SoFi (SOFI +1.82%) reported its first-quarter results, and to put it gently, the market wasn't thrilled. Shares fell by more than 10% the day after the earnings release, mainly because forward guidance fell short of expectations.
For the most part, SoFi's numbers looked incredibly strong. Revenue soared 41% year over year in the quarter to an all-time high, loan originations were the highest SoFi has ever reported, and profitability remains strong. SoFi added 1.1 million new members, the most it has ever added in a single quarter, and it completed the highly anticipated launches of business banking and its SoFi Plus premium subscription product.
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However, the most important number from a long-term investor's perspective was a little less obvious. Instead of fixating on SoFi's guidance, here's one under-the-radar number investors should be paying very close attention to.
SoFi's cross-selling efficiency is improving fast
As mentioned, SoFi added 1.1 million new members during the first quarter. But it also added 1.8 million new products to its ecosystem. For clarification, a product refers to something like a loan, a checking account, an investment account, or something else SoFi offers.
I won't keep you in suspense. Perhaps the most important number from SoFi's first quarter is 43%. That's the percentage of new products opened on SoFi's platform that were opened by the company's existing members. And the progress SoFi has made in this area has been impressive. As CEO Anthony Noto shared on the conference call, "SoFi continues to accelerate with 43% of new products opened by existing SoFi members versus 40% last quarter and 36% in Q1 of 2025."
NASDAQ: SOFI
Key Data Points
To be clear, SoFi still has a long way to go in cross-selling. A primary banking relationship is typically defined as having four to five products with the same institution. For example, a banking customer might have a checking account, a credit card, an investment account, and a loan.
Of course, some of this is because there's still a lot SoFi doesn't offer. For example, you can't get an auto loan or open a CD account through SoFi -- at least not yet. But with a total of 22.2 million products and 14.7 million members, the average SoFi member has approximately 1.5 products. That's still on the low end, but it's very encouraging to see this metric move in the right direction.
Why it matters to investors
The improvement in SoFi's cross-selling rate is important for a few reasons.
First, the more products SoFi's customers have, the stickier the relationships become. In other words, if you only have a checking account with a certain bank, it's far easier to switch than if virtually all of your financial accounts are at the same place.
Second, as cross-selling improves, SoFi's customer acquisition cost gets lower. Think of it this way. To get someone to take out a personal loan, SoFi either spends money on advertising or pays a hefty referral bonus if that customer isn't already a member. But if you already have a SoFi checking account and choose to apply for a credit card with the bank, it costs SoFi virtually nothing to add that credit card to your app.
It's no secret that SoFi's goal is to become its members' primary bank. A primary financial services relationship has tremendous long-term value to the company, and there's an argument to be made that of all of the non-traditional banks out there, SoFi has done the best job of creating an all-in-one banking disruptor.
Having said that, Noto has expressed some ambitious goals, such as becoming a top-10 U.S. financial institution and ultimately growing into a trillion-dollar company. To achieve these things, SoFi will have to become the primary financial institution for most of its members -- and with a rapidly rising cross-selling rate, this is very encouraging for long-term SoFi investors.
