SoFi Technologies Inc.’s stock rose 18 percent in after-hours trading Tuesday after the financial technology company’s earnings outlook beat expectations.
SoFi SOFI, -2.18 percent reported a net loss of $111.0 million, or 15 cents per share, in the fourth quarter, compared to a net loss of $82.6 million, or $1.85 per share, in the previous quarter. On a per-share basis, FactSet predicted a loss of 16 cents.
Total revenue increased from $171.5 million to $285.6 million. According to FactSet, analysts expected $279 million in revenue.
During the fourth quarter, the company added a “record” 523,000 new members, according to the corporation. There were also 906,000 new products added. Additions on both metrics were up sequentially, according to Mizuho analyst Dan Dolev.
SoFi just received approval for a national banking charter, and it expects increased net interest income from its SoFi Bank to “only contribute minimally” to the company’s first-quarter performance. SoFi anticipates a bigger impact once it starts completely originating loans in its in-house bank, which is expected to happen in May.
SoFi expects adjusted net revenue of $280 million to $285 million in the first quarter, which is a non-GAAP number. The company also provided a breakeven to $5 million range for adjusted profits before interest, taxes, depreciation, and amortisation (Ebitda).
The forecast includes a $30 million to $35 million income hit from “the unexpected prolongation of the federal student loan payment moratorium until May 1, 2022,” according to the forecast.
According to FactSet, analysts expected $3 million in adjusted Ebitda in the first quarter. FactSet does not provide a revenue forecast adjusted for inflation.
SoFi expects adjusted net sales of $1.57 billion and adjusted Ebitda of $180 million for the entire year. The FactSet consensus for full-year adjusted Ebitda was $147 million.
On SoFi’s earnings call, Chief Financial Officer Chris Lapointe stated that the company’s outlook includes the possibility of five rate hikes this year, and that the company’s vast breadth of offers allows it to succeed in a variety of rate environments.
“Our personal-loans company does incredibly well in rising rate situations, and we’re seeing that right now,” he said. “Our student-loan refinancing and home-loan refinancing businesses do well in lower rate conditions,” he said. “Overall, our diverse model enables us to make real-time adjustments and allocate capital to firms and opportunities that thrive in certain market and macro environments.”
According to the company’s earnings announcement, the outlook anticipates that the student-loan moratorium ends on May 1 and that student-loan refinancing origination volumes return to pre-COVID levels in the second quarter and stay there for the rest of the year.
The estimate also includes SoFi’s assumption that, despite its introduction in the first quarter, its in-house bank will begin contributing to results “more meaningfully” in the second quarter.
“Because SoFi Bank was initially financed with cash from the balance sheet, rather than loans,” according to the press release, “SoFi will not begin to experience the lower cost of capital benefits of SoFi Bank until it can originate and fund loans in SoFi Bank.”
The company recently announced its intention to purchase Technisys, a cloud-based banking platform, and stated on Tuesday that it expected 20 percent to 25 percent sales growth for the full year. Technisys “will begin adding to SoFi’s results following the completion of the deal,” according to the forecast.