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Lending Club Q4 net income crashes following investments

25 February 2015  |  1774 views  |  1 Source: Lending Club

Lending Club (NYSE:LC), the world's largest online marketplace connecting borrowers and investors, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2014.

"We have continued to expand our reach through 2014 by doubling the size of the business again, while continuing to invest heavily in future growth and risk management," said Renaud Laplanche, CEO and founder of Lending Club. "Our IPO in December was an important milestone in the life of the company, and everyone at Lending Club is excited about the next 5 to 10 years and committed to delivering more value and a great experience to our customers. 2015 is going to be another investment year, and we intend to continue growing originations and revenue at a fast, yet deliberate pace."

Recent Business Highlights

  • Expanded addressable market by launching super prime loans in the fourth quarter with interest rates starting at 3.99% (4.97% APR (Annual Percentage Rate)) for consumers with excellent credit.
  • Continued the integration of Springstone and launched a "true no interest" product for 6, 12, 18 or 24 months, delivering a transparent, consumer friendly no-interest patient financing experience.
  • Completed a $1 billion initial public offering (IPO), the fourth largest US-based Internet IPO, and began trading on the New York Stock Exchange under the ticker symbol "LC" on December 11, 2014.
  • In the first quarter of 2015, announced three strategic partnerships with Google, Alibaba and BancAlliance, a national consortium of 200 community banks.

Fourth Quarter 2014 Financial Highlights

Originations – Loan originations in the fourth quarter of 2014 were $1,415 million, compared to $698 million in the same period last year, an increase of 103% year-over-year. The Lending Club platform has facilitated loans totaling over $7.6 billion since inception.

Operating Revenue – Operating revenue in the fourth quarter of 2014 was $69.6 million, compared to $33.5 million in the same period last year, an increase of 108% year-over-year. Operating revenue as a perc-year. Operating revenue as a percent of originations, known as our "revenue yield", in the fourth quarter was 4.92%, up from 4.79% in the prior year.

Adjusted EBITDA(3)  – Adjusted EBITDA was $7.9 million in the fourth quarter of 2014, compared to $6.5 million in the same period last year.

Net Income/Loss– GAAP net loss was ($9.0) million for the fourth quarter of 2014, compared to a net income of $2.9 million in the same period last year. Lending Club's GAAP net loss included $11.3 million of stock-based compensation expense during the fourth quarter of 2014.

Earnings (Loss) Per Share (EPS)  - Basic and diluted loss per share was ($0.07) for the fourth quarter of 2014 compared to EPS of $0.00 in the same period last year.

Adjusted EPS(3)– Adjusted EPS was $0.01 for the fourth quarter of 2014 compared to $0.02 in the same period last year.

Cash and Cash Equivalents - As of December 31, 2014, cash and cash equivalents totaled $870 million, with no outstanding debt.

"We are entering 2015 with strong momentum on many fronts, and we intend to continue to execute on our strategy of fast yet disciplined growth," said Carrie Dolan, CFO of Lending Club. "We will also continue to aggressively invest in product development, engineering, process automation, and the buildup of support and risk management functions to pave the way for our long term growth opportunity."

Outlook

Based on the information available as of February 24, 2015, Lending Club provides the following outlook:

First Quarter 2015 

 
 

Operating Revenues in the range of $74 million to $76 million.

 

Adjusted EBITDA(3) in the range of $6 million to $9 million.

   

Fiscal Year 2015 

 
 

Total Revenues in the range of $370 million to $380 million.

 

Adjusted EBITDA(3) in the range of $33 million to $42 million.

 

Full figures available here.

Comments: (1)

A Finextra member
A Finextra member | 07 May, 2015, 16:08

This is a $2 stock in $25 clothing. The company is valued at over $8.5 billion - the multiples are ridiculous and make no sense for a piddly middleman subprime lender.

Simply unbelievable what Wall Street is dumping on Main Street - and Average Joe is eating it up. This is why we are in bubble territory. As always happens, Average Joe will lose his shirt, swear off of stocks for 5 years, then come back thinking he's got it figured out this time and go right back to doing the same stupid things he did last time around.

Just amazing.

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