This breakdown is extrmely helpful, especially the segment by segment revenue estimates. I think your $900M+ revenue call was pretty bold at the time but looks spot on now that we've seen the actual results. The lending segment analysis is particuarly interesting, I didn't realize how much the personal loan originations would drive fee income vs just NII. One thing I'm wondering about though is the tech platform revenue. You estimated $107M but that seems optimistic given historicl growth rates in that segment. Do you think the 10 new Technisys clients Noto mentioned will actually materialize fast enough to move the needle in Q3, or are we looking at a Q4/2026 story there?
Seems that if SoFi used their cash to retire Convertible Debt, that might lower their fully diluted share count in addition to saving interest expense. From Gemini…
“Yes, convertible debt counts into fully diluted shares because it is a type of dilutive security. Fully diluted shares include the number of common shares outstanding plus any shares that would be created if all dilutive securities, such as convertible debt, stock options, and warrants, were converted into stock.”
As always, great writeup and thanks or all of the hard work. I think that Noto said on Cramer that they used the $$ from the stock sale to reduce debt. Depending on accounting, which debt was retired, and how much of the $1.5 billion was used, that could be 0 cents to 2 cents per share of earnings right there. I agree with 10 cents to 12 cents being a reasonable range.
Issuer accounting for Zero Coupon Bonds
Issuance: Debit "Cash" for the proceeds received, debit "Discount on Bonds Payable" for the difference between the face value and the purchase price, and credit "Bonds Payable" for the face value.
Amortization: Each year, debit "Interest Expense" and credit "Discount on Bonds Payable" for the amount of interest expense recognized for that period. This amortization reduces the discount account, increasing the book value of the bond.
At maturity: Debit "Bonds Payable" and credit "Cash" for the face value of the bond.
Calculation: Use the effective interest method to amortize the discount over the bond's life, ensuring that the interest expense recognized is proportional to the book value of the liability. This is done by multiplying the carrying value of the bond by the effective interest rate to determine the periodic interest expense.
Annual debt savings is about $82M if they use it all to pay down debt. They only had it for 2 months out of the three months, so at most this would add around $13.6M in the quarter, which is one of the things that I talked about in that should make the corporate revenue line better.
Yup, that's why I wrote this in the article in the Corporate revenue section: "Technically, this should come down for the last two months if they used the capital raise to pay off their corporate revolver, because the interest they pay on that is a portion of the corporate revenue line item."
People are going ham on SoFi lately. Much potential here.
This breakdown is extrmely helpful, especially the segment by segment revenue estimates. I think your $900M+ revenue call was pretty bold at the time but looks spot on now that we've seen the actual results. The lending segment analysis is particuarly interesting, I didn't realize how much the personal loan originations would drive fee income vs just NII. One thing I'm wondering about though is the tech platform revenue. You estimated $107M but that seems optimistic given historicl growth rates in that segment. Do you think the 10 new Technisys clients Noto mentioned will actually materialize fast enough to move the needle in Q3, or are we looking at a Q4/2026 story there?
Seems that if SoFi used their cash to retire Convertible Debt, that might lower their fully diluted share count in addition to saving interest expense. From Gemini…
“Yes, convertible debt counts into fully diluted shares because it is a type of dilutive security. Fully diluted shares include the number of common shares outstanding plus any shares that would be created if all dilutive securities, such as convertible debt, stock options, and warrants, were converted into stock.”
As always, great writeup and thanks or all of the hard work. I think that Noto said on Cramer that they used the $$ from the stock sale to reduce debt. Depending on accounting, which debt was retired, and how much of the $1.5 billion was used, that could be 0 cents to 2 cents per share of earnings right there. I agree with 10 cents to 12 cents being a reasonable range.
Issuer accounting for Zero Coupon Bonds
Issuance: Debit "Cash" for the proceeds received, debit "Discount on Bonds Payable" for the difference between the face value and the purchase price, and credit "Bonds Payable" for the face value.
Amortization: Each year, debit "Interest Expense" and credit "Discount on Bonds Payable" for the amount of interest expense recognized for that period. This amortization reduces the discount account, increasing the book value of the bond.
At maturity: Debit "Bonds Payable" and credit "Cash" for the face value of the bond.
Calculation: Use the effective interest method to amortize the discount over the bond's life, ensuring that the interest expense recognized is proportional to the book value of the liability. This is done by multiplying the carrying value of the bond by the effective interest rate to determine the periodic interest expense.
I covered this in the article that I did on the equity raise:
https://www.datadinvesting.com/p/sofis-capital-raise-is-bullish-so
Annual debt savings is about $82M if they use it all to pay down debt. They only had it for 2 months out of the three months, so at most this would add around $13.6M in the quarter, which is one of the things that I talked about in that should make the corporate revenue line better.
Most of Corporate is "Net Interest Expense" so you can likely comfortably reduce by the $14mm you estimate. That would equate to about 1 cents per share. Right? See the details from the Q2 release. https://investors.sofi.com/news/news-details/2025/SoFi-Reports-Second-Quarter-2025-Accelerates-Net-Revenue-Growth-to-Record-855-Million-Record-Member-and-Product-Growth-and-Net-Income-of-97-Million/default.aspx
Corporate/Other
Net interest income (expense)
$
(48,426
)
$
(35,507
)
$
(35,851
)
$
(40,030
)
$
(6,412
)
$
15,968
$
17,002
$
(13,926
)
$
(15,396
)
Total noninterest income (loss)
(12,508
)
(12,653
)
(7,175
)
59
(7,245
)
53,634
9,254
(6,008
)
(3,702
)
Total net revenue (loss)(2)
(60,934
)
(48,160
)
(43,026
)
(39,971
)
(13,657
)
69,602
26,256
(19,934
)
(19,098
)
Yup, that's why I wrote this in the article in the Corporate revenue section: "Technically, this should come down for the last two months if they used the capital raise to pay off their corporate revolver, because the interest they pay on that is a portion of the corporate revenue line item."
Nice work Chris
Excellent write up