SoFi Technologies Inc (SOFI) Reports Strong Q4 and Fiscal Year 2023 Results

SoFi Technologies Inc (SOFI) Reports Strong Q4 and Fiscal Year 2023 Results

  • GAAP Net Income: $615 million in Q4, up 35% year-over-year; $2.1 billion for the full year, up 35%.

  • Adjusted EBITDA: Record $181 million in Q4, a 159% year-over-year increase; $431.7 million for the full year, up 201%.

  • GAAP Net Income: Positive $48 million in Q4; EPS of $0.02.

  • Member Development: Nearly 585,000 new members in Q4; total members increased by 44% per year to more than 7.5 million.

  • Product Growth: Nearly 695,000 new products in Q4; The total product increased by 41% annually to more than 11.1 million.

  • Deposits and Book Value: Total deposits grew by $2.9 billion to $18.6 billion; The tangible value of the book increased by 11% annually.

  • 2024 Guide: Management expects $550 to $560 million of adjusted net income in Q1 2024, with $110 to $120 million of adjusted EBITDA.

On January 29, 2024, SoFi Technologies Inc (NASDAQ:SOFI) released its 8-K filing, announcing its financial results for the fourth quarter and fiscal year ended December 31, 2023. including lending, personal finance, and investment products, delivered a strong performance with significant year-over-year growth in revenue and earnings.

SoFi Technologies Inc (SOFI) Reports Strong Q4 and Fiscal Year 2023 ResultsSoFi Technologies Inc (SOFI) Reports Strong Q4 and Fiscal Year 2023 Results

SoFi Technologies Inc (SOFI) Reports Strong Q4 and Fiscal Year 2023 Results

SoFi’s fourth quarter GAAP net income came in at $615 million, marking a 35% increase compared to the same period last year. The company’s adjusted net income also saw a significant increase, reaching $594 million, a 34% year-over-year growth. This growth was driven by record revenues in all three of SoFi’s business segments, with a notable 40% of adjusted net income generated by non-Lending segments (Segments in Technology Platform and Financial Services).

The company’s adjusted EBITDA for the quarter was a record of $181 million, representing a 159% increase from last year’s quarter and achieving a 30% target margin. SoFi also reported a positive GAAP net income of $48 million for the quarter, which translated into earnings per share (EPS) of $0.02, a significant improvement from a net loss that reported in the fourth quarter last year.

SoFi’s member base grew to more than 7.5 million, a 44% increase year-over-year, with nearly 585,000 new members added in the fourth quarter alone. The company’s total products also saw strong growth, with nearly 695,000 new product additions in the quarter, bringing the total to over 11.1 million, a 41% increase from last year.

SoFi’s financial achievements are especially important in the context of the credit services industry, where customer development and engagement are critical for maintaining revenue and profitability. The company’s ability to attract new members and cross-sell products indicates its strong market position and the appeal of its integrated financial services platform.

From a financial perspective, SoFi’s net interest income for the fourth quarter was $389.6 million, an 87% increase year-over-year, driven by a higher balance of loans and expanding the net interest margin. The company’s net interest margin reached a record of 6.02%, which shows its ability to take advantage of the strong demand for its lending products.

SoFi’s CEO, Anthony Noto, highlighted the company’s growth and operational efficiency, saying:

“Continued growth of over 40% in total members and products, along with improved operational efficiency, reflects the benefits of our broad product suite and unique strategy of the Financial Services Productivity Loop ( FSPL).”

Looking ahead, management provided guidance for the first quarter of 2024, expecting adjusted net income between $550 and $560 million, adjusted EBITDA between $110 and $120 million, and GAAP net revenue between $10 and $20 million. For the full year 2024, the company expects the combined growth of the Tech Platform and Financial Services segments to be at least 50%, with lending income at 92% to 95% of the 2023 level.

SoFi’s strong performance in Q4 and the fiscal year 2023, together with the positive outlook for 2024, shows the company’s successful execution of its growth strategy and its resilience in a challenging economic environment.

Check the complete 8-K earnings release (here) from SoFi Technologies Inc for more details.

This article first appeared on GuruFocus.

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