SOFI
Sofi Technologies, INC
NASDAQ
10-Q: SoFi Technologies Reports First Quarter 2024 Net Income of $88 Million, Driven by Lending and Financial Services Growth
Sentiment:
Quarterly Report
7 May 2024 4:26 PM
SoFi Technologies achieved a net income of $88 million in the first quarter of 2024, marking its second consecutive quarter of profitability, driven by strong growth in its Lending and Financial Services segments.
Better than expected
The company achieved a net income of $88 million, compared to a net loss of $34.4 million in the same period last year.
The company's total net revenue increased by 37% year-over-year, indicating strong growth.
The company's Financial Services segment achieved a contribution profit, compared to a loss in the same period last year.
Summary
- SoFi Technologies reported a net income of $88 million for the first quarter of 2024, a significant improvement from a net loss of $34.4 million in the same period last year.
- Total net revenue increased by 37% year-over-year to $645 million, driven by growth in both Lending and Financial Services segments.
- The company's total membership grew by 44% year-over-year, reaching over 8.1 million members.
- Total products increased by 38% year-over-year, reaching over 11.8 million.
- The Lending segment saw a 22% increase in origination volume, primarily driven by personal loans and student loans.
- The Technology Platform segment's contribution profit increased by 107% year-over-year, with total net revenue up by 21%.
- The Financial Services segment achieved a contribution profit of $37.2 million, a significant improvement from a loss of $24.2 million in the same period last year, with total net revenue up by 86%.
- SoFi's deposit base grew to $21.6 billion, supporting its lending activities and lowering its cost of funds.
- The company's net interest margin increased to 5.91%, up from 5.48% in the same period last year.
Sentiment
Score: 8
Explanation: The document presents a strong financial performance with significant growth in key areas, indicating a positive outlook for the company. The company's second consecutive quarter of profitability and strong growth in membership and products are positive indicators. However, there are some risks and challenges that need to be monitored.
Positives
- The company achieved its second consecutive quarter of profitability.
- Strong growth in both membership and total products indicates increasing adoption of SoFi's platform.
- The Lending segment saw a significant increase in origination volume, driven by personal and student loans.
- The Technology Platform segment's profitability improved significantly, driven by strong organic growth and new product adoption.
- The Financial Services segment achieved a positive contribution profit, indicating improved profitability.
- The growth in deposits provides a lower cost of funds for the company's lending activities.
- The increase in net interest margin reflects improved profitability in lending operations.
Negatives
- The Lending segment's contribution profit margin decreased slightly year-over-year.
- Noninterest income in the Lending segment decreased due to lower loan origination, sales, and securitization income.
- The company experienced higher loan write-offs in the current period, primarily driven by longer loan holding periods and elevated charge off rates.
Risks
- The company is exposed to risks associated with fluctuations in interest rates, which could impact demand for lending products and the value of financial assets.
- The company is subject to credit risk, which could lead to higher loan defaults and losses.
- The company relies on third-party service providers, and any failure by these providers could disrupt operations.
- The company is subject to regulatory risks, including compliance with consumer protection laws and banking regulations.
- The company is exposed to cybersecurity risks, which could lead to data breaches and financial losses.
- The company is subject to risks associated with the macroeconomic environment, including inflation, recessionary pressures and market volatility.
- The company is subject to risks associated with its international operations, including compliance with foreign laws and regulations.
Future Outlook
The company expects continued growth in its Lending and Financial Services segments, driven by its Financial Services Productivity Loop strategy. SoFi also anticipates continued growth in its Technology Platform segment, driven by new client adoption and product expansion. The company expects its funding mix to continue to shift towards deposit funding, which has a lower borrowing cost of funds than its warehouse and securitization financing model.
Management Comments
- Management believes that the company's suite of differentiated products and services provides the foundation for a diversified business that can endure through market cycles.
- Management expects that its funding mix will continue to move towards deposit funding, which has a lower borrowing cost of funds than its warehouse and securitization financing model.
Industry Context
The results reflect a trend of fintech companies expanding their product offerings and leveraging technology to provide a more integrated financial services experience. SoFi's growth in deposits and its focus on cross-selling products to existing members aligns with broader industry trends of financial institutions seeking to deepen customer relationships and increase profitability.
