--- title: "SOFI Trans: Raises FY rev. guide, EBITDA flat" type: "News" locale: "en" url: "https://longbridge.com/en/news/294216719.md" datetime: "2026-07-29T13:32:28.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294216719.md) - [en](https://longbridge.com/en/news/294216719.md) - [zh-HK](https://longbridge.com/zh-HK/news/294216719.md) --- # SOFI Trans: Raises FY rev. guide, EBITDA flat **Below is Dolphin Research's transcript of SoFi Technologies' Q2 FY26 earnings call.** **I. Earnings Highlights** 1\. **Guidance (revenue raised)**: Lifted FY26 adj. net revenue to $4.75–4.85bn, implying ~32%–35% YoY growth (vs. ~30% prior). Maintained adj. EBITDA of ~$1.6bn (33%–34% margin), adj. net income of ~$825mn (~17% net margin), and EPS of ~$0.60. EPS now assumes a 22% tax rate (~+700bps vs. initial); on the initial mid-point tax rate, EPS would be ~$0.65. Rate path moved from two cuts in 2026 to 1–2 hikes. 2\. **Key Q2 metrics**: Adj. net revenue was $1.2bn (+40% YoY), marking the 19th straight quarter above the Rule of 40 (score 70 = 40% revenue growth + 30% EBITDA margin). Adj. EBITDA was $358mn (+44% YoY) with a 30% margin and 31% incremental EBITDA margin. Adj. net income reached $160mn (13% net margin), while GAAP net income rose 61% YoY, delivering the 11th consecutive GAAP-profitable quarter. Adj. EPS was $0.12, including a roughly half-cent drag from a higher-than-expected tax rate. 3\. **Cash flow and capital**: Q2 cash revenue was $1.2bn, the third straight quarter above $1bn. NII was $790mn, and ~$420mn came from interchange, brokerage, tech platform, loan platform, and origination fees. Tangible book value was $9.5bn (+80% YoY); TBVPS was $7.34 vs. $4.72 a year ago (+56% YoY). Total capital ratio was 18.8%, well above the 10.5% regulatory floor, with a mid-term target in the low-to-mid teens. 4\. **NIM and deposits**: NIM was 5.98%, up 4bps QoQ, and is expected to stay above 5% sustainably. Total deposits rose $5.3bn QoQ to $45.5bn; total assets increased $7.2bn QoQ, including $5.8bn of loan growth. Corporate cash stood at $3.6bn. 5\. **Long-term return targets**: LT ROTCE target remains 20%–30%, and management sees a clearer path. Net margin is tracking toward 25%–30% (incremental net margin is ~30%) and, with more fee-based, light-capital revenue, aim to lift revenue per dollar of tangible common equity to ~1x. **II. Call Details** **2.1 Management Commentary** 1\. **Member and product growth (flywheel inflection)** a. Q2 added a record 1.1mn members, taking total members to 15.8mn (+35% YoY). New products added hit a record 2.2mn, bringing total products to 24.4mn (+42% YoY), and for the first time product adds were 2x member adds in a single quarter. b. Cross-buy accelerated: 51% of new products were opened by existing members (vs. 43% in Q1 and 35% a year ago, +16pp YoY). Products per member have accelerated for two straight quarters, and management believes the flywheel is approaching escape velocity. c. Non-loan products accounted for 87% (21.3mn), with materially lower CAC than loan products. This supports downstream loan originations. 2\. **SoFi Plus (paid subscription)** a. Relaunched in early Q2 as a fully paid model with enhanced benefits, including 4.5% on SoFi Money and a 1% match on SoFi Invest. The value proposition was materially upgraded. b. Paid subs surpassed 200k in one quarter (~206k), with an annualized revenue run-rate above $24mn. Eighty-five percent were existing members, and 25% bought at least one additional product after subscribing, with strongest demand for SoFi Invest. c. Management target: 1mn members and a $120mn annualized revenue run-rate in one year. This is expected to further lift cross-buy. 3\. **SoFi Coach (AI financial assistant launched in Jun)** a. Built on the SoFi Relay data hub, it connects to 12k institutions, spans 6.5bn transactions, covers roughly $750bn in outstanding balances, and tracks over $250bn of members' real assets. The data breadth underpins its utility. b. Since launch, it has generated nearly 500k conversations with a 90%+ positive rating, and over half of interactions focus on investing. Auto subscription management and cancellation will roll out later this year. 4\. **SoFi Invest and product innovation** a. Invest products rose 38% YoY, and brokerage revenue increased roughly 2.5x YoY. Launched Composer by SoFi, an AI tool to build, backtest, and automate strategies with natural language. b. Opened SpaceX IPO access in Jun, the largest and most subscribed IPO in company history and the 36th IPO in five years. Also launched the SoFi Social 50 Income ETF this month. 5\. **SoFi Credit Card** a. Credit card revenue more than doubled YoY and grew nearly 50% QoQ, with products up 17% QoQ. The back book has reached profitability. 6\. **Crypto and Big Business Banking (B2B)** a. As the first nationally chartered bank to launch crypto trading and its own stablecoin, SoFi USD, transactions have been processed on the SoFi Exchange Network since Q2. Initial business clients can move funds 24/7 in real time. b. Big Business Banking (announced in Jan and launched within months) enables regulated deposit accounts, real-time fiat and digital asset transfers via API, and fiat–crypto conversion in a regulated environment. Debit/credit cards (Mastercard) will begin settling in SoFi USD in the coming weeks. 7\. **SoFi Technology Solutions (STS)** a. Acquired Peach Finance, adding platform services for credit cards, revolving credit, BNPL, and installment loans. SoFi will insource processing for its own credit card. b. Began migrating SoFi Money to the new Cloud Native Banking Core, making SoFi the first large US bank on the platform. This sets a reference model for other institutions. 