SoFi (NASDAQ:SOFI) stock is one of the top-trending tickers today after reporting its first-quarter results this morning. While it was up slightly in pre-market trading, it cratered down about 10% after the opening bell.
In Q1, the firm generated a profit for the second consecutive quarter and delivered “beat-and-raise” results. The fintech company noted that 2024 would be a “transitional” year for it. Specifically, the firm expects its offerings aside from its student loans to constitute a far larger percentage of its revenue than in 2023.
The Highlights of SoFi’s Q1 Results
For the second consecutive quarter, SoFi generated an EPS of 2 cents in Q1. That was slightly above analysts’ average estimate of 1 cent. On the top line, the company’s net revenue, excluding certain items, came in at $580.65 million, well above the mean outlook of $555 million.
SoFi also increased its 2024 “adjusted net revenue” guidance to $2.39 billion to $2.43 billion from $2.365 billion to $2.405 billion. On the EPS front, the firm increased its full-year guidance to a range of 8 cents to 9 cents from a range of 7 cents to 8 cents.
SOFI Stock: “A Transitional Year”
In its Q1 earnings press release, the firm reported that “2024 remains a transitional year for SoFi.” The company explained that it expects the combined sales of its Tech Platform and Financial Services units to account for 50% of its total adjusted net revenue this year, up from 38% in 2023.
The firm’s technology platform features its Galileo Financial Technologies unit, which offers “key payment processing and technology support for a variety of SoFi offerings.” Its Financial Services unit includes its traditional banking offerings aside from the student loans that it provides.
To the extent that the company is able to generate a lower percentage of its revenue from student loans, SOFI stock will be less vulnerable to Washington’s regulatory decisions in that area. During the pandemic and for a significant period afterward, SoFi was hurt by Washington’s suspension of student loan payments.
What Investors Should Watch Going Forward
Investors with positions in SOFI stock and prospective investors should see if the firm can remain profitable and increase its bottom line going forward. They should also monitor the extent to which the company’s shift away from student loans is improving its financial results.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
