SoFi Stock Is Rising on Blockbuster Earnings. CEO Sees ‘Strong Demand.’

SoFi Technologies added a record 850,000 new members in its second quarter, representing 34% growth to 11.7 million members. (Dreamstime)

SoFi Technologies posted a solid quarter, and raised its full-year guidance for the second time, sending shares of the fintech higher on Tuesday.

Adjusted earnings of 8 cents a share came in above the consensus estimate for 6 cents among analysts polled by Bloomberg. Revenue surged 44% to $858 million, marking SoFi’s highest growth rate in over two years.

“I think it’s very rare that someone of our size can drive 44% revenue growth, at a scale of $858 million of revenue, and have 29% Ebitda margins,” CEO Anthony Noto said in an interview with Barron’s, referring to earnings before interest, taxes, depreciation, and amortization.

Individual business segments also saw double-digit growth. Tech platform revenue increased 15% to $110 million in the quarter, while lending revenue grew 32% to $447 million. Financial-services revenue saw the biggest gain, surging 106% to $303 million.

Management boosted SoFi’s full-year outlook “given the strong first half of the year,” raising estimates for adjusted net revenue to $3.375 billion, compared with a prior range of $3.235 billion to $3.31 billion.

The company said it expects adjusted Ebitda of $960 million, above prior calls for $875 million to $895 million. SoFi also guided for adjusted earnings of 31 cents a share, up slightly from an earlier range of 27 cents to 28 cents.

Shares neared record highs on Tuesday. The stock climbed 18% to $24.73, heading for its highest close since Feb. 4, 2021, when it ended the session at $25.06. While it came a hair short of setting a record, the stock traded as high as $25.11 during Tuesday’s session.

Management noted that the company had added a record 850,000 new members in the quarter, representing 34% growth to 11.7 million.

As interest rates remain high, a larger portion of consumers’ credit card payments continue to be diverted toward interest rather than principal, Noto explained.

“Consumers are looking to refinance very high-cost credit card debt that could average over 25% interest rates into much cheaper, more affordable debt at about 12% to 13% percent with us,” the CEO said. “So we’re seeing strong demand.”

While SoFi has moved beyond its roots as a student loan financing business, it continues to see strength in its lending segment, with total loan originations climbing 64% to a record $8.8 billion. Home loan originations saw the most growth, surging 92% to $799 million.

Another highlight from the quarter was the company’s continuous investment in emergent technology, namely artificial intelligence and cryptocurrency.

“We’re testing AI capabilities across the entire company,” Noto said. “We’re testing those in the back office in terms of compliance, suspicious activity reporting, dispute resolution. We’re testing things at the front line. We’re using AI in out chatbots, we’re using it to prevent fraud.”

SoFi made headlines last month when the company announced its return to the world of cryptocurrency for the first time since 2023. Starting this year, members will be able to take advantage of a blockchain money-transfer feature and hold select digital currencies including Bitcoin .

“We can give people access to investing in this asset class and using it as a devaluation tool globally, in places where currencies aren’t as stable as the U.S. dollar,” Noto said. He indicated investments in the technology would only bolster SoFi’s competitive advantage, even as the fintech stands as the clear winner in his eyes.

Analysts were similarly enthusiastic. Jefferies noted Tuesday that second-quarter results came in “well above expectations,” with record originations spurred by growth in personal and home loans.

Upward guidance revisions “suggest that the momentum will likely to continue throughout the year, supported by demands from private credit investors,” the analysts wrote. Jefferies rates the stock at Outperform with a $27 price target.

J.P. Morgan maintained a Neutral rating on the shares with a $16 price target. Although the analysts are on the fence, they acknowledged that the full-year guidance range implies “stable revenue growth and some margin expansion” in the second half of 2025.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com