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SoFi Technologies (SOFI) stock fell as much as 13% early Wednesday after the fintech bank reported earnings that showed a drop in tech platform sales.
Revenue of SoFi’s technology platform, where it sells banking-as-a-service and other infrastructure, dropped 27% to $75 million. The firm cited the impact of a large client fully leaving its platform before the end of last year as a contributor to the decline, per the release.
Chime (CHYM) shared plans to transition off of SoFi’s platform early last year, according to the company’s S-1 filing. Earlier this year, Mizuho analyst Dan Dolev said news of losing Chime was a major factor behind SoFi’s weak stock performance, though he called the concerns “overblown.”
In addition, the company reported lower-than-expected revenue from its financial services segment, which includes its investing platform and credit cards. Total fee-based revenue rose 23% to $387 million in the quarter but missed analysts’ expectations of $405 million.
SoFi showed overall top- and bottom-line earnings growth during the quarter, which CEO Anthony Noto described as “remarkable” during the company’s earnings call.
“The Street will hate these results, in our view, but we see limited downside,” SoFi bull Andrew Jeffrey, an analyst at William Blair, told clients on Wednesday. Jeffrey cited the company’s miss on fee-based revenue, an uptick in charge-offs, and management’s “uncharacteristic” decision not to revise its revenue outlook higher as reasons he expects “shares will be pressured” in the near term.
After reaching lofty highs last fall, SoFi’s stock has fallen 30% year to date as of Tuesday’s close.
In March, activist short seller Muddy Waters disclosed a short position in SoFi. It claimed the company used aggressive accounting and off-balance-sheet structures to hide credit risk. SoFi denied the allegations, expressing its intent to “explore potential legal action” and saying the short seller’s findings are “designed to deceive investors.”
Investors also worry that the fintech bank carries a high degree of consumer credit risk, as its risk management has never been tested against a credit downturn.
Read more: SoFi review (2026): Online banking with (almost) zero fees
During the quarter, SoFi reported higher net charge-offs in its student and personal loan categories. However, its overall net charge-off ratio fell to 2.07% compared to 2.37% in the year-ago period, as it grew total average loans 38%.
On the positive side, adjusted net revenue for SoFi climbed 41% to a record $1.1 billion, exceeding analyst estimates for $1.05 billion, according to data compiled by Bloomberg.
On a nonadjusted basis, profits for the San Francisco-based fintech bank reached $167 million, or $0.12 per share, in line with the Street’s expectations. Adjusted EBITDA also beat analyst expectations, rising 62% year over year to $340 million.
Like other financial services apps, SoFi is actively expanding its offerings as the Trump administration is pushing to deregulate the financial services and banking industry. The company’s strategy caters to young, affluent professionals.
Proceeds from the company’s core lending offerings rose 55% from the year-ago quarter to $642 million. A key source of SoFi’s lending platform comes from partnerships with private credit lenders, where firms including Blue Owl Capital (OWL) and Sixth Street provide capital for loan originations with the option to purchase some of those loans.
“Some people will raise the question about concerns about private credit. We’re not really seeing any in performance, nor in the demand that we have for loans from our partners. In fact, we have demand above our contractual obligations,” CEO Noto told analysts Wednesday.
David Hollerith covers the financial sector, ranging from the country’s biggest banks to regional lenders, private equity firms, and the cryptocurrency space.
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