SoFi Technologies Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Technology Platform Segment
In the table below, we present the total accounts metric related to Galileo within our Technology Platform segment:
| September 30, 2024 | September 30, 2023 | Change | % Change | |
|---|---|---|---|---|
| Total accounts | 160,179,299 | 136,739,131 | 23,440,168 | 17% |
See “Key Business Metrics” and “Business Overview” for further discussion of this measure as it relates to our Technology Platform segment.
Technology Platform Segment Results of Operations
The following table presents the measure of contribution profit for the Technology Platform segment:
| Three Months EndedSeptember 30, · 2024 vs 2023 · Nine Months EndedSeptember 30, · 2024 vs 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change |
| Net interest income | $629 | $573 | $56 | 10% | $1,685 | $573 | $1,112 | 194% |
| Noninterest income | 101,910 | 89,350 | 12,560 | 14% | 290,658 | 254,860 | 35,798 | 14% |
| Total net revenue | 102,539 | 89,923 | 12,616 | 14% | 292,343 | 255,433 | 36,910 | 14% |
| Directly attributable expenses | (69,584) | (57,732) | (11,852) | 21% | (197,495) | (191,231) | (6,264) | 3% |
| Contribution profit | $32,955 | $32,191 | $764 | 2% | $94,848 | $64,202 | $30,646 | 48% |
Net interest income in our Technology Platform segment of $0.6 million and $1.7 million for the three and nine months ended September 30, 2024, respectively, relates to interest income earned on segment cash balances, which we began recording within the Technology Platform segment in the third quarter of 2023. Prior period amounts were determined to be immaterial, and presented within Corporate/Other.
Noninterest income in our Technology Platform segment increased by $12.6 million, or 14%, and $35.8 million, or 14%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. The increase was primarily attributable to growth in technology services fees of $8.0 million and $25.7 million for the three and nine month year over year periods, respectively, driven by increased processing and service arrangement activity among our integrated technology solutions clients as well as account growth. Noninterest income also included $9.9 million and $25.2 million of intercompany revenue for the three and nine months ended September 30, 2024, respectively, compared to $7.0 million and $15.6 million for the three and nine months ended September 30, 2023, respectively. The increase in intercompany revenue was primarily attributable to increased usage of technology platform services during the 2024 period by our Financial Services segment as we continue to leverage synergies to enhance our product offerings.
Directly attributable expenses
The directly attributable expenses allocated to the Technology Platform segment that were used in the determination of the segment's contribution profit were as follows:
| Three Months EndedSeptember 30, · 2024 vs 2023 · Nine Months EndedSeptember 30, · 2024 vs 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change |
| Compensation and benefits | $38,127 | $34,155 | $3,972 | 12% | $109,814 | $112,201 | $(2,387) | (2)% |
| Product fulfillment | 15,501 | 11,784 | 3,717 | 32% | 44,077 | 34,332 | 9,745 | 28% |
| Tools and subscriptions | 7,757 | 6,085 | 1,672 | 27% | 20,739 | 19,931 | 808 | 4% |
| Professional services | 3,663 | 3,664 | (1) | —% | 9,585 | 10,841 | (1,256) | (12)% |
| Other(1) | 4,536 | 2,044 | 2,492 | 122% | 13,280 | 13,926 | (646) | (5)% |
| Directly attributable expenses | $69,584 | $57,732 | $11,852 | 21% | $197,495 | $191,231 | $6,264 | 3% |
(1)Other expenses are primarily related to travel and occupancy-related costs, advertising and marketing, data center costs and accounts receivable write offs.
Technology Platform segment directly attributable expenses increased by $11.9 million, or 21%, and $6.3 million, or 3%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. For the three month period, the increase was primarily attributable to an increase in compensation and benefits expense, which reflected an increase in average compensation in the 2024 period, and an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform. For the nine month period, the increase was primarily attributable to an increase in product fulfillment costs, primarily related to payment processing network association fees associated with increased activity on the platform, partially offset by a decrease in compensation and benefits expense which reflected a decrease in average headcount year over year.
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