Galileo Financial Technologies posted another quarter of strong revenue during the second quarter of 2022, growing 39 percent year-over-year and helping drive 85 percent year-over-year growth for SoFi Technologies Inc.’s Technology Platform segment.
Galileo contributed significantly to the segment's nearly $84 million in net revenue during Q2, SoFi announced in its quarterly earnings report on August 2, 2022. That figure included record quarterly Galileo revenue, as well as the first full quarter of contribution from Technisys, the digital multi-product core banking platform SoFi acquired and added to the segment in March 2022.
Total enabled client accounts for the Technology Platform segment continued to show robust growth, with a 48 percent year-over-year increase, reaching 116.6 million accounts in Q2—up from 78.9 million a year prior. That increase was fueled by diverse new client additions and growth among existing clients, SoFi reported.
“The combination of Technisys and Galileo is a pretty powerful combination of payment processing and a core end-to-end solution, which is a great opportunity for an existing large financial institution to move to a modern stack and benefit from all the innovation that we're driving in addition to the lower costs,” said Anthony Noto, CEO of SoFi, during the company’s earnings call.
For SoFi, the accounts dependent on Galileo’s technology platform use products like virtual cards that enable virtual wallets, peer-to-peer and bank-to-bank transfers, receiving early wages, separating savings from spending balances, making debit transactions and relying upon real-time authorizations—all of which result in revenues for the Technology Platform segment.
“On the technology services side for Galileo and Technisys, we're in an environment where companies really need to drive greater efficiency in their businesses and drive down costs, which means they need to upgrade their technology platforms,” said Noto. “And we are a perfect company to partner with them, whether it's on the core banking technology or payment processing and everything that's in between.”
B2B continues to be a major focus for Galileo as its client pipeline stemming from B2B deals more than doubled in Q2 from this time last year, Noto said. He noted that B2B companies present enormous growth potential as new capabilities are leveraged to penetrate the expanding market.
Noto cited the B2B market opportunity at an estimated $29 trillion, with 50 percent of B2B payments still made via paper check. To help enable businesses to digitize more of those payments,Galileo recently has rolled out several new B2B capabilities as well as a secured credit card offering.
“Just like in consumer banking, we have the capability and the opportunity to convert these to digital payments and virtual cards. This is a prime example of how we have driven technological innovation at Galileo to address more market segments and further diversify sources of growth,” Noto said. “And, Technisys continues to achieve milestones with its first core banking deal in Mexico and the launch of a new banking client in Brazil in the second quarter.”
Noto said Galileo and Technisys “contribute to two main tenets of the SoFi strategy” due to their “faster innovation at lower cost,” which helped deliver expansive revenue streams. The combined capabilities of Galileo and Technisys serves as an end-to-end, vertically integrated banking technology stack that enables established banks, fintechs and non-financial brands to offer API-based financial services innovation to their customers.
“In addition to new products and an increasingly diverse client list, Technisys and Galileo have yet another major source of growth: cross-selling among their complementary client bases, product sets and geographic footprints, bringing Technisys to the U.S. through Galileo and Galileo to LatAm through Technisys,” Noto said. “Suffice to say that teams are running after these opportunities, and we cannot be more excited.”
See SoFi’s full second-quarter results for more information.
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