 million, respectively. As of September 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 September 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 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 September 30, 2024. 95 SoFi Technologies, Inc. TABLE OF CONTENTS 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 September 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 September 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. The risk- and leverage-based capital ratios and amounts are presented below: September 30, 2024 December 31, 2023 ($ in thousands) Amount Ratio Amount Ratio Required Minimum (1) Well-Capitalized Minimum (2) SoFi Bank CET1 risk-based capital $ 4,044,118 17.1 % $ 3,331,616 17.3 % 7.0 % 6.5 % Tier 1 risk-based capital 4,044,118 17.1 3,331,616 17.3 8.5 8.0 Total risk-based capital 4,092,238 17.3 3,386,105 17.6 10.5 10.0 Tier 1 leverage 4,044,118 14.0 3,331,616 15.0 4.0 5.0 Risk-weighted assets 23,688,815 19,244,841 Quarterly adjusted average assets 28,797,726 22,273,285 SoFi Technologies CET1 risk-based capital $ 4,263,249 16.2 % $ 3,439,969 15.0 % 7.0 % n/a Tier 1 risk-based capital 4,263,249 16.2 3,439,969 15.0 8.5 n/a Total risk-based capital 4,311,370 16.3 3,494,458 15.3 10.5 n/a Tier 1 leverage 4,263,249 13.2 3,439,969 12.8 4.0 n/a Risk-weighted assets 26,379,209 22,883,185 Quarterly adjusted average assets 32,219,128 26,782,318 ____________________ 96 SoFi Technologies, Inc. TABLE OF CONTENTS (1) Required minimums presented for risk-based capital ratios include the required capital conservation buffer. (2) The well-capitalized minimum measure is applicable at the bank level only. As of September 30, 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 September 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 coverage through a network of participating banks in our Insured Deposit Program. We continued to have strong deposit contribution through the third 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 97 SoFi Technologies, Inc. TABLE OF CONTENTS 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 September 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: Nine Months Ended September 30, ($ in thousands) 2024 2023 Net cash used in operating activities $ (919,704) $ (6,979,198) Net cash used in investing activities (3,540,106) (476,335) Net cash provided by financing activities 3,813,743 8,906,046 Cash Flows from Operating Activities For the nine months ended September 30, 2024, net cash used in operating activities of $919.7 million stemmed from net income of $166.2 million, an unfavorable change in our operating assets net of operating liabilities of $1.2 billion, and a positive adjustment for non-cash items of $146.9 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 $13.6 billion during the period and also purchased loans of $21.7 million. These cash uses were partially offset by principal payments on loans of $7.0 billion and proceeds from loan sales of $5.3 billion. For the nine months ended September 30, 2023, net cash used in operating activities of $7.0 billion stemmed from a net loss of $348.7 million and an unfavorable change in our operating assets net of operating liabilities of $7.3 billion, partially offset by a positive adjustment for non-cash items of $647.7 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 $13.1 billion during the period and also purchased loans of $197.5 million. These cash uses were partially offset by principal payments on loans of $5.1 billion and proceeds from loan sales of $839.8 million. Cash Flows from Investing Activities For the nine months ended September 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 $4.3 billion, partially offset by principal payments on loans of $1.3 billion and proceeds from loan sales of $434.5 million, as well as net outflows related to credit cards of $30.7 million. Other cash uses included net purchases of $878.2 million related to our investments in AFS debt securities, $112.0 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and $20.6 million related to purchases of non-securitization investments, primarily FRB stock and FHLB stock. These uses were partially offset by proceeds of $69.5 million from our securitization investments. For the nine months ended September 30, 2023, net cash used in investing activities of $476.3 million was primarily attributable to net purchases of $280.9 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, $97.1 million related to loan activities, primarily driven by credit 98 SoFi Technologies, Inc. TABLE OF CONTENTS cards, $77.1 million for purchases of property, equipment and software, which primarily included internally-developed software and purchased software, and $45.9 million related to purchases of non-securitization investments, primarily FRB stock and FHLB stock. These uses were partially offset by proceeds of $101.3 million from our securitization investments. Cash Flows from Financing Activities For the nine months ended September 30, 2024, net cash provided by financing activities of $3.8 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $5.7 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 $1.9 billion related to our warehouses, and debt repayments of $340.1 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 in May 2024. For the nine months ended September 30, 2023, net cash provided by financing activities of $8.9 billion was primarily attributable to net cash sources from our SoFi Bank deposits of $8.3 billion. Additionally, our proceeds from debt financing activity of $1.2 billion exceeded our debt repayments of $595.2 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. We are also the servicer for all trusts in which we hold a financial interest. 