Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (Before Market Open)
Pre-Earnings Price$7.33Last close (Jul 29, 2024)
Post-Earnings Price$7.58Open (Jul 30, 2024)
Price Change
$0.25(+3.41%)
- SoFi's Financial Services segment achieved record revenue of $176 million, up 80% year-over-year, driven by 47% growth in financial services products and 80% growth in deposits, indicating strong future growth potential. ,
- SoFi is diversifying its lending business into less risky, less capital-intensive areas such as home equity loans and student loan refinancing, with home loan volumes up 71% year-over-year and student loan refinancing volumes up 87% year-over-year, positioning the company for sustainable growth. ,
- SoFi's credit performance is improving, with cumulative net losses well below expectations and leading indicators like delinquencies decreasing; recent loan vintages are performing better than prior cohorts, supporting confidence in their 7% to 8% life-of-loan loss assumptions.
- Despite improving credit trends, SoFi is intentionally limiting its lending growth by maintaining a conservative stance due to macroeconomic uncertainties, such as potential increases in unemployment rates. This conservative approach could limit future revenue growth in their lending segment.
- SoFi's credit card business is growing slowly, with less than 300,000 credit card accounts despite having almost 4 million SoFi Money users and 4 million Relay users. The company is cautious in expanding this business due to concerns about potential losses, which means they are not fully leveraging their large customer base—this could limit the growth potential of this segment.
- SoFi is not providing guidance on net charge-off rates (NCOs) in their lending business, stating that NCO rates are "lumpy" and affected by several factors. This lack of specific guidance may create uncertainty about future credit performance and potential loan losses.