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SoFi (SOFI -9%) is pulling back today following its Q4 report this morning. This digital-first provider of financial services beat slightly on EPS. Revenue rose a healthy 19.3% yr/yr to $734.1 mln, which was much better than expected. Our sense is that investors wanted to see better guidance for 2025.

• The company offers a full suite of financial products and services to its 10.13 mln SoFi members. SoFi is best known for its Lending segment (SoFi Loans), but it has been making diversification a priority. It now does a lot more than personal loan lending, which has seen some softness with higher rates in recent years. Its Financial Services and Tech Platform segments have been driving growth in recent quarters, this includes checking/savings accounts, credit cards, SoFi Invest etc.
• There were definitely some good metrics. Member and product adds in Q4 reached 785,000 and 1.1 mln, respectively, setting new quarterly records. SoFi Money reached record highs in Accounts, Total Deposits, and Direct Deposit members. Also, SoFi launched its Zelle offering and improved self-service wire transfers. Financial Services products increased by 34% yr/yr to 12.7 mln, primarily driven by continued demand for SoFi Money, Relay and Invest products.
• Lending segment sales increased 18% yr/yr to $417.8 mln, driven by net interest income, which rose 31% yr/yr and now makes up 82% of segment adjusted net revenue. This was driven by a 23% increase in average interest-earning assets. SoFi saw record origination volume in Q4 at $7.2 bln, up 66% yr/yr due to continued strong demand for personal loan, student loan and home loan originations.
• Financial Services segment revenue jumped 84% yr/yr to $256.5 mln, primarily driven by growth in consumer deposits. And finally, Technology Platform segment revenue increased 6% yr/yr to $102.8 mln. Tech revenue growth was driven by continued monetization of existing clients, along with new deals signed in new client segments.
• Its Tech segment's recent client wins have been more diverse, including major consumer and commercial brands, as well as large enterprises in Latin America. Also, Galileo was recently selected by the US Dept of the Treasury as the processing partner for Direct Express, a prepaid debit card program that 3.4 mln people use to access their federal benefits.
• As you can see, SoFi's non-Lending segments are growing nicely and comprised a record 49% of total adjusted net revenue during Q4, reflecting the continued diversification of its business beyond lending.

Overall, it seems investors are nervous about SoFi's 2025 guidance. The company said that, after a year of bolstering its capital base, it now wants to tilt the incremental revenue growth toward investment. Investors tend to read that as higher costs and the impact that it will have on margins. The stock has been a big mover since early October and there has been a lot of positive sentiment. However, it seems the 2025 outlook is tempering those expectations a bit.