SoFi Technologies Inc. saw its student-lending business reignite in the latest quarter, but shares of the financial-technology company gave back their early gains — despite an upbeat outlook as well.
SoFi
SOFI,
saw student-loan originations climb to $919.3 million in the third quarter, up 101% from a year prior, as borrowers planned for the resumption of student-loan payments after a pandemic-driven moratorium. Origination volume was the largest since the first quarter of 2022.
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The company also saw $3.9 billion in personal-loan originations, up 38% from a year before. Home-loan originations were up 64% to $355.7 million, as SoFi “began to benefit from the integration of Wyndham Capital Mortgage with improved fulfillment capacity from our acquisition at the beginning of the second quarter,” according to its release.
Revenue rose to $537 million from $424 million a year before, while analysts were expecting $518 million.
SoFi shares, which were up as much as 14% earlier Monday, had erased virtually all their gains by late morning.
“These overall results are a testament to our ability to outperform in difficult or rapidly changing environments but also our ability to deliver on our goals and our overall mission while maintaining financial discipline and continuously setting new operational and financial records,” Chief Executive Anthony Noto said on the company’s earnings call.
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SoFi notched a third-quarter net loss of $266.7 million, or 29 cents a share, whereas it posted a loss of $84.4 million, or 9 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling an 8-cent loss per share.
The company said in its release that, excluding the impact of non-cash impairment charges, it would have seen a 3-cent loss per share, “which reinforces our confidence in achieving positive GAAP net income in the fourth quarter of 2023.”
“We’re still in investment mode, but we have to balance growth versus investment,” Noto said on the call. “I would think about what we talked about earlier this year from an investment standpoint, that will focus on 30% incremental Ebitda [adjusted earnings before interest, taxes, depreciation and amortization] margins and 20% incremental GAAP net income margins as a guiding factor and how much will adopt to the bottom line versus reinvest in the business.”
SoFi also posted third-quarter adjusted Ebitda of $98 million, compared with $44 million on the non-GAAP metric in the year-earlier quarter. The FactSet consensus was for $65 million.
For the full year, SoFi models $2.045 billion to $2.065 billion in adjusted net revenue, above a prior forecast that called for $1.974 billion to $2.034 billion. The FactSet consensus was for $2.026 billion.
SoFi also now models $386 million to $396 million in full-year adjusted Ebitda, up from an earlier forecast that called for $333 million to $343 million. Analysts were looking for $344 million.
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