SoFi Technologies has just released its earnings for the fourth quarter of 2024, and it seems like the company did really well in many areas. However, some disappointing news regarding their outlook for 2025 has caused their stock to take a dive. Let’s dive into the details to understand what’s happening.
SoFi Q4 Earnings
On Monday, SoFi Technologies shared its fourth-quarter earnings, and it’s clear they impressed many analysts. They reported adjusted sales of $739.11 million, which was better than the expected $674.13 million. Their adjusted earnings came in at 5 cents per share, surpassing predictions too, which had estimated around 4 cents per share. This shows that the company is growing and doing well overall, with total adjusted revenue rising by 24% compared to last year.
Lackluster FY25 Profit Outlook Overshadows Performance
Despite the strong performance in Q4, investors were not satisfied with SoFi’s projections for the fiscal year 2025. The company expects adjusted net revenue for 2025 to fall between $3.20 billion and $3.275 billion, and that’s lower than what many analysts had hoped for. Specifically, analysts were forecasting higher numbers for earnings per share for both the first quarter and the entire year, making SoFi’s projections seem less exciting.
Q4 Earnings Highlights
- Q4 net revenue reached $734 million.
- Net income soared to $332 million, marking a significant milestone for the company.
- They managed to sign up 785,000 new members during this quarter alone!
- SoFi’s financial services revenue skyrocketed by 84% compared to the same quarter last year.
- The technology platform revenue increased by 6%.
Member and Product Growth
SoFi’s customer base is clearly expanding. They have reached over 10.1 million members, a 34% increase from the previous year. Not only have they gained members, they also added nearly 1.1 million new products during Q4 2024. This growth is particularly exciting since it shows how many people are using SoFi’s services.
Financial Services Segment Results
This quarter was a standout for SoFi’s financial services sector, which experienced spectacular growth. Revenue here jumped by 84% to $256.5 million. This is a clear indication that more people are taking advantage of SoFi’s services like personal loans and student loans, which also saw impressive growth at 63% and 71%, respectively.
Technology Platform Segment Results
SoFi’s technology platform also didn’t lag behind. It generated $102.8 million this quarter, showing a healthy growth rate of 6%. This segment is crucial for SoFi as it supports many of their services and innovations, driving efficiency and improvements across the board.
Price Action
Following the earnings report, SoFi’s stock took a noticeable hit, dropping about 12.1% to $15.76 on the day. This significant drop shows how much investors were banking on a more optimistic 2025 outlook. Despite the positive news from Q4, the stock market reacted negatively, highlighting the importance of future guidance to investors.
CEO’s Take on the Future
Anthony Noto, the CEO of SoFi, remained positive, declaring 2024 to be the company’s best year yet. He commented on the growth trajectory and highlighted that while the outlook for 2025 may not meet all expectations, they are focused on delivering revenue and profitability to their shareholders.
Looking Ahead to 2025
As SoFi moves into 2025, they anticipate adjusted net revenue to range between $725 million and $745 million for the first quarter alone. They expect to reach between $3.20 billion and $3.275 billion for the full year. Additionally, adjusted EBITDA is projected to land between $845 million and $865 million, although still trailing behind some analyst predictions.
While SoFi’s record achievements in Q4 seem impressive on the surface, how they execute in the upcoming year will determine their trajectory—and this reflects directly on investor confidence and stock performance. Everyone will be watching to see how they navigate the challenges of 2025.
