SoFi Technologies, Inc. (SOFI) Earnings Call Transcript & Summary

Jeff Adelson here with Equity Research at Morgan Stanley. Before we get started, I'll just go ahead and give a quick disclosure. For important disclosures, please see Morgan Stanley Research disclosure website www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Anthony, I'm very happy to have you join us today. Anthony Noto, CEO of SoFi, thanks for joining us in person this year.

Why don't we just get into right away. You've been at SoFi for over 5 years now, CEO for about 4 years. I think many investors here are familiar with SoFi, but for those of them who are not, can you just lead it with a quick overview of the company, what you're doing, what you're looking to do over time?

Sure. And thank you, Jeff, and Morgan Stanley for having us at the conference. I think, it's the first live conference I've done in quite a while. So good to be back in person. I always like to start with our mission. Our mission is to help people achieve financial independence to realize their ambition. And the best way to describe that in normal terms is we want to help people get to the point where they have enough money to do what they want, that could be having a family of a certain size, a certain size house in a certain location, retiring at a certain point in time. It was our observation when I was joining the company, when I pitched to the Board that there is this cohort of people in the United States that have done incredibly well academically. They've done well economically and professionally, but they're not getting to the point that they can have the things and live the American dream the way you use to be able to a couple of decades ago. And that they really needed more financial services and relationship over the span of their life to make all the right decisions, to make the right decision when they go off to college, to pay for that college education, make the right decision buying a house, making sure they invest in their 20s or losing 10 years of compounding investment returns, obviously, not overlevering themselves, and living in a state where they can continue to retire when they want and pay for their kids' education, et cetera. And the reason why it was, many of the big large banks had run ahead of account growth, they'd run out of household growth, because the industry became mature, and then they had to drive returns, ROE, by optimizing their businesses. So they got it out of the housing market, they got it out of the mortgage market or they got it out of the investment market. And they're just optimizing their portfolio and have the best ROE they could as opposed to starting with the consumer. And so we felt like there's this cohort of people that are making $100,000 or more and they weren't well served, and we wanted to be there for every one of their major financial decisions they make and all the days in between, to have that lifetime relationship, so they can get their money right. That was a big change for the company. It required us to immediately build a mobile application to launch all of the products across borrowing, saving, spending, investing and protecting. We were just in 2 of those products when I arrived. And now we're in all of those products and we're a bank and we own end-to-end technology in our loan business. We own the end-to-end technology in our checking account business. We will soon own that in the credit card business and eventually all of our businesses, which allows us to innovate faster than anyone else, allows us to be a low-cost operator, to have superior economics and lifetime value. It really forms the basis of our competitive advantage. Ultimately, when we build trust and reliability in one product, we get the second or third product, and it really drives great productivity on the LTV side of the equation. And then the technology we're using to driving it, is also a great business with high returns. And we're very happy to have achieved $1 billion of revenue last year with really high growth and our first full year of positive EBITDA at $30 million, and we're forecasting this year in our guidance $1.5 billion plus and $100 million plus in EBITDA.

Great. And speaking of some of the changes, there's a lot of uncertainty in the economy out there. Just wanted to kind of hone in on the environment you've seen over the last 3 to 6 months, what kind of steps have SoFi taken in reaction to the uncertainty out there? Are there any sort of strategic areas you've added, reprioritized, maybe where you're being a little bit more tactical right now?

