Disappointing second-quarter-revenue guidance overshadowed SoFi Technologies’ strong first-quarter report.
SoFi began as a lender focused on refinancing debt but now operates through three segments: lending, financial services, and a technology platform.
For the first quarter, the fintech reported earnings of 2 cents a share, beating Wall Street’s call of 1 cent, according to FactSet. Adjusted net revenue of $580.65 million in the quarter was above analysts’ consensus call for $555 million.
For its second quarter, SoFi sees adjusted net revenue of $555 million to $565 million; analysts had penciled in $581 million. For the full year, the company now forecasts adjusted net revenue of $2.39 billion to $2.43 billion, higher than a prior range of $2.365 billion to $2.405 billion. It also forecast earnings per share of 8 cents to 9 cents, above previous guidance for 7 cents to 8 cents. Analysts expect year revenue of $2.376 billion and earnings of 8 cents.
“2024 remains a transitional year for SoFi as the Tech Platform and Financial Services segments together are expected to drive growth and increase from 38% of total adjusted net revenue in 2023 to approximately 50% for the full year of 2024,” the company said in the earnings release. The company’s guidance assumes that lending revenue will be 92% to 95% of the year prior’s level.
SoFi began as a lender focused on refinancing debt but now operates through three segments: lending, which includes student, personal, and home loans; financial services; and a technology platform.
Origination volume within the lending segment rose 22% from a year ago—with personal, student, and home loans up 11%, 43%, and 274%, respectively.
The lending segment used to be the star of the show, but the financial services and tech platform have been making strides this quarter. Revenue for those segments grew 54%, while lending revenue was flat.
“We’ve hit a key inflection point as a company where the benefits of a diversified strategy are allowing us to drive responsible growth in an uncertain economic climate,” CEO Anthony Noto told Barron’s.
Total deposits grew by $3 billion to $21.6 billion in the quarter; SoFi added nearly 622,000 new customers and now has more than 8.1 million customers.
The stock ended Monday down 10.5%, at $7.04. The S&P 500 finished 0.3% higher.
SoFi stock has fallen 29% this year through Friday’s close but has risen 29% over the past 12 months.
