Reggie Smith

Reggie Smith asked if the innovation in new products like crypto, stablecoin, and Smart Card could stimulate greater interest and demand from SoFi's tech platform customers, potentially catalyzing a change in adoption and growth for the tech platform business.

Answer

Anthony Noto, CEO, confirmed a significant increase in interest from tech platform partners for blockchain, stablecoins, and wallets since the OCC's crypto permissibility for banks. He mentioned ongoing dialogues with international companies for stablecoin-backed debit cards and program managers, anticipating spillover to the U.S. Noto emphasized the enormous growth opportunities crypto provides for the tech platform and SoFi's own business, enabling lower costs, faster speeds, and enhanced safety across all products.

Reggie Smith requested details on the loan platform business, including the number of buyers, the projected capacity for the next four quarters, and the process by which companies upsize their commitments.

Answer

CFO Chris Lapointe stated that SoFi does not disclose the exact number of buyers but confirmed having multiple partners, including publicly known ones like Fortress and Blue Owl. He noted that Q3 LPB originations were $3.4 billion, with expected continued growth in Q4. He explained that partners typically request to upsize commitments intra-quarter if they have excess capacity or demand for incremental loans. CEO Anthony Noto added that SoFi is benefiting from the observed consolidation of buyers to higher-quality platforms.

Reggie Smith followed up on the Loan Platform Business, asking about the number of buyers on the platform, the next four-quarter capacity, and the process for companies to upsize their commitments.

Answer

CFO Chris Lapointe declined to disclose the exact number of buyers but confirmed that the $3.4 billion in Q3 originations through LPB is expected to grow in Q4. He explained that partners typically request to upsize commitments intra-quarter if they have excess capacity or demand, which SoFi fulfills if possible. CEO Anthony Noto added that SoFi is benefiting from the observed consolidation of partners towards higher-quality platforms.

Reggie Smith of JPMorgan Chase & Co. asked about the monetization progress of the SoFi Invest segment, its current unit economics, and the key performance indicators (KPIs) management uses to evaluate the business.

Answer

CEO Anthony Noto explained that Invest monetization is improving as assets grow and new revenue-generating products like options are introduced. While the segment is variable profit positive, it is not yet contribution profit positive. Key internal metrics include total products, product mix, AUM, and net flows, all of which are trending positively. Future monetization drivers include Level 1 options, margin lending, and the relaunch of cryptocurrency trading.

Reggie Smith asked about Bread Financial's appetite for the personal loans channel, its current size, and the economics compared to their core private label or brand business. He also inquired about the long-term impact of AI on the card issuing business over the next five years, focusing on operational and underwriting transformations, areas of most progress, and its effect on variable headcount and employee productivity.

Answer

Ralph Andretta, President and Chief Executive Officer, stated that personal loans are part of their diverse product suite and growth equation, currently a small but gradually growing portion on their balance sheet, managed responsibly. Perry Beberman, Executive Vice President and Chief Financial Officer, detailed Bread Financial's extensive AI deployment, including over 200 machine learning models and thousands of bots saving over 1 million manual hours. He outlined future focus areas: AI tools for personal productivity, accelerating core technology and data platforms, and developing intelligent applications for enhanced customer experiences and automated processes, all backed by disciplined value tracking and strong ROI.

Reggie Smith from J.P. Morgan asked about Bread Financial's appetite for personal loans, their current size, economics compared to the core private label or brand business, and whether these loans are held on the balance sheet. He also inquired about the long-term impact of AI on the card issuing business over the next five years, focusing on operational and underwriting transformations, potential effects on variable headcount, and how AI tools enhance employee productivity.

Answer

Ralph Andretta, President and Chief Executive Officer, stated that personal loans are part of their growth equation, currently a small but gradually growing portion of their balance sheet, managed responsibly. Perry Beberman, Executive Vice President and Chief Financial Officer, detailed Bread Financial's extensive use of AI, with over 200 machine learning models and thousands of bots saving over 1 million manual hours. He outlined three focus areas for AI: improving personal productivity (e.g., content summarization, intelligent search), accelerating core technology and data platforms (e.g., cloud migration), and developing intelligent applications for commerce and personalized service, all backed by disciplined value tracking and strong ROI.

Reggie Smith from JPMorgan Chase & Co. inquired about trends in gross application volumes, approval rates, new account engagement, and the company's wallet share and long-term penetration goals with its top 10 partners.

Answer

CEO Ralph Andretta stated that application flow is strong and approval rates are appropriate for the current economic conditions, highlighting the new crypto.com partnership as an example of modern engagement. Regarding top partners, he emphasized that with long-term renewals secured, the focus is now on execution and deepening relationships to drive growth, rather than on renegotiations.

