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SoFi Technologies Reports Q1 2024 Net Revenue of $645 Million and Net Income of $88 Million, Marking Second Consecutive Quarter of GAAP Profitability

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SoFi Technologies, Inc. (NASDAQ: SOFI) reported Q1 2024 net revenue of $645 million and net income of $88 million, marking the second consecutive quarter of GAAP profitability. The company saw a 54% combined revenue growth in the Tech Platform and Financial Services segments, driving a 26% growth in total adjusted net revenue. SoFi raised its FY 24 guidance, showcasing significant momentum in revenue growth and profitability. Adjusted EBITDA was $144 million with a 25% margin, a 91% year-over-year growth. The company strengthened its balance sheet and saw growth in tangible book value by $608 million, ending the quarter at $4.1 billion. Total deposits grew by a record $3.0 billion, reaching $21.6 billion at quarter-end. SoFi continues to see growth in high-quality deposits, driving lower costs of funding for loans and increasing net interest margin to 5.91%. The company added over 622,000 new members in Q1, reaching over 8.1 million total members. Product additions were over 989,000, with total products at over 11.8 million. The Financial Services segment saw a record net revenue of $150.6 million, an 86% increase year-over-year, while the Technology Platform segment saw a 21% revenue growth. SoFi expects adjusted net revenue of $2.39 to $2.43 billion and adjusted EBITDA of $590 to $600 million for FY 24.

Positive
  • SoFi reported a 54% combined revenue growth in the Tech Platform and Financial Services segments, driving a 26% growth in total adjusted net revenue for Q1 2024.

  • Adjusted EBITDA was $144 million with a 25% margin, a 91% year-over-year growth, showcasing significant profitability and growth for the company.

  • Total deposits grew by a record $3.0 billion in Q1, reaching $21.6 billion at quarter-end, driving lower costs of funding for loans and increasing net interest margin to 5.91%.

Negative
  • The Lending segment saw a 2% decrease in GAAP net revenue for Q1 2024, highlighting a slight decline in this area of SoFi's operations.

54% Combined Revenue Growth in Tech Platform and Financial Services Segments Drove 26% Growth in Total Adjusted Net Revenue

Management Raises FY 24 Guidance

SAN FRANCISCO--(BUSINESS WIRE)-- SoFi Technologies, Inc. (NASDAQ: SOFI), a member-centric, one-stop shop for digital financial services that helps members borrow, save, spend, invest and protect their money, reported financial results today for its first quarter ended March 31, 2024.

(Graphic: Business Wire)

(Graphic: Business Wire)

Anthony Noto, CEO of SoFi Technologies, Inc. commented: “Our first quarter was an exceptionally strong start to 2024, demonstrating significant momentum as we responsibly grow revenue and diversify toward our Financial Services and Tech Platform segments, sustain profitability, reinforce our balance sheet, and grow our member base. We delivered adjusted net revenue of $581 million, representing 26% year-over-year growth. Financial Services and Tech Platform segment revenue combined grew 54% and represented a record 42% of consolidated adjusted net revenue, offsetting flat Lending segment revenue given a more conservative approach in light of macroeconomic uncertainty.”

“We delivered adjusted EBITDA of $144 million, a 25% margin, representing 91% year-over-year growth. This equates to a 57% incremental adjusted EBITDA margin, with all three segments profitable on a contribution basis. At the same time, we further strengthened our balance sheet growing tangible book value by $608 million, ending the quarter at $4.1 billion and $3.92 of tangible book value per share up 16% sequentially."

Consolidated Results Summary

 

Three Months Ended March 31,

 

% Change

($ in thousands, except per share amounts)

 

2024

 

2023

 

Consolidated GAAP

 

 

 

 

 

 

Total net revenue

 

$

644,995

 

$

472,158

 

 

37

%

Net income (loss)

 

 

88,043

 

 

(34,422

)

 

n/m

 

Net income (loss) attributable to common stockholders – basic

 

 

77,964

 

 

(44,390

)

 

n/m

 

Net income (loss) attributable to common stockholders – diluted(1)

 

 

22,523

 

 

(44,390

)

 

n/m

 

Earnings (loss) per share attributable to common stockholders – basic

 

 

0.08

 

 

(0.05

)

 

n/m

 

Earnings (loss) per share attributable to common stockholders – diluted(1)

 

 

0.02

 

 

(0.05

)

 

n/m

 

Consolidated – Non-GAAP

 

 

 

 

 

 

Adjusted net revenue(2)

 

$

580,648

 

$

460,163

 

 

26

%

Adjusted EBITDA(2)

 

 

144,385

 

 

75,689

 

 

91

%

Tangible book value (as of period end)(3)

 

 

4,084,605

 

 

3,191,201

 

 

28

%

Tangible book value per common share(3)

 

 

3.92

 

 

3.43

 

 

14

%

___________________

(1)

 

For the three months ended March 31, 2024, diluted earnings per share of $0.02 and diluted net income attributable to common stockholders of $22,523 exclude gain on extinguishment of debt, net of tax, associated with convertible note activity during the period, as well as interest expense incurred, net of tax, related to convertible notes due 2026.

