Q3 2024 Earnings Summary
Reported on Oct 29, 2024 (Before Market Open)
Pre-Earnings Price$11.19Last close (Oct 28, 2024)
Post-Earnings Price$10.75Open (Oct 29, 2024)
Price Change
$-0.44(-3.93%)
- SoFi's loan platform business is experiencing significant growth as a great fee-based and capital-light revenue source without taking balance sheet risk. The company expects this segment to continue growing, supported by a $2 billion agreement with Fortress and commitments with several other partners for Q4 and 2025.
- The Financial Services segment is approaching a $1 billion annualized business, growing over 100%, and is profitable while still in investment mode. There is substantial potential to increase revenue per product, particularly in the Invest and credit card businesses, which could further enhance profitability as these businesses mature.
- SoFi is well-positioned to benefit from a declining rate environment, which is expected to drive increased demand for their student loan refinancing and home loan businesses. The company had its best quarter since 2021 in home loans and expects an uptick in these segments as rates continue to decline.
- SoFi's credit card and invest businesses are currently losing money and have long payback periods, impacting profitability. These investments have payback periods of 1.5 to 3 years, and the company is still losing a significant amount of money in these segments.
- SoFi does not expect significant growth in its personal loan balance sheet, potentially limiting lending growth. The company is happy with the current size of its balance sheet and does not plan to grow personal loan balances meaningfully.
- The loan platform business relies on partnerships and originating loans on behalf of third parties, which may introduce dependency risks and variable margins. The revenue generated depends on platform fees that vary depending on the partner, and these are loans SoFi would not have otherwise originated.
Research analysts covering SoFi Technologies.