Comparison to Industry Standards
- SoFi's growth in membership and products is strong compared to traditional banks, which often struggle with digital adoption.
- The company's net interest margin of 5.91% is competitive with other fintech lenders and banks.
- SoFi's Technology Platform segment's growth is notable compared to other platform-as-a-service providers, indicating strong demand for its solutions.
- The company's ability to achieve profitability in the current economic environment is a positive sign compared to other fintech companies that are still struggling to achieve profitability.
Stakeholder Impact
- Shareholders will benefit from the company's improved profitability and growth.
- Employees may benefit from the company's continued growth and success.
- Customers will benefit from the company's expanded product offerings and improved services.
- Suppliers and creditors may benefit from the company's improved financial stability.
Next Steps
- The company intends to continue to explore other products for SoFi Bank over time.
- The company expects to continue to scale its products through increased brand awareness and network effects.
- The company expects growth in Technology Platform segment revenue to continue to accelerate in 2024.
Key Dates
- January 7, 2021: Social Finance, Inc. entered into a merger agreement with Social Capital Hedosophia Holdings Corp. V.
- May 28, 2021: The transactions contemplated by the merger agreement were completed, and SCH changed its name to SoFi Technologies, Inc.
- February 2022: SoFi acquired Golden Pacific Bancorp, Inc., becoming a bank holding company and renaming Golden Pacific Bank as SoFi Bank, National Association.
- March 2022: SoFi acquired Technisys S.A., a cloud-native digital multi-product core banking platform.
- April 3, 2023: SoFi acquired Wyndham Capital Mortgage, a fintech mortgage lender.
- March 2024: SoFi issued $862.5 million aggregate principal amount of convertible senior notes due 2029.
- April 22, 2024: SoFi notified holders of its Series 1 Redeemable Preferred Stock that it intends to redeem all outstanding shares on May 29, 2024.
- May 29, 2024: SoFi intends to redeem all outstanding shares of Series 1 Redeemable Preferred Stock.
Keywords
SoFi Technologies, financial services, lending, technology platform, net income, revenue, membership growth, loan origination, deposits, fintech, digital banking, credit cards, student loans, personal loans, home loans, financial services productivity loop
SOFI
Sofi Technologies, INC
NASDAQ
Sector: Financial Services
Filings with Classifications
Better than expected
6 May 2025 4:57 PM
Quarterly Report
- The company's total net revenue increased by 20% year-over-year.
- The Lending segment's total net revenue increased by 25%.
- The Financial Services segment's total net revenue increased by 101%.
- Total membership grew by 34% year-over-year.
- Total products increased by 35% year-over-year.
- Diluted EPS was $0.06, compared to $0.02 in the same period last year.
Better than expected
29 April 2025 7:03 AM
Earnings Release
- SoFi's results were better than expected due to record revenue, member growth, and increased full-year guidance.
Better than expected
15 April 2025 4:02 PM
Proxy Statement
- SoFi's total net revenue reached $2.7 billion, with adjusted net revenue at $2.6 billion, both reflecting a 26% year-over-year increase.
- The company reported a net income of $498.7 million and adjusted EBITDA of $666.5 million in 2024.
- SoFi's membership base grew to over 10.1 million by the end of 2024, marking a 34% increase.
Better than expected
24 February 2025 4:09 PM
Annual Results
- The company achieved diluted earnings per share of $0.39, a significant improvement from the loss per share of $0.36 in the previous year.
- Financial Services segment contribution profit reached $307.0 million, a significant improvement from a loss in the previous year.
Better than expected
27 January 2025 7:05 AM
Quarterly Report
- SoFi's results were better than expected due to record revenue, profitability, and member growth.
- The company's Financial Services and Tech Platform segments showed strong growth, exceeding expectations.
- SoFi achieved its first full year of GAAP profitability, a significant milestone that was better than anticipated.
Better than expected
17 December 2024 9:05 AM
Press Release
- The company has exceeded the 10 million member milestone, which is a significant achievement and indicates strong growth.
Worse than expected
4 December 2024 8:12 PM
SEC Form 4 Filing
- The significant sale of shares by a major shareholder like Silver Lake is generally viewed negatively by the market.
