U.S. online personal finance company SoFi Technologies Inc. is set to announce its 2025 third-quarter earnings report on October 28 before the market opens. Market attention will focus on the synergistic growth of its platform business and loan segment, stable fee rates, and the repair of profit quality.
Market Forecast
According to data from the Tiger Trade APP, the company's third-quarter revenue is expected to be $885 million, representing a 28.32% increase year-on-year; adjusted earnings per share (EPS) is forecasted at $0.081, marking a 62.84% year-on-year increase.
In its Q2 earnings report and earnings call for FY25, the company provided guidance on third-quarter revenue growth and sequential improvement in adjusted EPS, emphasizing stable fee rates in the second half of the year.
The company’s current business highlights include a dual drive from financial services and technology platforms, with growth in membership and product numbers, expansion in transaction volume, and an increase in deposit balances, all supporting revenue resilience.
Looking ahead, the technology platforms (Galileo/Technisys) have been regarded by multiple institutions as a core support, driving year-on-year growth in platform revenue through the expansion of customers and transaction volume, optimizing recurring cash flow and profit margin structure.
Previous Quarter Review
In the second quarter of FY25, the company reported total revenue of approximately $600 million, achieving year-on-year growth, with sequential improvement in gross margin and continuous improvement in net income; adjusted EPS was around $0.05, up year-on-year. Management raised its full-year revenue and adjusted EPS outlook and provided guidance for continued growth in the third quarter.
The business highlights in Q2 included double-digit growth in membership and product numbers, an increase in deposit balances and transaction activity, and growth in credit and financial services revenue, with fee rates being controlled in an orderly manner.
By segment, financial services saw sequential improvement in gross margin, while the growth in customers and transaction volume for the technology platform boosted revenue, enhancing the contribution to scalable profitability.
Current Quarter Outlook
Optimization in Gross Margin Structure Driven by Platform Scale Effects
In Q2, the technology platforms (Galileo/Technisys) demonstrated dual momentum from customer expansion and growth in transaction volume. The market generally expects this trend to continue in Q3, positively contributing to revenue and gross margin. On the platform side, standardized APIs and compliance tools accelerate the onboarding of new clients, shortening the cycle from signing to commercialization, increasing the proportion of recurring revenue, and enhancing cash flow stability.
With the expansion of transaction volume, the effect of unit cost allocation improves, aligning with the management’s proposal of "stable fee rates in the second half of the year," providing conditions for further increases in Q3 gross margin.
Researchers highlight that cross-selling on the platform in high-frequency scenarios such as payments, cards, and accounts enhances activity and ARPU. This not only contributes to continuous revenue growth but also lifts the gross margin structure on the platform end through higher value-added services, thus marginally improving overall adjusted EPS.
Resilience in Financial Services and Stability in Net Interest Margin
Financial services showed signs of sequential improvement in gross margin in Q2, primarily supported by optimization on the funding side driven by growth in deposits and product penetration rates. In the outlook for Q3, the market is focused on the stability of the net interest margin, and whether financial services can continue to increase revenue and contribute profit under a framework of credit quality management and risk pricing at low marginal costs.
Several research views indicate that automation and process optimization in accounts, payments, and investments drive down unit operating costs. This, together with the strategy of stable fee rates, clarifies the path for margin repair in financial services. If deposit growth continues and funding cost management is in place, the stability of net interest margins in Q3 is more assured, making financial services, along with the platform, critical drivers for improving profit quality.
Management of Pace and Pricing for Personal and Student Loans
The market maintains attention on the restorative growth of personal loans and student loans in Q3, expecting the company to ensure net interest margin stability under a high-rate environment through more detailed pricing and risk control strategies. In Q2, management emphasized strengthening credit quality and compliance, iterating on risk control models, asset structure, and funding cost management, laying the foundation for stable net interest margins in Q3.
With the expansion of membership and deposit balances, the optimization space for funding costs on the liability side increases, allowing pricing strategies to better match different risk tiers and term structures, thereby enhancing loan yields and stability of net interest margin.
If personal loans continue to maintain steady placement and student loans bring seasonal incremental gains, coupled with platform-side customer acquisition and cross-selling, the likelihood of year-on-year improvement in Q3 revenue becomes stronger. Adjusted EPS will also benefit from the dual effects of scale and cost control.
Resonance of Fee Rate Control and Profit Quality Repair
Stable fee rates are a key focus for Q3, with the market paying high attention to management’s guidance of "stable fee rates in the second half of the year and sequential improvement in adjusted EPS in Q3." The scalability and automation capabilities of the technology platform reduce marginal costs, lowering maintenance and integration expenses through a unified tech stack, directly improving fee rates.
In terms of profit quality, the sequential improvement in financial services gross margin and the recurring nature of platform revenue provide the foundation for continuing to repair the profit structure in Q3. If fee rates remain stable alongside revenue expansion, the probability of simultaneous improvement in gross margin and adjusted EPS in Q3 increases. Additionally, if risk control and funding cost management are in place, stability in net margins will mean profit improvement comes not only from scale but also from optimizing quality structure, which will be one of the key points of interest in the earnings report.
Synergistic Efficient Paths for Platform and Loans
From a synergy perspective for Q3, the expansion of transaction volume and customers on the platform provides a richer data basis for customer acquisition, risk control, and pricing, improving the efficiency of loan deployment and collection quality. Stability and growth on the loan side lead to higher account and payment activity, further enhancing the recurring revenue and ARPU on the platform, forming a positive flywheel.
The standardized capability of the platform reduces the time and cost to launch new products, while detailed management of loans ensures net interest margin does not deviate from target ranges under various macro scenarios. Together, they synergistically reduce unit customer acquisition costs and improve overall profit margin. If these synergies materialize in Q3, revenue resilience and profit quality repair will become more sustainable, increasing market confidence in full-year prospects.
Analyst Views
Recently, many institutions have leaned towards optimism in their Q3 previews.
Wedbush maintains "Outperform," emphasizing "proper fee rate control with sustainable EPS improvement"; Mizuho upgraded to "Buy" in mid-October, noting "Q3 revenue and adjusted EPS are expected to exceed expectations, with technology platforms and financial services as drivers";
Morgan Stanley maintains "Overweight," believing "Galileo/Technisys will continue to drive revenue growth, with steady net interest margin performance"; Goldman Sachs maintains "Neutral," stating "Q2 results met expectations, focusing on the fulfillment of Q3 and full-year guidance." More optimistic views dominate the perspectives, with core justification based on recurring revenue and scale effects brought by the platform, the clear Q3 revenue and adjusted EPS improvement guidance in Q2, stable fee rates and strengthened risk control supporting continuous profit improvement, forming a relatively consistent conclusion on "year-on-year revenue growth, improved gross margin, stable net margin, adjusted EPS improvement" for Q3.
Summary
For Q3, the market focuses on the synergy between platform scale effects and loan pricing management, driving simultaneous improvement in gross margin and adjusted EPS under stable fee rates.
The expansion of customers and transaction volume on the technology platform boosts recurring revenue and gross margin structure, while stability in net interest margin and cost optimization in financial services solidify profit quality, and detailed pricing and risk control for loans provide assurance for stable net margins. Many institutions' previews and rating updates lean towards optimism but also consider credit quality and regulatory dynamics as continuous observation points.
Overall, if the synergy path between platform and loans is realized in Q3, revenue resilience and profit quality repair will become more sustainable, providing a foundation for achieving subsequent annual goals.
This content is generated based on Tiger AI data. Content is for reference only.