SoFi Technologies, Inc. (NASDAQ: SOFI) reported its fourth-quarter earnings on January 27, 2025, showcasing significant growth and outperforming analysts' expectations. The fintech company posted earnings per share (EPS) of $0.05, surpassing the Zacks Consensus Estimate of $0.04 per share. Compared to the same quarter last year, this marks an increase from earnings of $0.02 per share. The quarterly report represented an impressive earnings surprise of 25%.
For the quarter ended December 2024, SoFi delivered revenues of $739.11 million, exceeding the Zacks Consensus Estimate by 8.8%. This revenue signifies a remarkable 24% increase year-over-year, bolstered by strong performances across various business segments. Notably, revenues from Financial Services skyrocketed by 84%, contributing significantly to overall growth.
SoFi has not only consistently surpassed consensus revenue estimates over the past four quarters, but it has also steadily increased its user base, adding 785,000 new members during this quarter alone. This brings the total number of members to 10.1 million, reflecting a 34% year-over-year growth.
The growth narrative was well echoed by CEO Anthony Noto, who emphasized, "2024 was SoFi's best year ever." During the earnings call, Noto highlighted the company’s strategic focus on innovation and brand building as key drivers of this success. He noted the importance of the Financial Services and Tech Platform segments, which together constituted 49% of adjusted net revenue, highlighting their combined revenue growth of 52% compared to the previous year.
Looking forward, SoFi provided guidance for Q1 2025, predicting adjusted net revenue between $725 million to $745 million, alongside adjusted EBITDA estimates of $175 million to $185 million. The company expects to achieve GAAP net income of $30 million to $40 million, translating to GAAP EPS of approximately $0.03, which is below the consensus estimate of $0.05. For the full fiscal year 2025, SoFi anticipates adjusted revenues between $3.200 billion and $3.275 billion, equalling around 23% to 26% growth year-over-year.
Despite showcasing strong fourth-quarter numbers, SoFi's stock took a hit, dropping 12.1% on the day after the earnings report. Investors seemed to focus on the company's cautious guidance for 2025, which included some macroeconomic assumptions affecting growth expectations. The expected EPS for the full year was also lower than what analysts forecasted, with guidance set at $0.25 to $0.27, compared to expectations of $0.28.
The mixed responses from the market indicate the delicate balancing act fintech companies must manage between encouraging earnings reports and forward-looking guidance. While revenue projections were optimistic, the drop in expected EPS reflects concerns over lower margins, which may affect investor sentiment and confidence moving forward.
Analysts remain divided on SoFi's future performance, with some revising price targets and others capturing the cautious sentiment surrounding the stock post-earnings. Notably, the outlook suggests potential annual growth of at least 28%, as SoFi anticipates adding 2.8 million new members through 2025.
Overall, the recent earnings report and subsequent guidance have positioned SoFi Technologies as a resilient player within the financial services industry, albeit amid volatility and challenges inherent to the fintech sector. Investors will be closely monitoring how management strategies translate to sustained growth and profitability over the coming quarters, especially as the broader economic environment evolves.