SoFi Technologies shares rose almost 17% after the FinTech firm raised its 2023 full-year guidance and reported better-than-expected second quarter earnings on deposit growth and lower loan funding costs.
For the year, the company now expects to generate revenue between $1.974 and $2.034 billion, up from its previous guidance of $1.955 to $2.02 billion.
It also now expects full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $333 to $343 million, up from its prior guidance of $268 to $288 million, representing a 40% to 44% incremental adjusted EBITDA margin.
Also sending SoFi’s shares higher was its narrowed-than-expected 2Q loss of $57.6 million, or $0.06 per diluted share.
Analysts had been expecting a loss per share of $0.07.
Revenue was up 37% year-over-year from $362.5 million to $498 million in 2Q, ahead of the Street's forecast of $475.9 million.
SoFi also said that its deposits grew by $2.7 billion, or 26%, from the comparable quarter last year to $12.7 billion.
“As a result of this growth in high-quality deposits, we have benefited from a lower cost of funding for our loans,” SoFi CEO Anthony Noto noted.
“Our deposit funding also increases our flexibility to capture additional net interest margin and optimize returns, a critical advantage in light of notable macro uncertainty.”
SoFi shares added 16.8% at US$11.15 shortly before noon on Monday.
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