Yes. So the actions that SoFi started to take didn't start a year ago or 6 months ago. They actually started 2.5 years ago. When the pandemic hit in early March of 2020, we saw the commercial paper market and the repo market freeze overnight, and that was a wake-up call. We had an early warning framework that we use for underwriting, this was before we were a bank and before we operated in this environment over the last 2.5 years. We significantly reduced our lending during that time period. We made some strategic decisions. We [indiscernible]. We solidified our funding resources and made them committed lines versus uncommitted lines and really started managing the business for a high degree of uncertainty. On the back of all of that, the President then gave an executive order that said, you didn't have to pay your federal student loans for the foreseeable future, while student loans at that point in time were our largest and most profitable business. And over the course of last 2.5 years, we've operated in an environment without that business with the great uncertainty around us across the board. So we've tightened our belt for the last 2.5 years, reallocated resources to the highest growth businesses, and good return businesses and just managed the portfolio to deliver, in my mind, unprecedented results that hit that objective last year of $1 billion of revenue. We set it in early January of '21 and to achieve the EBITDA of $30 million, also set in early January of '21 was a great accomplishment despite the fact that the student loan moratorium got extended twice after we've given that guidance. So we've been very prudent with how much we spend and how much we drop to the bottom line. So we've changed our hiring practices. We've changed what businesses we're investing in. So there's not one answer, it's just we've done it for last 2.5 years, and we like the trend in our business. We gave increased guidance after we had outperformance in Q1, and we built a durable business that gives us that diversity.

And you mentioned the changes or the -- yes, the changes you were doing when COVID hit. So what are your recession plans at this point? What would you do if you saw things that cause you to say, gee, maybe the consumer is starting to go the other way, how would you react? What are you looking for at this point?

Yes. So we have a number of leading indicators that we track. And if they turn from green to yellow to red, we'll make changes on what we're doing from an underwriting standpoint. Our objective with our underwriting model is to achieve about a 7% to 8% life of loan loss on our unsecured personal loans. Student loans, the life of loan losses are less than 1%. That business has been so dramatically impacted by the student loan moratorium, that it's not really a factor in how we think about the environment getting challenging. And so the unsecured personal loans would be the business that would be the most impacted. And if we go from green to yellow to red, we would change what we're underwriting to make sure we could still be at that 7% to 8% life of loan losses. Because the yield that we get on our loans need to be attractive to us or any of our buyers through the cycle. And so for the last, call it, 4 years, we've built a business where we could react to that environment to underwrite less and still deliver what we like to focus on internally as a 40% to 50% variable profit margin per loan, which is dependent on that life of loan losses of 7% to 8%. So if that went up, we would either have to raise prices to offset it, lower cost to offset it, but we have to get back to that 40% to 50% of variable profit margin, because through the cycle that will be a durable good return yield.

And what have you been doing on pricing lately? You talk about the WACCs and APRs you're charging the borrowers today. How have you adjusted to the higher rate environment? And what are you seeing from your -- the buyers of your paper, are they still there, pulling back, what are you seeing?

Yes. So in 2018, when we set the objective of hitting a 40% to 50% variable profit margin per loan, we had to develop a lot of testing capability. One thing that we developed was the ability to test pricing and credit. And we have about 6 different grids, with 36 cells in each grid that we're constantly testing each week to see how far we can push WACC versus credit and where we would be on a loss basis. And we've been able to pass on a lot of the increase in benchmark rates. I would say the last 2 weeks, we're just adjusting to now where prior to the last 2 weeks, we were passing on about 70% of the increase in benchmark rates and a higher WACC in our unsecured products, which is a testament to our testing capability, but also the differentiation in our product, in terms of our ability to find the right customer with the right credit profile at the right price. And we've maintained -- as you'd imagine, we're looking at elasticities as we raise price, but we maintained what we thought we would want to see in the quarter.

So 70%, I think you might have been at 11% yields before. I know you don't disclose your WACCs, but so that should be going up 70% with the benchmark rates out there, the 2- to 3-year...

I'm carving out the last 2 weeks, because rates have moved so much in the last 2 weeks, and we're in the process of making changes. It lags a little bit, but we're constantly testing it. But yes, we've been able to pass on a good percentage of the benchmark rates.

So the buyers are also -- they're liking that demand in your paper at this time...

One of the things we also focused on in 2018 was expanding the buyer base for our loans. We wanted the loans to be attractive through the economic cycle. That's why we focused on that 40% to 50% and communicated our commitment to 7% to 8% life of loan losses and we've been delivering on that and therefore, the demand has been where we expect it to be. And I would say, if anything, people are going up in credit. And so while we have a good [indiscernible] worth of buyers for our loans, there's increasingly more demand from people that may not have borrowed as much from us in the past as they're looking to go up in credit as well.

And where are those people coming from?

