What makes Anthony Noto run? We’ll let him tell you in his own words.
“I honestly think I’m the kind of person that is driven by fear of failure rather than striving for success,” the CEO of SoFi Technologies (SOFI) once said. “I tend to go to bed scared and wake up terrified.”
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That fear of failure has driven Noto to some extraordinary places.
He was a star linebacker on West Point’s football team, for example, and earning the All East Linebacker and Academic All American titles, and receiving the Toyota Leadership Award in the 1990 Army-Navy Game.
A former U.S. Army Ranger, Noto joined Goldman Sachs (GS) in 1999 and led the firm’s communications, media, and entertainment research team.
In 2008, he became the chief financial officer of the National Football League.
And then in 2014, he joined Twitter as CFO, and four years later, he took over the helm at SoFi, where he initiated the online financial services company’s IPO in 2021.
SoFi CEO Anthony Noto said the first quarter was an ‘exceptionally strong’ start to 2024.
Drew Angerer/Getty Images
CEO notes ‘significant momentum’
SoFi—short for Social Finance—offers several financial products, including student loan refinancing, mortgages, personal loans, credit cards, investing, and banking, through mobile app and desktop interfaces.
The San Francisco-based company reported first-quarter earnings of 2 cents per share on Monday, up from a loss of 5 cents a share a year ago, beating the FactSet consensus for one cent per share.
Net revenue totaled $581 million, up from $460 million a year ago, surpassing FactSet’s call for $555.3 million in sales.
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“Our first quarter was an exceptionally strong start to 2024, demonstrating significant momentum as we responsibly grow revenue and diversify toward our financial services and tech platform segments, sustain profitability, reinforce our balance sheet, and grow our member base,” Noto said in a statement.
The financial services and tech platform segment revenue combined grew 54%, marking a record 42% of consolidated adjusted net revenue, Noto said, and “offsetting flat lending segment revenue given a more conservative approach in light of macroeconomic uncertainty.”
Nearly 622,000 new members were added in the quarter, and total members reached over 8.1 million by quarter-end, up nearly 2.5 million, or 44%, from the prior year period.
During the quarter, Noto said the company issued $862.5 million of convertible notes due in 2029 at a 1.25% coupon to reduce overall financing costs and exchanged $600 million principal of convertible notes due in 2026 for shares of SoFi common stock.
“These transactions reduce upcoming maturities, have minimal impact on a fully diluted EPS basis for 2024, and are accretive to tangible book value and tangible book value per share,” he said.
Analyst says SoFi CEO ‘top-notch’
Looking ahead, SoFi forecast adjusted second-quarter revenue between $550 million and $565 million and net income of $5 million to $10 million. Analysts surveyed by FactSet had called for $580.8 million in revenue and net income of $13.9 million.
Investors bailed on SoFi on Monday, April 29. The company’s stock sank 10% to $7.04.
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SoFi said that 2024 “remains a transitional year” for the company. The tech platform and financial services segments are expected to drive growth and increase from 38% of total adjusted net revenue in 2023 to roughly 50% for the full year of 2024.
For the full year, the company forecast adjusted revenue of between $2.39 billion and $2.43 billion, compared with earlier guidance of $2.37 billion and $2.41 billion.
TheStreet Pro’s Stephen Guilfoyle has been a long-time supporter of SoFi.
By his own admission, Guilfoyle, whose experience on Wall Street dates back to the 1980s on the New York Stock Exchange, has been “sweet on SoFi for a long time.”
“SoFi Technologies is a very well-run online bank/financial services company that seems to be steadily growing and doing so quite efficiently,” he wrote on Monday. The growth seems to be happening in the more desirable parts of the business.”
Guilfoyle also had high words of praise for Noto, saying that “the leadership at the CEO level is in my book, top notch.”
“While the Q2 guidance is admittedly a little soft, the full-year guidance is excellent,” he said. “I am long this stock, and I would welcome the chance to get longer, as I believe in the concept, and I believe in Anthony Noto. SOFI is my seventh largest position.”
Guilfoyle said that the 50-day moving average line stands at $7.67, and. the loss of “this line could impact the stock significantly.”
“If the 50-day line is lost, and the stock comes in, I will be adding this afternoon at a discount,” he said. “Should that line hold during the regular session, I will likely be adding on momentum. I don’t expect to sit on my hands.”
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