SoFi Technologies notched its fourth straight quarter of profitability on a generally accepted accounting principles basis and topped quarterly estimates. The stock, however, fell 11% to $10.01 in early trading Tuesday, reversing earlier gains.
For its third quarter, the fintech reported earnings of 5 cents per share, beating Wall Street's call for 4 cents, according to FactSet. Adjusted net revenue of $689 million was above the consensus call for $632 million.
SoFi Technologies shares sank nearly 10% in midday trading.
Total deposits grew to $24.4 billion in the quarter; SoFi added more than 756,000 new customers and now has nearly 9.4 million customers.
SoFi began as a lender focused on refinancing debt. It now operates as three segments: lending, which includes student, personal, and home loans; financial services; and a technology platform.
"Our Financial Services and Tech Platform segments now make up a record 49% of SoFi's adjusted net revenue, up from 39% a year ago," CEO Anthony Noto said in the earnings release. "In the third quarter, these businesses grew revenue by a combined 64% year-over-year, a testament of our continued execution and deliberate shift towards capital-light, high ROE [return on equity], fee based revenue streams."
Origination volume within the lending segment rose 23% from a year ago -- with personal, student, and home loans up 26%, 3%, and 38%, respectively.
The company also raised its 2024 fiscal year forecasts for adjusted net revenue, earnings per share, and other metrics.
It now expects adjusted net revenue between $2.535 billion and $2.55 billion for the year and earnings between 11 cents and 12 cents per share. Analysts had penciled in revenue of $2.46 billion and earnings of 10 cents, according to FactSet.
In recent quarters, Noto deemed 2024 a " transitional year." Looking ahead, he says he sees sunny skies.
"2025 is the first year in which we don't see headwinds," the CEO told Barron's on Monday. "We see a declining rate environment, we see a stable economy, and that's going to bode well for our businesses. And for the first time, we'll have wind at our back, as opposed to a headwind."
Jefferies analysts led by John Hecht, who rate shares at Buy with a price target of $12, weighed in on the quarter.
"SOFI remains on track for FY GAAP profitability (4th consecutive quarter) and continues to navigate well in a challenging environment with rate volatility," they wrote. "We will look to the call for details on credit trends and FV [fair value] assumptions."
