Fans of SoFi (NASDAQ:SOFI) stock are eagerly awaiting the company’s upcoming second-quarter earnings report, scheduled for Monday, July 31. With the student loan moratorium ending in less than two months, investors are excited for a taste of what’s to come from the high-growth personal finance company.
In the Q2 report, investors are likely hoping to see a continued trend of expectation-beating earnings per share (EPS) and revenue growth. Indeed, the company has managed to handily surpass even the loftiest earnings projections in its last two quarterly reports, despite hefty student loan-related headwinds.
In its fiscal first quarter, which ended March 2023, the company reported an EPS loss of 4 cents, beating the expected 9-cent loss by nearly 50%. SoFi also reported revenue of $460.16 million, beating guidance of $436.78 million by 5.35%.
“We delivered another quarter of record financial results and generated our eighth consecutive quarter of record adjusted net revenue, which was up 43% year-over-year,” said Anthony Noto, Chief Executive of SoFi.
SoFi has clearly managed to adjust surprisingly well to the loss of its student loan business, which has been nearly erased in the face of the pandemic-era student loan moratorium.
With student loan payments restarting on Sept. 1, this month’s earnings report represents the last fiscal quarter before the company starts enjoying the benefits of its biggest historical money maker.
SoFi Stock Climbs Ahead of Optimistic Earnings Report
Investors have plenty to be excited about at SoFi’s upcoming earnings call. Indeed, the company expects to earn between $470 and $480 million in adjusted revenue in Q2 of this year, representing a roughly 33% year-over-year upside and between $50 and $60 million of adjusted EBITDA.
Even given the promising nature of SoFi’s guidance, this is almost a distraction from the fact that this is the last quarter before the resumption of SoFi’s main attraction: its digital student loan business.
If you recall, prior to the pandemic SoFi earned the majority of its revenue from its student loan service. In 2019, student loans comprised 60% of SoFi’s total revenue.
This upcoming quarter may well prove an opportunity for SoFi to flex the strength of its adaptability. The company has managed to pivot quite strongly to high-rate unsecured personal loans. Additionally, last quarter SoFi managed to attract more than $10 billion in deposits, just one year after the company received its banking license.
That said, the return of its biggest cash cow is an undeniable bullish indicator for SoFi stock. Expect the Sept. 1 return of student loan payments to be a fixture of the company’s earnings call.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
