SoFi Technologies, Inc. (NASDAQ: $SOFI) is an American fintech company and online banking institution headquartered in San Francisco. SoFi offers a range of financial services, encompassing student loan refinancing, mortgages, personal loans, credit cards, investment opportunities, and banking services, accessible via both mobile applications and desktop platforms.
SoFi, an abbreviation for Social Finance Inc., was established during the summer of 2011 by four individuals: Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady. These founders initially crossed paths while pursuing their studies at the Stanford Graduate School of Business.
Their vision for SoFi was to make higher education more affordable by providing alternative financing solutions for those undertaking educational debts.
SoFi’s pioneering lending initiative took the form of a trial program at Stanford University. In this pilot program, around 100 students received approximately $20,000 each in loans, totaling approximately $2 million, funded by 40 alumni.
In September 2012, SoFi secured a substantial investment of $77.2 million, primarily led by Baseline Ventures, with involvement from DCM and Renren, among others. Notably, Ron Suber was among the additional investors.
On October 2, 2013, SoFi disclosed that it had successfully amassed $500 million in funding for the purpose of student loan refinancing.
This funding was a combination of $90 million in equity, $151 million in debt, and $200 million in bank participation, with the remaining funds contributed by alumni and community investors.
The $151 million in debt included a $60 million line of credit from Morgan Stanley and a $41 million line of credit from Bancorp.
SoFi Technologies, Inc. Reports Third Quarter 2023 Results
SoFi Technologies, Inc. (NASDAQ: SOFI), a comprehensive provider of digital financial services designed to empower its members in borrowing, saving, spending, investing, and safeguarding their finances, has released its financial performance report for the third quarter, concluding on September 30, 2023.
“We have achieved yet another exceptional quarter in terms of financial performance, marking our tenth consecutive quarter of remarkable adjusted net revenue, totaling $531 million. We have observed unprecedented growth in several key areas, including a record increase in new members, which reached 717,000.
Our total ending membership count has surged to over 6.9 million, reflecting a growth rate of 47%. Furthermore, we achieved a record number of new product additions, surpassing 1 million, with a growth rate of 45%, bringing our total products to over 10 million.
This remarkable revenue record is the result of outstanding performance across all three of our business segments, with 67% of the adjusted net revenue growth stemming from our non-lending segments, namely the Technology Platform and Financial Services segments.
On a consolidated level, we observed both sequential and year-over-year expansion in our net interest margin, which now stands at 5.99%, and a record-breaking increase in deposits, totaling $2.9 billion.
In addition, we proudly report a record-breaking adjusted EBITDA of $98 million, representing an impressive 48% incremental adjusted EBITDA margin and an overall margin of 18%. Importantly, all three business segments are profitable, with the Financial Services segment achieving positive contribution profit for the first time.
Excluding the impact of a non-cash impairment of goodwill assets, our net loss would have been $19.5 million, resulting in an EPS loss of $0.03. This strengthens our confidence in our ability to achieve positive GAAP net income in the fourth quarter of 2023.
Finally, we have seen significant growth in tangible book value, with an increase of $68 million in the quarter and $171 million over the trailing 12-month period,” said Anthony Noto, CEO of SoFi Technologies, Inc.
SoFi Shares Gain as FinTech Company Reports Record Memberships
SoFi Technologies (SOFI) shares advanced on Monday after the fintech company revised its full-year outlook, buoyed by a quarter marked by record new memberships, increased product enrollment, and a substantial uptick in student loan volume.
In the third quarter, SoFi reported a net loss of $19.5 million, equivalent to $0.03 per share. However, CEO Anthony Noto expressed optimism about the company’s trajectory, indicating a potential profit in the fourth quarter.
The quarter saw SoFi welcome a record-breaking 717,000 new members, a 47% year-over-year surge. Additionally, the company’s members embraced over 1 million new financial products during the quarter, marking a remarkable 45% increase compared to the same period last year.
SoFi’s stock surged by as much as 15% in early trading but ultimately closed the session with a modest 1% gain. Year-to-date, SoFi has witnessed a remarkable ascent of over 50%.
The company’s robust performance was underpinned by a strong demand for personal loans and notable growth in student loans, resulting in a 48% year-over-year increase in total loan volume. Student loan volume, in particular, surged by $462 million, exceeding $919 million, representing a staggering 101% upturn from the corresponding quarter last year, as borrowers prepared to resume student loan payments in October.
Quarterly loan originations for personal loans reached an all-time high of $3.9 billion, reflecting a substantial $1.1 billion (38%) increase from the same quarter the previous year and a 4% boost from the prior quarter. The company also recorded a 64% year-over-year growth in home loans, totaling $356 million, driven by the integration of the Wyndham Capital Mortgage acquisition into its operations.
SoFi revised its full-year adjusted net revenue expectations, now anticipating a range of $2.045 billion to $2.065 billion, up from the previous guidance of $1.974 billion to $2.034 billion. The company also elevated its full-year adjusted EBITDA guidance to $386 million to $396 million, an increase from the prior guidance of $333 million to $343 million.
During the earnings call with analysts, Noto acknowledged that the company was still experiencing losses in its credit cards and certain investment products. However, he remained confident in the company’s ability to drive growth through other offerings.
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