SoFi Q4 Earnings: Lackluster FY25 Profit Outlook Overshadows Performance, Stock Slides

SoFi Technologies, Inc. (NASDAQ: SOFI) reported its fourth-quarter and full-year 2024 earnings on January 27, 2025, with mixed results that sent its stock sliding. While the company beat analyst estimates for both revenue and earnings per share (EPS) in the fourth quarter, its guidance for the first quarter and full year of 2025 fell short of expectations, leading to a decline in its stock price.



SoFi's fourth-quarter performance was robust, with adjusted net revenue reaching $739.1 million, up 24% year-over-year, and adjusted EPS of $0.05, surpassing the anticipated EPS of $0.035. The company's net income soared to $332.5 million, a substantial leap from the $47.9 million reported in the fourth quarter of 2023. SoFi's net income margin also improved significantly, reaching 45%.



However, SoFi's guidance for the first quarter and full year of 2025 was less impressive. The company expects adjusted net revenue of $725 million to $745 million in the first quarter, below the consensus estimate of $691.41 million. For the full year, SoFi projects adjusted net revenue of $3.200 billion to $3.275 billion, which equates to approximately 23 to 26% year-over-year growth, but still falls short of the consensus estimate of $3.000 billion. SoFi's guidance for GAAP net income and GAAP EPS also missed the mark, with the company expecting $30 million to $40 million and $0.03, respectively, for the first quarter, and $285 million to $305 million and $0.25 to $0.27 per share for the full year.



SoFi's stock price dropped 12.1% to $15.76 at last check on Monday, January 27, 2025, following the release of its earnings report. The company's lackluster profit outlook for 2025 appears to have overshadowed its strong fourth-quarter performance, leading investors to question its future growth prospects.



In conclusion, SoFi's fourth-quarter earnings report was a mixed bag, with strong performance in the quarter but lackluster guidance for the first quarter and full year of 2025. While the company's stock price took a hit following the earnings release, investors should consider the long-term potential of SoFi's strategic shift towards capital-light, higher return-on-equity revenue streams and its strong member and product growth. As SoFi continues to execute on its strategic initiatives, it may be able to overcome the challenges it faces and deliver on its long-term growth prospects.