SoFi Technologies: Priced for Problems That Aren't in the Filings
$SOFI is down ~40.8% YTD and currently sat around $16.13, in Q1 2026 the business posted record revenue of $1.1B, +43% YoY. Net income more than doubled to $167M, loan originations hit a record $12.18B and members grew 35% to 14.7 million.
The stock fell 13% after earning day because management kept full year guidance unchanged.
Since then two more things have weighed on the stock. A short seller (Muddy Waters) called the accounting fraudulent in back March, then in early June a law firm opened a formal securities investigation tied to those same claims.
The CEO has bought 39 times in five years and never sold once, he bought the day the Muddy Waters report came out and he is still holding 11.9M shares worth ~$191M at current prices.
What SoFi Actually Does
SoFi started as a student loan refinancer, it is now a federally chartered digital bank with a financial services marketplace and a banking-as-a-service tech platform.
SoFi Bank takes deposits and makes loans: Personal loans, student loans, home loans, credit cards. $40.2B in deposits as of Q1 2026, +$2.7B in a single quarter.
The financial services business sits on top of the bank with members getting a checking account, savings account, brokerage account, credit card, and insurance products through one app. The more products a member uses, the cheaper it becomes to serve them. Cross-buy, the percentage of members using more than one product, reached 43% in Q1. This is the most important metric in the business, measuring how embedded SoFi has become in its members' financial lives.
The technology platform (Galileo), is the infrastructure that powers other fintechs and banks with Chime, Robinhood, and dozens of other financial apps running on it.
These three businesses compound off each other, new members come for one product and adopt others, more adoption generates better data, better data improves underwriting, better underwriting enables cheaper credit and cheaper credit attracts more members.
The Q1 2026 Numbers
Per the Q1 2026 10-Q filed April 29th: Revenue $1.1B (+43% YoY), net income $167M (+134% YoY), adjusted EBITDA $340M at a 31% margin, Loan originations a record $12.18B (+68% YoY), members 14.7M (+35% YoY), total products 22.2M (+38% YoY) deposits $40.2B and total assets $53.7B.
The lending segment shows the real growth, with net interest income +39% YoY, driven by average loan balance growth of 40%. This segment's profit of $382.4M was +60% YoY at a 61% contribution margin.
Management kept FY2026 guidance unchanged at $4.655B in adjusted net revenue, $1.6B in adjusted EBITDA, and $825M in adjusted net income. The market interpreted that as a disappointment after a record quarter, a business growing at 43% with unchanged guidance implies management is being conservative.
The balance sheet is clean, total debt $1.81B and cash $3.4B, the business is funded primarily by deposits rather than wholesale borrowing.
The Rate Tailwind
SoFi earns more when interest rates are higher, the bank charges interest on loans and pays interest on deposits. The spread between those two rates drives the core profit in the banking business.