SOFI shares rally 10% after posting Q4 earnings, positive outlook

SoFi Technologies Inc. (SOFI) recently released its fourth-quarter earnings report, showcasing impressive financial results and outlining its plans for future growth. The company experienced accelerated revenue growth, expanding margins, and achieved GAAP profitability during the quarter. Additionally, SoFi provided guidance for the first quarter and beyond, highlighting its optimistic outlook and potential for long-term success.

In the fourth quarter of 2023, Sofi Technologies Inc reported adjusted net revenue of $594.2 million, a 34% year-over-year increase. This marked the eleventh consecutive quarter of record adjusted net revenue. 

The company registered earnings of $0.02 per share, outperforming the expectations of a loss of $0.02 per share. Adjusted EBITDA reached $181.2 million, a 159% increase from the same period in the previous year. Sofi Technologies Inc ended the quarter with total members of over 7.5 million, a 44% year-over-year growth, and total products exceeding 11.1 million, a 41% increase.

In a significant milestone, the company announced that 40% of its fourth-quarter adjusted net revenue originated from its Tech Platform and Financial Services segments. The company also reported record financial results, with 11 consecutive quarters of record adjusted net revenue and generated positive GAAP net income of $48 million in the quarter.

For the first quarter of 2024, Sofi Technologies Inc expects adjusted net revenue to range between $550 and $560 million, while anticipating adjusted EBITDA of $110 to $120 million and GAAP net income of $10 to $20 million. 

Guidance for the full year 2024 forecasts revenue from the Tech Platform and Financial Services segments to be equal to revenue from the Lending segment, while expenses are expected to remain flat compared to 2023 results, excluding the reported goodwill impairment expense. The company predicts an adjusted EBITDA margin of approximately 30% by year-end, with a range of $580 to $590 million in adjusted EBITDA for the full year.

Additionally, Sofi Technologies Inc expects to add at least 2.3 million new members during the full year 2024, representing 30% growth, and anticipates tangible book value growth of $300 to $500 million for the year.

Sofi Technologies Inc forecasts a full-year GAAP net income in the range of $95 to $105 million, equating to a GAAP EPS of $0.07 to $0.08 for the fiscal year 2024. The company anticipates a 20% to 25% compound revenue growth for the period spanning from 2023 to 2026, with a 50% compound growth for Financial Services revenue and mid-20% compound growth for Technology Platform revenue. This growth is expected to drive GAAP earnings per share between $0.55 and $0.80 in 2026.

In a recent development, Sofi introduced new investment opportunities for its members, allowing them to invest in mutual funds, money market funds, and alternative investments. This expansion showcases the company's commitment to diversifying its offerings and meeting the evolving needs of its customers.

Shares of SOFI are breaking out following the announcement. The stock has rallied 10% in pre-market trade, ripping through its 20-, 50-, and 200-sma.It is now testing gap down resistance at the $9 area. 

In summary, Sofi Technologies Inc's earnings report highlights accelerating revenue growth, expanding margins, and GAAP profitability. With the company's strategic focus on diversification and growth, Sofi Technologies Inc is well-positioned to continue its upward trajectory in the financial services industry.

 Please note that this article is based on information obtained from public sources, and should not be considered financial advice. Investors should conduct further research and consult with a financial advisor before making any investment decisions.