SOFI Results: SoFi's Q3 results beat estimates, guidance raised

SoFi Technologies (SOFI) shares rose in premarket trading on Tuesday after the company reported solid third-quarter results. The fintech company swung to a profit in the third quarter, reporting earnings of $0.05 per share, slightly above consensus estimates of $0.04 per share.

SOFI's third quarter revenue is driven by financial services and technology platforms

The company's adjusted revenue increased 30% year-over-year to $689.45 million, significantly improving its financial performance. This exceeded analysts' expectations of $631.6 million. The huge increase in revenue was driven by the company's financial services and technology platforms segments.

Anthony Noto, CEO of SoFi Technologies, highlighted this growth, stating that the financial services and technology platforms segments “now account for a record 49% of SoFi's adjusted net revenue, up from 39% a year ago.” In the third quarter, these companies increased revenue by a total of 64% compared to the previous year, a testament to our continued execution and conscious shift towards capital-light, higher ROE (Return on Equity) and fee-based revenue streams.”

In addition to the impressive revenue numbers, SoFi added over 756,000 new members in the third quarter, contributing to overall membership growth of 35% year-over-year to nearly 9.4 million.

SOFI increases guidelines

Looking forward, management now expects adjusted net sales in the range of $2.54 billion to $2.55 billion, up from the previous guidance of $2.43 billion to $2.47 billion. Additionally, adjusted earnings per share are forecast to be between $0.11 and $0.12, up from the previous guidance of $0.09 to $0.10. For reference, analysts expected earnings of $0.10 per share on revenue of $2.46 billion.

Additionally, the company aims to add at least 2.3 million new members in 2024, a significant increase of 30% year-on-year.

Is SoFi Stock a Buy?

Analysts remain on the sidelines on SOFI stock, with a Hold consensus rating based on four buys, six holds, and three sells. Over the past year, SOFI is up more than 60%, and the average SOFI price target of $8.63 implies a downside potential of 22.8% from current levels. These analyst ratings are likely to change following SOFI's results today.

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