Lending Club Corp.: LendingClub Reports Second Quarter 2017 Results

Tickers: LC

LendingClub Reports Second Quarter and Full Year 2017 Results

LendingClub returns to growth; revenue up 35% Year-Over-Year, 12% Quarter-Over-Quarter to

$139.6 million

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SAN FRANCISCO - August 7, 2017 - Lending Club (NYSE: LC), America's largest online marketplace connecting borrowers and investors, today announced financial results for the second quarter ended June 30, 2017 and provided guidance for the third quarter and full year 2017.

Three Months Ended

Six Months Ended June 30,

($ in millions)

June 30,

2017

March 31,

2017

June 30,

2016

2017

2016

Originations

$ 2,147.3

$ 1,958.7

$ 1,955.4

$ 4,106.1

$ 4,705.4

Net Revenue

$ 139.6

$ 124.5

$ 103.4

$ 264.1

$ 255.7

Consolidated Net Income

$ (25.4)

$ (29.8)

$ (81.4)

$ (55.3)

$ (77.2)

Adjusted EBITDA (1) (2) $ 4.5 $ 0.2 $ (29.1) $ 4.7 $ (2.8)

(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.

(2) Amounts for the three and six month periods ended June 30, 2016 have been reclassified to conform to the current period presentation.

"It's great to be back to growth. Our second quarter results demonstrate the power of the LendingClub platform and the capability of our team to execute," said Scott Sanborn, LendingClub CEO. "We are excited about the momentum building in the business and the massive opportunity that lies ahead."

Ke y accompl i shment s and development s i n the sec ond quart er across t he Lendi ngCl ub pl at f orm

i ncl ude:

Borrowers

  • Achieved 10% sequential growth to over $2.1 billion in originations, driven by strong borrower demand

  • Successfully launched multiple conversion initiatives, including pricing optimization and a redesigned website

  • Improved sales and marketing efficiency by over 7% sequentially

  • Credit continues to perform in line with expectations as observed in both vintage and portfolio trends

    Investors

  • Successfully executed the first self-sponsored securitization thereby opening a new funding source, expanding the investor base with 20 new investors, and generating a new repeatable revenue stream

  • Record number of managed accounts and institutional investors participating on the platform in the quarter

  • Successfully launched new iOS mobile application for retail investors

Second Q uart er 2017 Fi nanci al Hi ghli ght s

"We closed Q2 with the second highest revenue in our company's history and returned to Adjusted EBITDA profitability. Based on the second quarter results and how we are tracking against our initiatives, we are raising our financial outlook for the year," said Tom Casey, LendingClub CFO.

Originations - Loan originations in the second quarter of 2017 were $2.15 billion, up 10% from both the first quarter of 2017 and compared to the same quarter last year.

Net Revenue - Net revenue in the second quarter of 2017 was $139.6 million, up 12% sequentially and up 35% compared to the same quarter last year, driven primarily by higher loan volumes. In addition, net revenue as a percent of originations, or revenue yield, was 6.50% in the second quarter, up 14 basis points sequentially, driven primarily by revenue related to the securitization program that was commenced in the second quarter.

Consolidated Net Income (Loss) - GAAP net loss was $(25.4) million for the second quarter of 2017, improving $4.4 million compared to the first quarter of 2017 and improving $55.9 million compared to the same quarter last year. The decrease in loss from the first quarter to the second quarter of 2017 was primarily due to a $15.1 million increase in revenue, offset by higher general and administrative expenses as a result of a lower insurance reimbursement of $2.4 million in the second quarter compared to a

$9.6 million reimbursement in the first quarter.

Adjusted EBITDA (3) - Adjusted EBITDA was $4.5 million in the second quarter of 2017, improving

$4.3 million from the first quarter of 2017 and improving $33.6 million from the same quarter last year.

The increase in Adjusted EBITDA from the first quarter to the second quarter of 2017 was primarily due

to a $15.1 million increase in revenue, offset by higher general and administrative expenses as a result of a lower insurance reimbursement of $2.4 million in the second quarter compared to a $9.6 million reimbursement in the first quarter.

Earnings Per Share (EPS) - Basic and diluted EPS attributable to LendingClub was $(0.06) for the second quarter of 2017, compared to basic and diluted EPS attributable to LendingClub of $(0.07) in the first quarter of 2017 and $(0.21) in the same quarter last year.

Adjusted EPS (3) - Adjusted EPS was $(0.01) for the second quarter of 2017, compared to adjusted EPS of $(0.02) in the first quarter of 2017 and $(0.09) in the same quarter last year.

Cash, Cash Equivalents and Securities Available for Sale - As of June 30, 2017, cash, cash equivalents and securities available for sale totaled $764 million, with no outstanding debt.

O utl ook

Based on the information available as of August 7, 2017, LendingClub has increased its guidance for the full year and third quarter 2017:

Full Year 2017

Total Net Revenue in the range of $585 million to $600 million. Net Income (Loss) in the range of $(69) million to $(61) million. Adjusted EBITDA(3) in the range of $50 million to $58 million.

Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $75 million, depreciation and amortization and other net adjustments of approximately $44 million.

Third Quarter 2017

Total Net Revenue in the range of $154 million to $159 million. Net Income (Loss) in the range of $(12) million to $(8) million. Adjusted EBITDA(3) in the range of $18 million to $22 million.

Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $19 million, depreciation and amortization and other net adjustments of approximately $11 million.

(3) Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. Adjusted EBITDA for the prior period has been reclassified to conform to the current period presentation. Please see discussion below under the heading "Non-GAAP Measures" and the reconciliations at the end of this release.

About LendingClub

LendingClub was founded to transform the banking system to make credit more affordable and investing more rewarding. Today, LendingClub's online credit marketplace connects borrowers and investors to deliver more efficient and affordable access to credit. Through its technology platform, LendingClub is able to create cost efficiencies and passes those savings onto borrowers in the form of lower rates and to investors in the form of solid returns. LendingClub is based in San Francisco, California. Currently, residents of the following states may invest in LendingClub notes: AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, ND, NE, NH, NJ, NV, NY, OK, OR,

RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, or WY. All loans are made by federally regulated issuing bank partners. More information is available at https://www.lendingclub.com.

Conference Call and Webcast Information

The LendingClub second quarter 2017 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time on Monday, August 7, 2017. A live webcast of the call will be available at

htt p: // ir. lending club. 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 3610198, 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

htt p: // ir. lending club. com . An audio replay will also be available on August 7, 2017, until August 14, 2017, by calling +1 (877) 344-7529 or +1 (412) 317-0088, with Conference ID 10110646 LendingClub has used, and intends to use, its investor relations website, Blog (http://blog.lendingclub.com), Twitter handle (@LendingClub) and Facebook page (https://www.facebook.com/LendingClubTeam) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

Contacts

For Investors:

I R@lending club. com

Media Contact:

PR@lending club. com

Lending Club Corp. published this content on 07 August 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 07 August 2017 20:27:13 UTC.