SoFi Technologies (NASDAQ:SOFI) investors are celebrating as the company’s stock soared by a staggering 5.8% in Monday’s premarket trading session.
The reason? SoFi posted exceptional Q3 results that exceeded all expectations and raised its 2023 revenue and EBITDA guidance, leaving Wall Street in awe. If you’re not invested in SoFi yet, you might want to rethink your portfolio strategy after reading this!
SoFi’s Remarkable Q3 Results
SoFi, known for revolutionizing the student loan refinancing game, is not just meeting expectations; it’s exceeding them. In its Q3 report, the company showcased its commitment to growth and innovation, leaving investors buzzing with excitement.
2023 Revenue Projections Soar
SoFi now anticipates adjusted net revenue for 2023 to be in the range of $2.045 billion to $2.065 billion. This is well above the previous consensus estimate of $2.03 billion and their own earlier range of $1.974 billion to $2.034 billion.
With such robust guidance, it’s no wonder the stock is surging!
Profitability on the Horizon
Investors have eagerly been awaiting the news of SoFi’s path to GAAP net income profitability. The company remains on track, reaffirming its outlook to reach this financial milestone in Q4. If that’s not a compelling reason to invest, what is?
EBITDA Guidance Takes Flight
SoFi’s adjusted EBITDA outlook has also experienced an impressive boost. It now stands at $386 million to $396 million, significantly surpassing its previous range of $333 million to $343 million.
This revised projection easily outperforms the Visible Alpha consensus estimate of $345.8 million.
Exceeding Earnings Expectations
In Q3, SoFi reported a GAAP EPS of -$0.29. However, when excluding the impact of a goodwill impairment of $247 million, the EPS stood at -$0.03.
This result was far better than the average analyst estimate of -$0.09, demonstrating the company’s ability to outperform expectations consistently.
Explosive Growth in Membership and Deposits
SoFi has been on a remarkable journey of attracting new customers and deposits. In Q3 alone, they added more than 171,000 new members, ending the quarter with a whopping 6.9 million members, representing a remarkable 47% year-over-year increase.
Total deposits also saw an impressive uptick, growing by 23% during the quarter, reaching $15.7 billion.
Boosted by High-Quality Deposits
The median FICO score for new direct deposit accounts opened in Q3 was a remarkable 743. The influx of high-quality deposits allowed SoFi to enjoy the benefits of lower funding costs, a strategic advantage they’ve successfully capitalized on.
SoFi’s CEO, Anthony Noto, Shares Insights
CEO Anthony Noto expressed his enthusiasm, saying, “More than half of newly funded SoFi Money accounts are setting up direct deposit by day 30, and this has had a significant impact on debit spending, which exceeded $1 billion in quarterly debit transaction volume and was up 3.2 times year-over-year, representing more than $5 billion of annualized debit transaction volume.
We continue to see strong cross-buy trends from this attractive member base into Lending and other Financial Services products.”
Origination Volume and Net Interest Income Soar
SoFi’s origination volume in Q3 hit $5.16 billion, reflecting a remarkable 48% year-over-year increase.
Personal loans origination surged by 38% year-over-year and 4% sequentially to $3.9 billion, while student loans skyrocketed by 101% year-over-year and 133% quarter-over-quarter to $919 million.
Home loans also rose by an impressive 64% year-over-year to $356 million. The cherry on top? Q3 net interest income surged to $345.0 million, up from $291.1 million in Q2 and $157.9 million in Q3 2022.
In summary, SoFi Technologies is riding high on its remarkable Q3 results and promising 2023 guidance, and it seems poised for even greater success in the future.
With the company’s aggressive growth and financial milestones within reach, the stock’s recent surge might be just the beginning of a lucrative journey for investors.
Don’t miss out on this financial success story – SoFi is the stock to watch in the coming months!