Why Is SoFi Technologies Stock Shooting Upwards Monday?

SoFi Technologies Inc SOFI shares are trading higher after the company reported better-than-expected fiscal fourth-quarter 2023 results.

Adjusted revenue increased 34% year-on-year to $594.25 million, beating the consensus of $571.70 million. The adjusted EPS of $0.02 beat the consensus of $0.00. 

SoFi added 585,000 new members in the quarter, bringing its total member count to over 7.5 million (+44% Y/Y). 

SoFi also added 695,000 new products in the quarter, with a total count of over 11.1 million total products (+41% Y/Y) at the end of the quarter.

In the Financial Services segment, total products rose by 45% Y/Y to 9.5 million. 

SoFi Money (including Checking and Savings and cash management accounts) rose 54% Y/Y to 3.4 million products. 

Adjusted EBITDA rose by 159% Y/Y to $181 million, representing a 74% incremental EBITDA margin.

Total deposits grew 19% Y/Y to $18.6 billion at the end of the quarter, with more than 90% of SoFi Money deposits (including Checking and Savings and cash management accounts) coming from direct deposit members.

Outlook: SoFi projects a first-quarter adjusted net revenue of $550 million – $560 million (versus consensus of $573.87 million), and an adjusted EBITDA of $110 million – $120 million with a 20% margin.

For the full year 2024, SoFi expects the Tech Platform and Financial Services segments combined to grow at least 50% and lending revenue to be 92% to 95% of 2023 levels. 

It projects an adjusted EBITDA margin of approximately 30% by year-end, which equates to a range of $580 million – $590 million for the year. It expects GAAP EPS of $0.07 – $0.08 (versus consensus of $0.06).

Looking beyond 2024, SoFi expects 20% – 25% CAGR for 2023 through 2026, implying 50% compound growth for Financial Services revenue, mid-20% compound growth for Technology Platform revenue, and mid-teens compound growth for Lending segment revenue. 

The revenue will likely drive $0.55 – $0.80 in EPS in 2026. SoFi expects 20% – 25% EPS growth beyond 2026.

Price Action: SOFI shares are up 13% at $8.61 premarket on the last check Monday.

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