SoFi (SOFI) Stock Plummets 10% as Crypto Division Reveals Paper-Thin Profit Margins

Key Highlights

• SOFI shares declined more than 10% across five sessions, settling at $12.33.
• The digital assets division generated $121.6M in Q1 transaction volume but delivered only $852,000 in net revenue after accounting for $120.7M in costs.
• SoFi reports 239,509 cryptocurrency accounts, representing cumulative registrations rather than currently active users.
• The company is reorganizing its SoFiUSD stablecoin operations into a separately regulated structure to meet GENIUS Act requirements.
• Mizuho maintained its Outperform stance but reduced its price objective from $38 down to $29 post-earnings.

SoFi Technologies provided its first comprehensive breakdown of cryptocurrency operations this quarter — revealing profitability challenges that caught Wall Street’s attention. Shares tumbled more than 10% over five consecutive sessions, closing at $12.33 as investors processed the division’s razor-thin margins.

SoFi Technologies, Inc., SOFI

At first glance, the figures appeared impressive: $121.6 million in cryptocurrency transaction volume during Q1. However, after deducting $120.7 million in associated costs, actual net revenue from digital currency trading totaled a mere $852,000.

The fintech company utilizes gross accounting for its cryptocurrency operations since it functions as a principal in transactions — purchasing and selling digital assets directly before transferring them to clients. This accounting approach significantly inflates both revenue and expense figures, creating the appearance of a larger operation than profitability metrics suggest.

The platform currently maintains 239,509 cryptocurrency accounts. Important clarification: this metric represents all accounts created historically, not exclusively active trading accounts. The genuine active user base is presumably considerably smaller.

First Quarter Performance Exceeds Projections

Putting aside cryptocurrency concerns, SoFi’s overall Q1 performance showed strength. The financial technology firm posted earnings of $0.12 per share, aligning with analyst consensus and representing a 100% increase from the $0.06 reported in last year’s corresponding quarter.

Overall revenue reached $1.09 billion, surpassing the $1.05 billion forecast by Wall Street. Year-over-year revenue growth registered at 42.6%. Looking ahead to fiscal 2026, management has issued full-year EPS guidance of $0.60.

Mizuho’s Dan Dolev characterized the results as “solid” and noted that membership expansion “remained robust.” While maintaining his Outperform recommendation, he reduced his price objective from $38 to $29 following adjustments to 2026 and 2027 financial projections.

Competing analysts showed greater caution. Barclays slashed its target from $28 to $18 while maintaining an Equal Weight stance. Wells Fargo reduced its projection from $19 to $18, also Equal Weight. Goldman Sachs held steady with a Neutral rating at $17. UBS lowered its target from $24.50 to $21, maintaining Neutral.

The consensus price target among analysts currently stands at $22.72, with TipRanks reporting seven Buy ratings, nine Hold recommendations, and three Sell ratings.

Stablecoin Operations Face Regulatory Overhaul

SoFi introduced its proprietary stablecoin, SoFiUSD, in late 2024, marketing it as a business payment solution. The financial institution combined this launch with a Mastercard collaboration designed to facilitate future payment settlements.

Fresh regulatory requirements are now mandating operational changes. The GENIUS Act requires SoFi to ultimately relocate stablecoin activities into a distinctly licensed or regulated subsidiary. Management indicates this transition is already in progress.

Regarding executive transactions, CEO Anthony Noto purchased 28,900 shares at $17.32 during March. CTO Jeremy Rishel subsequently sold 94,958 shares at $17.43 the next day. Company insiders have collectively divested approximately $4.1 million in stock over the preceding three months.

SOFI’s 52-week trading range spans from $12.56 to $32.73. The stock’s 50-day moving average stands at $17.49, while the 200-day moving average rests at $23.16.

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