What happened
Shares of digital bank SoFi Technologies (SOFI 3.69%) had jumped close to 14.5% as of 9:58 a.m. ET Monday after the company reported strong earnings results for the third quarter of the year.
So what
In the third quarter, SoFi generated a loss of $0.09 per share on record quarterly revenue of nearly $424 million. SoFi also delivered adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of nearly $44.3 million in the quarter. Both earnings and revenue beat analyst estimates for the quarter.
"Our bank charter is enabling new flexibility that has proven even more valuable in light of the current macro environment, and the economic benefits are already starting to materialize and positively impact our operating and financial results," SoFi CEO Anthony Noto said in an earnings statement.
SoFi added another 424,000 members to its ecosystem in the quarter and now has 4.7 million members total. The company also continued to add new customers to its Galileo fintech platform and grew the number of loans it made in the quarter nicely. Student loan originations, while still below pre-pandemic levels, grew about 15% from levels seen in the second quarter, while personal loan originations were up close to 14%.
SoFi also raised its guidance for the full year and now expects to generate adjusted revenue between $1.517 billion and $1.522 billion. SoFi also now expects to generate adjusted EBITDA in the range of $115 million to $120 million for the year, which is up from prior guidance of $104 million to $109 million.
Now what
SoFi generated a solid quarter and it continues to look like getting the bank charter was a good move for the company because it gives SoFi a better financial profile, while allowing it to still operate a lot like a fintech company.
Still valued at more than 47 times adjusted 2022 EBITDA, I wouldn't necessarily call SoFi cheap, but I do think the company is headed in the right direction and could turn into a good long-term play.
