SoFi Investor Relations Spotlight: The Benefits of Our Recent Opportunistic Capital Raises

SoFi Investor Relations Spotlight: The Benefits of Our Recent Opportunistic Capital Raises

Introduction

SoFi is fortunate to have a broad and diverse community of investors. As we enter 2026, our mission and vision for the future are attracting more interest than ever before. That's why we are excited to share our first Investor Relations Spotlight: providing more context on our strategy and how we're executing as a business. We'll share these from time to time and look forward to your feedback.

This analysis details the rationale behind SoFi Technologies, Inc.'s ("SoFi" and the "company") recent capital raises and why the equity offerings are characterized as neutral to EPS. The analysis covers the following sections:

1. Details of the two offerings

2. Use of funds through Q4 2025

3. Intermediate and Long-Term Value Accretion

SoFi places a high value on its equity, prioritizing the long-term interests of shareholders and members. The recent capital raises are being used to fund the long-term growth of the company. As stated publicly, the additional capital "enhances our ability to drive innovation and pursue organic and inorganic growth opportunities across our business." A strong financial foundation gives SoFi the optionality to accelerate the business and respond in an agile way to current and future opportunities.

Offering Details

SoFi announced a capital raise via an equity offering on July 29, 2025 and a subsequent offering on December 4, 2025. Including the over-allotment, the first transaction raised $1.725B via 82.73M shares and the second transaction raised $1.588B via 57.75M shares. Combined, these transactions generated $3.3B in gross proceeds.

Use of funds through Q4 2025

Both capital raises were highly accretive to tangible book value (TBV)(1)on an absolute and

per-share basis. SoFi's TBV has increased from $3.3B as of the end of Q1 2023 to $8.9B at the end of Q4 2025. This drove an increase in tangible book value per common share

(non-GAAP)(1)over the same period from $3.49 to $7.01 (Figure 1). This is a key measure for bank holding companies and is often seen as an important valuation metric by analysts.

Figure 1. Tangible book value per common share (non-GAAP)(1)

(1) Tangible book value and tangible book value per common share are non-GAAP measures. Tangible book value is defined as permanent equity, adjusted to exclude goodwill and intangible assets, net of related deferred tax liabilities. Tangible book value per common share represents tangible book value at period-end divided by common stock outstanding at period-end.

The raised funds were immediately put to work to improve SoFi's net interest income by paying down expensive debt and investing the remaining capital in productive assets. At the end of Q2 2025, SoFi was using personal loan, student loan, and risk retention warehouse facilities to provide liquidity for business activities. In Q2 2025, the average drawn balance on these facilities was $2.14B at an average interest rate of 5.23%. This equated to a quarterly interest expense of $27.9M ($111.5M annualized), as shown in Figure 2.

Figure 2. Excerpted from our Q2 2025 SEC Form 10-Q filing, "Consolidated Results of Operations"

SoFi has already paid down these more expensive funding sources, exiting Q4 2025 with no balance drawn on any of these warehouse facilities. This is illustrated in the balance sheet information published in the recent Q4 2025 earnings presentation, as shown in Figure 3. After paying down the entirety of the warehouse facilities, the remaining capital is invested in income-generating assets. Investors can estimate the lower bound of net interest income being generated by assuming the capital is placed in SoFi's Federal Reserve master account and earning the effective federal funds rate (EFFR), currently 3.64%.

Figure 3. Balance Sheet Information from the Q4 2025 Investor Presentation

The immediate financial impact to SoFi from the capital raises is the combination of the decrease in interest expense from drawing down the warehouse facilities and the interest income generated by placing the remaining capital in yield-generating assets. Based on the Q2 2025 interest expense shown above and the current EFFR, the increase in net interest income to the business from this capital is $154M for the 140M shares issued. That is $1.10 of annual earnings per issued share on a pre-tax basis, or $0.81 assuming a 26% tax rate. The increase in net interest income helps to offset the dilutive effects of issuing shares. This is why SoFi has previously stated that the incremental equity raised can be neutral to EPS. This analysis suggests that the financial impact may be sufficient to be accretive to EPS.

Intermediate and Long-Term Value Accretion

Increasing net interest income is just the beginning of how SoFi can use the capital to drive returns. A distinguishing feature of SoFi is its ability to function as a tech company while also driving strong returns from its balance sheet. Our unit economics further benefit from a vertically integrated tech stack and lack of legacy infrastructure. SoFi has proven adept at reacting to changing macroeconomic conditions, rapidly expanding into new markets, launching new products, and changing resource allocation faster than competitors.

Ultimately, SoFi raised capital to increase optionality, fuel growth, and increase profitability. This capital strengthens an already robust position and enhances SoFi's ability to drive innovation and pursue organic and inorganic growth opportunities across the business, supporting SoFi's intermediate and long-term growth ambitions. We plan to use that optionality to maximize shareholder returns.

Inorganic Growth

In the Q4 2025 earnings call, management was asked about strategic opportunities and appetite for mergers and acquisitions. The response from CEO Anthony Noto outlines the strategy for inorganic growth:

"There's a lot of opportunities out there. I would say more than we've ever seen in eight years here. But I'd also say the bar is really high for us. When I say really high, we've looked at dozens and dozens of things, some of which were for sale, some of which were interesting to us. What we're prioritizing are things that can accelerate our growth versus the time it would take to build it ourselves.

So one area we're very interested in is technology platform capabilities. So whether it's as a custody as a service, stablecoin as a service, being able to provide a market exchange for fiat, and for different types of stablecoins. Our pay product, SoFi Pay, we launched in September, is currently using Bitcoin and the Lightning network, which transport fiat dollars from the U.S. to fiat dollars in over 30 countries internationally. So is there a way for us to accelerate SoFi Pay's international expansion through a technology platform type of acquisition or infrastructure? We're also very interested in international countries and the licenses some small companies could have. In addition to that, in technology platform, we don't have revolving credit card processing and issuing. It's something we can build ourselves, but if there's a technology that's not that expensive, and we don't have to pay for a business, we may do that and leverage our technology platform in core plus their processing to enter the revolving credit technology platform services space.

There are some horizontal things that we've looked at but nothing of interest. As you know we've talked about building big business banking, and we look at some SMB platforms to see if they would accelerate our opportunity there. The fact of the matter is they don't. We're likely going to build that ourselves. Big business banking, which we have seen a really strong positive response from the marketplace as it relates to the need of these services to be a bank that can do both fiat and crypto. So we feel really good about having optionality in our balance sheet. [...] But if something presents itself in the area that I mentioned at the right price versus doing it internally, we would act on that. But the bar is really high."

Organic Growth

Noto's quote mentions several businesses and products, such as big business banking, SMB products, our SoFiUSD stablecoin, and many other products that require investment to build. Additionally, SoFi now has a fortress balance sheet with capital ratios more than double the regulatory minimum. SoFi's current return on tangible common equity(2)(ROTCE) is 9.0% as of Q4 2025 (see Figure 4). SoFi's stated goal for long-term return on equity is 20%-30%.