(2)

 

Adjusted net revenue and adjusted EBITDA are non-GAAP financial measures. For more information and reconciliations to the most comparable GAAP measures, see “Non-GAAP Financial Measures” and Table 2 to the “Financial Tables” herein.

(3)

 

Tangible book value is defined as permanent equity, adjusted to exclude goodwill and intangible assets. Tangible book value per share is defined as tangible book value, divided by diluted weighted average common stock outstanding. Refer to Table 7 to the “Financial Tables” herein.

Noto continued: “We opportunistically executed two key transactions in the quarter. First, we issued $862.5 million of convertible notes due in 2029 at a 1.25% coupon to reduce overall financing costs. Second, we exchanged $600.0 million principal of our convertible notes due in 2026 for shares of SoFi common stock at a notable discount to par, which further strengthened our balance sheet for long-term growth. These transactions reduce upcoming maturities, have minimal impact on a fully diluted EPS basis for 2024 and are accretive to tangible book value and tangible book value per share. In terms of our regulatory capital ratios, our total capital ratio of 17.3% improved by 200 bps from 15.3% last quarter and remains comfortably above the regulatory minimum of 10.5%.

“Total deposits grew by a record of $3.0 billion, up 16% during the first quarter to $21.6 billion at quarter-end, with over 90% of SoFi Money deposits (inclusive of Checking and Savings and cash management accounts) coming from direct deposit members. For new direct deposit accounts opened in the first quarter of 2024, the median FICO score was 744, with more than half of newly funded SoFi Money accounts setting up direct deposit by day 30. This account primacy boosted debit spend by more than threefold year-over-year to over $1.9 billion. Importantly, and as anticipated, we continue to benefit from continued strong cross-buy trends from this attractive member base into Lending and other Financial Services products.

“This growth in high quality deposits drives lower cost of funding for our loans and increases our flexibility to capture additional net interest margin (NIM) and optimize returns, a critical advantage in light of notable macroeconomic uncertainty. We saw year-over-year expansion in our net interest margin to 5.91% in the quarter. SoFi Bank, N.A. generated $100 million of GAAP net income at a 21% margin in the first quarter of 2024, and an annualized return on tangible equity of 11.7%."

Noto concluded: “Tech Platform revenue growth accelerated to 21% year-over-year, while contribution margins rose from 19% to 33% as our consistent product development and successful shift in sales strategy has enabled us to diversify growth and pursue larger, more durable revenue opportunities.

“In Lending, a record 82% of the segment’s adjusted net revenue was derived from Net Interest Income, compared to 76% last quarter and 62% in the year-ago quarter. This is a direct benefit of the strong performance of our balance sheet assets. In fact, the percent of adjusted Lending revenue from Net Interest Income has more than doubled since we launched SoFi Bank two years ago.”

Consolidated Results

SoFi reported a number of key financial achievements in the first quarter of 2024, including total GAAP net revenue of $645.0 million, which increased 37% relative to the prior-year period's $472.2 million. First quarter adjusted net revenue of $580.6 million grew 26% from the corresponding prior-year period of $460.2 million. First quarter adjusted EBITDA of $144.4 million increased 91% from the same prior year period's $75.7 million.

SoFi reported its second consecutive quarter of GAAP net income, achieving $88.0 million in the first quarter of 2024, which includes a $59.2 million one-time benefit from exchanging convertible debt in the quarter. This compares to a loss of $34.4 million in the first quarter of 2023. Diluted earnings per share for the first quarter was $0.02, which did not include a benefit from the convertible debt exchange in the quarter.

Net interest income of $402.7 million for the first quarter was up 71% and up 3% sequentially. Net interest margin of 5.91% was up from 5.48% in the prior-year quarter.

The average rate on interest-earning assets decreased by 20 basis points sequentially and increased 114 basis points versus the prior-year period, while the average rate on interest-bearing liabilities decreased 13 basis points sequentially and increased 54 basis points year-over-year. The funding of loans continued to shift toward deposits. In the first quarter of 2024, the average rate on deposits was 226 basis points lower than that of warehouse facilities.

Member and Product Growth

Continued growth of over 35% in both total members and products, along with improving operating efficiency, reflects the benefits of our broad product suite and unique Financial Services Productivity Loop (FSPL) strategy.

