Heath

WHY $SOFI IS A TOP 3 POSITION FOR ME The market is overpricing the credit fear and underpricing the platform optionality when it comes to SoFi which is why I think it's one of the weirdest setups in the market right now. The business is still executing very well but the stock is stuck in one of the worst sentiment buckets since the market clearly doesn't want exposure to credit-sensitive stocks in a higher-for-longer rate environment and SoFi still gets treated like a bank-like lender even though the business is becoming much broader than that. The Loan Platform Business (LPB) is more important than people realize since SoFi originated $3B of personal loans on behalf of third parties through LPB in the quarter and added another $3.6B of capital commitments from three new partners. That matters because it gives SoFi flexibility so they can choose which loans to keep on the balance sheet and which loans to push through partners for fee revenue without taking the same balance sheet risk (very different model than being a traditional lender that is stuck holding everything). This is also why the private credit fear looked less scary if you listened to the actual earnings call. One of the biggest bear arguments was that funding partners would pull back if credit conditions weakened but Noto said they're not seeing issues in performance or partner demand and LPB demand was actually above what they chose to fulfill. The member flywheel is still the main reason this is a top 3 position for me because this is a real moat the market is overlooking. SoFi added over 1M members in the quarter, ~45% of new products came from existing members and 50% of SoFi Plus sign-ups took another product. The more members they add, the more products they cross-sell, the more deposits they gather, the more revenue they generate per member and the more efficient the platform becomes (how SoFi becomes more valuable over time). SoFi Plus becoming a paid subscription is also great to see because recurring fee revenue on top of a growing user base can improve unit economics over time. The biggest thing I want to see next is the Tech Platform turning around which is obviously the weakest link. Technology Platform revenue fell 27% YoY to $75M, contribution profit fell 61% and total accounts declined because of the large client that transitioned off the platform. Management is rebranding it as SoFi Tech Solutions and breaking it into processing, banking core ledgers, payment hub, and risk and fraud. If that platform starts growing again then great but I view this more as a free call option on owning SoFi. I truly believe SoFi is a good business trapped in a bad sentiment bucket. The market is focused on rates, credit risk and the weak Technology Platform while I'm focused on members, deposits, cross-buy, loan platform flexibility, operating leverage and the long-term path toward becoming a top financial institution. It can absolutely trade lower if the market sells off or if credit fears come back but I think the business is much stronger than the stock action suggests and I have no problem keeping this a top 3 position for me.