00:00Look, there was real strength in the quarter that you reported, and analysts are saying that time
00:04and time again, particularly in loan origination across the board. But, well, many are saying,
00:07look, you uncharacteristically didn't raise your revenue outlook. What held you back from doing
00:11that? Yes, we had a record quarter, actually saw accelerating revenue growth to 41% year-of-year
00:17growth and reported over a billion dollars of revenue. Our view was we went into the year with
00:23a view that we'd have at least two rate cuts, and that was one of the key assumptions to our
00:28outlook for revenue guidance. And while we beat the quarter, we're not raising full-year guidance
00:33because we now expect no rate cuts, and that will be a more difficult environment to operate in than
00:38if we had two rate cuts. The business is performing incredibly well. I'm not sure there are many
00:43companies that are generating over $1 billion of revenue with 41% growth year-of-year and 31% EBITDA
00:51margins. We like to look at the rule of 40, which is revenue growth plus EBITDA margins, and we've had
00:57more than a rule of 40 for 18 consecutive quarters, including this quarter, and we're still
01:02forecasting that. But we saw no reason to raise guidance in this environment given the
01:06uncertainty as it relates to markets and interest rates, as well as global issues with the Middle
01:13East and the pressure on oil and inflation generally. A lot of macro headwinds that you're
01:19navigating. What about, in particular, private credit, Anthony? Because I'm looking at the slowing volume in the loan
01:25platform business. You said it's not because of that. But still, analysts are kind of worried about it.
01:30Yeah, I think generally when you don't raise guidance, you give something, you give people something to worry
01:35about. So we had record personal loan originations, $12.9 billion, record student loan refinancing
01:41originations, and record home loans. In fact, our home loans business doubled year-over-year, as did our student loan
01:47refinancing business. The loan platform business is one where we produce loans for other partners, and that business
01:54was very strong. It wasn't as strong as it was prior quarters, because we made the conscious decision to put
02:00more of the loans we originated on our balance sheet because we had capital to do it. Those loans will
02:05produce cash flow over the next three years, as opposed to the loan platform business, where we just generate
02:11revenue in this quarter. We're not seeing any issues with credit performance. It's been quite strong. The
02:17concerns about private credit are really not appropriate for our business. Our partners in the loan platform
02:23business are buying consumer unsecured loans from us, not financing companies with corporate debt.
02:31Your goal is to kind of be this one-stop shop, particularly for the category of young and affluent, right?
02:37We talk about
02:38that a lot with you on the program. You didn't call out the economy this quarter. And forgive me if
02:43I missed it, but in the
02:43call, you didn't call out the economy. And a lot of people are looking at how solid credit quality signals
02:49are. Your
02:50borrowers are holding up. Would you tell me a little bit about how you see the economy, but particularly
02:54people that are young and people that are affluent?
02:58Sure. We're not seeing any economic headwinds for our consumer. As you mentioned, they're younger,
03:04they're mass affluent. We saw very strong trends in spending through our debit exchange,
03:09interchange, revenue. We also saw strong trends in investing or investing business doubled on a year-over-year
03:15basis. And we're also seeing strong trends in performance in our credit card. So, as we think
03:20about the breadth of our businesses and the activity that we see, we're seeing no slowdown in consumer
03:25spending, consumers' ability to deliver the obligations they have on their debt or their desire
03:32for more products like invest. So, no issues whatsoever with our underlying consumer or their
03:38profile. I think the concerns about AI creating unemployment among white collar workers is a lot
03:45of hype we're not seeing in any of our businesses. You're a technology company, but you also have
03:51this goal of being a top 10 financial institution, or so Bloomberg Intelligence writes, you have that
03:56goal. When you talk to the team internally, how do you hold yourself on milestones to get to that?
04:03When will you decide, Anthony, that, yeah, you know what, today we are a top 10 financial
04:07institution? Sure. To be a top 10 financial institution, it's measured by market cap.
04:12We have seen a great increase in our valuation over the last eight years that I've been here.
04:18When I arrived, our capitalization was private, but the value of the company was on a common stock
04:24basis was in the $2 billion range. You know, we're now well over $20 billion of market cap. And so,
04:31we're on our way there. We've made great progress in that eight years. We've taken our member base from
04:36650,000 members to $14.7 million this quarter. Our revenue from about $250 million of revenue to last
04:44year, over $3.5 billion, and on our way to $5 billion in 2026. But ultimately, we'll measure it
04:51based on market capitalization. And I think we're in rarefied air, growing 41% year-over-year with over
04:58$1 billion of quarterly revenue. And as I mentioned, 30-plus percent EBITDA margin. So, it's just a matter of
05:03when, not if. And we're looking at the 20-plus percent increase in the share price over the last
05:08year. But today, it's down by $3 billion. Does that frustrate you, the day-to-day gyrations, if that's how
05:14you're measuring yourself in terms of making the top 10?
05:17I think it's just the reality of the investment markets. The markets do not like uncertainty. We're not
05:22raising our guidance for the full year. People think there's some degree of uncertainty. Well, the outlook for the market
05:27is different
05:28today than what it was when we gave guidance three months ago. If the interest rates do actually come down,
05:34we'll see a big
05:35pickup in our business that would cause us to be more bullish than we already are. It's not like we're
05:40growing a very slow rate,
05:43even on our current guidance. Our current guidance calls for 30-plus revenue growth and 30-percent margins. There just
05:49aren't a lot of
05:50companies with a billion dollars of quarterly revenue growing 30 percent with 30 percent margins. So we're focused on two
05:57things, driving durable growth through product innovation and brand building, and then delivering great returns. And that's what we
06:05continue to do. And so I understand why people are concerned about the outlook because we're going to raise guidance.
06:10But the world is
06:11changing every day around us. We're executing incredibly well. Our goal is to generate escape velocity so that we're the
06:17winner that
06:18takes most in the industry. As you mentioned, we're in everything digital financial services app. That's in place. The
06:24brand building's in place. The execution's in place. We just have to keep delivering it. Everything else will take care
06:28of itself.
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