LENDINGCLUB CORP SAN FRANCISCO, May 5, 2015 /PRNewswire/ -- Lending Club (NYSE: 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.
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Quarter Ended March 31,
-----------------------
($ in millions) 2015 2014 % Change
-------------- ---- ---- --------
Originations $1,635.1 $791.3 107%
Operating Revenue $81.0 $38.7 109%
Adjusted EBITDA(1) $10.6 $1.9 458%
(1) Adjusted EBITDA is a non-GAAP
financial measure. Please see the
discussion below under the heading
"Non-GAAP Measures" and the
reconciliation at the end of this
release.
"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. (NASDAQ: 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.
Please see the discussion below under
the heading "Non-GAAP Measures" and
the reconciliations at the end of
this release.
About Lending Club
Lending Club's mission is to transform the banking system to make credit more affordable and investing more rewarding. The company's technology platform enables it to deliver innovative solutions to borrowers and investors. Lending Club has been prominently recognized as a leader for its growth and innovation, including being named one of Forbes' America's Most Promising Companies three years in a row, a CNBC Disruptor two years in a row, a 2012 World Economic Forum Technology Pioneer, and one of The World's 10 Most Innovative Companies in Finance by Fast Company. Lending Club is based in San Francisco, California. More information is available at https://www.lendingclub.com. Currently only residents of the following states may invest in Lending Club notes: CA, CO, CT, DE, FL, GA, HI, ID, IL, KY (accredited investors), LA, ME, MN, MS, MT, NH, NV, NY, RI, SD, UT, VA, VT, WA, WI, WV, or WY. All loans made by WebBank, a Utah-chartered Industrial Bank, Member FDIC.
Conference Call and Webcast Information
The Lending Club First Quarter 2015 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time on Tuesday, May 5th, 2015. A live webcast of the call will be available at http://ir.lendingclub.com under the Events & Presentations menu. To access the call, please dial +1 (888) 317-6003, or outside the U.S. +1 (412) 317-6061, with conference ID 8254302, ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time). An audio archive of the call will be available at http://ir.lendingclub.com. An audio replay will be also available the evening of May 5th, 2015, until May 12th, 2015, by calling +1 (877) 344-7529 or +1 (412) 317-0088, with Conference ID 10064174.
Non-GAAP Measures
Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. Contribution, contribution margin, adjusted EBITDA, adjusted EBITDA margin, and adjusted EPS should not be viewed as substitutes for, or superior to, net income (loss), and basic and diluted EPS, as prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these measures differently, which may reduce their usefulness as a comparative measure. Contribution, contribution margin, adjusted EBITDA, adjusted EBITDA margin and adjusted EPS do not consider the potentially dilutive impact of stock-based compensation. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA and adjusted EBITDA margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements. Adjusted EBITDA and adjusted EBITDA margin do not reflect tax payments that may represent a reduction in cash available to us. Please see the "Reconciliation of GAAP to Non-GAAP Measures" tables at the end of this release.
In evaluating contribution, contribution margin, adjusted EBITDA, adjusted EBITDA margin and adjusted EPS, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation.
Safe Harbor Statement
Some of the statements in this above are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "outlook," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Information in this press release is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Additional information about Lending Club is available in the prospectus for Lending Club's notes, which can be obtained on Lending Club's website at https://www.lendingclub.com/info/prospectus.action.
LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended March 31,
----------------------------
2015 2014
---- ----
Operating revenue
Transaction
fees $72,482 $35,412
Servicing
fees 5,392 1,780
Management
fees 2,215 1,094
Other
revenue 956 416
-------- --- ---
Total
operating
revenue 81,045 38,702
---------- ------ ------
Net interest
income
after fair
value
adjustment 187 16
------------ --- ---
Total net
revenue 81,232 38,718
--------- ------ ------
Operating expenses(1):
Sales and
marketing 34,884 20,582
Origination
and
servicing 12,680 7,402
General and administrative
Engineering
and product
development 12,328 5,722
Other 27,087 12,311
----- ------ ------
Total
operating
expenses 86,979 46,017
---------- ------ ------
Loss before
income tax
expense (5,747) (7,299)
Income tax
expense 627 -
---------- --- ---
Net loss $(6,374) $(7,299)
======== ======= =======
Basic net
loss per
share
attributable
to common
stockholders $(0.02) $(0.13)
Diluted net
loss per
share
attributable
to common
stockholders $(0.02) $(0.13)
Weighted-
average
common
shares -
Basic 371,959,312 55,780,644
Weighted-
average
common
shares -
Diluted 371,959,312 55,780,644
(1)Includes stock-based compensation expense
as follows:
Three months ended March 31,
----------------------------
2015 2014
---- ----
Sales and
marketing $1,519 $3,502
Origination
and
servicing 721 358
General and administrative
Engineering
and product
development 1,406 737
Other 7,947 2,436
----- ----- -----
Total stock-
based
compensation
expense $11,593 $7,033
============= ======= ======
LENDINGCLUB CORPORATION
OPERATING AND FINANCIAL HIGHLIGHTS
(In thousands, except percentages and number of employees, or as noted)
(Unaudited)
Three months ended March 31, 2015
%Change
------------------ ---------------
March 31, June 30, September 30, December 31, March 31, Q/Q Y/Y
2014 2014 2014 2014 2015
---- ---- ---- ---- ----
Operating highlights:
Loan originations (in
millions) $791 $1,006 $1,165 $1,415 $1,635 16% 107%
Operating revenue $38,702 $48,621 $56,538 $69,551 $81,045 17% 109%
Contribution(1) $14,578 $21,915 $26,881 $32,672 $35,721 9% 145%
Contribution margin(1) 37.7% 45.1% 47.5% 47.0% 44.1% N/M(2) N/M
Adjusted EBITDA(1) $1,866 $4,002 $7,517 $7,916 $10,646 34% 458%
Adjusted EBITDA margin(1) 4.8% 8.2% 13.3% 11.4% 13.1% N/M N/M
Adjusted EPS - diluted(1) $0.00 $0.01 $0.02 $0.01 $0.02 N/M N/M
Standard Program Originations by Investor Type:
Managed accounts,
individuals 57% 46% 44% 48% 51%
Self-managed, individuals 27% 23% 25% 19% 24%
Institutional investors 16% 31% 31% 33% 25%
----------------------- --- --- --- --- ---
Total 100% 100% 100% 100% 100%
===== === === === === ===
Originations by Program:
Standard program 90% 81% 75% 78% 79%
Custom program 10% 19% 25% 22% 21%
-------------- --- --- --- --- ---
Total 100% 100% 100% 100% 100%
===== === === === === ===
Servicing Portfolio by Method Financed (in millions, at end of period):
Notes $792 $881 $983 $1,055 $1,210
Certificates 1,350 1,481 1,601 1,797 2,067
Whole loans sold 638 981 1,373 1,874 2,300
---------------- --- --- ----- ----- -----
Total $2,780 $3,343 $3,957 $4,726 $5,577
===== ====== ====== ====== ====== ======
Select Balance Sheet Information (in millions, at end of period):
Cash and cash equivalents $65 $69 $83 $870 $874
Loans $2,110 $2,326 $2,534 $2,799 $3,231
Notes and certificates $2,120 $2,337 $2,552 $2,814 $3,249
Total assets $2,229 $2,582 $2,815 $3,890 $4,328
Total stockholders' equity $69 $137 $142 $973 $982
Condensed Cash Flow Information:
Net cash flow from
operating activities $20,094 $2,043 $13,258 $14,525 $6,495
Cash flow related to loans (305,525) (242,789) (241,279) (304,472) (479,976)
Other (8,764) (116,739) (10,382) (27,125) 1,276
----- ------ -------- ------- ------- -----
Net cash used in investing
activities (314,289) (359,528) (251,661) (331,597) (478,700)
Cash flow related to
notes/certificates 304,954 242,759 248,802 301,593 483,543
Other 4,541 119,085 3,317 802,585 (6,993)
----- ----- ------- ----- ------- ------
Net cash flow from
financing activities 309,495 361,844 252,119 1,104,178 476,550
--------------------- ------- ------- ------- --------- -------
Net change in cash and
equivalents $15,300 $4,359 $13,716 $787,106 $4,345
====================== ======= ====== ======= ======== ======
Employees and
contractors(3) 475 628 742 843 976
Notes:
(1) Represents a Non-GAAP measure. See Reconciliation of GAAP to Non-GAAP measures.
