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SOFI Shares Fall 1.4% Despite Impressive Earnings: Is the Stock a Buy?
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Key Takeaways
{\"0\":\"SoFi\'s Q2 EPS and revenues beat estimates, with 43% revenue growth and record member additions.\",\"1\":\"All segments saw record profits and margins, with adjusted EBITDA up 80.6% year over year.\",\"2\":\"2025 guidance raised for revenues, EPS, and EBITDA, with strong membership growth expected.\"}
SoFi Technologies, Inc. (SOFI - Free Report) released impressive second-quarter 2025 results on July 29. Both earnings and revenues comfortably surpassed consensus estimates, with double-digit growth across core segments. Yet, despite this outperformance, the market’s initial response was muted, with shares slipping 1.4% since the announcement.
Image Source: SOFI
Given this puzzling divergence between fundamentals and investor reaction, we intentionally waited before publishing our review to gauge whether price movements may reveal deeper sentiment trends. Now, with the dust settling, it is clear that while the results reinforce SoFi’s robust growth trajectory, the market is weighing other factors alongside the upbeat financials.
SOFI Posts Record Revenue and Member Growth
SoFi’s second-quarter 2025 adjusted earnings came in at 8 cents per share, beating the Zacks Consensus Estimate by 33.3% and more than doubling from the same period a year earlier. Revenues reached $858.2 million, surpassing estimates by 6.6% and growing 43.4% year over year. Management emphasized that this surge was powered by both a swelling customer base and an expanding product portfolio.
The company added a record 850,000 new members during the quarter, taking total membership to 11.7 million, a 34% annual increase.
Image Source: SOFI
Product adoption was equally strong, with 1.3 million new products added, representing 34% year-over-year growth to over 17 million products in total. Notably, 35% of new products were opened by existing members, underscoring effective cross-selling strategies.
Image Source: SOFI
Segment performance reflected this broad-based momentum. Financial Services net revenues surged over 100% year on year to $362.5 million, while the Technology Platform segment delivered $109.8 million, up 15%. Lending revenues rose 30% to $443.5 million, fueled by strong originations totaling $6.3 billion in the segment, alongside an additional $2.4 billion in Loan Platform originations for third parties. In all, total originations hit a record $8.8 billion, $1.5 billion higher than the prior quarter.
The diversification of revenue streams continues to take shape. Total fee-based revenue reached $378 million, up 72% year over year, driven by origination fees, referral fees, interchange revenue, and brokerage fees. Annualized, SoFi now generates more than $1.5 billion in fee-based income, reducing reliance on interest-based earnings and aligning with a capital-light growth model.
SOFI Delivers Record Margins and Profitability
Profitability metrics also reached new highs. Adjusted EBITDA climbed 80.6% year over year to $249.1 million, representing a 29% margin, an improvement of 600 basis points. The incremental EBITDA margin stood at 43%, highlighting operating leverage despite the company's continued investment in long-term expansion. Net income for the quarter was $97 million, translating to an 11% net margin.
All three business segments posted record contribution profits at attractive margins, showcasing both scale benefits and disciplined cost management. Tangible book value rose to $5.3 billion, up more than $1 billion from the prior year and $200 million from the prior quarter.
However, SoFi’s cash and cash equivalents declined to $2.1 billion from $2.5 billion at the end of 2024, reflecting capital deployment into growth initiatives and loan originations. While this level remains substantial, it is an area investors may watch closely, especially if funding conditions tighten.
CEO Anthony Noto highlighted the company’s strategic advantages, noting: “We accelerated adjusted net revenue growth to 44% year-over-year, the highest level in over two years, driven by record high new members, as well as new products, and an increase in fee-based revenue. This consistent, disciplined investment across our platform, combined with unmatched products and services, uniquely positions us to capture the massive and expanding opportunities ahead”.
SOFI Lifts Full-Year 2025 Guidance Substantially
Given the strong first half, SoFi has raised its 2025 guidance. The company now expects adjusted net revenues of approximately $3.375 billion, $65 million above the prior top-end forecast and implying about 30% annual growth. Adjusted EBITDA is projected at $960 million, above the earlier $875-$895 million range, with a margin of 28%.
EPS is now anticipated at 31 cents, surpassing both prior guidance of $0.27-$0.28 and the current consensus of $0.28. GAAP net income guidance has been increased to $370 million from the previous $320-$330 million range. The outlook also assumes a 26% tax rate for the remainder of the year.
In operational terms, SoFi expects to add at least 3 million new members in 2025, representing roughly 30% year-over-year growth, and increase tangible book value by about $640 million. Management’s confidence in its growth prospects is underpinned by product innovation, brand strengthening, and the expansion of both fee-based revenue and its technology platform.
Despite this optimism, the market’s subdued reaction indicates that investors may be cautious about macroeconomic headwinds, potential credit risks, or the sustainability of high growth rates. While the fundamentals remain strong, sentiment suggests a “prove-it” phase, where consistent execution across quarters will be required to drive sustained share price appreciation.
Closing Words
SoFi’s second-quarter 2025 results underscore a company firing on multiple cylinders, scaling membership, diversifying revenues, expanding margins, and enhancing profitability. Its raised guidance for the full year signals confidence in the business model and the strategic investments underpinning future growth. Yet, the post-earnings share price dip is a reminder that markets can be as much about expectations and sentiment as about performance metrics. For long-term investors, the underlying trajectory remains encouraging, especially given the robust outlook and operational discipline.
Fiserv (FI - Free Report) reported mixed second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
FI’s adjusted EPS of $2.47 topped the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion missed the consensus estimate by a slight margin but gained 1.7% on a year-over-year basis.
