SoFi's Least Profitable Division Might Be Its Most Important
If you dig into SoFi's (NASDAQ: SOFI) Q3 earnings report, it is easy to see that the financial services division is the largest drag on earnings of the company's three main business segments. It's been the smallest contributor to quarterly revenue and has never turned a contribution profit, which shows how profitable a segment is. In fact, SoFi's financial services division regularly generates a contribution loss between $24 million and $40 million.
But despite the bad financial performance, the financial services division is arguably the most important to SoFi's success now and in the future. Here's why.
SoFi is seeking to become the digital bank for all a person's financial needs, targeting high-income earners who are poorly served by their current financial institutions. Its lending division currently offers student loans, personal loans, and home mortgages. Its technology platform, Galileo, assists other fintech firms with front- and back-end functions. And its financial services division offers a number of products, including the SoFi Money cash management account, the SoFi Invest online brokerage, and the SoFi credit card.
Source Fool.com
