$SoFi Technologies Inc.(SOFI)$
SoFi reported third-quarter results before the US open today.
Revenue grew 44%. Pre-tax profit grew 114%. EPS grew 64%.
Same company, same quarter, three growth rates.
The gaps between them are where the information is.
WHAT I WROTE DOWN BEFORE TODAY
On 6 October I wrote what I would read first on 27 October, and it was not the revenue line. Deposits growing near $5 billion a quarter. Net interest margin near 6%.
Reported: deposits grew $5.8 billion in the quarter, to $51.3 billion. Net interest margin was 6.14%, against 5.84% a year ago.
Both cleared the lines I set. That tells me the funding side held. It does not tell me what happened to profit per share, so here is how to check that.
THE THREE CHECKS
Check one: walk the staircase from revenue to EPS and name every drop.
Revenue: $1,385.1 million, up 44% from $961.6 million.
Pre-tax income: $317.8 million, up 114% from $148.6 million.
Net income: $241.0 million, up 73% from $139.4 million.
EPS: $0.18, up 64% from $0.11.
Revenue to pre-tax is the step that goes up. Of the extra $423.5 million of revenue, $169.3 million reached pre-tax income. That is 40 cents of every extra dollar.
Pre-tax to net income is the tax step. $76.8 million of tax on $317.8 million is 24.2%. A year ago it was $9.2 million on $148.6 million, or 6.2%. This one step takes growth from 114% to 73%. That is 41 points.
It is not a one-quarter event. The same sum for 2026: Q1 16.4%, Q2 23.4%, Q3 24.2%. The release says discrete tax benefits for stock compensation are recorded in each quarter, so they are recurring, and it does not size them. I will not call any part of the rate one-off.
At last year's 6.2% rate, Q3 net income would be about $298 million and EPS about $0.22, not $0.18. Put another way, pre-tax profit per diluted share is up 103%, and EPS is up 64%.
Check two: the share step.
Diluted shares went from 1,291.0 million to 1,357.8 million, up 5.2%. This takes 73% to 64%. That is 9 points.
Now look at the other count. Basic weighted shares went from 1,171.2 million to 1,292.5 million, up 10.4%.
The gap between the two counts fell from 119.8 million shares to 65.3 million. Basic rose twice as fast as diluted. The release gives the counts. It does not explain why they moved differently, and the 10-Q should.
41 plus 9 is 50, the full gap between 114% and 64%. Which share count should you use when you compare per-share numbers across years?
Check three: take the full-year guide and subtract what is already booked.
The 2026 guide is adjusted net revenue of about $5.04 billion. Nine months are booked at $3,663.9 million. That leaves about $1,376 million for Q4. Q3 was $1,371 million. Q4 is roughly flat on Q3.
The guide for adjusted net income is about $840 million, up from about $825 million in July. Nine months are booked at $570.1 million. That leaves about $270 million for Q4, against $243.0 million in Q3. That is up 11%.
Flat revenue with rising profit means costs grow slower than revenue, or the tax rate falls, or the guide is set carefully. The July release assumed a full-year tax rate of about 22%. This release does not repeat a tax assumption, so I cannot separate those. Q4 is the test.
The company also gave a first 2027 outlook: adjusted net income of about $1.28 billion and adjusted EPS of about $0.90. Dividing the two gives roughly 1.42 billion shares, against 1,357.8 million diluted today. Those are the company's numbers and my division.
HOW TO RUN IT ON YOUR OWN BOOK (HYPOTHETICAL NUMBERS)
Hypothetical: last month your options income was 100. This month it is 214, up 114%.
Closing losing trades and fees take 58 of it, so you kept 156. That is up 56%.
You also added capital during the month. The account is 5% bigger. Kept income per unit of capital is 156 divided by 1.05, about 148.6. That is up 49%.
Same month, three growth rates: 114%, 56%, 49%. Which one are you quoting to yourself?
The first number is the one that feels good. The last one is the one that tells you whether the engine got better.
THREE HONEST LIMITS
These are the company's unaudited release figures. No 10-Q had been filed when I checked EDGAR on 27 October, and I could not find a published transcript of today's call. I have not heard it.
Share-based tax benefits are in every quarter and unsized, so I cannot say how much of 24.2% would remain at a different share price.
I make no comment on price or valuation, and I have not put either into this piece.
AFTER READING THIS, YOU CAN
Take any earnings release, line up revenue, pre-tax income, net income and EPS, and name what sits behind each gap before you decide which growth number to quote.
When a company reports one growth number, which gap do you check first: costs, tax or share count?
Educational, not advice. I may hold positions in the names mentioned.
Stop guessing. Start calculating.
Live to fight another day. đ¤
#options #tradingpsychology #riskmanagement #optionstrading
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