SoFi Technologies (SOFI 1.63%) has been a rising star ever since it opened its virtual doors in 2011, and SoFi stock is up 223% over the past three years. It's growing at a rapid pace, and its all-digital financial services platform is quickly becoming a go-to banking choice for customers looking for easy-to-use services.
It's a small outfit that's just getting started, and now could be a great time to buy shares. Here are five reasons why.
Image source: Getty Images.
1. Rising membership
The path to the top starts with attracting and engaging customers, and SoFi is doing a great job of bringing customers to its platform. It added a record 800,000 new members in the 2025 first quarter, a 34% increase over last year.
Image source: SoFi.
SoFi targets young professionals who are just getting started on their financial journeys. These are people with good jobs moving up in their careers who have a long trajectory of engaging with a financial platform ahead. 90% of the bank's deposits come from direct deposit, a recurring revenue stream for SoFi.
So far, these customers are demonstrating loyalty, which bodes well for the future. SoFi recently launched a membership program called SoFi Plus, and 90% of sign-ups were existing members in the first quarter. Of those members, 30% adopted a second product within the first 30 days of registration.
2. Increasing revenue
SoFi has been growing at a rapid pace, especially for a bank. Adjusted net revenue increased 27% year over year in Q1 2025, an acceleration.
There are multiple growth drivers, including lower interest rates, cross-selling, and new members. Stabilizing interest rates are resulting in a stronger lending segment, which is SoFi's core business. Lending revenue increased 25% year over year in Q1, with a 15% increase in contribution profit. There was strength across categories, with loan originations up 69% for personal loans, 59% for student loans, and 54% for home loans in the quarter.
Revenue from financial services, which are the non-lending services outside of the tech platform setting, increased 101% over last year in Q1. Contribution profits were up 299%, and contribution margin expanded from 25% to 49%.
3. Climbing profits
As SoFi adds new users and generates higher sales, scale is leading to stronger profitability. It's also growing more of its revenue from lower-cost, fee-based services, specifically in the financial services segment. Fee-based revenue has increased from 26% of the total in 2021 to 41% of the total in 2025.
It reported its first annual profit in 2024, and management is expecting it to keep increasing this year and beyond. Adjusted earnings per share were $0.06 in Q1, up from $0.02 last year, and management is guiding for $0.27 or $0.28 for the full year, up from $0.15 last year. Wall Street is expecting EPS of $0.28 this year and $0.46 next year.
NASDAQ: SOFI
Key Data Points
4. Lower interest rates
Interest rate cuts have boosted SoFi's lending business, and those rates may continue to go down. Fed Chairman Jerome Powell said last week that he would have already made more cuts if not for the new tariffs, and the market is still expecting more rate cuts in the second half of the year.
Lower interest rates make it easier for people and businesses to borrow money, boosting loans for SoFi and also boosting the economy, which is great for banks. That's great for SoFi in the short term, and it will help it build its business and become stronger and more resilient for when the next inevitable economic event happens.
5. The expanding platform
SoFi has been able to shore up its business by expanding into services outside its core lending segment. It continues to innovate and offer specialized financial services that appeal to its core market and make it stand out in a crowded sea of online banks.
Most recently, it received accolades from investors for announcing that it will bring back cryptocurrency as a trading option on its platform. It had removed crypto due to regulatory concerns when it got its banking charter in 2023. On top of that, it's planning to offer self-serve global remittances, which are an alternative to international wire transfers, on the app over a blockchain network. It's also going to add more value-driven services that appeal to its clientele.
SoFi stock is up 25% this year as investors get more excited about its business, but it has a long growth runway.
