SoFi rides surge in home-loan originations to a profit beat, but its stock sinks

By Emily Bary

SoFi's total deposits were up 16% in the first quarter

SoFi Technologies Inc. on Monday reported a profit beat for the latest quarter while boosting its full-year outlook, but shares were falling after the company came up short with its outlook for the current quarter.

For the second quarter, SoFi (SOFI) models adjusted net revenue of $555 million to $565 million, while analysts were looking for $581 million. The company also anticipates $115 million to $125 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), whereas the FactSet consensus was for $135 million.

Its shares were down about 11% shortly after Monday's open.

The financial-technology company reported first-quarter net income of $22.5 million, or 2 cents a share, whereas it recorded a net loss of $44.4 million, or 5 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling per-share earnings of 1 cent.

SoFi also reported adjusted Ebitda of $144 million, up from $76 million a year before, whereas the FactSet consensus was for $121 million.

Total net revenue was $645.0 million, up from $472.2 million a year earlier.

The company saw personal-loan originations jump 11% to $3.3 billion, while student-loan originations rose 43% to $752 million. Home-loan originations swelled 274% to $336 million.

See also: SoFi CEO Anthony Noto saw his pay increase more than 40% last year

SoFi said in its release that the more muted growth on the personal-lending side was "anticipated given our more conservative approach in light of macro uncertainty."

The company noted that its total capital ratio was 17.3% in the first quarter, up from 15.3% in the prior quarter and above the 10.5% regulatory minimum.

"Q1 featured some positives for SOFI, particularly the higher capital levels which will allow the bank to continue to grow the balance sheet, with the pace of asset growth actually fairly slow this quarter as well," Keefe, Bruyette & Woods analyst Timothy Switzer wrote in a report.

The increased capital ratio "indicates additional lending capacity if needed, which can drive potential upside to 2024 revenue," Mizuho's Dan Dolev added.

Total deposits at SoFi increased 16% in the period to $21.6 billion. Debit spending was up more than threefold on a year-over-year basis.

The company slightly boosted its full-year adjusted Ebitda target, which now calls for $590 million to $600 million, up from a prior range of $580 million to $590 million. SoFi models $2.39 billion to $2.43 billion in adjusted net revenue, whereas its prior outlook implied $2.365 billion to $2.405 billion.

-Emily Bary

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04-29-24 0942ET

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