CEO Anthony Noto Makes It Clear That SoFi Should Be Valued Like a Software Stock: Q1 Marked 18 Quarters of Rule of 40 Strength

For years, SoFi Technologies (SOFI) has wrestled with an identity problem in the eyes of investors. Is it a digital bank that should be valued like a traditional financial institution — with modest multiples and cyclical sensitivity — or is it a technology-driven platform that deserves to trade more like a high-growth software company? CEO Anthony Noto recently made it clear where he stands on that debate.

On the latest earnings call, Noto once again highlighted SoFi’s performance against Wall Street’s famed “Rule of 40,” a benchmark most commonly associated with software companies. The metric, which combines revenue growth and profit margin, is widely used to assess whether a company is balancing expansion and profitability efficiently. By drawing attention to the Rule of 40, Noto is effectively signaling how he believes investors should value SoFi: not as a slow-growth lender, but as a diversified, tech-enabled financial services platform.