How SoFi Had an Insane Year of Growth
SoFi’s first year of profits explained.
2024 has been a standout year for SoFi. The stock is up 123% over the last 3 months and an incredible 92% for the year. That’s insane, but it may be fully justified. The company posted impressive Q3 results, with $697 million in revenue — a 30% year-over-year increase — and 9.4 million members, up 35%.
Watch the video instead at BullAcademy.org on YouTube: “How SoFi Had an INSANE Year of GROWTH”
I hear you: “Okay, Lincoln, that’s impressive, but what’s behind all this growth?” Good question! I’ll tell you.
Ok, now back to your inquisitive question. SoFi is leveraging innovative partnerships and smart strategies that are setting it apart from the wannabe one-stop-shop banks out there. As you know, and as I always say, SoFi is the only true one-stop-shop online bank. Now, let me show you why.
SoFi’s growth story this year has been remarkable. In Q3 2024, the company reported $61 million in GAAP net income — that’s profits — delivering their fourth consecutive profitable quarter. And remember that they only became profitable for the very first time at the end of last year, so it’s great to see that they can keep it going. Anthony Noto has really turned this company around. And if you don’t know the story behind that, go watch our 2-part documentary on the rise and fall and rise of SoFi. I promise it’ll give you greater appreciation for this visionary CEO.
Okay, I’m done. I’ll down put the glazing knife. Let’s cut deeper into SoFi’s recent growth.
Membership climbed to nearly 9.4 million people — a 35% increase from last year. On top of that, nearly half of its revenue now comes from non-lending sources, showcasing a well-diversified business model.
CEO Anthony Noto highlighted this success, stating: ‘Our results reflect how SoFi is consistently achieving durable growth, how our innovation and brand building are attracting more members and clients to our platform than ever before, and how we are delivering strong and improving returns. Combined, our non-lending segments grew 64% year-over-year and drove the company’s overall growth of 30%. And now they make up a record 49% of total revenue.’
That’s amazing! I remember years ago when I was saying that Galileo, SoFi’s tech platform would one day make up 25% of its revenues. It’s only at 15% now, but I see it continuing to rise as it builds more partnerships and acquires larger customers. And how about those financial services that drive SoFi’s amazing financial services productivity loop? Those used to be purely a loss-leader through Q3 of last year.
Now look at them! They made up a whopping 34% of revenues, with contribution profits of $99.8 million. That’s not all. Those profits came from high contribution margins of 42%, up from 3% the year prior. I don’t know what to say… It’s almost as if I said this would happen years back and it’s happening now. Who would have thought? The Financial services productivity loop is not only working, but it has become a profit-leader. It’s profitable! How fast they grow!
These results underscore SoFi’s ability to build a resilient, future-focused foundation in the financial services sector.
Next, announced towards the end of 2023, one strategic move that’s materializing in 2024 has been SoFi’s partnership with TGL, a cutting-edge golf league featuring stars as big as Tiger Woods. This collaboration raises SoFi’s profile and aligns the brand with high-profile, innovative events. In addition, Best Buy recently joined TGL as a founding partner, bringing even more visibility and credibility to the league. This synergy amplifies SoFi’s positioning in aligning with iconic brands and game-changing ventures.
SoFi also enhanced its insurance offerings by partnering with its first two direct carriers for SoFi Protect. This strengthens its ecosystem, providing members with more comprehensive financial solutions and unlocking additional cross-sell opportunities.
Galileo, SoFi’s tech platform, made waves by partnering with two prominent banks in Mexico, marking a significant step in SoFi’s international expansion. Also, Galileo deployed its Cyberbank Core technology for SoFi’s new commercial payment services sponsored bank program, further advancing its capabilities in modernizing financial infrastructure for the industry.
If you’re not familiar with SoFi’s new and exciting Sponsor Bank program, we’ll cover it in more detail in another video. For now, all you need to know is that this program helps SoFi extend its technological and operational capabilities into the banking sector, providing services like processing and operational support for sponsored accounts. The initiative is a part of SoFi’s broader technology platform expansion, emphasizing partnerships with traditional financial institutions to modernize their operations, including leveraging artificial intelligence.
Additionally, Galileo introduced advanced fraud prevention tools and launched a secured credit product with dynamic funding. These innovations enhance the security and flexibility of SoFi’s offerings, further solidifying its leadership in fintech.
SoFi’s march towards becoming the ‘AWS of financial services’ is well underway with its international push. If you want to know more about the complex financial system and how SoFi’s tech platform powers and integrates with various parts of it, I’ve done a comprehensive deep dive video into it. Every SoFi investor should watch it to fully understand the promise of Galileo and Technisys.
So, what should you takeaway from this video? All of it. There’s a lot that SoFi’s accomplished this year to move along its growth story and create more enthusiasm around its stock. But I get it. You need still need it distilled. Because we’re friends, I’ll summarize it for you. Here we go. Write this down and tell a friend about it.
SoFi’s record-setting performance isn’t just about impressive numbers — it’s about a deliberate and effective growth strategy that continues to yield exceptional results. By expanding into high-potential areas like tech platforms, international markets, and diversified financial services, SoFi is positioning itself for long-term success. As you know, we love a focus on the long-term vision on this channel. If you’re a long-term investor, what you want is for the companies in which you invest to also be investing in the long-term potential of their business. Clearly, SoFi is one of the best at this.
The future outlook of this company remains bright.
What are your thoughts on SoFi’s growth strategy? Is it a good investment? Is it over or under valued? Share your thoughts in the comments below.