I would say our whole loan market is really a combination of regional banks, large banks and large asset managers, those are the buyers of the whole loans. And we haven't tapped the ABS market in a while because the whole loan market has been so strong. And the way we think about sort of where we sell which is a common question, we have sort of 3 choices: one, we can hold the loans; two, we can sell in the whole loan market; and three, we can sell in the ABS market. And we're trying to optimize for the best return and best ROE we can drive in those choices.

And are you finding that you're getting more demand for your paper, because you underwrite to a 7.40 FICO or higher on an average with a strong income level? Are you finding that people are getting mindful of the deterioration elsewhere maybe coming to you guys?

I think people are looking at the environment and the great uncertainty, and so it's a flight to quality, and fight to get back to the home, so to speak. And while there may not be a deterioration on in the marketplace, there's an expectation there could be. And so that means people want to go up in credit and be a little bit safer. They're willing to accept less yield for less risk.

And maybe just switching gears a little bit. You talked about the 40% to 50% target there. What about the path to profitability of SoFi as a whole? I think there's been a lot of focus out there in the tech space, in the fintech space, on bottom line profitability. We've seen a lot of announcements out there on cuts. What are you doing [indiscernible]? How are you managing your expense base? How are you looking to get to increase your profitability over time?

Sure. When we set the objective of having a 30% incremental EBITDA margin, we did that so that we could answer this question when times get tough, the same way we answered it when the market is very jubilant. We didn't like reinvest everything when the market was jubilant, because we have to show a path towards long-term margins, which on an EBITDA basis, we think are over 30%. So when we established 30% incremental EBITDA margin, reinvesting 70%, it was the reinforce where our long-term margins were going to be as well as our long-term ROE and ROA. And this year is a little bit of an aberration with the student loan refinancing moratorium being extended. But that's sort of our path long term. Let me talk about each of the pieces. So our lending business is very profitable. We disclose the contribution profit there. I wouldn't expect that margin to go up very meaningfully. There's a couple of sources of upward margin expansion there, but we'd likely reinvest it over time. So student loans is operating at less than 50%, we have talked about that in the past. So that margin gets negatively impacted by that environment. Personal loans very high margin, add high volumes, I wouldn't expect the margin to go higher there, because we want to maximize dollars in that range of 40%, 50%. Home loans are definitely under earning relative to where they could be long term, as we're retooling the back-end operation there for purchases versus refinance loans. So I would say the contribution of profit margin for lending is probably at steady state already with some pluses and minuses depending on the environment. The technology services business is about a 30% EBITDA contribution margin. That was 40% to 45% when we first bought Galileo, but we've invested massively in moving to the cloud and a bunch of new products that we want to sell to existing customers. And so the revenue streams against that investment will come down the line. So that margin over time would go from 30% to 40-plus percent. But in the near term, we said keep it at 30%, because we want to invest in future growth of those new products, but more upside there. As I earlier said, the financial services business, that's the area where we have the most margin expansion. If you through our Qs and Ks, you can now calculate the revenue for that segment, less all the variable costs. If you subtract all the variable cost except marketing, you'll see we've been profitable revenue versus variable costs for the last 3 quarters. If you then add marketing expenses -- we'll cover the marketing expense in addition to the other variable costs by the fourth quarter of this year. So by end of this year, our variable profit in financial services will be positive after marking and that includes acquisition costs within marketing. And then by the end of 2023, it will cover our fixed cost. And then the last piece we have to cover is our SB, stock-based compensation. That currently is very high. If you sort of adjust it for the onetime grant of the PSUs, it was around 15% to 16% of revenue in Q1. We expect that to get down to the high-single digits by 2024. And that's when we'll bring all the pieces together for GAAP profitability.

So it sounds like you could get to the GAAP profitability by sometime in 2024, depending on what happens with the macro environment and some other things going on?

We can grow faster. Student loans business comes back faster and is bigger, the home loan business gets to where we want it to go, that path could change. There's other revenue streams that we have that we're not counting on in our 5-year forecast that are tied to the bank as well as our technology platform business. So lots of opportunity for new products that we're not factoring into that outlook for technology.

