SoFi Technologies CEO Highlights Strong Trends Across Business Following Q2 Earnings: 'We're Stealing Market Share'

SoFi Technologies Inc SOFI shares are surging Monday after the company reported better-than-expected quarterly results and boosted its guidance. Following the print, CEO Anthony Noto highlighted the company's operating leverage, which is helping to broaden its revenue contributors. 

What Happened: Sofi said second-quarter revenue increased 37% year-over-year to $489 million, which beat analyst estimates of $474.6 million, according to Benzinga Pro. The financial services company reported a loss of 6 cents per share, which beat estimates for a loss of 7 cents per share. 

SoFi also raised its revenue outlook. The company said it now expects revenue in the second half of the year to come in at $1.025 billion to $1.085 billion. Full-year revenue is now expected to be in the range of $1.974 billion to $2.034 billion versus estimates of $2 billion. 

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Why It Matters: On CNBC's "Squawk On The Street," Noto said margins are improving, which is boosting the company's financial services business.

"What we are starting to see is the scale of the variable profit exceed the acquisition cost which is now dropping to the bottom line, so great leverage in the business," the SoFi CEO said.

A lot of the strength in the quarter was driven by segments beyond lending, Noto said. Financial services and the company's technology platform drove the outperformance for the first time in company history, he said, adding SoFi's lending business is usually the main driver. 

That broadening of revenue contributors is what appears to be catching the eye of shareholders, with the stock up more than 18% at last check. 

"Our lending business has continued to do well also, but the diversification is what's being recognized," Noto said. 

The SoFi CEO remains optimistic about the company's student loan business. He noted that SoFi has helped just one million of the 40 million individuals who have expensive student loan payments and could benefit from refinancing. 

Noto is also seeing strong consumer spending trends, but noted that SoFi may not be representative of the broader economy. Spending in the second quarter almost doubled from 2022, but the bank's average customer is not the average American, he said.

"We have an outlier customer, it's higher end, we're stealing market share from traditional banks, so it's really not a cyclical read, it's more of a secular read," Noto said. 

"In terms of our outlook ... we've shared guidance for '23. That guidance assumes that we do have a modest recession and unemployment does go above 5%."

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SoFi Price Action: SoFi shares were up 20.1% at $11.47 at the time of publication, according to Benzinga Pro.

Photo: Thomas Breher from Pixabay.