SoFi Technologies (SOFI) delivered solid Q2 2022 results that improved significantly from the year-ago quarter and beat Wall Street’s expectations. Also, the company raised its full-year guidance. The stock gained 0.79% on August 2 and rallied almost 8% in extended trading hours as investors reacted to the better-than-expected results.
SoFi, which went public through a SPAC merger, provides digital financial products. It offers a variety of loan types and supports trading in stocks and cryptocurrencies.
SoFi’s Loss Narrowed in Q2
Revenue in the quarter increased 50% from the year-ago quarter to $356.1 million, beating consensus estimates of $340.87 million. The increase was driven by growth in all three of the business segments — Lending, Technology Platform, and Financial Services.
SoFi posted a loss per share of $0.12, a significant improvement from the loss of $0.48 per share in the year-ago quarter. It also beat consensus estimates as analysts expected the company to post a loss per share of $0.14. The company also registered an eighth consecutive quarter of positive adjusted EBITDA that landed at $20.2 million, an 81% increase from the year-ago quarter. The improvements came as the company experienced growth in members, products, and cross-buy, and benefited from a broad product suite.
Members and Products Growth
During the quarter, SoFi Technologies added over 450,000 new members. It exited the quarter with 4.3 million members, a 69% increase from the year-ago quarter. The company also added 702,000 new products, a 79% increase from the year-ago quarter.
Deposits in the quarter grew 135% from the year-ago quarter to $2.7 billion. Consequently, SoFi Technologies benefited from the lower cost of funding for loans. The increase also allows the company to benefit from a lower cost of funding for loans.
SoFi Technologies Ups Full-Year Guidance
SoFi Technologies now expects full-year revenue between $1.508 billion and $1.513 billion from initial guidance of $1.505 billion – $1.510 billion. Full-year EBITDA is expected at between $104 million and $109 million from the previous guidance of between $100 million and $105 million.
Wall Street is Cautiously Optimistic on SoFi Stock
The Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating, based on six Buys and five Holds. The average SoFi Technologies price target of $9.09 implies 41.8% upside potential from current levels.
Rising Website Traffic Predicted the Strong Results
SoFi’s strong performance shouldn’t have surprised you if you have been a TipRanks user who leverages the website traffic screener. SoFi’s increased website traffic on a quarterly basis already indicated strong Q2 results.
According to the tool, the SoFi Technologies website recorded a 12.6% quarterly increase in global visits to 34.9 million in Q2 compared to the previous quarter. Furthermore, year-to-date, SoFi Technologies website traffic increased by 275.57%, compared to the same period last year.
Increased online activity affirms that the company is on the right path.
Key Takeaway for Investors
The impressive second-quarter figures show that SoFi Technologies is experiencing rapid growth. The strength in all the business segments should help the company to post solid full-year results and boost investor confidence.
Read the full Disclosure