SoFi stock gains after earnings: 'Charter Bank couldn't have come at a better time'

Shares of SoFi Inc. rose 8% in after-hours trading on Tuesday after the company beat expectations with its latest results and signaled various benefits stemming from its banking charter.

“While the political, fiscal and economic landscape continues to change around us, we maintain strong and consistent momentum in our business,” CEO Anthony Noto said in a statement. “We’ve built our products and services to deliver sustainable growth and profitability, and that’s what we’re delivering.”

The company reported a second-quarter net loss of $95.8 million, or 12 cents per share, compared with a loss of $165.3 million, or 48 cents per share, in the year-ago quarter. Analysts tracked by FactSet had modeled a GAAP loss of 14 cents per share for the latest quarter.


posted adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $20 million, up from $11 million a year earlier and ahead of the FactSet consensus of $10 million.

Revenue rose to $362 million from $231 million, while analysts expected $344 million.

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In the second quarter, SoFi originated $2.5 million in personal loans, a 91% year-over-year increase.

“This excellence is the result of years of investment in technology to automate and accelerate the application-to-approval process for qualified borrowers and constant testing of risk controls and underwriting models to maintain the highest credit quality,” SoFi executives said in the message.

The company revealed that its $399 million in student loan volume as of the quarter was down to about 25% of SoFi’s average pre-pandemic volume “as the moratorium on student loan payments continues to weigh on the business.” Home loans originated fell by more than half to $332 million, which the company attributed in part to rising interest rates.

Noto said during the earnings call that the company sees big benefits from the bank charter it was officially received at the beginning of the year.

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“The bank charter could not have come at a better time, and the economic benefits are already beginning to have a positive impact on our operating and financial results,” he said, noting that the company has been able to offer “industry-leading APY and value support.” , which is a membership engine for its SoFi Money accounts.

Additionally, the company has seen improved trends in deposits and spending.

“To put that in perspective, it took three years to raise our first $1 billion in deposits and just three months to raise another $1.6 billion,” Noto said. “Additionally, approximately 80% of our deposits are from direct deposit members, which demonstrates the quality and stickiness of these deposits.”

For the third quarter, SoFi executives modeled adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $75 million to $80 million, while analysts expected $35 million.

“Over the past 12 months, we have demonstrated the benefit of having a diversified set of revenue streams and a strong focus on continuing to underwrite high-quality credit,” Chief Financial Officer Christopher Lapointe said on the call. “We expect these benefits to persist going forward even in light of the existing macro backdrop.”

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