LendingClub (LC) Q2 Incurs Loss As Expected, Revenues Rise
Zacks Investment Research | Aug 07, 2017 09:30PM ET
LendingClub Corporation (NYSE:LC) reported second-quarter 2017 loss per share of 6 cents, in line with the Zacks Consensus Estimate. Further, the figure compared favorably with the prior-year quarter’s loss of 21 cents.
The results largely benefited from top-line growth and decline in expenses. While adjusted EBITDA showed exceptional improvement, loan balance declined.
Results for the reported quarter included several significant items. Including these, net loss on a GAAP basis came in at $25.4 billion compared to net loss of $81.3 million in the year-ago quarter.
Revenue Rise, Costs Decline
Total net revenue increased 35% year over year to $139.6 million. The rise was primarily due to an increase in all revenue components, except interest income. Further, the figure outpaced the Zacks Consensus Estimate of $134.5 million.
Total operating expenses came in at $165.1 million, reflecting a decline of 12.5% from the prior-year quarter. The decrease was triggered primarily by an absence of goodwill impairment.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $4.5 million compared with adjusted loss before interest, taxes, depreciation, and amortization of $29.1 million in the prior-year quarter.
In the reported quarter, loan originations were $2.2 billion, up 9.8% from the year-ago quarter.
As of Jun 30, 2017, cash and cash equivalents were $539 million, up 1% from the prior quarter. Loans were down 6% sequentially to $3.8 billion. Total stockholders' equity was $984 million, up 1% from the Mar 30, 2017 level.
Guidance
Concurrent with the results, management provided guidance for third-quarter and full-year 2017:
Third-Quarter 2017
• Total net revenue in the range of $154–$159 million.
• Adjusted EBITDA in the range of $18-$22 million.
• Net loss in the range of $12–$8 million
Full-Year 2017
• Total net revenue in the range of $585–$600 million.
• Adjusted EBITDA in the range of $50–$58 million.
• Net loss in the range of $69–$61 million.
Our Viewpoint
LendingClub’s revenue growth is commendable. Also, increase in loans originations and rising adjusted EBITDA are impressive. Moreover, we are encouraged by a decline in the company’s total expenses. However, the lower loan balance in the reported quarter and dismal 2017 outlook are the headwinds.
LendingClub Corporation Price, Consensus and EPS Surprise
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