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LendingClub posts narrower-than-expected loss in Q2

LendingClub Corporation (NYSE: LC) reported a narrower loss in the second quarter helped by improving customer acquisition and origination and servicing cost efficiency. The bottom line was narrower than the analysts’ expectations while the top line missed consensus estimates. Further, the online lender issued guidance for the third quarter.

Net loss was $10.66 million or $0.12 per share, narrower than the previous year’s loss of $60.86 million or $0.72 per share. Adjusted loss per share narrowed to $0.01 from $0.08 a year earlier. Net revenue increased 8% to $190.8 million driven by higher volume of loan originations. Loan originations of $3.1 billion, up 11% year-over-year.

For the full year 2019, the online lending platform, which connects borrowers and investors, still expects net revenue in the range of $765 million to $795 million. The net loss outlook is now expected to be $38 million to $23 million compared to the previous estimate of $37 million to $17 million.

Picture Courtesy: LendingClub

For the full year, adjusted EBITDA guidance is narrowed to the range of $120 million to $135 million from the previous range of $115 million to $135 million. Adjusted net loss forecast is reduced to the range of $20 million to $5 million from the prior range of $29 million to $9 million for the full year.

For the third quarter, the company expects net revenue in the range of $200 million to $210 million, which is up 8% to 14% year-over-year. Net income is predicted to be in the range of $0 million to $5 million and adjusted EBITDA is projected to be in the range of $35 million to $40 million.

For the second quarter, data-driven improvements in demand generation helped grow applications and improve conversion. Innovation to improve throughput resulted in 72% of customers going from application to approval within 24 hours, up from 46% in the second quarter of 2018, helping to increase conversion rates and drive business model efficiency.

Also read: Turtle Beach Q2 earnings preview

The company said 35% of loans purchased by investors in the second quarter of 2019 were through structured program channels developed by LendingClub over the last two years.

Shares of LendingClub ended Tuesday’s regular session down 4.06% at $13 on the NYSE. Following the earnings release, the stock gained over 1% in the after-market session.

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