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. 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 that initial 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 September 30, 2024 compared to December 31, 2023 were principally attributed to the following: • a decrease of $645.8 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 $1.7 billion, primarily related to longer loan holding periods on student loans, and secured loans; • an increase in loans held for sale of $1.9 billion, which was primarily related to personal loan originations; • an increase in investments in AFS debt securities portfolio of $882.9 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 $5.8 billion, which was primarily related to increased savings deposits from members; and 99 SoFi Technologies, Inc. TABLE OF CONTENTS • a decrease of $1.9 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 September 30, 2024, management has determined that it is more likely than not that the fair values of the Galileo and Technisys reporting units within the Technology Platform segment, with goodwill of $816.0 million and $522.6 million, respectively, 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 100 SoFi Technologies, Inc. TABLE OF CONTENTS 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 manage and mitigate these risks using interest rate derivative hedges, our investment portfolio, and broader asset liability management activities. Our corporate Treasury group, under the supervision of our ALCO and Board Risk Management committees, centrally manages our interest rate risk. Our ALCO includes leadership from Treasury, Finance, Independent Risk Management, and Business Units. ALCO is responsible for identifying key risks and exposures, establishing tolerances and limits, monitoring them appropriately, and managing these risks. Risk management activities are conducted under the oversight of respective Board Risk Management committees. Our primary metrics for the measurement and monitoring of interest rate risk (IRR) on a company-wide basis include Net Interest Income (NII) and fair value sensitivity. Additionally, we utilize Economic Value of Equity (EVE) as a longer term metric of interest rate risk. These interest rate risk metrics are calculated for a wide range of interest rate scenarios, and risk appetite limits have been established. The interest rate risk exposures and historical trends against risk limit scenarios are reported to our ALCO and EBRC. The NII risk metric measures the change in net interest income under an interest rate shock relative to the forecasted baseline scenario over a 12 month horizon. Our baseline forecast takes into consideration the current balance sheet, projections of future business activity, and the market expectations of benchmark interest rates. The NII metric is driven by key modeling assumptions for both assets and liabilities. For assets, key assumptions include prepayment speeds, new lending origination volumes, and new lending origination pricing. For liabilities, key assumptions include forecasted deposit balances and deposit pricing betas. Fair value sensitivities measure the interest rate sensitivity of balance sheet assets recorded at fair value which primarily consists of loans and securitization investments. Servicing rights and AFS securities in the investment portfolio are also measured as fair value sensitivities. The fair value sensitivity reflects the change in asset price due to an interest rate shock to the underlying benchmark discount rate. Key assumptions for the fair value sensitivity include conditional prepayment rates, annual default rates, and discount rates. Please refer to the Level 3 Significant Inputs in Note 12. Fair Value Measurements to the Notes to Condensed Consolidated Financial Statements for more details on these assumptions. 101 SoFi Technologies, Inc. TABLE OF CONTENTS The following tables summarize the potential effect on (i) net interest income; and (ii) the change in fair value of interest rate sensitive financial assets recorded on our consolidated balance sheet, based upon a sensitivity analysis performed by management assuming a hypothetical, immediate and parallel increase and decrease in market interest rates of 100 and 200 basis points. While a relevant measure of the our interest rate exposure, this sensitivity analysis does not represent a forecast of our net interest income. Net Interest Income (Expense) September 30, 2024 December 31, 2023 Basis point change scenario +200 $ (117,117) $ (80,484) +100 (53,195) (33,942) -100 44,479 42,855 -200 83,231 81,436 Change in Fair Value September 30, 2024 December 31, 2023 Basis point change scenario +200 $ (1,003,553) $ (802,857) +100 (512,946) (409,956) -100 540,363 438,486 -200 1,104,443 896,011 Our consolidated balance sheet is liability sensitive, given that liabilities are expected to reprice faster than assets resulting in higher net interest income in decreasing interest rate scenarios. The period over period change in sensitivity reflected in the tables above are attributed to changes in balance sheet composition and asset-liability management activities. In addition to our net interest income and fair value sensitivity analysis above, we also utilize EVE as a longer term measure of interest rate risk. EVE is a po