Got it. I wanted to make sure we also addressed the other big theme for you guys. You recently launched the bank. You bought Golden Pacific, got the bank charter. I know that Chris was out there last week with the deposit growth update, $2.2 billion. You've been growing $100-plus million a week. Can you just talk about the account growth you've been getting there? How that's going so far? Any learnings you've been able to take away running the bank in this short time period?

The bank was a big strategic debate we had with the Board and the company on whether or not we wanted to be a bank. And as we started to learn the business and understand the competitive factors, and how we want to differentiate our product, like we want to build trust and reliability with the new member based on whatever product they want. But ultimately, we want to be their primary provider of financial services. And in order to do that, you have to have a really attractive checking and savings account, which is what they use every day. And we believe that without becoming a bank, we could never compete in a very attractive checking and savings account on the scale and innovation that we wanted. And I would tell you, now that we have the bank and going through that entire process, I couldn't be happier. Everything we thought the bank could do for our business, it's doing it for our business. It gives us a lower cost of funding for our loans. It allows us to take that savings and give it to members in a high interest rate, in unprecedented interest rate. I don't know anyone that's offering 1.25% on checking with direct deposit and an unlimited amount of money with no restrictions on spending. So it's pretty unique. It's resonating in the marketplace, and we like the trends that we're seeing across the board. As Chris updated on the deposit side of the equation, it took us 3 years to get to $1 billion in deposits, and it took us 3 months to add another $1 billion, and they are high-quality coming from direct deposit customers. So once we have that primary relationship, we have their central nervous system. We understand how much they're spending. We understand that they're sitting on a bunch of cash and they should be investing that and setting them up with a free certified financial planner. We can see if they're overspending and they need to consolidate their debt, we could offer them that product. We can also help them diversify into other areas as they think about yields. So the bank has definitely lowered our funding cost. It's given us the ability to hold loans if we want to hold loans, which puts pressure into the wholesale market, puts pressure on the ABS market, when people want our pristine credit, we can hold that if we want, and that creates another competitive advantage on what prices we can yield, not to mention all the benefits we have in the checking and savings account business. The added benefits of the bank are things we haven't talked about before. So Galileo has partners. Most of them are consumer-facing partners. But increasingly, they're signing up more B2B partners that want payment capabilities. Well, they also need sponsor banks, because they want to open up small, medium checking accounts or savings accounts. Well, now that SoFi is a bank, it could be the sponsor bank for those enterprises. And so that's a line of business that we wouldn't have had before without the bank that actually is synergistic with Galileo and its ability to sign new customers which then leads over into Technisys, especially for a company that may be starting in a small and medium business area. And they need a core technology that Technisys can provide. They need a premium process that Galileo can provide, and they need a sponsor bank and now they can get it in one place. There are other businesses that will add to the bank over time. That's just one example.

Got it. I want to revisit that in a little bit, but just maybe finishing up on the bank. What's your goal with the deposit growth? It's been very successful so far. You've only needed to increase the rate once so far. Do you have a deposit funding target in mind? And you mentioned holding loans. Do you have a retention of the loan strategy at some point coming into play? Just help investors understand that.

Yes. What we articulated during the going public process from January '21 to when we went public in June, we'd continued to say even before we got the bank is, we want to use the bank to optimize for the best ROE that we can. And if we can get a great price for our loans in the whole loan market versus holding them, then we will do that. From a deposit standpoint, we're on track to our year-end target for deposits. We're growing, as Chris mentioned, over $100 million a week. I would say as long as we say at that rate with the high-quality new account openings of the members that we're getting, we won't increase rates. If competition keeps up and increases, we have a lot of cushion to increased rates to stay at that rate, but that's kind of where we want to be. We came out with a 1% rate on checking initially with direct deposit. The Fed has moved 75 basis points since then. We've only passed through 25 basis points of that, and it's really doing well where it's at. So if something we need to change for us to want to go higher, we can definitely afford to do it. But we're at the pace we want to be at the year-end targets and have the optionality of holding loans longer, we said that we would hold 6 months instead of 3 months, and that's what we've been doing.

