<News Alert> SoFi Technologies (SOFI US, BUY) 3Q23 adj. EBITDA beat, boosted FY23F guidance
- SoFi reported strong 3Q23 results, with adj. EBITDA of $98m, beating expectations of $65m
- Key business drivers continued to show robust growth
- SoFi boosted its FY23F outlook for adj. net revenue and adj. EBITDA by c.3% and 16%, respectively
SoFi reported strong 3Q23 results, with adj. EBITDA of $98m, beating expectations of $65m. 3Q23 net revenue grew 27% y-o-y to $531b, exceeding estimates of $512b, driven by increased personal loan originations, attracting new members with good credit scores, and boosting deposit levels at controllable cost of fundings. The company reported an adj. net loss of 3 cents per share, which beat estimates for an adj. net loss of 8 cents per share.
Key business drivers continued to show robust growth. SoFi added over 717k new members in 3Q23, reaching more than 7.0m members, up 47% y-o-y. Total deposits increased 23% q-o-q to $15.7b by end 3Q23, with 90% coming from direct deposit members with a controllable cost of fundings. Origination volume in 3Q was $5.2b, up 48% y-o-y, driven by 1) a 38% y-o-y increase in personal loans origination and 2) doubled y-o-y growth of student loans due to restarting student loan repayment, and 3) home loans up 64% y-o-y. The decreased marketing expense per new member, which saw a 17% decline q-o-q and 32% decline y-o-y, indicated the increased monetization of Sofi’s member base and the improved financial services productivity.
SoFi boosted its FY23F outlook for adj. net revenue and adj. EBITDA by c.3% and 16%, respectively. The company now projects adj. net revenue between $2.045b to $2.065b, compared to previous guidance of $1.974b to $2.034b, and raised adj. EBITDA guidance from $333m-$343m to $386m-$396m. The improved outlook is supported by diversified revenue mix towards non-lending business. Management maintains expectations to achieve a GAAP net profit inflection point in 4Q23F.