The Interpublic Group of Companies (IPG - Free Report) reported impressive second-quarter 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate.
IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year but outpaced the Zacks Consensus Estimate of $2.2 billion.
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SOFI Shares Fall 1.4% Despite Impressive Earnings: Is the Stock a Buy?
Key Takeaways
SoFi Technologies, Inc. (SOFI - Free Report) released impressive second-quarter 2025 results on July 29. Both earnings and revenues comfortably surpassed consensus estimates, with double-digit growth across core segments. Yet, despite this outperformance, the market’s initial response was muted, with shares slipping 1.4% since the announcement.
Given this puzzling divergence between fundamentals and investor reaction, we intentionally waited before publishing our review to gauge whether price movements may reveal deeper sentiment trends. Now, with the dust settling, it is clear that while the results reinforce SoFi’s robust growth trajectory, the market is weighing other factors alongside the upbeat financials.
SOFI Posts Record Revenue and Member Growth
SoFi’s second-quarter 2025 adjusted earnings came in at 8 cents per share, beating the Zacks Consensus Estimate by 33.3% and more than doubling from the same period a year earlier. Revenues reached $858.2 million, surpassing estimates by 6.6% and growing 43.4% year over year. Management emphasized that this surge was powered by both a swelling customer base and an expanding product portfolio.
The company added a record 850,000 new members during the quarter, taking total membership to 11.7 million, a 34% annual increase.
Product adoption was equally strong, with 1.3 million new products added, representing 34% year-over-year growth to over 17 million products in total. Notably, 35% of new products were opened by existing members, underscoring effective cross-selling strategies.
Segment performance reflected this broad-based momentum. Financial Services net revenues surged over 100% year on year to $362.5 million, while the Technology Platform segment delivered $109.8 million, up 15%. Lending revenues rose 30% to $443.5 million, fueled by strong originations totaling $6.3 billion in the segment, alongside an additional $2.4 billion in Loan Platform originations for third parties. In all, total originations hit a record $8.8 billion, $1.5 billion higher than the prior quarter.
The diversification of revenue streams continues to take shape. Total fee-based revenue reached $378 million, up 72% year over year, driven by origination fees, referral fees, interchange revenue, and brokerage fees. Annualized, SoFi now generates more than $1.5 billion in fee-based income, reducing reliance on interest-based earnings and aligning with a capital-light growth model.
SOFI Delivers Record Margins and Profitability
Profitability metrics also reached new highs. Adjusted EBITDA climbed 80.6% year over year to $249.1 million, representing a 29% margin, an improvement of 600 basis points. The incremental EBITDA margin stood at 43%, highlighting operating leverage despite the company's continued investment in long-term expansion. Net income for the quarter was $97 million, translating to an 11% net margin.
All three business segments posted record contribution profits at attractive margins, showcasing both scale benefits and disciplined cost management. Tangible book value rose to $5.3 billion, up more than $1 billion from the prior year and $200 million from the prior quarter.
However, SoFi’s cash and cash equivalents declined to $2.1 billion from $2.5 billion at the end of 2024, reflecting capital deployment into growth initiatives and loan originations. While this level remains substantial, it is an area investors may watch closely, especially if funding conditions tighten.
CEO Anthony Noto highlighted the company’s strategic advantages, noting: “We accelerated adjusted net revenue growth to 44% year-over-year, the highest level in over two years, driven by record high new members, as well as new products, and an increase in fee-based revenue. This consistent, disciplined investment across our platform, combined with unmatched products and services, uniquely positions us to capture the massive and expanding opportunities ahead”.
SOFI Lifts Full-Year 2025 Guidance Substantially
Given the strong first half, SoFi has raised its 2025 guidance. The company now expects adjusted net revenues of approximately $3.375 billion, $65 million above the prior top-end forecast and implying about 30% annual growth. Adjusted EBITDA is projected at $960 million, above the earlier $875-$895 million range, with a margin of 28%.
EPS is now anticipated at 31 cents, surpassing both prior guidance of $0.27-$0.28 and the current consensus of $0.28. GAAP net income guidance has been increased to $370 million from the previous $320-$330 million range. The outlook also assumes a 26% tax rate for the remainder of the year.
In operational terms, SoFi expects to add at least 3 million new members in 2025, representing roughly 30% year-over-year growth, and increase tangible book value by about $640 million. Management’s confidence in its growth prospects is underpinned by product innovation, brand strengthening, and the expansion of both fee-based revenue and its technology platform.
Despite this optimism, the market’s subdued reaction indicates that investors may be cautious about macroeconomic headwinds, potential credit risks, or the sustainability of high growth rates. While the fundamentals remain strong, sentiment suggests a “prove-it” phase, where consistent execution across quarters will be required to drive sustained share price appreciation.
Closing Words
SoFi’s second-quarter 2025 results underscore a company firing on multiple cylinders, scaling membership, diversifying revenues, expanding margins, and enhancing profitability. Its raised guidance for the full year signals confidence in the business model and the strategic investments underpinning future growth. Yet, the post-earnings share price dip is a reminder that markets can be as much about expectations and sentiment as about performance metrics. For long-term investors, the underlying trajectory remains encouraging, especially given the robust outlook and operational discipline.
SOFI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Snapshots of a Few Recent Earnings
Fiserv (FI - Free Report) reported mixed second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
FI’s adjusted EPS of $2.47 topped the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion missed the consensus estimate by a slight margin but gained 1.7% on a year-over-year basis.
The Interpublic Group of Companies (IPG - Free Report) reported impressive second-quarter 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate.
IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year but outpaced the Zacks Consensus Estimate of $2.2 billion.