You mentioned the Galileo opportunity with some of these enterprise clients acting as the sponsor bank. Can you dig in a little bit on that? What would you actually do? Is that something where you're originating for banks? Or what's the profitability aim there?

Yes. So I think you mean on the bank as a sponsor bank for Galileo.

You were talking about the enterprise client Galileo.

Yes. So if an enterprise customer, sorry, enterprise partner of Galileo has a number of customers and they want to provide banking services for them. They -- they're not a bank, they need a sponsor bank. So we would provide them with the BIN for their debit cards as the card issuer. Before that we would also provide them a ledger, a core technology and be able to do end-to-end banking services in that small, medium business sector. If we didn't have the bank, we couldn't offer that end-to-end solution. We could offer the technology solution, but they would have to go with one of the sponsor banks that exist outside. Because we're now a bank, we can do everything [indiscernible] in-house.

Got it. And with Technisys, can you just remind us why you decided to pursue that acquisition? What does it bring to the table that you don't have today? And then you also talked a lot about the opportunity in the U.S., which I don't think you were embedding in the numbers you put out initially with the cross-sell there. But what are your goals there and how achievable do you think it is? I think it's a highly competitive market. One of the things that sometimes we hear from investors is that it's really hard to be successful in that business globally. Just maybe...

Therefore, the highest lifetime value. Our loan business, we own the end-to-end. We can innovate faster than anyone else. We can test faster than anyone else. We can drive better engagement and more data to do personalization and real-time decisioning. As we were building of SoFi Money account, we built on one of the old providers, and we were trying to innovate with the 2-day early paycheck. We were trying to innovate with free roundups. We were trying to innovate with a few other things. And the partner just couldn't do it. We were at the long -- we were at the end of a long line. So we did a big RFP and said, what would it take for us to do this with someone else. We picked Galileo among all the other choices. As we were integrating with them, we realized that we had a more ambitious road map than they had on their own or for any of their customers wanted. And we felt that we could provide the funding, the vision and the foresight of where we needed to go, and the industry needed to go, and that we would help enable the entire industry of digital frontier companies. And so we bought Galileo so that we can innovate faster, drive lower cost and bring new products to market that no one else was willing to do. It turns out to that, that technology in those products were needed by all of their customers, so it would also drive great profits for us to reinvest as well. As we thought about this concept of end-to-end integration, we came to the realization that our core technology needed to be on one platform. We have a core technology for our lending business. We have a different core technology for checking and savings. And for those who don't know core technology, it's really the operating system of that product. We have a different one for credit card, different one for investing. So we started to look at building our own multiproduct core that was extendable to the products, that they meet all our needs to have core technology across all of our existing products, customizable in the way that we want it and it could be extensible to products we hadn't contemplated yet today. And ultimately, we thought this was the right solution for that. At the same time, Galileo's partners, many of which are one-product companies, one that secured credit card. They wanted to add a revolving credit card. They wanted to add buy now pay later. They wanted to add crypto services, they wanted to add loans. They were going to need multiproduct core as well because Galileo has one core. So Technisys serves two purposes. One, it will be our core technology across all the products, which enables lower cost, real-time decisioning and personalization, but it'll also serve the community well with Galileo's partners and on its own, which it's already doing, which is very strong across all of LatAm. In terms of international expansion, Technisys can go global. We have a lot of demand out of Europe and increasingly other parts of the world, not just LatAm and the U.S. It's a stand-alone product by itself, where we can couple it together with our bank, we can couple it together with Galileo and pieces along the way.

And how has the progress been going there so far? I know it's still pretty early, but any learnings you can share with us on that process?

Yes, I'd say in the course of acquiring a company at the scale of a Galileo or Technisys, one of the things you can never truly, truly understand is like their operating tempo and their decision-making process. You have to be part of the company and after about my fourth weekly, like what we call latest call business update meeting, I'm like, I couldn't be happier. Like I just needed to check in with Derek and Miguel once in a while. They are professionals. They know what they're doing. This is a well, well-run company and can really -- it's really complementing Galileo and bringing partners to the table from the traditional financial industry that wouldn't have come to the table before. But because that's something that's so unique and valuable, it's been a great complement and it's incredibly well run.

