SOFI
Sofi Technologies, INC
NASDAQ
10-Q: SoFi Technologies Reports Strong Q3 2024 Results, Achieves Fourth Consecutive Quarter of Profitability
Sentiment:
Quarterly Report
7 November 2024 4:29 PM
SoFi Technologies reports a profitable third quarter in 2024, marking its fourth consecutive quarter of positive net income, driven by growth in members and products.
Better than expected
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.
Summary
- SoFi Technologies reported a net income of $60.7 million for the third quarter of 2024, marking its fourth consecutive quarter of profitability.
- The company's total net revenue reached $697.1 million, a 30% increase compared to the same period in 2023.
- Total members grew to nearly 9.4 million, a 35% increase year-over-year, while total products reached nearly 13.7 million, a 31% year-over-year increase.
- The Lending segment's contribution profit was $238.9 million, with a 60% contribution margin.
- The Technology Platform segment's contribution profit was $33.0 million, with total net revenue of $102.5 million.
- The Financial Services segment's contribution profit was $99.8 million, with total net revenue of $238.3 million.
- The company's net interest margin was 5.57% for the quarter.
- The company's total capital ratio was 16.3% as of September 30, 2024.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong growth in key metrics and a return to profitability. However, there are some risks and challenges that need to be monitored.
Positives
- SoFi's net income of $60.7 million represents a significant turnaround from a loss of $266.7 million in the same quarter of the previous year.
- The company experienced strong growth in both members and products, indicating increased adoption and engagement with its platform.
- The Lending segment demonstrated solid profitability with a 60% contribution margin.
- The Financial Services segment showed substantial improvement in profitability, with a contribution profit of $99.8 million.
- The Technology Platform segment continues to grow, with a 14% increase in total net revenue.
- The company's total capital ratio of 16.3% indicates a strong financial position.
Negatives
- The net interest margin decreased by 42 bps to 5.57% for the quarter.
- The Technology Platform segment's contribution profit growth was relatively modest at 2%.
Risks
- The company's performance is subject to macroeconomic factors, including interest rate fluctuations and economic uncertainty.
- The company faces intense competition in the financial services and technology sectors.
- The company's ability to maintain profitability depends on its ability to manage expenses and continue to grow its revenue.
- The company's loan portfolio is subject to credit risk, and an increase in default rates could negatively impact its financial results.
- The company's reliance on third-party service providers exposes it to operational and cybersecurity risks.
- The company's ability to access funding on favorable terms is subject to market conditions and regulatory changes.
Future Outlook
The company expects continued growth in its Technology Platform segment and anticipates that its funding mix will continue to shift towards deposit funding. The company also expects to continue to scale its Loan Platform Business services and increase its fee-based revenue.
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 believes that the company is well positioned to capture opportunities from traditional financial institutions and nonfinancial categories.
Industry Context
The announcement reflects a trend of fintech companies expanding their product offerings and achieving profitability. The company's focus on a diversified business model and its ability to leverage technology are consistent with broader industry trends.
Comparison to Industry Standards
- SoFi's growth in members and products is comparable to other rapidly growing fintech companies.
- The company's net interest margin of 5.57% is within the range of other financial institutions, but may be subject to fluctuations based on market conditions.
- The company's focus on a diversified business model, including lending, financial services, and technology platform, is similar to other large fintech companies.
- The company's ability to achieve profitability in the third quarter of 2024 is a positive sign, as many fintech companies struggle to achieve profitability.
Stakeholder Impact
- Shareholders will benefit from the company's return to profitability and strong 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 will benefit from the company's strong financial position.
Next Steps
- The company will continue to focus on growing its member base and expanding its product offerings.
- The company will continue to invest in its technology platform and explore new opportunities for growth.
- The company will continue to monitor macroeconomic conditions and their impact on its business.
Key Dates
- January 7, 2021: Social Finance entered into a merger agreement with SCH.
- 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, a bank holding company, and its subsidiary, Golden Pacific Bank, which was renamed SoFi Bank.
- March 2022: SoFi acquired Technisys, a cloud-native digital multi-product core banking platform.
- April 3, 2023: SoFi acquired Wyndham Capital Mortgage, a fintech mortgage lender.
- September 30, 2024: End of the reporting period for the third quarter of 2024.
- October 31, 2024: The number of shares of the registrants common stock outstanding was 1,085,146,875 shares.
- November 7, 2024: Mr. Ahmed Al-Hammadi and Mr. Harvey Schwartz notified the Board of Directors of the Company of his respective resignation from service as a director of the Company, effective immediately.
Keywords
SoFi Technologies, financial results, net income, revenue growth, member growth, lending, financial services, technology platform, profitability, net interest margin, loan origination, digital banking, fintech
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.