Reggie Smith asked about the CapEx required to upgrade the Sandersville site for HPC, potential use cases (training vs. inference), and how these factors might influence pricing. He also inquired about the expected timeline for signing a lease agreement for AI sites, comparing it to the longer timelines observed with peers.

Answer

Matt Schultz, Chairman and CEO of CleanSpark, clarified that Sandersville would involve new construction on adjacent land for AI, not a conversion of existing mining facilities. He discussed different campus types (gigacampus, megacampus, low-latency) and the high demand for 2026 delivery. Schultz expressed strong confidence in securing a lease agreement much quicker than peers, citing direct customer demand, CleanSpark's operational excellence, and the urgency from hyperscalers, with two different offtakers potentially signing by year-end.

Reggie Smith inquired about the CapEx required to upgrade the Sandersville site for HPC, whether it's move-in ready, and if use cases like training versus inference play a role in lease pricing. He also asked about CleanSpark's internal timeline expectations for signing a deal, comparing it to other companies that have taken a year.

Answer

Chairman and CEO Matt Schultz clarified that Sandersville would involve new construction on adjacent land, parallel to ongoing Bitcoin mining, allowing for a 'flip the switch' transition. He discussed different campus types (gigacampus, megacampus, low-latency sites) and the high demand for 190-200 megawatt critical IT loads with 2026 delivery. Mr. Schultz expressed confidence that a lease would be executed 'much quicker than what you've seen in the space,' citing a 'complete paradigm shift' with customers actively seeking rapid load service and two potential offtakers aiming to sign by year-end.

Reggie Smith sought Riskified's view on the opportunities and threats of agentic commerce, asking for a bull and bear case scenario for its impact on the business. He also inquired about the potential to provide services directly to AI labs and Riskified's current sentiment regarding its 2026 EBITDA targets in light of recent gross margin momentum, operating leverage, and accelerating GMV growth.

Answer

Eido Gal, Co-founder and CEO, outlined the bull case: agentic commerce introduces complexity (identifying agentic shoppers, distinguishing legitimate from fraudulent, managing unique policies), which Riskified is well-equipped to solve, making it a net positive. The bear case involves transactions moving away from enterprise e-commerce to end-to-end purchasing within LLM environments. He confirmed that LLM providers could be Riskified clients for fraud management. Regarding 2026 EBITDA targets, he expressed pride in progress and continued planning for double-digit growth next year, but noted that some merchant events in 2024 mean the 15% margin target would be pushed out by a few quarters, aligning with sell-side expectations.

Reggie Smith asked about the opportunities and threats of agentic commerce for Riskified's business, outlining both bull and bear cases. He also inquired about the opportunity to provide services to AI labs and Riskified's current view on its 2026 EBITDA targets.

Answer

CEO Eido Gal presented the bull case for agentic commerce, stating it introduces increasing complexity for merchants (identifying agentic shoppers, legitimacy, policy fit) which Riskified is well-positioned to solve, making it a net positive. The bear case involves transactions moving away from enterprise e-commerce to end-to-end purchasing within LLM environments. He confirmed that LLM providers could be Riskified clients for fraud management. Regarding 2026 EBITDA targets, he expressed satisfaction with targeting 50% margins in Q4 and planning for double-digit growth next year, but noted that the 15% margin target would be pushed out by a few quarters due to 2024 merchant events, aligning with sell-side expectations.

Reggie Smith from JPMorgan Chase & Co. inquired about the marketplace GMV growth, noting a discrepancy between the 16% year-to-date growth and the 12-14% full-year guidance, asking if this implies low single-digit Q4 growth and if seasonality around cell phone purchases is a factor. He also asked about the issue's scope (iPhone vs. Android) and the mix of sales. Additionally, he questioned the long-term profitability of the e-grocery and delivery businesses and the expected level of dividend reinstatement next year.

Answer

David Ferguson (Head of Investor Relations, Kaspi.kz) confirmed marketplace growth would moderate in Q4, primarily due to high-end smartphones like the iPhone 17, which represent significant missed GMV. Mikheil Lomtadze (CEO and Co-founder, Kaspi.kz) added that the demand for iPhones is still high, and the issue is supply-related, emphasizing the healthy engagement shown by a 36% increase in marketplace transactions and 86% in e-Commerce transactions. Mr. Lomtadze stated that the e-grocery business is self-sustainable and profitable, with ongoing investments in dark stores to meet demand. Mr. Ferguson addressed the dividend, stating that while international expansion is a priority, Kaspi aims to balance investments with cash returns via buybacks and dividends, but specific payout ratios for next year are not yet determined.

Reggie Smith questioned the marketplace GMV growth guidance versus year-to-date performance, asking about Q4 assumptions, seasonality, and the scope of the smartphone issue (iPhone vs. Android mix). He also asked if the e-grocery business is self-sustainably profitable or primarily an engagement tool, and about the potential payout level for the reinstated dividend.

