(Bloomberg) — SoFi Technologies Inc., which operates a business for refinancing educational debt, cut its guidance after President Joe Biden’s administration again extended the pause on student-loan payments. The lender’s shares slumped.
Most Read from Bloomberg
SoFi now expects adjusted net revenue for the full year to total $1.47 billion, down from earlier guidance of $1.57 billion, the company said in a statement Wednesday after the close of regular U.S. trading. Adjusted earnings before interest, taxes, depreciation and amortization are likely to total $100 million, down from a previous forecast of $180 million.
Shares of SoFi dropped in after-market trading, falling 3.7% to $8.43 at 4:37 p.m. in New York.
SoFi’s student-loan-refinancing business has operated at less than 50% of its pre-pandemic levels for the past two years, Chief Executive Officer Anthony Noto said in the statement. The San Francisco-based lender said it expects the upcoming fall midterm elections to result in another payment extension beyond August, and that the moratorium probably won’t end this year.
“SoFi has done an outstanding job achieving record financial results, member and product growth and consistent profitability, despite the negative impact of the extended student-loan-payment moratorium,” Noto said in the statement.
The company said it still expects $280 million to $285 million of adjusted net revenue in the first quarter, and as much as $5 million of adjusted Ebitda.
Separately, SoFi said that SoftBank Group Corp.’s Michel Combes and Carlos Medeiros will step down from the lender’s board at the company’s annual meeting, while Clay Wilkes, founder of Galileo Financial Technologies, is departing immediately. As part of the resignations, SoftBank affiliate Delaware Project 10 LLC and Red Crow Capital LLC waived their right to designate nominees to the board, according to a regulatory filing Wednesday.
“Clay, Michel and Carlos have provided crucial guidance to the board and the management team as the company expanded into new products, raised significant capital, made a critical strategic acquisition, transitioned to being a publicly traded company and received a national bank license,” Noto said in a statement Wednesday. “Given all that we have accomplished, this marks a natural point to continue the transition of our board in regards to its size and composition over time.”
(Updates with board resignations in last two paragraphs.)
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