Got it. One thing I wanted to touch on and make sure I got it in front of you. There was the whole proposal you put out in the proxy recently with the reverse stock split. Just wanted to see if you could answer what was the thought process there? Why are you putting them in there?

Yes. And there's been a lot of chatter on all the social media platforms which we read, and we care about all of our shareholders deeply. And this is definitely one that's created a lot of controversy. The headline, I would say is this is one of those break in case of an emergency. And I've lived through the financial crisis of 2000, 2001, 2002, the crisis in 2008, '09 and '10. And obviously, we're going through a huge dislocation now. And so as we're going into the shareholder meeting, we thought about all the ranges of scenarios that could unfold and what do we need to be best prepared. And markets can be irrational. Like we're incredibly proud of what we built. We think we have a durable business. It's doing quite well. We're one of the few companies that exceeded Q1 expectations and raised for the rest of the year. So our confidence is in no way reflected in the ask for this vote. What is reflecting in the ask for this vote is prudent management. We want to give our Board the option that if we enter a market that's even more irrational than we are in now, and it is justified to do a reverse stock split, they have the option to do it. Many shareholders don't realize that to do a reverse stock split requires a shareholder vote. If you don't ask in your annual shareholder meeting and for some reason you need it down the road, because the markets are irrational in our case, which would be the only scenario that I see us having to do it unless there's something I haven't anticipated, the Board has the optionality to do that. Otherwise, we'd have to have a shareholder vote on one particular thing at a high point of stress when the markets are irrational and may not be able to help the company. So it's really meant to be a free option for the Board if they believe they have to break in case of emergency. But it in no way communicates our confidence in our strategy, our business or what we see in the future. Our goal is to keep driving our results, which will eventually be reflected in our stock price. But we're now going through great uncertainty and people don't know answers to some questions, probably know our strategy is the right one, we have the right team and we're executing.

Got it. So it's really there, not to actually execute on it, but the vote is really there just to have the option down the line.

That's right. And the Board would have to approve it if it's approved in the shareholder vote. And there have been other financial institutions that have had to do that, and we looked at the range of scenarios, and it's just prudent financial management and risk management.

And is that something where if you want to execute it out there, it's approved, you can do whenever you want or is there like another step there, like how does that work?

It requires Board approval and they only have the right to do it for 1 year.

Okay. Before we continue, I just want to see if the audience had any questions, open it up a little bit here. Nope, I'm happy to go ahead and continue. So financial services, you mentioned earlier that's something you are striving to get towards profitability right now. Is there anything in that line of business that you feel like you're missing today, you want to add more to for your customers? Talk about your growth ambitions there.

Sure. In the invest product, we've really pioneered being a one-stop shop, just in invest. So we have launched with single stocks, fractional shares, which we pioneered, others have copied. We have our own robo advisory accounts, which people will talk about as automated investing. We offer 30 crypto coins. In addition to that we launched IPOs last year. So we're the only place digitally, you can go on and buy all those asset classes in one place. We also provide a free certified financial planner and a lot of other member benefits as it relates to financial investing and planning. We will more selection. We will continue to differentiate on selection. There's a huge opportunity of other asset classes to add. I think investing is one of the hardest access -- drivers of wealth long term and the least understood. Not that we've seen in our invest product, even despite these challenging markets, it's really positive, and it shows the desire of our members to invest to try to get to where they want to go, and we want to give them more products and services to get there that can drive outsized returns. As it relates to checking and savings, we launched with this just one account. There's a lot more innovation we can add within that portfolio of products. High-yield savings as an example, we have a 70 basis point product for home, auto and life. We generate for our partners about $250 million of insurance premiums a year. So it's about $1 billion run rate. That would be an area we'd love to be in as a principal at some point in time. It's an asset. We're available at a low price, and it was a technology and a team and it could be an acqui-hire and being in that business, there's areas we'd like to be there. Currently, we're not in tax, again, something that our members really want, it will be complementary to our ability to save and reinvest that savings through the right types of tax planning. But again, not something we're rushing to get into, but something down the line. And there's a lot of other areas within the vertical categories. In credit card, we have one credit card today. It's a great card. It's the one card that helps you get out of debt. You can redeem your points at 2x into loans versus the 1% you get with just gas. You can redeem 2x into invest as well as checking and savings. And you'll see us launch something called SoFi Plus, which brings everything together. SoFi Plus will be like a subscription service where you get a whole host of member benefits, if you do direct deposit with us. So we won't charge for it, but we'll give you all these value-added services when you do SoFi Plus with us, which is triggered off of doing direct deposit, and there will be benefits in loans, benefits in invest, benefits in rewards, and in a number of other areas. So that we'll bring it together as well.