Better than expected
7 November 2024 4:29 PM
Quarterly Report
- The company achieved its fourth consecutive quarter of profitability, a significant improvement over prior periods.
- The company's total net revenue increased by 30% year-over-year, indicating strong growth.
- The company's member base and total products both grew by over 30% year-over-year, demonstrating strong adoption of its platform.
Better than expected
29 October 2024 7:09 AM
Quarterly Report
- SoFi's Q3 results exceeded expectations with record adjusted net revenue, net income, and adjusted EBITDA.
- The company raised its full-year guidance, indicating confidence in continued strong performance.
- The Financial Services and Tech Platform segments showed significant growth, driving overall results.
Better than expected
6 August 2024 4:06 PM
Quarterly Report
- The company achieved its third consecutive quarter of profitability, exceeding expectations.
- Total net revenue increased by 20% year-over-year, indicating strong growth.
- The Financial Services segment achieved a positive contribution profit, a significant improvement from prior periods.
Better than expected
30 July 2024 7:08 AM
Quarterly Report
- SoFi's results were better than expected due to the company achieving its third consecutive quarter of GAAP profitability.
- The company's adjusted net revenue and adjusted EBITDA exceeded expectations, showing strong growth.
- SoFi raised its full-year guidance, indicating confidence in future performance.
Worse than expected
14 June 2024 7:41 AM
SEC Form 4 Filing
- The sale of a significant number of shares by a major investor like QIA is generally viewed negatively by the market.
Better than expected
7 May 2024 4:26 PM
Quarterly Report
- The company achieved a net income of $88 million, compared to a net loss of $34.4 million in the same period last year.
- The company's total net revenue increased by 37% year-over-year, indicating strong growth.
- The company's Financial Services segment achieved a contribution profit, compared to a loss in the same period last year.
Better than expected
29 April 2024 7:04 AM
Quarterly Report
- SoFi's results exceeded expectations with a second consecutive quarter of GAAP profitability and increased full-year guidance.
Better than expected
24 April 2024 5:11 PM
Corporate Action Announcement
- The redemption of the Series 1 Preferred Stock is expected to result in $29.3 million in cost savings for SoFi in 2024, which is a positive financial outcome.
Better than expected
26 March 2024 5:08 PM
Debt Restructuring Announcement
- The debt exchange is expected to improve SoFi's risk-based capital ratio, increase tangible book value, and be accretive to GAAP net income.
Capital raise
8 March 2024 5:22 PM
Debt Financing Announcement
- SoFi raised $862.5 million through a private offering of convertible senior notes due 2029.
- The offering included an initial $750 million and an additional $112.5 million through the exercise of an option by the initial purchasers.
Capital raise
5 March 2024 9:39 PM
Debt Offering Announcement
- SoFi is raising $750 million through a private offering of convertible senior notes due in 2029.
- The initial purchasers have an option to purchase an additional $112.5 million in notes.
- The net proceeds are estimated to be approximately $735 million, or $845.3 million if the option is fully exercised.
Capital raise
5 March 2024 8:31 AM
Capital Raise Announcement
- SoFi is planning to offer $750 million in convertible senior notes due in 2029.
- The initial purchasers have an option to purchase an additional $112.5 million in notes.
Better than expected
5 March 2024 8:31 AM
Capital Raise Announcement
- The transactions are expected to increase SoFi's risk-based capital ratio by more than 200 basis points.
- The transactions are expected to be accretive to GAAP net income and tangible book value for the first quarter of 2024.
Better than expected
27 February 2024 5:14 PM
Annual Results
- The company reported record total net revenue and strong growth across all business segments, exceeding expectations.
- The Financial Services segment significantly improved its contribution loss, moving towards break-even, which was better than expected.
- SoFi Bank's deposit growth was strong, providing a lower cost source of funding for loans, which was better than expected.
Better than expected
29 January 2024 7:05 AM
Quarterly Report
- SoFi achieved its first quarter of positive GAAP net income, which was better than expected.
- The company's adjusted EBITDA and revenue growth exceeded expectations.
- The company's member and product growth was better than expected.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.