8\. **Loan product innovation** a. Launched SMB lending, initially via the Loan Platform Biz. (LPB), with potential to bring on balance sheet to generate recurring NII. SMB borrowers typically face \>30% rates, and SoFi can price roughly 10ppt lower. b. Rolled out a new HELOC experience, and together with home equity loans, it accounted for one-third of a record mortgage origination quarter. This strengthens the home equity franchise. 9\. **On-balance-sheet advantage**: From Q1 2024 to Q2 2026, cumulative cash NII totaled $5.4bn, which is 2.7x the $2.0bn of non-cash on-balance-sheet premiums over the same period. This demonstrates strong on-balance-sheet performance and provides visible, controllable income to fund new investments. **2.2 Q&A** **Q: For LPB's newly added SMB and home equity categories, how large is the TAM? How fast can you scale, and what does unit economics look like?** **A:** In the early years, LPB primarily operated as a referral channel, directing declines to the marketplace for a fee. It then scaled into third-party origination of unsecured personal loans, and the ideal state is an 'asset type menu' for investors to self-select by risk-return, making new asset types critical. This quarter marked the first scaled SMB partnerships: a 3-year, $3bn agreement with BasePoint Capital and another undisclosed partner for several hundred million dollars, with HELOCs to be added in coming days. SMB is just beginning to scale, with solid application demand and expected economics comparable to or slightly better than current levels. Closed-end second lien/mortgage has established healthy monthly originations, with partnership volumes of $100–200mn per month, active discussions with multiple parties, and full capacity to absorb. We do not disclose counterparties' pricing, but expect it to be similar to current execution. In SMB, we can price roughly 10ppt below market, just as personal loan WAC is ~12% vs. ~25% on credit cards; sharper pricing attracts higher-quality borrowers, reinforcing the 'originate prime assets — deliver high-return assets to partners/on balance sheet — release capital to lend again' productivity flywheel. **Q: With cross-buy at an inflection, is it time to prioritize monetization over member growth, or will both rise together over the next few years?** **A:** This quarter represents an important inflection that actually began in Q1. H1 proved our broad 'all-in-one app' strategy works, with products per member improving in both Q1 and Q2, and we expect that to continue. Relay and SoFi Money are the lead-ins with widest appeal — over 7mn Money members and 6mn Relay members — and the more we bring them in, the more downstream lift we see in Invest, credit card, SMB, and loans, with near-zero CAC for those follow-on products. This effectively doubles loan-side profitability as acquisition costs vanish on cross-sell. The 2024 change is that SoFi Plus and SoFi Crypto are organically lifting products per member: Plus already surpassed 200k paid members, with a \>$24mn annualized run-rate and fast growth, 85% from existing members and one-quarter adding another product post sign-up. Hence, forward growth will be driven by member count, products per member, and revenue per product together. **Q: How are competition, CAC, and channel trends?** **A:** Outside of lending, competition is very benign and CAC remains stable. Growing members 35% and products 40%+ while holding CAC steady reflects strong data analytics and a compelling value proposition — each product is designed to be best-in-class in its category, so we do not mind which product a customer starts with. Competition is tougher in lending, but our offerings are differentiated. We rarely compete with large banks on personal loans due to their incentive to protect large credit card books, and our primary competitors are smaller players with less capital and higher funding costs; student loans and mortgages face very few rivals. Overall, the top and bottom of the funnel are fairly benign, pricing is consistently competitive, and our lower funding cost and agility help, with a significant share of mortgages and a rising share of personal loans sourced via cross-buy at zero CAC. **Q: With such strong results, why not raise the EBITDA outlook?** **A:** We raised revenue guidance by ~$100–200mn to reflect sustained strong execution and demand. When we see opportunities to deploy capital at attractive returns, we will lean in — there are many large, high-growth areas to invest in, and we prefer to capture future growth rather than simply expand margins now, as profit opportunities will remain. Incremental revenue gives us room to invest for LT growth while keeping EBITDA and EPS guidance unchanged. We do not want to chase near-term EPS/EBITDA at the expense of larger growth options, but we will stay balanced with the backdrop. Demand, product performance, credit and consumer trends, and investment trends are all moving in our favor, and the demand is not being bought through higher costs — incremental spend targets new growth vectors. This year we launched several businesses not in the initial FY26 plan: Big Business Banking, SMB, SoFi USD, and SoFi Crypto, and we are stepping up SoFi Plus given its strong traction. We also shifted our rate outlook from cuts to two hikes and still maintained revenue and profit guidance while raising revenue. Looking to H2: if we get two hikes, we are fine; if not, there may be upside, as guidance carries buffer to handle varied scenarios. **Q: LPB buy-side demand is strong, but you have not fully met requests to scale due to capital and unit economics; will this persist for personal loans, and does HELOC/SMB scaling affect that decision?