And when can we expect that to come out?

That's a back half of this year type of initiative and one that we think communicates a couple of things first. It says, hey, this is a one-stop shop. They have a product across all these different areas. I only have to do one thing to get the benefits across all these areas. And it will be something we add more value to over time as we learn and grow. As an example, today, we double your points if you redeem it to other products, you could imagine a SoFi Plus member getting triple the points or quadruple the points for a special activity and many other iterations around that. But we want to get the platform launched, learned and iterate as we go.

Have you figured out what kind of pricing you would like to do on that product?

SoFi Plus will be free if you do direct deposit. At some point, we may provide the opportunity to pay for it instead of doing direct deposit, but we love direct deposit customers, given all the benefits we get from the data and helping them get their money right.

And you mentioned the potential for maybe bringing in-house some of the services you referred right now, insurance, tax, do you have a priority list or any kind of ranking or is it really just take it as you will, pricing, et cetera?

Yes, I'd say we're not in a rush to do anything. The Technisys acquisition was our second large acquisition, Galileo was a huge home run. Technisys, looks like it will be that as well. We want to make sure successfully execute on that strategy before we do anything else large. So I might mention these other things that would be relatively small and not distracting. And the reality is just not a lot of small attractively priced assets like that. So I wouldn't expect anything in the near term. It's just longer-term thinking about where we could go.

Understood. And then just maybe to wrap it up a little bit here. The deposit customers you're getting, what are you finding that those customers are like compared to the existing SoFi customer? Are they the same? Are they doing anything different? What kind of activity are they putting on the platform for you?

They're exactly the people we like to acquire. They are high income. They're very active in spending, their deposits continue to grow, even though they're doing direct deposit and spending. So they have the right characteristics for our business that we bring on top of the funnel. Our cross buy rates into loans have remained relatively the same. We disclosed during the IPO process mid-20s, cross buy rates into loans. That means 25% of the loans that we underwrite, personal loans, student loans come from our existing members, 60% to 70% of home loans come from existing members. At the top of the funnel is money invest in credit card. And that's coming in, in the profile that is allowing us to still drive those type of cross buy rates. So even though the top of the funnel has grown so dramatically, the cross buy rates have held up quite meaningfully, and we haven't changed our underwriting criteria.

And maybe I could just get one last quick one in for you. Mortgage has been a hot topic of late. The market has come off a lot. Can you just talk a little bit about what you're doing there? I know the purchase area is something you're really focused on right now, how are you addressing that right now?

Yes. We are definitely transitioning from a refinancing market in home loans to a purchase market. In a purchase market, you need to be able to close within 30 days. In the refinancing market, it's not that critical, once the rate is locked in people are less sensitive to how long it takes to close the loan. And we want to create a great consumer experience for our members. Given the fact that 60% to 70% of our loans in mortgage or from existing members, we need to be able to close in 30 days. We're working hard with our back-end partner to make that transition. So we've taken our foot off the gas and driving the demand until that back end is ready to go, and then we'll step back on the gas. So we think it's an incredibly important product to have for our members. It's one of the biggest financial decisions they'll make. It's definitely one of the most emotional decisions they'll make, and we have to be there for them, but we have to be reliable and build trust in every experience we have with them, trust is critical, so that when they need the second, third, or fourth product, they choose us, because they had such a great first experience. So we have to nail the back end and we're working hard to do that.

All right. Well, I think we're out of time. Really appreciate you being here, Anthony. It was a pleasure.

Thank you, Jeff.