LendingClub Corp (NYSE:LC), the world’s largest online marketplace connecting borrowers and investors, today announced financial results for the second quarter ended June 30, 2015 and raised its outlook for the remainder of the year.
“We had another very strong quarter with accelerating revenue growth from 17% to 19% quarter over quarter and expanding margins from 13.1% in Q1 to 13.9% in Q2.” said Renaud Laplanche, CEO and founder. “Strong platform effects, industry leading position, superior engineering, and record high customer satisfaction translating into a loyal repeat customer base, have helped us continue to lower our acquisition costs this quarter. These results and the continued momentum we are seeing give us the confidence to, once again, raise our outlook for the full year in terms of both growth and margins.”
Quarter Ended June 30,
Six Months Ended June 30,
($ in millions)
(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.
Second Quarter 2015 Financial Highlights
Originations – Loan originations in the second quarter of 2015 were $1.91 billion, compared to $1.01 billion in the same period last year, an increase of 90% year-over-year. The Lending Club platform has now facilitated loans totaling roughly $11.2 billion since inception.
Operating Revenue – Operating revenue in the second quarter of 2015 was $96.1 million, compared to $48.6 million in the same period last year, an increase of 98% year-over-year. Operating revenue as a percent of originations, or our revenue yield, was 5.03% in the second quarter, up from 4.83% in the prior year.
Adjusted EBITDA(2) – Adjusted EBITDA was $13.4 million in the second quarter of 2015, compared to $4.0 million in the same period last year. As a percent of operating revenue, Adjusted EBITDA margin increased to 13.9% in the second quarter of 2015, up from 8.2% in the prior year.
Net Loss – GAAP net loss was $4.1 million for the second quarter of 2015, compared to a net loss of $9.2 million in the same period last year. Lending Club’s GAAP net loss included $12.5 million of stock-based compensation expense during the second quarter of 2015, compared to $8.3 million in the second quarter of 2014.
Loss Per Share (EPS) – Basic and diluted loss per share was ($0.01) for the second quarter of 2015 compared to EPS of ($0.16) in the same period last year.
Adjusted EPS(2)– Adjusted EPS was $0.03 for the second quarter of 2015 compared to $0.01 in the same period last year.
Cash, Cash Equivalents and Securities Available for Sale – As of June 30, 2015, cash, cash equivalents and securities available for sale totaled $888 million, with no outstanding debt.
“The second quarter was another example of how our diversified borrower channel and investor mix is driving fast and efficient growth,” said Carrie Dolan, CFO. “We continue to see improving sales and marketing efficiency in our standard personal loan product and we saw better than expected acceptance and response rates in our custom products. With demand remaining strong on both the borrower and investor sides of our online credit marketplace, our increasing confidence in our near-term and long-term opportunities is reflected in our raised outlook.”
Recent Business Developments
- Opened to investors in Texas and Arizona in the second quarter and, subsequent to the quarter end, opened to investors in Arkansas, Iowa and Oklahoma. Lending Club is now available to investors in 33 states.
- Opened to borrowers in Nebraska and North Dakota. Lending Club is now available to borrowers in 47 states.
- Investor base exceeds 100,000 active individual investors who collectively invested over $1 billion on the Lending Club platform in Q2.
- Launched an alliance with Ingram Micro (NYSE: IM), the world’s largest wholesale technology distribution company, to be the exclusive provider of unsecured lines of credit and term loans up to $300,000 for Ingram Micro’s tens of thousands of U.S. value-added resellers, and with Zulily (NASDAQ: ZU), a specialty online retailer that’s topped a billion a year in sales.
Outlook Based on the information available as of August 4, 2015, Lending Club provides the following outlook: Third Quarter 2015 Operating Revenues in the range of $106 million to $108 million. Adjusted EBITDA(2) in the range of $12 million to $14 million. Fiscal Year 2015 Total Revenues in the range of $405 million to $409 million, up from $385 million to $392 million previously. Adjusted EBITDA(2) in the range of $49 million to $53 million, up from $40 million to $46 million previously. (Original Source)
Following the earnings release, shares of Lendingclub are up 1.46% to $14.55 in after-hours trading. LC has a 1-year high of $29.29 and a 1-year low of $13.18. The stock’s 50-day moving average is $15.14 and its 200-day moving average is $18.28.
On the ratings front, Lendingclub has been the subject of a number of recent research reports. In a report issued on August 1, Canaccord Genuity analyst Michael Graham initiated coverage with a Buy rating on LC and a price target of $24, which implies an upside of 72.5% from current levels. Separately, on July 29, BTIG’s Mark Palmer maintained a Buy rating on the stock and has a price target of $31.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Graham and Mark Palmer have a total average return of 13.2% and -2.9% respectively. Graham has a success rate of 53.0% and is ranked #259 out of 3724 analysts, while Palmer has a success rate of 46.1% and is ranked #3391.
LendingClub Corp is an online marketplace connecting borrowers and investors to engage intransactions relating to standard or custom program loans.