Following the shocking revelation that Lending Club CEO had resigned in the wake of non-conforming sale of loans to a single investor, Lending Club has announced Q1 financial results.
Lending Club said it had experienced solid growth in originations, operating revenue, and adjusted EBITDA during the first quarter of 2016. The results came during a difficult operating environment as the economy slowed. Operating revenue in the first quarter of 2016 was $151.3 million, an increase of 87% year-over-year. Adjusted EBITDA was $25.2 million in the first quarter of 2016, an increase of 137% year-over-year. Loan originations in the first quarter of 2016 were $2.75 billion, compared to $1.64 billion in the same period last year, an increase of 68% year-over-year. The Lending Club platform has now facilitated nearly $19 billion in loans since inception.
Additionally, Lending Club reported;
Operating Revenue – Operating revenue in the first quarter of 2016 was $151.3 million, compared to $81.0 million in the same period last year, an increase of 87% year-over-year. Operating revenue as a percent of originations, or revenue yield, was 5.50% in the first quarter, up from 4.95% in the same period last year.
Adjusted EBITDA (2) – Adjusted EBITDA was $25.2 million in the first quarter of 2016, compared to $10.6 million in the same period last year. As a percent of operating revenue, adjusted EBITDA margin was 16.7% in the first quarter of 2016, up from 13.1% in the same period last year.
Net Income (Loss) – GAAP net income was $4.1 million for the first quarter of 2016, compared to net loss of $6.4 million in the same period last year. GAAP net income included $15.0 million of stock-based compensation expense in the first quarter of 2016, compared to $11.6 million in the same period last year.
Earnings Per Share (EPS) – Basic and diluted EPS was $0.01 for the first quarter, compared to basic and diluted EPS of ($0.02) in the same period last year.
Adjusted EPS – Adjusted EPS was $0.05 for the first quarter of 2016, compared to $0.02 in the same period last year.
Cash, Cash Equivalents and Securities Available for Sale – As of March 31, 2016, cash, cash equivalents and securities available for sale totaled $868 million.
The board of directors has approved a share repurchase program under which Lending Club may repurchase up to $150 million of the Company’s common stock in open market or privately negotiated transactions. This repurchase plan is valid for one year and does not obligate the Company to acquire any particular amount of common stock, and may be suspended at any time at Lending Club’s discretion. As of May 9, 2016, Lending Club has repurchased roughly 2.3 million shares for approximately $19.5 million, and has $130.5 million remaining under its authorization.
The financial results, which met analyst expectations, comes at a challenging intersection for the online lending industry. The economy stumbled in Q1 of 2016 and questions remain as to whether or not we are headed for a new recession. Meanwhile government officials are reviewing online lending to decipher whether or not new regulations are required for the nascent industry. The departure of Laplanche, the visionary behind the company, comes at a difficult time.
Lending Club will be holding its earnings call with analysts at 8AM ET today.