To The Moon

Fintech platform$SoFi Technologies Inc.(SOFI)$ released a strong Q4 results, benefiting from the comprehensive recovery of personal credit demand in US. Sofi's key financial indicators and operational indicators both hit record highs, and ended strongly in 2021, with the company's share price rising by 15% before the market.

2021Q4 Highlight:

In the case of unexpected extension of deferred payment of federal student loans at the end of December, the adjusted net income was 280 million US dollars, a year-on-year increase of 54%, which was located at the middle end of the guidelines;

After Q4, the adjusted EBITDA was US $5 million, achieving profit for the sixth consecutive quarter, which was at the high end of the guidance range, and the adjusted EBITDA for the whole year was US $30 million.

The number of members, products and user stickiness in a single season all reached a record high. As of 2021, the total number of SoFi members is about 3.5 million, which is about 500,000 higher than the preset target.

The US personal loan market is crazy, and student loans are quite "pressure-resistant"

In this quarter, the scale of loans are growing at a high speed, among which the scale of personal loans has increased by 168% year-on-year to US $1.65 billion, surpassing student loans as the biggest driving factor since Q3. Personal loans were issued for the whole year, exceeding $5.3 billion, more than double that in 2020 and 44% higher than the level before the epidemic in 2019.

In terms of student loans, although the deferred repayment period of federal student loans was unexpectedly extended to May 2022 (the original period was January), the scale of student loans in this quarter alone still increased by 50.6% year-on-year to US $1.46 billion, exceeding expectations. The total amount of student loans may fully recover in May, but there are still uncertainties, which is also a risk source in the first half of 2022.

In addition to the strong growth of the lending sector, the financial services sector also showed fierce growth. User growth and new products boosted financial service revenue by 440% year-on-year to US $22 million.

Among them, SoFi Money and SoFi Invest accounts increased by 275,633 and 361,616 respectively, reaching 1.44 million and 1.59 million. The annual growth rate of SoFi Money account is 123%, and the annual growth rate of SoFi investment account is 200%.

SoFi regards its SoFi Money as an important entrance for new users to enter its ecosystem, and the increasing user base and product richness enable Sofi to provide cross-selling advantages to the user base. Although this part of the business is small, the growth of its business is an important boost for the company.

SoFi Invest expanded the business scope of cryptocurrency and retail IPO in 2021. In the fourth quarter, two new cryptocurrencies were added, and the total number of cryptocurrencies increased to 30 in the whole year, making SoFi a leader in this field. In the fourth quarter, SoFi Invest also brought two IPOs to its members, namely Rivian, a new energy vehicle, and Nubank, a leading financial technology company in Brazil.

The number of members and products reached a new high in a single quarter

In the fourth quarter, the number of Sofi members, products and user stickiness all reached record highs.

Among them, Q4 added 520,000 new members, an increase of 87% year-on-year and an increase of 39% quarter-on-quarter. The absolute value of new members reached a new high in a single quarter; By 2021, the total number of SoFi members is approaching 3.5 million, which is about 500,000 higher than the preset target.

The number of products is also growing at a record level, with 900,000 new products added in a single quarter, with the total number of products reaching 5.2 million, an increase of 105% over 2020. In 2021, Q1-Q4 maintained a high growth of over 100%.

The number of Galileo platform accounts exceeded 100 million in Q4, compared with 60 million in the same period last year.

Important event update

1)Banking licence granted.In January 2022, Sofi was granted a national banking license and became a bank holding company. With the completion of the merger with the bank, SoFi gradually transferred its lending, SoFi Money and SoFi credit card products to SoFi Bank, which helped it provide customers with a wider range of financial products and services and improve profitability.

2)Acquisition of Technisys.On February 22nd, SoFi, a financial technology startup, announced the acquisition of Technisys, a digital banking service platform, with an estimated total amount of US $1.1 billion, and the related process will be completed in the second quarter of 2022. SoFi aims to become "AWS of financial technology". By acquiring Technisys, SoFi hopes to combine Technisys' Cyberbank platform with Galileo to provide full-stack digital banking services including savings, loans, credit cards and other innovative products.

2022Q1 and annual guidelines

The guidance for the first quarter of 2022 included the negative impact of the unexpected extension of deferred federal student loan payments to May. The negative impact on revenue is about $30 million to $35 million, and the impact on profits is between $20 million and $25 million. The loan issuance level in the whole quarter is basically the same as that in the first three quarters of 2021.

For 2022Q1, the management expects the adjusted net income to be US $280-285 million, up 30-32% year-on-year, and the adjusted EBITDA is US $0-5 million.

For the 2022 annual guidelines, the management expects the adjusted net income to be USD 1.57 billion and the adjusted earnings before interest and tax to be USD 180 million.