New member additions were nearly 622,000 in the quarter, and total members reached over 8.1 million by quarter-end, up nearly 2.5 million, or 44%, from the prior year period.

Product additions were over 989,000 in the first quarter of 2024, and total products were over 11.8 million at quarter-end, up 38% from 8.6 million at the same prior year period.

In the Financial Services segment, total products increased by 42% year-over-year, to 10.1 million from 7.1 million in the first quarter of 2023. SoFi Money (inclusive of Checking and Savings and cash management accounts) grew 61% year-over-year to 3.9 million products, SoFi Relay grew 64% year-over-year to 3.6 million products and SoFi Invest grew 1% year-over-year to 2.2 million products, but when adjusted to exclude the accounts of our now closed digital assets business, total products increased 24% year-over-year.

Lending products increased 20% year-over-year to 1.7 million products, driven primarily by continued demand for personal loan products as well as steady growth in student loan products.

Technology Platform enabled accounts increased by 20% year-over-year to 151 million.

Lending Segment Results

For the first quarter of 2024, Lending segment GAAP net revenue of $330.5 million decreased 2% from the prior year period, while adjusted net revenue for the segment remained flat year-over-year at $325.3 million. Higher loan balances and net interest margin expansion drove strong growth in net interest income of $65.5 million, or 33% year-over-year, for the first quarter of 2024. Net interest income of $266.5 million significantly exceeded directly attributable segment expenses of $117.6 million for the first quarter of 2024.

Lending segment first quarter of 2024 contribution profit was $207.7 million, down 1% from $209.9 million in the same prior-year period. Contribution margin using Lending adjusted net revenue for the first quarter of 2024 decreased to 64% from 65% in the same prior-year period. These strong margins reflect SoFi’s ability to capitalize on continued strong demand for its lending products.

​Lending – Segment Results of Operations

 

 

Three Months Ended March 31,

 

 

($ in thousands)

 

2024

 

2023

 

% Change

Net interest income

 

$

266,536

 

 

$

201,047

 

 

33

%

Noninterest income

 

 

63,940

 

 

 

136,034

 

 

(53

)%

Total net revenue – Lending

 

 

330,476

 

 

 

337,081

 

 

(2

)%

Servicing rights – change in valuation inputs or assumptions

 

 

(5,226

)

 

 

(12,084

)

 

(57

)%

Residual interests classified as debt – change in valuation inputs or assumptions

 

 

73

 

 

 

89

 

 

(18

)%

Directly attributable expenses

 

 

(117,604

)

 

 

(115,188

)

 

2

%

Contribution profit

 

$

207,719

 

 

$

209,898

 

 

(1

)%

 

 

 

 

 

 

 

Adjusted net revenue – Lending(1)

 

$

325,323

 

 

$

325,086

 

 

%

___________________

(1)

 

Adjusted net revenue – Lending represents a non-GAAP financial measure. For more information and a reconciliation to the most comparable GAAP measure, see “Non-GAAP Financial Measures” and Table 2 to the “Financial Tables” herein.

Lending – Loans At Fair Value

 

 

 

 

 

 

 

($ in thousands)

Personal Loans

 

Student Loans

 

Home Loans

 

Total

March 31, 2024

 

 

 

 

 

 

 

Unpaid principal

$

14,332,874

 

$

6,559,211

 

$

58,304

 

 

$

20,950,389

Accumulated interest

 

116,366

 

 

27,414

 

 

22

 

 

 

143,802

Cumulative fair value adjustments(1)

 

607,765

 

 

247,536

 

 

1,151

 

 

 

856,452

Total fair value of loans(2)(3)

$

15,057,005

 

$

6,834,161

 

$

59,477

 

 

$

21,950,643

December 31, 2023

 

 

 

 

 

 

 

Unpaid principal

$

14,498,629

 

$

6,445,586

 

$

67,406

 

 

$

21,011,621

Accumulated interest

 

114,541

 

 

34,357

 

 

92

 

 

 

148,990

Cumulative fair value adjustments(1)

 

717,403

 

 

245,541

 

 

(1,300

)

 

 

961,644

Total fair value of loans(2)(3)

$

15,330,573

 

$

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FAQ

What was SoFi's net revenue and net income for Q1 2024?

SoFi reported net revenue of $645 million and net income of $88 million for Q1 2024.

How much did SoFi's total deposits grow by in Q1 2024?

SoFi's total deposits grew by a record $3.0 billion in Q1 2024, reaching $21.6 billion at quarter-end.

What is SoFi's FY 24 adjusted EBITDA guidance range?

SoFi's FY 24 adjusted EBITDA guidance range is $590 to $600 million.

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