Shares of SoFi Technologies (SOFI 2.62%) rallied 20.2% Monday after the banking and financial technology (fintech) stock handily beat expectations with its fourth-quarter 2023 report.
NASDAQ: SOFI
Key Data Points
SoFi delivers its first-ever GAAP profit
SoFi's Q4 adjusted (non-GAAP) revenue grew 35% year over year, to $594 million, translating to adjusted earnings of $0.04 per share. SoFi also achieved its first-ever quarter with positive consolidated generally accepted accounting principles (GAAP) net income of $48 million or $0.02 per share.
Analysts on average were expecting a break-even quarter on lower revenue of $571.7 million.
A deeper look into SoFi's results shows the company added nearly 585,000 new members to bring its total to over 7.5 million (up 44% year over year). SoFi also saw deposit growth of $2.9 billion during the quarter, bringing its total to $18.6 billion exiting 2023.
"As a result of this growth in high quality deposits, we have benefited from a lower cost of funding for our loans," stated SoFi CEO Anthony Noto.
"Record revenue at the company level was driven by record revenue across all three of our business segments," Noto added, "with a record contribution of 40% of adjusted net revenue generated by our non-Lending segments (Technology Platform and Financial Services)."
What's next for SoFi investors?
Looking ahead to 2024, SoFi issued guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 30% by year end, or a range of $580 million to $590 million, assuming revenue from its Tech Platform and Financial Services segments collectively represents around half of its top line. SoFi also suggested its full-year GAAP net income should range from $95 million to $105 million, or $0.07 to $0.08 on a per-share basis.
Zooming out to beyond 2024, SoFi management also expects compound annual revenue growth of 20% to 25% for the time period of 2023 through 2026, assuming "non meaningful changes" to the current macroeconomic environment and no significant new business launches or acquisitions.
In the end, this was a straightforward beat and raise from SoFi that left little room for skeptics to argue. Shares of the leading fintech stock are responding in kind.
