Sofi Technologies nasdaq Sofi Stock Takes a Hit on Weak Revenue Outlook

SoFi Technologies (NASDAQ: SOFI) Stock Takes a Hit on Weak Revenue Outlook

SoFi Technologies (NASDAQ: SOFI) stock plummeted over 10% in intraday trading Monday after the company issued disappointing revenue guidance for the current quarter.

SoFi, the fintech company, revealed its fiscal first-quarter 2024 results on Monday, showcasing impressive growth and beating analyst expectations across various metrics. However, Q2 revenue guidance missed estimates.

The company reported an adjusted revenue of $580.648 million for the quarter. This figure marks a 26% year-on-year increase and outpaced the consensus estimate of $555.997 million. SoFi also delivered better-than-expected adjusted earnings per share (EPS) of $0.02, compared to the consensus of $0.01.

The company added 622,000 new members during the quarter, bringing its total member count to over 8.1 million, marking a 44% year-on-year increase.

Moreover, SoFi saw substantial growth in its product offerings, adding over 989,000 new products in the quarter, bringing the total to over 11.8 million, reflecting a 38% year-over-year increase.

Within the Financial Services segment, total products saw a 42% year-on-year increase to 10.1 million. SoFi Money, which includes Checking and Savings accounts, witnessed a 61% year-over-year increase, totaling 3.9 million products. In addition, SoFi Relay grew by 64% year-over-year to 3.6 million products, while SoFi Invest saw a modest 1% year-over-year growth, reaching 2.2 million. Adjusted to exclude accounts from its now-closed digital assets business, total products increased by 24% year-over-year.

The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared by 91% year-on-year to $144.39 million, with a 57% incremental EBITDA margin.

Furthermore, total deposits surged by 16% year-over-year to $21.6 billion by the end of the quarter, with more than 90% of SoFi Money deposits (including Checking and Savings and cash management accounts) originating from direct deposit members.

Q2 Revenue Guidance Missed Estimates

SoFi expects second-quarter adjusted net revenue to range between $555 million and $565 million, slightly below the consensus estimate of $580.73 million. The company also forecasts adjusted EBITDA to range between $115 million and $125 million for the same period.

For the full year, SoFi reiterated its outlook, anticipating combined growth of at least 50% in the Tech Platform and Financial Services segments while expecting Lending revenue to be 92% to 95% of 2023 levels.

SoFi Technologies (NASDAQ: SOFI) Stock Price Action

SOFI stock plunged 10.48% to close at $7.05 on Monday. Its value has dropped by 2.83% this week. Trading activity has witnessed 142,646,347 (142.64 million) shares changing hands, well above the average daily volume of 54.59 million.