Anthony Noto: Thanks. I can appreciate your enthusiasm. And if we wanted to accelerate revenue growth for next year, we absolutely could, given how low our market shares in all these different businesses. But under this scenario where you have higher for longer, I think we all need to be realistic of what that means for the industry. The demand for our products and higher for longer, as you mentioned will continue to be robust and the opportunity for us to capture that will also be strong. But we can’t just think about SoFi, we also have to think about the other market participants. I do think hire for longer will absolutely put pressure on other financial companies that unlike SoFi are not benefiting from growing deposits and that faced notable interest rate risk because they either don’t hedge.
They lack the ability to pass on higher rates the way that we are able to, and those are two really important points. It allows us to manage our assets and liabilities in real time and to do it at a micro level down to the loan level. Higher for longer could put pressure on these other financial companies and in that environment, we would want to be a lot more conservative and actually see something like personal loans, not grow very much at all, and student loans grow marginally. And so as we think about higher for longer, what we think about being very balanced, not because of the opportunity in front of us, but because the tool that may happen around us. As I said earlier, think about personal loans and student loans being additive to growth and the Tech Platform and the Financial Services segment as being the driver of growth.
Those are low capital businesses, in fact, nearly capital-free. I’ve also hit the point of profitability, which allows us to step on the gas to drive even more scale on them. We haven’t talked about it yet on the call, but it was not an easy progress over the last six years in which we invested heavily in SoFi Money, SoFi Invest, SoFi Credit Card, SoFi Relay, our land turn product, our app work business, and a number of other businesses that are in that Financial Services segment for it to go from a loss of over $50 million a year ago to a positive profit on a contribution basis of $3 million this year, gives us license to grow that in a much bigger way because we don’t absorb losses the way we were previously. We’re still losing quite a bit of money and invest in credit card given their investment modes but we can really step on the gas on the other products to drive great scale and profitability there.
So it’s a great option for us to have. But higher for longer may not be the center for next year. But if you actually believe that’s the scenario, we’re going to be conservative. We’re still going to have really strong growth, but we’ll be very balanced, especially on the origination side.
Operator: Thank you. Our final question today comes from Vincent Caintic of Stephens. Please go ahead.
Vincent Caintic: Hi. Good morning. Thanks for taking my questions. And it’s great to hear the positive reiteration of positive GAAP net income in the fourth quarter. Just wondering, when we look forward on that trend, and you’ve talked about revenues accelerating increased efficiencies in the business. So should we expect the profitability of the business to actually continue to accelerate from here or are there investments or something else that you’d like to make in the meantime and how we should anticipate that profitability? Thank you.
Anthony Noto: Yeah. Obviously, in the fourth quarter, we’re expecting the profitability to increase since we go from not generating positive GAAP earnings to generate positive GAAP earnings for the first time. We’re committed to generating GAAP — positive GAAP earnings for all of 2024. We will — we’re still in investment mode, but we have to balance growth versus investment. I would think about the — what we talked about earlier this year from an investment standpoint, that will focus on 30% incremental EBITDA margins and 20% incremental GAAP net income margins as a guiding factor and how much will adopt to the bottom line versus reinvest in the business. Obviously, this year, we’ve been well ahead of the 30% incremental EBITDA margin while still maintaining growth.
In fact, what I’d say is, I can’t find another company that’s driven the level of consistent growth that we have in revenue as well as our member base and product base while driving such significant improvement in profitability and building a high quality deposit and funding base and diversifying it, in addition to growing tangible book value by the level that I mentioned. We’ll continue to make sure that we balance growth versus profitability next year, and we’re committed to GAAP profitability for the full year in that 30% incremental EBITDA margin and 20% GAAP net income margin at a minimum.
Operator: Thank you. We have no further questions in the queue. So I’ll turn the call back over to Anthony Noto for any closing remarks.
