SoFi (NASDAQ:SOFI), a regulated digital bank that provides many different financial services, reported Q4 financial results today and Wall Street likes them. SoFi became a public company via a SPAC deal.
Currently, shares in SoFi closed over 20% higher on the news now trading over $9/share.
The Fintech delivered Q4 results of $615 million GAAP net revenue up 35% versus year prior and $594 million adjusted net revenue up 34% year-over-year. For Q4, GAAP EPS was $0.02 a share or $48 million.
New members jumped by 585,000 – an increase of 44% or 7.5 million year over year.
SoFi provided guidance on 2023 and the company expects to generate $550 to $560 million of adjusted net revenue in the first quarter of 2024 and $110 to
$120 million of adjusted EBITDA and GAAP net income of $10 to $20 million. Full year net income is anticipated to be$95 to $105 million or an EPS of $0.07 to $0.08. SoFi says they see 20% to 25% EPS growth beyond 2026 which will be helped by new business lines launched this year and through 2026.
SoFi CEO Anthony Noto said they “delivered another quarter of record financial results and generated our eleventh consecutive quarter of record adjusted net revenue.”
He shared that total deposits grew by $2.9 billion, up 19% during Q4 to $18.6 billion at year-end, and over 90% of SoFi Money deposits (including Checking and Savings and cash management accounts) are
from direct deposit members.
“As a result of this growth in high quality deposits, we have benefited from a lower cost of funding for our loans,” Noto said. “Our deposit funding also increases our flexibility to capture additional net interest margin (NIM) and optimize returns, a critical advantage in light of notable macroeconomic uncertainty.”
So it seems that SoFi is executing on its strategy of being a better bank that is digital only. More people are signing up for its services as well as its foundational lending products. SoFi offers 4.6% APY on its savings accounts and 0.5% APY on checking (which they state is 7X the national average).
It is a fact that modern consumers want a single location to access their financial services: credit and savings, payments and transfers and investing – including fractional and Robo services. As analyst had expected a break even quarter – the beat on earnings provided the fuel to push shares higher. Let’s see if SoFi can keep it going.