** **A:** For personal-loan-related LPB, we are comfortable with current volumes, able to meet all contractual commitments with some headroom. More meaningful growth will come from other asset types, as discussed earlier. On capital, within the guidance window and medium-term plan we are self-funded, and as profitability expands, internal capital generation will increase, helped by fee, light-capital businesses and flexibility between on-balance-sheet and LPB monetization. We are confident we can operate comfortably within the target capital range without external financing under the current plan. That balance supports continued growth. **Q: As you add more business-oriented products (SMB, Big Business Banking), how does the cross-buy flywheel evolve?** **A:** The most common path starts with SoFi Relay or SoFi Money. Members entering via Relay often move to Money next, and those coming through Money often progress to Relay, Invest, or lending. SMB originated because a meaningful portion of our members are small biz owners. During COVID, when PPP loans were offered, we saw significant demand even though we did not offer SMB lending, so we built a compliant application flow and routed demand to lenders, then set up marketplace referrals and monetized. SMB is therefore highly synergistic with our core, and we will add SMB checking, savings, and other adjacencies to reinforce the flywheel. The market undervalues Big Business Banking. We initially sought to partner with crypto market participants, but many asked us to be their bank and build API-driven fiat-plus-crypto capabilities, which birthed the business. It not only stands alone financially but also drives second-order effects by expanding SoFi USD usage: Big Business Banking is live with SoFi USD payments, crypto settles in SoFi USD, and consumer debit/credit cards will settle via Mastercard in SoFi USD within weeks. **Q: What does the SoFi Plus customer profile look like, and what shifts do you see in wallet share and engagement (e.g., deposit balances)?** **A:** We relaunched SoFi Plus to raise awareness of other products because Plus bundles best-in-class benefits across products. Compared with using Money alone, Plus offers a higher rate; compared with Invest alone, Plus offers a 1% match; and the credit card benefits are richer. Of the 206k Plus members this quarter, 85% were existing members, so their profile mirrors our core base. Within the 25% who added a product post sign-up, Invest benefited most, spanning first-time investors and those transferring funds for the match, indicating rising wallet share; for the 15% whose first product is Plus, their second product is typically SoFi Money. Second-order effects are notable: among Money members who adopt Plus, one in four add a third product, and their deposits, AUM, and spend increase. A striking datapoint: the Q1 2021 Money cohort saw products per member rise by a full product this quarter following the Plus launch, showing strong impact even on five-year-old cohorts; this is the flywheel inflection we described, with Crypto also contributing. **Q: How will you pace excess capital deployment? CET1 has declined quickly in recent quarters; how do you view balance sheet growth and runoff?** **A:** One benefit of enlarging the balance sheet in Q1 and Q2 is strong visibility into 2027 revenue. If we simply maintain current scale, we can continue generating today's NII barring major macro or credit shocks, which makes this income highly predictable, under our full control, and able to backstop significant investment in any environment. This is why we keep loans on balance sheet instead of pushing everything through LPB: to ensure visible, deliverable future revenue. On top of that, LPB across personal loans, SMB, and closed-end second liens adds highly visible incremental returns. As noted, cumulative cash NII from Q1 2024 to Q2 2026 exceeded $5.0bn, 2x the non-cash premium over the same period, underscoring asset strength. (CFO) Our total risk-based capital ratio was 18.8% at quarter-end, which is our binding constraint and well above the 10.5% regulatory minimum. Over the long run, we believe a level in the low-to-mid teens is more appropriate; based on our plan and guidance, we are confident we can operate in that range without external capital. As profitability expands, internal capital generation will rise, and growth in fee, light-capital businesses will help. **Risk disclosures and statements for this article:**[**Dolphin Research Disclaimer and General Disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ## Related News & Research - [Will they or won't they? The case for and against a Fed rate hike](https://longbridge.com/en/news/294230315.md) - [ANALYSIS-Fed's 'hawkish hold' muddies path for stocks and bonds](https://longbridge.com/en/news/294302759.md) - [Apple Q3 Preview: Stock Hits All-Time Highs, Will Earnings Justify the Momentum?](https://longbridge.com/en/news/294246956.md) - [The Fed Held Rates at 3.5%-3.75%. Here's What That Means for Walmart, Costco, and Target.](https://longbridge.com/en/news/294274149.md) - [Mark Zuckerberg Says Can't Rely on Open Source AI Models Right Now: 'We Think That There's Some Risk…'](https://longbridge.com/en/news/294310763.md)