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LendingClub (NYSE: LC) Q3 loss narrows on top-line growth

LendingClub Corporation (NYSE: LC) reported a narrower loss in the third quarter of 2019 helped by an increase in revenue and a decrease in class action and regulatory litigation expense. The results exceeded analysts’ expectations.

Net loss was $383,000 or breakeven per share compared to a loss of $22.8 million or $0.27 per share in the previous year quarter. Adjusted earnings were $0.09 per share compared to a loss of $0.09 per share a year ago. This is better than the analysts’ expectation of $0.02 per share.

Net revenue jumped by 11% to $204.9 million, which exceeded the consensus estimates of $204.81 million. Loan originations improved by 16% to $3.35 billion.

Earnings Update by AlphaStreet

Looking ahead into the fourth quarter, the company expects net revenue in the range of $190 million to $200 million and net income in the range of $0 million to $5 million. Adjusted EBITDA is anticipated to be in the range of $34 million to $39 million. The company remains on track to be adjusted net income profitable over the second half of 2019.

For the full year 2019, LendingClub lowered its net revenue outlook to the range of $760 million to $770 million from the previous range of $765 million to $795 million. Net loss guidance is tightened to the range of $31 million to $26 million from the prior range of $38 million to $23 million. Adjusted loss is narrowed to the range of $5 million to $0 million from the earlier range of $20 million to $5 million.

Read: TD Ameritrade Q4 earnings review

For the third quarter, data-driven improvements in demand generation helped grow applications, improve conversion and retention, and drive business model efficiency. Innovation to improve throughput resulted in 71% of customers going from application to approval within 24 hours, up from 60% in the third quarter of 2018, helping to increase the company’s Net Promoter Score to 80.

The company said returning to profitability remained an important milestone. Also, LendingClub is striving to achieve profitability by growing its market opportunity, generating competitive returns for platform investors, building resiliency and compounding competitive advantages.

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