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SoFi reported earnings Tuesday morning, and the stock closed the day up 14%. This is exactly the report investors were waiting for . So, today in the program we will analyze the earnings report in detail, learn about the company's activities in the third quarter of 2026, and, more importantly, what does the rest of the year look like and what does management expect in 2027 ?
I'm Travis Hoyle. Thank you for watching The Motley Fool YouTube channel . If you haven't subscribed yet, click the subscribe button to receive our analysis daily. Now let's move directly to the earnings report, and I think that in the case of SoFi, everything is moving in the right direction : revenue, number of participants, and their margins are also improving .
That's why the market was so impressed with the results. That's why stocks are rising. Surprisingly, the stock is still down almost 50% over the past year. So for investors looking for a return on investment in the banking industry, few companies are growing as quickly. Well, let's take a detailed look at what we learned in the third quarter.
Revenue grew by 44% year-on-year . This income growth is accelerating. This is exactly what we want to see. A significant part of this acceleration has been their lending business. They have raised capital in the last year or so. This allows them to issue more loans, especially consumer loans, but they are also growing in mortgage lending, which I will talk about in a moment.
Management now expects just over $5 billion in adjusted net income in 2025, and they provided a 2027 outlook, expecting $6.4 billion in adjusted net income. They also expect earnings of 90 cents per share. This means that the stock is only trading at about 18 times earnings. Yes, there are cheaper bank stocks, but there are few cheaper bank stocks that are growing this fast.
When I look at SoFi, I like to start with the number of members and products. This is really the first key performance indicator that investors should pay attention to . How fast is the number of participants growing? Still growing extremely fast. Almost 1.2 million new members in the third quarter alone.
The year-on-year growth this year is 35%. These participants are also more active in using more products. This will ultimately stimulate revenue. The number of products has increased by 44%, and each customer now uses 1.56 products. Management wants to increase this figure well beyond two over the next few years, but they are moving in the right direction .
This means people with credit cards are investing through SoFi or taking out personal loans. The more you enable cross-platform usage, the more you engage customers with new products through services like SoFi Plus, the more profit you make as a bank, as a digital bank, which is SoFi. So, these are the metrics that are the most important drivers of the business, and they are all moving in the right direction .
The margin is also moving in the right direction . As recently as 2023, the company was unprofitable. They now have adjusted net income of $243 million for the third quarter of 2026 alone, expecting that figure to reach $840 million for the full year . And it's also a diversified set of income. The company said it now appears to have eight products generating more than $100 million in revenue each.
They are trying to increase this number. Therefore, they have a much more diversified income portfolio. They also want to have more income from commissions. You see that this figure has increased from 25% in 2022 to a confident over 40% now. And this allows SoFi to generate more revenue without being exposed to banking risks, without default risk or interest rate risks.
These are risks that banks must constantly work with. So the larger the proportion of your income that comes from commissions, the less risk you are taking on and the higher multiplier the market is likely willing to pay . Tangible book value. This is another indicator that investors look at. It continues to grow, reaching $9.7 billion.
That significant jump you see in 2025 is actually due to the company raising capital. Therefore, issuing shares at a high price/book value ratio increases the tangible book value. This also increases the number of shares outstanding. So when that happened, there was a dilution of capital. But management uses this capital to develop the lending business.
And if they can do this effectively, it is the path to long-term growth for the bank. And if we talk about lending, then a growth of 68% year-on-year is simply a phenomenal pace. Contribution income continues to move in the right direction . It now stands at $455 million in the last quarter alone. A significant portion of this is personal loans.
This is a portfolio they have grown significantly over the past 2 years. $4.9 billion in the third quarter of 2024, and $12.6 billion in the third quarter of 2026 . Student loans are also growing wildly: now at $2.9 billion in new issuance in the third quarter. But look at the mortgage lending business.
This is a company that is moving from ancillary services that most banks don't want to do to a core business that all banks do every day. In the third quarter of 2026, SoFi issued more mortgages than in all of 2023. And they seem to be managing risk extremely effectively. Here are the net debt forgiveness figures for consumer loans in the top two rows , and for student loans in the bottom row.
So, you see that they have a positive dynamic. This means that the margin and profitability of each of these loans will be higher than expected. That is why the company is showing slightly better results than management had predicted. But that's not the only growth engine for SoFi. SoFi also has a financial services segment.
This has been the main driver of the company's growth recently. This is no longer entirely true, as consumer lending has grown significantly, but a 25% increase in net income is a very solid indicator, and a contribution margin of 50% indicates that this business is also becoming profitable. So, these are the two largest segments that will drive not only the growth of participants, but also the number of products they use.
Financial services and lending—both of these areas are growing extremely rapidly. But, of course, SoFi has one drawback. This is a technology platform. This business is not developing as management had hoped . The idea was to create banking technology that could be licensed to other companies. Great idea, but many banks are doing the same thing and it's a very competitive market.
And as customers grow, as Chime did in 2025, they eventually start using their own internal products and technologies. So they lost Chime, which is why revenue was down compared to last year. But you see it starting to grow again. Management aims to return to growth rates of around 25% by the end of the decade.
We'll see if they can do it. If you follow the results quarter by quarter, this is the segment that continues to disappoint a bit . But the main takeaway for a SoFi investor is that management expects phenomenal growth through 2027. So here you see their 2026 forecast : they raise it just one quarter before the end of the year , now expecting $5.04 billion in adjusted net income and $1.66 billion in adjusted EBITDA.
This is 57% more than a year ago, with earnings per share of 61 cents. This is again 56% more than a year ago. But really, the main thing that I think takes many investors by surprise is that the company has grown significantly in scale. It 's harder to grow at a rate above 30%, but they expect revenue to grow by almost 30%.
27%—that's their forecast, $6.4 billion in adjusted net income. Remember, management usually sets such goals quite low, so I expect they will probably exceed them in the long run. Adjusted EBITDA is expected to grow another 35%, and earnings per share are expected to increase another 48% to 90 cents.
And this is where SoFi's valuation becomes truly attractive. The price-to- book value ratio is only 1.9. If you look at their forward price-to- earnings ratio, it's only about 18, based on the new forecast. And remember, this company is still growing at an impressive rate. This is a real advantage of being a company that is “ digital by nature.” Yes, they take on a lot of banking risks, just like many other banks.
You can find cheaper bank stocks, but you won't find stocks that trade at this multiple and grow as fast. Here's why investors should take another look at SoFi. As I said, stocks are down almost 50% over the past year, even after today's rebound. But with such an attractive valuation, there's a lot to like about the stock.
Let us know what you think about SoFi in the comments section below. Don't forget to subscribe to The Motley Fool here on YouTube and check out our new AGI service. The link is on the screen , as well as in the video notes. Thank you all for watching. See you here next time.
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