SoFi New Member Additions Soared 44% Amid Strong ‘Cross-Buy’ Opportunities

SoFi Technologies said in its latest earnings report that it had seen significant growth in cross-selling activity, and noted that the vast majority of its SoFi Money deposits came from direct deposit members.

The company said Monday (Jan. 29) net new member adds of nearly 585,000 represented 44% growth for a total of over 7.5 million members at the close of the fourth quarter.

New product additions came in at of nearly 695,000 and growth of 41% to over 11 million total products at period end.

The company’s quarterly supplementals showed that personal loan originations of $3.2 billion in the fourth quarter of 2023 were up 31% year over year.

More than half of newly funded SoFi Money accounts are setting up direct deposit by day 30, CEO Anthony Noto said, “which has had a significant impact on debit spending.” Debit spending was more than $1.5 billion on a quarterly run rate and is three times higher than it was last year.

Embracing Cross-Selling Opportunities

Noto said on the conference call with analysts that “we continue to diversify our revenue with financial services and the tech platform contributing 40% of fourth quarter adjusted net revenue up from 34% in the year ago quarter.” He noted that student loan originations grew 95% year over year to $790 million.

“We see ample opportunity for cross buy in terms of engagement,” Noto said on the call.

CFO Chris Lapointe said on the call that the company’s personal loan borrower’s weighted average income is $171,000 with a weighted average FIO score of 744. SoFi’s student loan borrower’s weighted average income is $154,000 with a weighted average FICO of 781. Charge-offs for the loans held on the balance sheet are, he said, “anticipated to normalize back towards pre-COVID levels.” The personal loan delinquency rate as of the latest quarter was 0.56%, with an annualized charge off rate of 4%, which in turn was up from 3.4% seen in the third quarter of this past year.

Galileo accounts grew 11% year over year to 145 million, said Lapointe.

During the question-and-answer session, Noto said that “in the credit card business, we’ve really hunkered down there and pulled back to make sure we have the credit profile right [for our] market segmentation. And most importantly, like we did in SoFo Money, we’ve made sure we have the unit economics right.”

Investors sent the shares soaring more than 17% in intraday trading as the company logged its first profit and management said it could add at least 2.3 million new members in the current year, up 30% year on year and 20% to 25% CAGR in its top line through the 2023 to 2026 timeframe.