Key Points
SoFi reported earnings that handily beat expectations on both the top and bottom lines.
The loan platform business is generating an impressive stream of fee income.
SoFi’s asset quality is improving, with the net charge-off ratio declining by more than 40 basis points.
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SoFi Technologies (NASDAQ: SOFI) recently reported its second-quarter earnings, and the stock soared to a multiyear high. Not only were the numbers generally stronger than analysts had been looking for, but the company also is growing in all the right ways and has big plans.
With that in mind, here are some of the key takeaways from SoFi’s earnings report that you need to know, and what to keep an eye on.
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1. Growth momentum isn’t slowing down
In the second quarter, revenue growth was 44% year over year, an acceleration over its prior rate. The company grew its membership base by 34% year over year, adding 846,000 new members, the highest single-quarter total ever.
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2. Capital-light revenue streams are strong
SoFi has been a personal lender for years, but the recent focus has been on the loan platform business, which consists of several capital-light streams of fee income. In addition to securitizing loans and selling them to investors, the company has been originating a high volume of loans on behalf of third parties and referring applicants to other lending partners. Its loan platform is generating high-margin fee income at a rate of more than $500 million annually on a run rate of $9.5 billion in loan originations.
Fee-based revenue now makes up 44% of the company’s total, compared with 27% a couple of years ago, and this shift is a big reason for SoFi’s surprisingly strong profitability. Noninterest income roughly quadrupled year over year, and the loan platform business has been the primary driver.
3. Profits are better than expected
Not only did SoFi produce better-than-expected profitability in the second quarter, but the company also reported its highest earnings per share (EPS) ever. It produced an 11% adjusted net margin, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 80% year over year.
And management raised its full-year 2025 guidance for all major profitability metrics and now expects EPS to more than double from 2024 levels.
4. Asset quality is improving
SoFi’s loan net charge-off rate ticked higher in 2023 but it has been in a clear downward trend for nearly two years. Since it peaked at 3.98% in late 2023, the net charge-off rate for personal loans has declined to 2.83%, including a 48-basis-point sequential drop in the most recent quarter.
5. More than personal loans
SoFi is well known for its personal loan business, and for good reason. But the company also originates student loans and home loans, and I’d argue that these are underappreciated growth drivers.
In the second quarter, student loan volume grew by 35%, and I wouldn’t be surprised to see it accelerate in the second half of the year, since more pandemic-era federal student loan protections have expired recently. For example, borrowers whose loans are in limbo as the SAVE repayment plan makes its way through the legal system just recently saw interest start accumulating on their student loans again.
Perhaps most exciting is the fintech’s home loan business, which grew volume by more than 90% year over year despite a slow real estate market and persistent high interest rates. There’s a lot of pent-up demand for home purchases as well as for refinancing and home equity lines of credit, and if mortgage rates fall, this could become a big business.
What to watch
The second half of 2025 could be an exciting time for SoFi. The Federal Reserve is widely expected to resume interest rate cuts, and this could help lower the company’s deposit cost. Also, management is bringing back cryptocurrency trading before the end of the year and has other big plans to integrate cryptocurrency and blockchain technology throughout its platform.
Along with its earnings report, SoFi announced a plan to raise $1.5 billion in fresh capital by selling new common stock. With plenty of growth opportunities, this could help take its business to the next level.
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Matt Frankel has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
