Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

The following tables present financial information, including the measure of contribution profit (loss), for each reportable segment for the periods indicated:


Three Months Ended June 30, 2022	Lending(2)		Technology Platform(1)		Financial Services(1)(2)		Reportable Segments Total(2)		Corporate/Other(1)(2)		Total
Net interest income (expense)	$	114,003	$	—	$	12,925	$	126,928	$	(4,199)	$	122,729
Noninterest income (loss)	143,114		83,899		17,438		244,451		(4,653)		239,798
Total net revenue (loss)	$	257,117	$	83,899	$	30,363	$	371,379	$	(8,852)	$	362,527
Servicing rights – change in valuation inputs or assumptions(3)	(9,098)		—		—		(9,098)
Residual interests classified as debt – change in valuation inputs or assumptions(4)	2,662		—		—		2,662
Directly attributable expenses	(108,690)		(62,058)		(84,063)		(254,811)
Contribution profit (loss)	$	141,991	$	21,841	$	(53,700)	$	110,132

Three Months Ended June 30, 2021	Lending		Technology Platform		Financial Services		Reportable Segments Total		Corporate/Other		Total
Net interest income (expense)	$	56,822	$	(32)	$	542	$	57,332	$	(1,320)	$	56,012
Noninterest income	109,469		45,329		16,497		171,295		3,967		175,262
Total net revenue	$	166,291	$	45,297	$	17,039	$	228,627	$	2,647	$	231,274
Servicing rights – change in valuation inputs or assumptions(3)	224		—		—		224
Residual interests classified as debt – change in valuation inputs or assumptions(4)	5,717		—		—		5,717
Directly attributable expenses	(83,044)		(32,284)		(41,784)		(157,112)
Contribution profit (loss)	$	89,188	$	13,013	$	(24,745)	$	77,456

Six Months Ended June 30, 2022	Lending(2)		Technology Platform(1)		Financial Services(1)(2)		Reportable Segments Total(2)		Corporate/Other(1)(2)		Total
Net interest income (expense)	$	208,357	$	—	$	18,807	$	227,164	$	(9,502)	$	217,662
Noninterest income (loss)	301,749		144,704		35,099		481,552		(6,343)		475,209
Total net revenue (loss)	$	510,106	$	144,704	$	53,906	$	708,716	$	(15,845)	$	692,871
Servicing rights – change in valuation inputs or assumptions(3)	(20,678)		—		—		(20,678)
Residual interests classified as debt – change in valuation inputs or assumptions(4)	5,625		—		—		5,625
Directly attributable expenses	(220,411)		(104,608)		(157,121)		(482,140)
Contribution profit (loss)	$	274,642	$	40,096	$	(103,215)	$	211,523


Six Months Ended June 30, 2021	Lending		Technology Platform		Financial Services		Reportable Segments Total		Corporate/Other		Total
Net interest income (expense)	$	108,599	$	(68)	$	771	$	109,302	$	(6,010)	$	103,292
Noninterest income	205,669		91,430		22,731		319,830		4,136		323,966
Total net revenue (loss)	$	314,268	$	91,362	$	23,502	$	429,132	$	(1,874)	$	427,258
Servicing rights – change in valuation inputs or assumptions(3)	12,333		—		—		12,333
Residual interests classified as debt – change in valuation inputs or assumptions(4)	13,668		—		—		13,668
Directly attributable expenses	(163,395)		(62,664)		(83,766)		(309,825)
Contribution profit (loss)	$	176,874	$	28,698	$	(60,264)	$	145,308