(2) Not meaningful.
(3) As of the end of each respective period.
LENDINGCLUB CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)
Three months ended
------------------
March 31, June 30, September 30, December 31, March 31,
2014 2014 2014 2014 2015
---- ---- ---- ---- ----
Contribution reconciliation
Net loss $(7,299) $(9,187) $(7,371) $(9,037) $(6,374)
Net interest expense
(income) and other
adjustments (16) 396 474 1,430 (187)
General and administrative expense:
Engineering and product
development 5,722 8,030 9,235 11,714 12,328
Other 12,311 20,951 22,613 26,492 27,087
Stock-based
compensation expense 3,860 1,085 1,511 1,742 2,240
Income tax expense - 640 419 331 627
------------------ --- --- --- --- ---
Contribution $14,578 $21,915 $26,881 $32,672 $35,721
============ ======= ======= ======= ======= =======
Total operating revenue $38,702 $48,621 $56,538 $69,551 $81,045
======================= ======= ======= ======= ======= =======
Contribution margin 37.7% 45.1% 47.5% 47.0% 44.1%
------------------- ---- ---- ---- ---- ----
Adjusted EBITDA reconciliation:
Net loss $(7,299) $(9,187) $(7,371) $(9,037) $(6,374)
Net interest expense
(income) and other
adjustments (16) 396 474 1,430 (187)
Acquisition and related
expense 1,141 1,378 301 293 294
Depreciation and amortization:
Engineering and product
development 791 1,088 1,447 1,868 2,744
Other 216 245 322 383 404
Amortization of
intangible assets - 1,123 1,388 1,387 1,545
Stock-based
compensation expense 7,033 8,319 10,537 11,261 11,593
Income tax expense - 640 419 331 627
------------------ --- --- --- --- ---
Adjusted EBITDA $1,866 $4,002 $7,517 $7,916 $10,646
=============== ====== ====== ====== ====== =======
Total operating revenue $38,702 $48,621 $56,538 $69,551 $81,045
======================= ======= ======= ======= ======= =======
Adjusted EBITDA margin 4.8% 8.2% 13.3% 11.4% 13.1%
---------------------- --- --- ---- ---- ----
Adjusted net loss and net loss per share
Net loss $(7,299) $(9,187) $(7,371) $(9,037) $(6,374)
Acquisition and related
expense 1,141 1,378 301 293 294
Stock-based compensation 7,033 8,319 10,537 11,261 11,593
Amortization of acquired
intangible assets - 1,123 1,388 1,387 1,545
Income tax effects
related to acquisitions - 640 419 331 627
------------------------ --- --- --- --- ---
Adjusted net income $875 $2,273 $5,274 $4,235 $7,685
=================== ==== ====== ====== ====== ======
GAAP diluted shares(1) 55,781 57,971 59,844 127,859 371,959
Diluted effect of
preferred stock
conversion(2) 240,195 249,029 249,351 195,608 -
Other dilutive equity
awards 28,397 27,469 27,993 39,488 38,166
--------------------- ------ ------ ------ ------ ------
Non-GAAP diluted shares 324,373 334,469 337,188 362,955 410,125
======================= ======= ======= ======= ======= =======
Adjusted net income per
diluted share $0.00 $0.01 $0.02 $0.01 $0.02
----------------------- ----- ----- ----- ----- -----
Note:
(1) Equivalent to the basic and diluted shares reflected in the quarterly EPS calculations.
(2) For the fourth quarter of 2014 and prior quarters, gives effect to the conversion of convertible preferred stock into common stock as though the conversion had occurred at the beginning
of the period under the "if converted" method.
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SOURCE Lending Club
