SoFi Technologies Inc. (NASDAQ:SOFI) saw its shares climb 5.3% to $17.18 in Monday morning trading, recovering from an initial post-earnings dip and trading 2.6% above its pre-results close on July 28. The rebound came as investors shifted focus from the immediate reaction to the company's full-year guidance, which implies a significant acceleration in profitability during the second half of the year.
According to the company's projections, adjusted EBITDA for the second half is expected to reach approximately $902 million, requiring quarterly EBITDA to average 26% higher than the level achieved in Q2. Meanwhile, revenue growth is only anticipated to be between 2% and 6% per quarter, highlighting the company's focus on margin expansion rather than top-line growth.
SoFi reported first-half adjusted net revenue of $2.293 billion and adjusted EBITDA of $697.7 million. Management guided to full-year adjusted net revenue between $4.75 billion and $4.85 billion and adjusted EBITDA of approximately $1.6 billion. These figures suggest an EBITDA margin improvement from 30.4% in the first half to a range of 35.3% to 36.7% in the second half, up from 29.7% in Q2 alone.
The company's funding advantage remains a key pillar of its strategy. In Q2, average deposits represented over 90% of average liabilities, and at a cost 156 basis points cheaper than warehouse facilities, generating annualized interest expense savings of $712.6 million. This represents roughly 45% of the full-year EBITDA outlook, underscoring the importance of deposit funding to SoFi's profitability.
However, the revenue mix raises questions. Lending accounted for 59.5% of Q2 GAAP revenue, while lending products represented only 12.7% of the overall product lineup. Financial Services, with 87.3% of products, contributed just 38.3% of revenue. This disconnect suggests that SoFi's growth is heavily reliant on balance-sheet expansion rather than diversified fee income.
Chief Financial Officer Chris Lapointe addressed the unchanged EBITDA guidance, explaining that the company sees too many attractive growth opportunities to prioritize additional profitability. Chief Executive Anthony Noto emphasized the dual approach of holding loans for net interest income while growing capital-light, fee-based businesses.
Analyst sentiment is mixed. KBW's Tim Switzer called the quarter a "lower-quality beat," attributing performance to balance-sheet growth, while William Blair's Andrew Jeffrey advised investors to "aggressively accumulate" the stock. FactSet consensus rates the stock as Hold with an average price target of $19.58, implying about 14% upside from Monday's price.
With shares trading at 28.6 times 2026 adjusted EPS estimates of 60 cents, and 20.9 times 2027 projections, valuation remains a point of contention. The company also faces risks from potential loan losses and rising deposit costs. Technology Platform revenue declined 23% year-over-year after losing a major client, though it improved 13% sequentially.
SoFi's path to higher profitability is clear on paper, but execution and market conditions will determine whether the second-half surge materializes.
