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Following an accidental and premature release of its Q1 2022 results, SoFi shares declined sharply due to an underwhelming Q2 forecast.
SoFi Technologies Inc (NASDAQ: SOFI) saw its stock plunge dramatically on Tuesday after accidentally releasing its Q1 2022 financial report prematurely. Shares of the American online financial services company dropped more than 18% and were subsequently halted for approximately three hours. Eventually, the price drop improved marginally to 12%, after trading resumed after 2 pm Eastern Time. According to SoFi, the accidental release was due to human error.
Breakdown of SoFi Q1 2022 Report
SoFi released reports that exceeded analysts’ estimates even though its forecast for the second quarter was weaker than anticipated. For the first quarter, the fintech firm reported a loss of 14 cents per share, versus an expected loss of 15 cents per share. In addition, SoFi also comfortably surpassed revenue expectations, registering $322 million compared to analysts’ expectations of $286 million. Furthermore, in Q1, SoFi’s lending segment raked in $252 million in revenue, with a contribution profit of $132.7 million. These two sums represent the largest ever generated for the division.
The fintech company’s lending division also realized more than $2 billion of personal loan originations. Meanwhile, student loan originations of $984 million declined markedly from the preceding quarter due to the student loan moratorium extension.
In the quarter ended March 31st, SoFi grew its total membership to 3.87 million after adding over 400,000 members. The San Francisco-based online bank added 212,000 new SoFi Invest accounts in its financial services division – its online brokerage. In addition, 188,000 new SoFi Money account users relating to the depository account were also onboarded.
As a full-fledged banking platform, SoFi has now included deposits it may have been storing at other banks on its balance sheet. The deposits totaled $1.2 billion.
Insight into Q2 2022 Analysis
However, SoFi’s forecast for Q2 revenue was unimpressive, no more than $340 million compared to Wall Street’s predictions of $343.7 million. The proposed revenue generation breakdown for the second quarter is an adjusted net revenue of $322 million. In addition, there are also adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of between $5 million and $15 million.
Furthermore, for the full 2022 year, SoFi anticipates adjusted net revenue of approximately $1.51 billion. This marks a marginal increase from the online bank’s previous revenue guidance for the full year. In addition, the adjusted EBITDA guidance between $100 million and $105 million is almost the same as the initial $100 million figure.
In a media session, SoFi chief executive officer Anthony Noto explained that some of Wall Street’s estimates may be outdated. His reason for this is SoFi’s early-April update in early April. As a result, SoFi subsequently reduced net revenue expectations for the full year.
Regardless, investors quickly shed SoFi stock most likely because of the underwhelming Q2 revenue guidance. The drop in the company’s stock resulted in a market cap of around $4 billion for SoFi. So far, the fintech bank has now lost 70% in stock value year-to-date.