$SOFI · Schwab Network · 2026-10-27

Did they deserve a 15% rise, which is the level we are at now? The company has so far managed to build a good reputation for attracting customers in a way that is unlike many other companies in this sector.

What they have begun to demonstrate this quarter is their ability to turn that into profitability in a scalable way. I think this is what the market was waiting for . Again, the initial indications still need further confirmation, but I think the initial signals have given investors who have been waiting for this moment a great deal of confidence as the story unfolds.

And Andrew, I mean the stock was down about 45% before the earnings announcement. And now we see this big leap thanks to the strong results. To what extent do you view this as a fundamental reassessment of work versus simply a rise resulting from reduced anxiety?

Yes, I think investors questioned Sofy's valuation, its exposure to consumer credit, and whether it deserved a technology premium. Today's results challenge some of this pessimism.

We saw revenues grow by 44% while net income rose by 73%. As I mentioned, management raised its guidance for this year and provided a stronger-than-expected outlook for 2027. So, the stock rose today, proving that investors like to get evidence of improving earnings strength despite the challenging interest rate environment.

Keith, while looking at some of the comments, came out as the CEO said they were delivering results despite having to deal with high borrowing costs and what they described as a difficult year.

Do you think the management has gained more credibility with investors with the figures it has provided , especially in light of the attacks from short sellers and concerns about its lending strategy?

certainly. The discussion specifically about what they should pay for deposits is something that has also impressed the market. Look, the market was expecting and hoping that Sophie would mature, and I think that's what caused its difficult year at the stock level, as there were many questions about its ability to transform into a more mature financial services company , and they started to prove that this quarter.

Again, as you see the scope and a larger portion of revenues beginning to impact net profits, especially with customer growth and lending still being the core of profits, the bank has truly impressed the market and demonstrated its ability to mature into a business capable of producing sustainably, particularly in enhancing profitability .

Andrew, let's delve deeper into this private sector of lending. I mean, he was clearly the main driver of this quarter. Lending revenues amounted to $807 million. Total loan assets jumped 71% to a record high of $16.9 billion.

Are you impressed by this level of demand? Do you have concerns that this sector is becoming an increasingly important part of their business, when they are really trying, as Keith just pointed out, to transform into a broader financial services company that seeks to attract customers to their banking and savings as well?

I think my focus will shift in the future from how quickly "Sophie" grows to how sustainable that growth is. Personal loans accounted for nearly three-quarters of loan assets this quarter.

Improved credit performance is encouraging, but fast-growing loan portfolios take time to reveal their full losses. Next year will also bring difficult comparisons. Management forecasts indicate that revenue growth will slow to around 27%, down from around 40% this year.

I believe the economic background will be an important factor. Lower inflation coupled with strong employment may help borrowers. Lower inflation due to a weak economy is a completely different story.

So, the test for Sofy is whether borrowers will continue to make payments and whether profits will continue to grow as the business matures.

Well, we are monitoring the " Sofi" stock, which is up nearly 15%. We are at the 16.61 level.