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SoFi Earnings: Pushed Into Profitability by Strong Results From Lending and Technology Platforms

We still see SoFi stock as meaningfully undervalued.

A detail view of the SoFi Stadium logo.
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SoFi Technologies Inc Ordinary Shares

Key Morningstar Metrics for SoFi Technologies

What We Thought of SoFi Technologies’ Earnings

SoFi Technologies SOFI reported solid fourth-quarter results; in fact, this was the firm’s first profitable quarter ever. Net revenue increased 35% from last year and 15% from last quarter to $615 million. Net income increased to $48 million from a net loss of $40 million last year. Along with earnings, SoFi provided medium-term growth expectations. The company anticipates GAAP earnings per share of $0.55-$0.80 in 2026, higher than our projection of $0.48. As we incorporate these results, we do not plan to materially alter our fair value estimate, and we still see the stock as meaningfully undervalued.

Revenue growth was driven by higher net interest income, which increased 87% from last year and 13% sequentially to $390 million. The increase was mostly due to SoFi’s expanding loan book, although its net interest margin did expand modestly to 6.02% from 5.94% last year. On the other hand, the company’s average loan balance increased 80% from last year to $22.3 billion, making balance sheet expansion the main source of net interest income growth.

SoFi’s ability to rapidly grow its loan book while expanding its net interest margin continues to be driven by its impressive success in growing its deposit base. Total deposits increased 156% from last year and 19% sequentially to $18.6 billion. This strong growth allows the firm to fund its loan book while also reducing its reliance on more expensive external debt.

After a period of stagnation, SoFi’s technology platform is showing clear signs of reacceleration in growth. Revenue from the segment increased 13% from last year, up from the 6% annual rate reported last quarter. Total accounts on the platform also increased 11% from last year and 6% sequentially, a clear trend reversal from the poor results reported in the first half of 2023. SoFi recently changed its strategy for the segment to focus on larger and better-established clients, and it appears this shift is helping.

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The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Michael Miller, CFA

Equity Analyst
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Michael Miller, CFA, is an equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers credit card issuers, financial exchanges, and financial-services firms.

Before joining Morningstar in 2020, Miller spent two years at a New York-based investment firm, conducting convertible-bond and asset-class research for the company's risk-management team.

Miller holds a bachelor's degree in economics from Northwestern University's Weinberg College. He also holds a Master of Business Administration from the New York University Stern School of Business.

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