SoFi: A Most Peculiar Ascent

by

The quarterly reports arrive, as reliably as the autumn chill, and with just as much potential to induce a cough of skepticism. One observes, with a detached amusement, the pronouncements of management – these modern oracles predicting fortunes built on algorithms and the fleeting confidence of borrowers. SoFi Technologies, it appears, is currently enjoying a particularly favorable alignment of the stars, or perhaps, a temporary reprieve from the usual chaos. The projections for 2026 are… ambitious. One might even say, bordering on the fantastical.

They speak of a 72% surge in profit. A figure that, if one weren’t accustomed to the peculiar arithmetic of Wall Street, would seem almost… demonic. The transformation, you see, is quite the spectacle. From a venture bleeding capital – a rather unsightly wound, frankly – to a purveyor of burgeoning profits. It’s enough to make one suspect a pact with some unseen power, though I suspect it’s merely competent management, a rare enough phenomenon these days.

From Red Ink to Something Approaching Respectability

The subject of our observation is SoFi Technologies (SOFI +7.04%). Last year, they managed to cobble together an adjusted net income of $481 million. A modest sum, perhaps, in the grand scheme of things, but enough to silence the vultures for a time. They now predict $825 million for 2026. A rather tidy increase, wouldn’t you agree? One recalls, with a touch of melancholy, the years of red ink, the critics sharpening their pens, ready to deliver the final, withering judgment. They questioned whether SoFi would ever escape the abyss. Such shortsightedness. The abyss, after all, is often just a temporary inconvenience for those with sufficient audacity.

Anthony Noto, the Chief Executive Officer, speaks of “scale, innovation, and profitability.” A rather pedestrian pronouncement, truth be told. One expects a bit more poetry from a man steering a vessel through such turbulent waters. Still, he’s not entirely wrong. They’ve managed to build something… substantial. A foundation, perhaps, for a future that isn’t entirely dependent on the whims of the market. Though, one must always remember, the market is a fickle mistress.

Loading widget...

The Lean Machine and the Ever-Expanding Flock

SoFi, it seems, operates without the encumbrance of physical branches. A sensible decision, in this age of digital ephemera. It allows them to remain… lean. A rather clinical term, but accurate. Expenses related to technology, product development, and the relentless pursuit of customers have, thankfully, declined as a percentage of revenue – from a rather alarming 84% to a more manageable 48%. A clear indication of operating leverage, or, as I prefer to call it, a temporary respite from the usual financial hemorrhaging.

The customer base is expanding at an alarming rate. Over a million new customers in the last quarter alone. Almost 13.7 million in total. A veritable flock, descending upon the digital landscape. Revenue increased by 35% in 2025. A respectable figure, though one wonders if it can be sustained. The laws of physics, after all, apply even to the financial world.

Loan originations – personal, student, and home – are soaring. A clear indication that people are still willing to borrow money, despite the looming specter of economic uncertainty. Or perhaps, they’ve simply lost their minds. One can never be entirely sure.

The net interest margin is expanding, fueled by nearly $30 billion in interest-bearing deposits – a 32% increase from the previous year. A sticky, low-cost source of funding. A rather elegant solution, if one can overlook the inherent absurdity of profiting from the financial anxieties of others.

Fee-based revenue is also on the rise, jumping 53% year over year. SoFi is diversifying its revenue streams, attempting to build a fortress against the inevitable storms. A wise move, though one suspects that even the most formidable fortress can be breached by a sufficiently determined adversary.

It is, of course, rational to assume that growth will eventually slow. The market, after all, is a relentless engine of equilibrium. But Wall Street remains bullish, predicting a 36% increase in earnings per share in 2027 and a 25% increase in 2028. Such optimism. One almost envies them.

Paying a forward price-to-earnings ratio of 35 may seem… excessive. But in a world where rationality is often suspended, it may just be a smart move. Or a particularly foolish one. Time, as always, will tell. And time, my friends, is a cruel and unforgiving master.

Read More

2026-02-08 14:02