Memberships Jumped 113%, Yet The Stock Is Down 14%

SoFi Technologies reported a net loss of $ 165m, down from last year's profit of $ 7.8m. However, adjusted net revenue grew 74% year over year as member growth accelerated to 113%.

"The second quarter proved to be another quarter full of milestones for SoFi, [...] We exceeded our financial expectations, delivering record adjusted quarterly net revenue and our fourth consecutive quarter of positive adjusted EBITDA. We drove our 8th straight quarter of accelerating member growth, with even faster growth in cross-buying from existing members, increased our Galileo account base to nearly 79 million [...]" Anthony Noto, CEO of SoFi

Galileo performing well

SoFi's growth was helped by its technology platform segment which grew by 119% as the number of accounts grew to 79m, up from 36m a year earlier. Galileo is a key part of SoFi's strategy going forward as it would enable it to supply its competitors with the infrastructure they need to deliver their own banking services.

  • Taking clues from Amazon, SoFi aims to become a vertically integrated FinTech solution and therefore acquired Galileo
  • Galileo acts as the backend of SoFi’s financial services but also serves SoFi’s main competitors such as Robinhood, Chime, Revolut, Monzo
  • On top of lower customer acquisition costs and higher customer lifetime value, SoFi is adding a third advantage through Galileo: lower product costs


  • Galileo provides SoFi with a powerful tool to compete against the new wave of digital banks
  • However, we doubt its competitors will not try to break away from it by developing or acquiring their own technology infrastructure as the market is still in its early phases and the potential gains from owning its technology in-house are large
  • We are staying on the sidelines and will monitor how the banking infrastructure market evolves going forward


Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.


Photo by SoFi.