Lending Club (LC), the world's largest online marketplace connecting borrowers and investors, today announced financial results for the first quarter ended March 31, 2015 and raised its outlook for the remainder of the year.
"We continued to benefit from strong network effects this quarter, and took that opportunity to grow faster than we had planned," said Renaud Laplanche, CEO and founder. "Our investments in channel diversification helped us cost-efficiently grow borrower acquisitions, our diversified investor base helped us deliver affordable credit to a wide spectrum of borrowers, our leadership position helped us secure the most coveted partnerships, and our exceptional customer satisfaction rate continued to fuel our growth. These successes give us the confidence to raise our target for the full year."
First Quarter 2015 Financial Highlights
Originations – Loan originations in the first quarter of 2015 were $1,635 million, compared to $791 million in the same period last year, an increase of 107% year-over-year. The Lending Club platform has now facilitated loans totaling roughly $9.3 billion since inception.
Operating Revenue – Operating revenue in the first quarter of 2015 was $81.0 million, compared to $38.7 million in the same period last year, an increase of 109% year-over-year. Operating revenue as a percent of originations, or our revenue yield, was 4.96% in the first quarter, up from 4.89% in the prior year.
Adjusted EBITDA(2) – Adjusted EBITDA was $10.6 million in the first quarter of 2015, compared to $1.9 million in the same period last year. As a percent of operating revenue, Adjusted EBITDA margin increased to 13.1% in the first quarter of 2015, up from 4.8% in the prior year.
Net Loss – GAAP net loss was $6.4 million for the first quarter of 2015, compared to a net loss of $7.3 million in the same period last year. Lending Club's GAAP net loss included $11.6 million of stock-based compensation expense during the first quarter of 2015, compared to $7.0 million in the first quarter of 2014.
Loss Per Share (EPS) - Basic and diluted loss per share was ($0.02) for the first quarter of 2015 compared to EPS of ($0.13) in the same period last year.
Adjusted EPS(2)– Adjusted EPS was $0.02 for the first quarter of 2015 compared to $0.00 in the same period last year.
Cash and Cash Equivalents - As of March 31, 2015, cash and cash equivalents totaled $874 million, with no outstanding debt.
"The strong momentum from the fourth quarter carried into the first quarter, and we continue to execute on our strategy of fast yet disciplined growth," said Carrie Dolan, CFO. "We experienced improving sales and marketing efficiency compared to first quarter last year, even with expected seasonality. The benefits we are seeing from the investments we are making in product development, engineering, marketing channels, sales force expansion, process automation and back office continue to bolster our confidence in our current investment strategy and long term growth opportunity."
Recent Business Developments
- Launched a pioneering partnership with Citi to provide affordable credit to low and moderate income borrowers.
- Launched a referral partnership with Home Advisor ahead of the peak season for home improvements, a channel particularly appropriate for our platform's new AA super prime loan product with starting rates at 3.99% (4.97% APR).
- Completed the rebranding of Springstone Patient Finance as Lending Club Patient Solutions, released a new "Check Your Rate" application funnel for Patient Solutions, our Patient Solutions issuing bank rolled out a new credit model, and we made progress toward building up our Patient Solutions sales team.
- Entered into an exclusive program to deliver non-SBA term loans to Sam's Club's millions of small business members, and an exclusive partnership with Newtek Business Services Corp. (NEWT), the nation's largest non-bank SBA lender, to offer non-SBA loans to Newtek's existing and prospective business clients.
Outlook
Based on the information available as of May 5, 2015, Lending Club provides the following outlook:
Second Quarter 2015
Operating Revenues in the range of $90 million to $92 million.
Adjusted EBITDA(2) in the range of $8.5 million to $10.5 million.
Fiscal Year 2015
Total Revenues in the range of $385 million to $392 million, up from $370 million to $380 million previously.
Adjusted EBITDA(2) in the range of $40 million to $46 million, up from $33 million to $42 million previously.
(2) Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures.