Shares of SoFi plunged more than 15% on Wednesday after the company declined to raise its full-year outlook – a move that CEO Anthony Noto said reflects macroeconomic reality and does not weaken fundamentals.
“We didn’t raise the full-year forecast because when we released the full-year forecast we were expecting at least two interest rate cuts from the Federal Reserve,” he told Jim Cramer. “And now we assume there will be no rate cuts.”
The digital finance company reported results that were broadly in line with expectations, showing profit of 12 cents per share and net sales of $1.09 billion. Despite what Noto called a “remarkable” quarter – including meeting its Rule of 40 target for the 18th straight quarter – investors remained focused on the unchanged outlook.
Noto said the decision underscored a change in macroeconomic assumptions rather than a deterioration in the business itself.
“To raise the bar in an environment that was uncertain about interest rates and developments in the Middle East, we just didn’t think that was a wise decision,” he said.
The more cautious stance comes even as SoFi continues to deliver strong growth, including 41% revenue growth and 31% margin, as well as continued gains in membership and product adoption. The company also reported cash sales of more than $1 billion for the second consecutive quarter.
“We’re really going full throttle,” Noto said.
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