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(1)During the three and six months ended June 30, 2022, total net revenue for the Technology Platform segment included $953 and $1,723, respectively, of intercompany fees earned by Galileo from SoFi, which is a Galileo client. There is an equal and offsetting expense reflected within the Financial Services segment directly attributable expenses representing the intercompany fees incurred to Galileo. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense is adjusted in our reconciliation of directly attributable expenses below. We did not recast the segment information for these intercompany amounts for the three and six months ended June 30, 2021, but rather reflected the full year 2021 impact within the fourth quarter of 2021, as inter-quarter amounts were determined to be immaterial. Additionally, for both the three and six months ended June 30, 2022, total net revenue for the Technology Platform segment included $718 of intercompany fees earned by Technisys from Galileo, which is a Technisys client. There is an equal and offsetting expense reflected within the Technology Platform segment directly attributable expenses representing the intercompany fees incurred by Galileo to Technisys. The intercompany revenue and expense are eliminated in consolidation. The revenue is eliminated within Corporate/Other and the expense is adjusted in our reconciliation of directly attributable expenses below.

(2)During the first quarter of 2022, we implemented a centralized FTP framework to attribute net interest income to our business segments based on their usage and/or provision of funding, which impacted the measure of net interest income and, thereby, total net revenue and contribution profit (loss) in our Lending and Financial Services segments, as well as the total net revenue in Corporate/Other, but had no impact on our consolidated results of operations. The net interest income presented within Corporate/Other represents the residual impact of the FTP charges and FTP credits on our reportable segments.

(3)Reflects changes in fair value inputs and assumptions, including market servicing costs, conditional prepayment and default rates and discount rates. This non-cash change, which is recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss) is unrealized during the period and, therefore, has no impact on our cash flows from operations. As such, the changes in fair value attributable to assumption changes are adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations.

(4)Reflects changes in fair value inputs and assumptions, including conditional prepayment and default rates and discount rates. When third parties finance our consolidated VIEs through purchasing residual interests, we receive proceeds at the time of the securitization close and, thereafter, pass along contractual cash flows to the residual interest owner. These obligations are measured at fair value on a recurring basis, with fair value changes recorded within noninterest income in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The fair value change attributable to assumption changes has no impact on our initial financing proceeds, our future obligations to the residual interest owner (because future residual interest claims are limited to securitization collateral cash flows), or the general operations of our business. As such, this non-cash change in fair value during the period is adjusted to provide management and financial users with better visibility into the cash flows available to finance our operations.

The following table reconciles reportable segments total contribution profit to loss before income taxes for the periods presented. Expenses not allocated to reportable segments represent items that are not considered by our CODM in evaluating segment performance or allocating resources.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Reportable segments total contribution profit	$	110,132	$	77,456	$	211,523	$	145,308
Corporate/Other total net revenue (loss)	(8,852)		2,647		(15,845)		(1,874)
Intercompany expenses	1,671		—		2,441		—
Servicing rights – change in valuation inputs or assumptions	9,098		(224)		20,678		(12,333)
Residual interests classified as debt – change in valuation inputs or assumptions	(2,662)		(5,717)		(5,625)		(13,668)
Expenses not allocated to segments:
Share-based compensation expense	(80,142)		(52,154)		(157,163)		(89,608)
Depreciation and amortization expense	(38,056)		(24,989)		(68,754)		(50,966)
Fair value change of warrant liabilities	—		(70,989)		—		(160,909)
Employee-related costs(1)	(45,316)		(36,944)		(88,006)		(69,224)
Special payment(3)	—		(21,181)		—		(21,181)
Other corporate and unallocated expenses(2)	(41,589)		(33,297)		(104,570)		(67,402)
Loss before income taxes	$	(95,716)	$	(165,392)	$	(205,321)	$	(341,857)

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(1)Includes compensation, benefits, recruiting, certain occupancy-related costs and various travel costs of executive management, certain technology groups and general and administrative functions that are not directly attributable to the reportable segments.

(2)Represents corporate overhead costs that are not allocated to reportable segments, which primarily includes corporate marketing and advertising costs, tools and subscription costs, professional services costs, corporate insurance expense and transaction-related expenses.

(3)Represents a special payment to the Series 1 preferred stockholders in connection with the Business Combination.