10-Q, Member Exclusive

What’s SoFi’s profit recipe for the final quarter of 2023?

  • SoFi delivered as promised, attaining profitability in the last quarter of 2023.
  • The company's boosted profitability is attributed to growth in Lending, Technology Platform, and Financial Services, offsetting loan expenses.
close

Email a Friend

What’s SoFi’s profit recipe for the final quarter of 2023?

What’s SoFi’s profit recipe for the final quarter of 2023?

“2024 will be a transitional year,” CEO Anthony J. Noto said.

 

by SARA KHAIRI

SoFi reported its fourth quarter 2023 results this week. Net income came in at $47.9 million, while revenue grew 34% from the prior-year quarter to a record $594.25 million. Breaking through a significant milestone, SoFi turned a profit in the final quarter of 2023, which has been awaited for quite some time.

Why wasn’t it profitable earlier?

Despite SoFi’s delivery of strong quarterly earnings in the past year, analysts continued to harbor concerns regarding the company’s future path and its prospects for profitability since its second-quarter financial results of 2023.

As of July 2023, SoFi Bank offered an APY of up to 4.40%, which has since increased to 4.60%, without any account fees. Additionally, customers qualifying for direct deposits could enjoy a bonus of as much as $250, which has now increased to $300. During the same period, the federal funds rate experienced a shift, touching 5.00% in the early part of the second quarter of 2023, and has since stabilized within the 5.25% to 5.50% range.

While SoFi successfully attracted customers throughout the quarters with enticing high-yield offerings and perks, the backend costs associated with these deposit relationships have been eroding the company’s profit margin.


subscription wall for TS Pro

0 comments on “What’s SoFi’s profit recipe for the final quarter of 2023?”

10-Q, Member Exclusive

Robinhood: From capturing trading market share to its ambition to tap into industry assets

  • While trading forms the bedrock of the investment platform, Robinhood has embraced the ethos of diversification.
  • New product adoption and revenue from non-trading sources, particularly from retirement accounts, were key contributors to the significant growth seen in Q4 2023 results.
Sara Khairi | February 20, 2024
Banking, Member Exclusive

Letter from the editor: Navigating the world of Earned Wage Access

  • Earned Wage Access' popularity means it's becoming table stakes for many consumers as they select financial providers.
  • We take a deep look at what's been happening in the earned wage space, EWA trends, EWA benefits, and more.
Zachary Miller | February 15, 2024
Member Exclusive, Payments

Payments Briefing: A closer look at J.P. Morgan Payments’ new full stack solution and what it says about the bank’s ambitions 

  • The new solution targets eliminating the disjointed experience caused by using multiple payment service providers.
  • JPMorgan isn't the only player offering a full-stack solution. Non-bank large payment providers like Adyen and Stripe also provide comprehensive payment services. So, what sets JPM’s solution apart? 
Sara Khairi | February 14, 2024
Data Snacks, Getting the rules right, Member Exclusive

Risk on the mind: Shadow bank loans and AI may be a risk to the financial system

  • Data by the Federal Board of Governors revealed that lenders in the US have loaned upwards of $1 trillion to non-deposit-taking financial companies.
  • Along with loans to shadow banks, regulators are also eyeing AI and its possible negative impacts on the financial system.
Rabab Ahsan | February 13, 2024
10-Q, Member Exclusive

Breaking down PayPal’s Q4 earnings: The hits and misses

  • PayPal reported its earnings for the final quarter of 2023 with a solid 9% increase in Q4 revenue, reaching $8.0 billion
  • While the earnings reflected a profitable growth trajectory and beat expectations, the 2024 guidance fell short of analysts' expectations. 
Sara Khairi | February 12, 2024
More Articles