Answer

David Ferguson, Head of Investor Relations, confirmed marketplace growth will moderate in Q4, influenced by high-end smartphone seasonality, particularly iPhone 17 models. CEO Mikheil Lomtadze added that the issue is primarily with high-value iPhones due to new model supply constraints, emphasizing strong underlying engagement shown by 36% growth in marketplace purchases and 86% in e-commerce transactions. Mikheil Lomtadze confirmed the e-grocery business is self-sustainable and profitable, with significant investments in dark stores to meet high demand. David Ferguson stated that while cash returns are important, future international expansion is a priority, and the company will balance growth investments with shareholder returns via buybacks and dividends, but declined to provide specific payout ratios for next year.

Reggie Smith from JPMorgan Chase & Co. sought clarification on the capital return policy for 2026, asking if a similar payout ratio to 2024 should be expected. He also asked if the Turkish banking license would create a competitive advantage and inquired about the nature of future investments in Turkey.

Answer

Mikheil Lomtadze, Co-Founder, Director, Chairman & CEO, responded that while investments for long-term growth remain a priority, the company expects to find a balance with capital distributions in 2026, though it is too early to commit to specific payout ratios. He described the banking license as a critical enabler for offering a full suite of world-class fintech products. David Ferguson, MD & Head of IR, added that the company has a history of making significant investments, like in e-grocery, while simultaneously returning capital to shareholders.

Reggie Smith from JPMorgan Chase & Co. sought clarification on the capital return policy for 2026, the competitive advantage conferred by the Turkish banking license, and the nature of planned investments in Turkey.

Answer

CEO Mikheil Lomtadze and MD & Head of IR David Ferguson responded. They clarified that while it's too early to commit to a specific payout ratio for 2026, the company will balance significant investments for growth with capital returns. Lomtadze emphasized the Turkish banking license is a critical enabler for offering a full suite of fintech products, with Kaspi's competitive advantage stemming from its world-class, tech-driven service model. Investments will focus on building the operational and compliance framework to launch these services.

Reggie Smith inquired about how Affirm's underwriting changes when moving into new verticals like automotive repair and Service Titan, specifically regarding risk related to the service provider.

Answer

Max Levchin, Founder and CEO, confirmed that underwriting models need to adapt for different SKUs or services. He highlighted Affirm's 'defensible moat' in its robust process for building and modifying models, quickly incorporating new data and learnings from each vertical. This infrastructure maturity allows them to confidently enter new businesses like services or elective medical.

Reggie Smith asked how Affirm's underwriting changes when moving into new verticals like automotive repair or services, considering potential risks related to the service provider in addition to the consumer.

Answer

Max Levchin confirmed that underwriting does change, highlighting Affirm's 'defensible moat' in its robust process for building and modifying lending models. He explained that Affirm quickly incorporates new data and descriptors (e.g., for services vs. merchandise) into its models, allowing it to confidently enter new verticals without overwhelming its delinquency rates, marking it as an infrastructure maturity indicator.

Reggie Smith of JPMorgan Chase & Co. asked about Affirm's penetration and growth within the non-Shopify e-commerce PSP channel and sought clarification on the volume impact from a large merchant transitioning away.

Answer

Founder & CEO Max Levchin noted that while it's still 'pretty early' in non-Shopify PSP channels, they are an important and accretive growth driver. CFO Rob O'Hare clarified that the company's outlook conservatively assumes zero volume through the departing merchant's integration after the end of fiscal Q1.

Reggie Smith asked about the outsized impact on conversion rates (approvals vs. consumer acceptance), potential share shifts due to competitor origination trends, the day-one economics and take rate of the HELOC product relative to the corporate average, and sought clarification on credit performance despite UMI signals.

Answer

CTO Paul Gu stated that conversion changes were predominantly due to the model's conservatism impacting approvals. CFO Sanjay Datta explained that HELOC take rates would be healthier but more modest than personal loans, on much larger loan sizes (roughly half the take rate, but more than double the loan size). Sanjay Datta confirmed exceptional credit performance, emphasizing that the model's conservative breather is a feature, not a bug.

Reggie Smith asked about the relative impact of approvals versus consumer acceptance on conversion rates, whether Upstart's application flow includes comparison pricing, and sought clarification on superprime declines and HELOC product economics.

Answer

Paul Gu, CTO of Upstart, stated that conversion changes were predominantly related to the model's conservatism, primarily impacting approvals. He clarified that superprime applicants typically see rate adjustments rather than declines. Sanjay Datta, CFO of Upstart, reiterated that HELOC take rates would be healthy but more modest than personal loans, on much larger loan sizes. Dave Girouard, CEO of Upstart, emphasized that the model's conservative stance is a feature, not a bug, and credit performance remains exceptional.

