SoFi is revving up consumer lending. Investors are tapping the breaks.

SoFi is revving up consumer lending. Investors are tapping the breaks.

David Hollerith · Senior Reporter

Wed, July 29, 2026 at 5:42 PM GMT+3 3 min read

• SOFI -8.43%

SoFi (SOFI) stock fell more than 8% on Wednesday morning after it reported second quarter earnings. Despite posting its eighth consecutive quarter of record revenue and raising full-year sales guidance, concerns swirled around its costs and soaring consumer lending.

The fintech bank reported $1.2 billion in net revenue. Net income beat analyst estimates, rising 61% from the year-ago period to $157 million, or $0.12 adjusted earnings per share (EPS). Analysts were expecting $0.11 per share.

"We had nothing short of an exceptional quarter," CEO Anthony Noto said during the Wednesday morning earnings call.

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SoFi also raised its adjusted revenue guidance for the full year to between $4.75 billion and $4.85 billion. But it left its adjusted EPS forecast unchanged at $0.60, raising questions about its added spending.

"There are just too many large, attractive growth areas for us to invest in versus adding even more profitability," SoFi CFO Chris Lapointe told analysts. "The incremental revenue gives us additional flexibility to invest in initiatives that we believe will drive long-term growth."

The bank's guidance also assumes one to two 25 basis point hikes in the Federal Reserve's benchmark interest rate in 2026, versus the two cuts it expected earlier this year.

SoFi's lending surge comes as the Fed's path forward remains uncertain. Investors are also weighing the added credit risk from the business.

Total loan originations jumped 69% from a year ago to $14.8 billion. Personal loan originations rose 54% to $10.7 billion, while student loan originations nearly tripled to $2.7 billion. Deposits rose 37% from the year-ago period, helping fuel some of the growth.

Its loan platform business, which includes private credit investors Blue Owl Capital (OWL) and Fortress Investment Group, funded $3.1 billion of its new loans in the quarter. But the volume from that business was only slightly higher than the previous quarter, suggesting that most of the recent lending growth came from loans funded by SoFi itself.

Management defended this strategy.

"Why are you putting loans on the balance sheet?" CEO Noto said during the call. "It's because we want to make sure we have revenue in the future that's visible, that can deliver no matter what. It's 100% in our control."

Credit quality remained stable despite the rapid pace of loan growth. Excluding sales of delinquent loans, the company estimated that its year charge-off rate for personal loans fell to 3.7% from 4.4% in the first quarter.

But costs rose quickly too. Total noninterest expenses rose by $267 million year over year, driven by a 48% increase in sales and marketing costs.

After reaching a peak of $29 per share last October, SoFi's stock is down more than 45% as of its Wednesday morning price.

The company has faced valuation concerns, a short seller attack, and general skepticism from investors that its growth strategy increasingly relies on taking more balance sheet risk through lending.

David Hollerith covers a range of developments throughout the financial sector, from Wall Street to banking and asset management to crypto and fintech. Email him at david.hollerith@yahoofinance.com. Follow him on X at @DsHollers.

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