SoFi Shares Plunge Despite Revenue Beat as Guidance Stagnates

SoFi Technologies (NASDAQ: SOFI) experienced a sharp sell-off on Wednesday after reporting first-quarter results that, while beating revenue expectations, failed to satisfy investor demands for raised forward guidance. The online bank reported Q1 revenue of $1.1 billion, a 41% increase year-over-year, surpassing the $1.05 billion anticipated by analysts. Earnings per share also showed strong growth, doubling from $0.06 in the prior year to $0.12 for the quarter ending in March, aligning with analyst estimates. However, the market's negative reaction centered on fee-based revenue, which grew 23% to $387 million but fell short of the $405 million estimate. Additionally, revenue directly generated by its banking-as-a-service (BaaS) technology platform plummeted 27% year-over-year, largely attributed to Chime discontinuing its use of the digital banking solution. Investor anxiety was further compounded by management's decision to maintain full-year revenue guidance at approximately $4.66 billion rather than raising it. This lack of upward revision, combined with a perceived lack of detail regarding the company's private credit business, triggered a 13.8% intraday decline. Despite the price action, the company highlighted several operational wins. Loan originations grew 16% to a record $12.2 billion during the quarter, and the total customer headcount improved 35% year-over-year to 14.7 million members.