SoFi’s (SOFI) Q1 2025 earnings took place this morning before the markets had opened, and the results weren’t just a win on paper, they were a clear signal that the company might be entering its next phase. With a solid beat across the board and higher full-year guidance, SoFi made a case that it’s no longer just packed with potential; it’s a maturing financial platform with control over growth and profitability.
Let’s break this down through profitability, platform strength, and credibility.
Operating Leverage Is Finally Kicking In
(SOFI) Q1 2025 earnings took place this morning before the markets had opened, and the results weren’t just a win on paper; they were a clear signal the company might be entering its next phase. With a solid beat across the board and higher full-year guidance, SoFi made a case that it’s no longer just packed with potential; it’s a maturing financial platform with control over growth and profitability. Let’s break this down through profitability, platform strength, and credibility. Operating Leverage Is Finally Kicking In SoFi's Q1 adjusted EBITDA hit a record $210 million, up 46% year-over-year and ahead of expectations. Revenue grew 33% to $771 million, but the margin story is more impressive. This is the company's highest revenue growth in five quarters, and the incremental EBITDA margin came in at 27%. That kind of scaling signals the business is learning to convert top-line expansion into real bottom-line leverage. Adjusted EPS landed at $0.06, doubling analysts’ estimates of $0.03. This is not a one-off: the company just raised its full-year EPS guide to $0.27–$0.28, up from $0.25–$0.27. For a company that is still often treated like a startup, SoFi shows signs of operating maturity, and the market noticed, with the stock popping 4.3% premarket. The Fee-Based Flywheel Is Real SoFi’s original lending model is still very lively, with personal loan originations up 69% to $5.54 billion. However, the real standout was fee-based revenue. It soared 67% to a record $315 million, powered by new products and more engaged members. Membership grew 34% year-over-year to 10.9 million. That means more people are using more products, more often, and those products don’t carry the same capital intensity as loans. Now, let’s look beyond lending, where SoFi is pushing investing tools, credit cards, and new initiatives like the Cosmos Fund. If those keep gaining traction, SoFi’s revenue mix could become increasingly asset-light, which is exactly what you want in a rising-rate world where the cost of capital matters. Guidance That Rebuilds Trust In a volatile market inspired by macro uncertainty - tariffs, inflation, and slower consumer spending - SoFi’s raised guidance delivers a resounding message. Management now expects $3.235 billion-$3.310 billion in 2025 adjusted revenue, up from prior guidance. Adjusted EBITDA is also getting a lift with $875 million–$895 million, compared to $845 million–$865 million. That’s $30 million more in expected operating income. Even Q2 guidance is solid. SoFi projects another $200 million–$210 million in adjusted EBITDA and EPS of $0.05–$0.06, broadly in line with street expectations. So, this isn’t just a strong Q1, it’s a stronger trajectory. SoFi Is Asking to Be Re-Rated SoFi now trades in the in-between spectrum: too big to be a speculative fintech, but not yet valued like a scaled bank. But with margins expanding, fee revenue flying, and guidance rising, the company is trying to change that. If SoFi keeps this pace, the conversation around its valuation, and its place in the financial stack, could start to look very different by year-end.">SoFi’s Q1 adjusted EBITDA hit a record $210 million, up 46% year-over-year and ahead of expectations. Revenue grew 33% to $771 million, but the margin story is more impressive. This is the company’s highest revenue growth in five quarters, and the incremental EBITDA margin came in at 27%. That kind of scaling signals the business is learning to convert top-line expansion into real bottom-line leverage.
Adjusted EPS landed at $0.06, doubling analysts’ estimates of $0.03. This is not a one-off: the company just raised its full-year EPS guide to $0.27–$0.28, up from $0.25–$0.27. For a company that is still often treated like a startup, SoFi shows signs of operating maturity, and the market noticed, with the stock rising almost 7% premarket.
The Fee-Based Flywheel Is Real
SoFi’s original lending model is still very lively, with personal loan originations up 69% to $5.54 billion. However, the real standout was fee-based revenue. It soared 67% to a record $315 million, powered by new products and more engaged members. Membership grew 34% year-over-year to 10.9 million. That means more people are using more products, more often, and those products don’t carry the same capital intensity as loans.
Now, let’s look beyond lending, where SoFi is pushing investing tools, credit cards, and new initiatives like the Cosmos Fund. If those keep gaining traction, SoFi’s revenue mix could become increasingly asset-light, which is exactly what you want in a rising-rate world where the cost of capital matters.
Guidance That Rebuilds Trust
In a volatile market inspired by macro uncertainty – tariffs, inflation, and slower consumer spending – SoFi’s raised guidance delivers a resounding message. Management now expects $3.235 billion-$3.310 billion in 2025 adjusted revenue, up from prior guidance. Adjusted EBITDA is also getting a lift with $875 million–$895 million, compared to $845 million–$865 million. That’s $30 million more in expected operating income.
Even Q2 guidance is solid. SoFi projects another $200 million–$210 million in adjusted EBITDA and EPS of $0.05–$0.06, broadly in line with street expectations. So, this isn’t just a strong Q1, it’s a stronger trajectory.
SoFi Is Asking to Be Re-Rated
SoFi now trades in the in-between spectrum: too big to be a speculative fintech, but not yet valued like a scaled bank. But with margins expanding, fee revenue flying, and guidance rising, the company is trying to change that. If SoFi keeps this pace, the conversation around its valuation and its place in the financial stack could start to look very different by year-end.
Is SoFi Stock a Good Buy?
Currently, SOFI stock sports a Hold ratings, but I suspect, in the aftermath of its strong Q1 earnings and the company’s bright guidance, this rating will gradually change to a more bullish sentiment. Sofi’s average price target is $12.94, implying a 1.97% downside potential. Again, expect a change in the coming weeks.
