SoFi Technologies Reports Q1 2024 Financial Results and Increases Forecast

DENVER, Colo., Apr 29, 2024 ( SoFi Technologies, Inc. (NASDAQ:SOFI) reported its first quarter financial results this morning, including 37% increase in total GAAP net revenue to $645 million, compered to $472.2 million for the first quarter of 2023.

SoFi expects adjusted full-year net revenue to reach $2.39 to $2.43 billion and full-year GAAP net income of $165 to $175 million, compared to prior guidance of $95 to $105 million.

Anthony Noto, CEO of SoFi Technologies, stated, “Our first quarter was an exceptionally strong start to 2024, demonstrating significant momentum as we responsibly grow revenue and diversify toward our Financial Services and Tech Platform segments, sustain profitability, reinforce our balance sheet, and grow our member base. We delivered adjusted net revenue of $581 million, representing 26% year-over-year growth. Financial Services and Tech Platform segment revenue combined grew 54% and represented a record 42% of consolidated adjusted net revenue, offsetting flat Lending segment revenue given a more conservative approach in light of macroeconomic uncertainty.

“We delivered adjusted EBITDA of $144 million, a 25% margin, representing 91% year-over-year growth. This equates to a 57% incremental adjusted EBITDA margin, with all three segments profitable on a contribution basis. At the same time, we further strengthened our balance sheet growing tangible book value by $608 million, ending the quarter at $4.1 billion and $3.92 of tangible book value per share up 16% sequentially.

“We opportunistically executed two key transactions in the quarter. First, we issued $862.5 million of convertible notes due in 2029 at a 1.25% coupon to reduce overall financing costs. Second, we exchanged $600.0 million principal of our convertible notes due in 2026 for shares of SoFi common stock at a notable discount to par, which further strengthened our balance sheet for long-term growth. These transactions reduce upcoming maturities, have minimal impact on a fully diluted EPS basis for 2024 and are accretive to tangible book value and tangible book value per share. In terms of our regulatory capital ratios, our total capital ratio of 17.3% improved by 200 bps from 15.3% last quarter and remains comfortably above the regulatory minimum of 10.5%.

“Total deposits grew by a record of $3.0 billion, up 16% during the first quarter to $21.6 billion at quarter-end, with over 90% of SoFi Money deposits (inclusive of Checking and Savings and cash management accounts) coming from direct deposit members. For new direct deposit accounts opened in the first quarter of 2024, the median FICO score was 744, with more than half of newly funded SoFi Money accounts setting up direct deposit by day 30. This account primacy boosted debit spend by more than threefold year-over-year to over $1.9 billion. Importantly, and as anticipated, we continue to benefit from continued strong cross-buy trends from this attractive member base into Lending and other Financial Services products.

“This growth in high quality deposits drives lower cost of funding for our loans and increases our flexibility to capture additional net interest margin (NIM) and optimize returns, a critical advantage in light of notable macroeconomic uncertainty. We saw year-over-year expansion in our net interest margin to 5.91% in the quarter. SoFi Bank, N.A. generated $100 million of GAAP net income at a 21% margin in the first quarter of 2024, and an annualized return on tangible equity of 11.7%.

“Tech Platform revenue growth accelerated to 21% year-over-year, while contribution margins rose from 19% to 33% as our consistent product development and successful shift in sales strategy has enabled us to diversify growth and pursue larger, more durable revenue opportunities.

“In Lending, a record 82% of the segment’s adjusted net revenue was derived from Net Interest Income, compared to 76% last quarter and 62% in the year-ago quarter. This is a direct benefit of the strong performance of our balance sheet assets. In fact, the percent of adjusted Lending revenue from Net Interest Income has more than doubled since we launched SoFi Bank two years ago.”

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