Interview with Anthony Noto, CEO of $SOFI


Q2 earnings report [click here]

Q2 earnings presentation [click here]

Several weeks ago I did a writeup on $SOFI because it’s one of my highest conviction fintech companies for the next few years (after $UPST of course).

$SOFI is building a “one stop shop” for lending, financial services, investing, and even enterprise banking/card services through their acquisition of Galileo — which they bought last year for $1.2 billion

Last week $SOFI reported strong Q2 earnings which included tremendous growth in several of their key business segments [click here]

The company reported a Q2 loss however that was only because of one-time charges related to warrants, stock based compensation and the SPAC fees from coming public.

The company also provided softer than expected Q3 guidance however this was only because of the CARES ACT which created the student loan repayment moratorium and since $SOFI has a large student loan refinance business and now people don’t need to make payments until 2022 it means $SOFI is taking a $40-50M hit on revenues. This segement of their business should come roaring back in 2022 when the moratorium ends and people needs to start refinancing their student loans again. Despite the fact that $SOFI will miss out on those $40-50M of revenues this year but left their 2021 guidance at $980M goes to show how well the rest of their business is performing — every business segment (outside of the student loan business) is essentially growing triple digits YoY.

If this student loan moratorium had not been enacted, it’s very possible $SOFI would be raising their 2021 guidance from $980M to $1030M. I think the recent pullback in $SOFI is a buying opportunity for long term investors, based on their Q2 results and comments from management the company appears to firing on all cylinders with an exciting pipeline of new products and services for both their consumer and enterprise segments.

It’s also a great sign that $SOFI is cross-selling products to their members by using analyzing data coming through $SOFI money that tells them when to present a loan product versus a credit card product versus an investment product. This also means that ARPU (average revenue per user) is increasing along with LTV (lifetime value) while CAC (customer acquisition cost) is decreasing.

This is where $SOFI can really exploit the operational leverage in their business model which stems from being a digital/tech first company versus the traditional brick & mortar banks. It’s also quite obvious that $SOFI continues to target a younger demographic that prefers this digital-first approach since these customers would prefer to never step foot in a bank branch again.

Once their student loan refi business rebounds in 2022, this should help drive new customers for the rest of their product ecosystem.

This past Friday afternoon, Mr. Noto was gracious enough to give me 25+ minutes of his time for this interview. He shared some exciting updates on $SOFI including the national bank charter, options/margin coming to $SOFI invest, global expansion plans, possible M&A opportunities and new products/services coming to Galileo which already boasts a rapidly growing customer list such as Robinhood, Revolut, Dave, MoneyLion, Chime, TransferWise, Monzo, Verizon and many more. Learn more about Galileo at

Right now there are only two analysts that have coverage on $SOFI and both have buy ratings as you can see below…

Now that $SOFI has reported their first quarter as a publicly traded company I suspect we’ll see more firms picking up coverage in the next few weeks — hopefully with more buy ratings and price targets ranging from $24-30

I added to my $SOFI position on Friday at $15.00