Reggie Smith requested a breakdown of the conversion rate into approval and acceptance rates, asked about the profile of newly approved borrowers under the new model, and sought clarification on interpreting the co-investment slide in the investor deck.

Answer

CFO Sanjay Datta stated the company does not externally decompose conversion rates. CTO Paul Gu explained that model improvements find many subtle relationships rather than targeting one specific borrower profile. Sanjay Datta clarified the co-investment slide (slide 23) provides a holistic view of risk-sharing investments, which are expected to ramp before leveling off, with returns flowing to the P&L over time.

Reggie Smith from JPMorgan Chase & Co. asked for a breakdown of the conversion rate into approval and acceptance rates, the profile of newly approved borrowers under Model 22, and for help interpreting the co-invested risk capital slide.

Answer

CFO Sanjay Datta did not provide a breakdown of conversion rates. CTO Paul Gu explained that model improvements find many subtle relationships rather than targeting one borrower type. Sanjay Datta clarified the co-investing slide provides a holistic view of risk capital investments, which are expected to ramp before leveling off, with returns flowing to the P&L over time.

Reggie Smith inquired about the BlackRock program and the insurance sales channel, asking if it allows individual investors to gain exposure to these notes, the liquidity for consumers, and if LendingClub anticipates announcing committed numbers from the insurance channel similar to private credit.

Answer

CFO Drew LaBenne clarified that the BlackRock program is not direct-to-consumer sales, but rather BlackRock managing funds for other clients. He noted the insurance pool is deep and offers a generally low cost of capital, with potential for channel growth. CEO Scott Sanborn added that while individual capital does come through funds managed by RIAs, a direct-to-consumer retail model (like their original structure) would entail significant regulatory overhead and competitive disadvantages due to public disclosure requirements.

Reggie Smith asked about the impact of new marketing channels like direct mail on applicant mix and conversion, and also inquired about the demand from whole loan buyers.

Answer

CEO Scott Sanborn stated that new channels were a significant driver of growth and that they are still in the 'early innings' of optimizing them, deliberately managing for performance differentials. He reiterated that demand from loan buyers is very strong, and the company is balancing the immediate returns from sales against the higher lifetime value of holding loans on its balance sheet.

Reggie Smith of JPMorgan Chase & Co. requested details on the specific operational changes driving the sharp increase in gross margins, the status of the M&A pipeline, and the valuation drivers for the separate Resolute Holdings entity.

Answer

President & CEO Jonathan Wilk attributed margin gains to broad-based process improvements under the CompoSecure Operating System, noting significant opportunity for further efficiencies remains. Regarding M&A, he described the pipeline as 'robust' but declined to specify deal stages, emphasizing a selective and accretive strategy. For Resolute Holdings, Wilk explained its value is primarily driven by the management fee from CompoSecure, which is expected to grow with CompoSecure's EBITDA and create operational leverage.

Reggie Smith of JPMorgan Chase & Co. asked for specific details on the operational changes driving the sharp increase in gross margins and the potential for future efficiencies. He also inquired about the M&A pipeline and sought clarity on the valuation drivers for the separate Resolute Holdings entity.

Answer

CEO Jonathan Wilk attributed margin gains to the company-wide implementation of the CompoSecure Operating System, noting there is still significant opportunity for future improvements. He described the M&A pipeline as 'robust' but emphasized a selective approach based on strict criteria. Regarding Resolute Holdings, Wilk explained its value proposition is the potential for the management fee to grow with CompoSecure's EBITDA against relatively flat costs, but declined to comment further on its valuation.

Reggie Smith from JPMorgan Chase & Co. asked about Shopify's pricing strategy, questioning if the company might introduce a la carte pricing for new product enhancements rather than bundling them.

Answer

President Harley Finkelstein reaffirmed the company's commitment to its GMV-based business model, where Shopify's success is tied to its merchants' success. He highlighted Commerce Components as a modular approach that allows large merchants to adopt individual products like Checkout or Shop Pay, serving as an on-ramp to the full platform, rather than a shift toward a la carte pricing for all services.

On behalf of Reggie Smith, an analyst inquired whether Cipher has seen changes in the types of workloads, such as model training versus inference, that potential HPC counterparties want to run, and how workload type might impact negotiations or site development.

Answer

CEO Tyler Page stated that potential tenants are interested in capacity for a variety of use cases, and lease discussions have not been explicitly differentiated by workload type. However, he acknowledged that the low-latency requirements for inference applications do appear to drive higher interest in certain sites that are less remote, such as the '3M' sites, compared to Black Pearl. He noted that interest remains strong across the entire portfolio for multiple HPC applications.