SoFi Technologies Inc
What Happened: SoFi beat estimates on both the top and bottom line when it reported third-quarter financial results on Monday. Sales came in at $530.72 million and the company beat expectations for a loss of 7 cents per share, reporting a loss of 3 cents per share.
SoFi also raised its full-year outlook. The company previously guided for full-year adjusted net revenue of $1.974 billion to $2.034 billion, but raised the anticipated range to $2.045 billion to $2.065 billion on Monday.
Why It Matters: Monday morning on CNBC's "Squawk On The Street," Noto called out a "misperception" that student loans were a big driver of the company's quarterly performance.
Sixty-seven percent of the company's absolute revenue growth in the quarter was non-lending driven, he said. Both the company's technology and financial services businesses fared very well, he added.
The SoFi CEO said its student loan business recovered from about $400 million in loan originations to $900 million in the quarter, but "it wasn't that big of an impact on the overall P&L," Noto said.
SoFi doesn't expect to see its student loan business return to pre-pandemic levels until sometime around 2025, he said, but the company's tech platform is seeing robust demand.
"What we're seeing in a big way is traditional banks, large incumbent banks, looking to upgrade to a modern processor ... we're also seeing a lot of demand from other incumbents that want to switch to us that are not big large banks," Noto said.
SoFi is also seeing strong demand for its differentiated loan products and checking account, which offers 4.6% interest and has zero fees, he said.
The company added $2.9 billion in deposits during the quarter and they are high quality, the CEO said: 90% are from direct deposit customers who are using SoFi as their primary bank, Noto said.
"In addition to that, we're seeing really strong trends in the ability to bring in deposits that are diversified ... a lot of banks are not seeing deposit growth ... they can't offset the higher rates with hedges or pass on higher rates to consumers in loans, both of which we can do because we have the ability to manage our assets and liabilities in real-time."
SOFI Price Action: SoFi shares initially surged on the company's earnings results before pulling back and turning negative. The stock was down 1.17% at $6.79 at the time of publication, according to Benzinga Pro.
