SoFi: SoFi Technologies Inc (SOFI) Q1 2025 Earnings Call Highlights: Record Revenue and Member Growth ...

In This Article: Revenue: $771 million, up 33% year-over-year. Adjusted EBITDA: $210 million, up 46% year-over-year, with a margin of 27%. Net Income: $71 million, with a margin of 9%. Earnings Per Share (EPS): $0.06. Member Growth: Added 800,000 new members, reaching 10.9 million, a 34% year-over-year increase. Product Growth: Added 1.2 million new products, totaling 15.9 million, a 35% year-over-year increase. Financial Services Revenue: $303 million, more than double from Q1 2024. Lending Segment Revenue: $412 million, up 27% year-over-year. Loan Originations: $7.2 billion, up 66% year-over-year. Fee-Based Revenue: $315 million, up 67% year-over-year. Net Interest Income: $361 million, up 35% year-over-year. Deposits: Total deposits grew to over $27 billion. Tangible Book Value: $5.1 billion, a year-over-year increase of $946 million. Guidance for 2025: Adjusted net revenue expected between $3.235 billion to $3.310 billion; adjusted EBITDA expected between $875 million to $895 million. Warning! GuruFocus has detected 5 Warning Signs with SOFI. Release Date: April 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript . Positive Points SoFi Technologies Inc ( NASDAQ:SOFI ) reported a 33% year-over-year increase in revenue, reaching a record $771 million for Q1 2025. The company added a record 800,000 new members, marking a 34% year-over-year growth, bringing the total to 10.9 million members. Adjusted EBITDA for the quarter was a record $210 million, up 46% year-over-year, with a margin of 27%. The Financial Services segment doubled its revenue year-over-year to over $300 million, driven by strong growth in SoFi Money and the Loan Platform Business. SoFi Technologies Inc ( NASDAQ:SOFI ) increased its full-year guidance for adjusted net revenue and adjusted EBITDA, reflecting confidence in continued growth. Negative Points Despite strong growth, the company faces macroeconomic uncertainties and potential volatility in interest rates, which could impact future performance. The Tech Platform segment saw a slight decrease in accounts, down 6% year-over-year, which could indicate challenges in client retention or acquisition. The company is heavily reliant on fee-based revenue, which, while growing, may face pressure if market conditions change or if competition intensifies. SoFi Technologies Inc ( NASDAQ:SOFI ) continues to operate in a highly competitive environment, particularly in the financial services and technology sectors, which could impact margins. The company's strategy to expand into new areas such as crypto and blockchain is subject to regulatory changes, which could pose risks to execution and growth. Q & A Highlights Q : Can you envision a time where SoFi is primarily a fee-based business, and what are the implications for deposit and interest rate environments? A : Anthony Noto, CEO: We foresee an increase in fee-based revenue, currently at 41% on an annualized basis. This growth is not just from the Loan Platform Business but also from interchange, referral revenue, and other smaller businesses. We aim for fee-based revenue to exceed 50%, especially if we expand the Loan Platform Business beyond our current credit box. Additionally, the Invest business, including potential crypto offerings, will contribute to fee-based revenue. However, we still value holding loans on our balance sheet for a balanced ROE of 20% to 30%. Q : Has recent market volatility affected the Tech Platform pipeline or client decision-making? A : Anthony Noto, CEO: There has been no change in our outlook for the Tech Platform business despite recent market volatility. We continue to sign new partners, and our revenue guidance remains unchanged. We anticipate potential acceleration in 2026 as traditional financial institutions and consumer brands seek to innovate and compete more aggressively. Q : How is SoFi handling underwriting in the current macroeconomic environment with potential shocks? A : Anthony Noto, CEO: We use an early warning dashboard to monitor economic indicators and adjust credit policies accordingly. Currently, indicators do not suggest a need to change our underwriting standards. Our credit performance remains strong, and we are prepared to adjust quickly if necessary. Q : How does SoFi plan to position its student loan business if Congress caps certain programs like Grad Plus and Parent Plus? A : Anthony Noto, CEO: We are prepared to capture opportunities in the in-school student loan market if the government reduces its role. These loans offer higher WACC and ROE, often backed by co-borrowers. We would also refinance these loans post-graduation, enhancing member relationships and revenue streams. Q : What are the implications of changing Fed fund expectations on deposit costs and growth? A : Anthony Noto, CEO: We have a competitive advantage with our insured depository entity and lending products, allowing us to offer competitive APYs. We expect industry APYs to decrease, but ours will remain top-tier. We aim to grow deposits in line with loan growth, maintaining a strong competitive position. For the complete transcript of the earnings call, please refer to the full earnings call transcript . This article first appeared on GuruFocus .